AML stands for Anti-Money Laundering. The term covers the processes, controls and policies that companies implement to prevent money laundering and terrorist financing.
In Denmark, AML is regulated by the Money Laundering Act, and a wide range of industries are required to follow the rules - including banks, mortgage lenders, insurance companies, lawyers, accountants and real estate agents. Common to these is that they handle or manage customers' money and can therefore be exposed to attempts at abuse.
What does anti-money laundering involve?
Money laundering is defined as the concealment or movement of funds derived from illegal activities for financial gain. Terrorist financing is closely related and involves making funds available for acts covered by section 114 of the Criminal Code.
AML work therefore aims to prevent companies from being unintentionally used as intermediaries in these activities.
KYC as part of AML
A key part of AML is KYC (Know Your Customer). KYC is about knowing your customer, gathering relevant information and assessing the risk that the customer may be involved in money laundering or terrorist financing.
Chapter 3 of the Anti-Money Laundering Act describes the requirements for customer due diligence procedures that companies must follow. This includes identification, ongoing monitoring and risk assessment of customers.
Risk assessment and compliance
Companies covered by the Money Laundering Act must:
- Perform risk assessments of each customer.
- Develop policies and internal procedures to ensure compliance.
- Implement controls to detect and prevent money laundering.
In other words, AML isn't just a legal requirement - it's also an important part of your overall risk management.
AML in practice
While AML may seem complex, there are systems and tools available today that make it easier. Many companies use digital solutions that integrate procedures and controls to reduce the risk of errors and missing documentation.
At Qatchr, AML processes can be supported through data washing and digital account creation. Both tools help companies maintain valid customer data and ensure an efficient customer knowledge process.
