How Does Money Laundering Process Work?

Money laundering is no more a hidden criterion. The increasing financial breach has made the concept of money laundering a common one. Every business and financial institution understands how AML compliance works in order to evade the risk of money laundering. Knowing this, they still know how programs and software are not immune to loopholes. 

Simply put, no matter how hard the authorities try, the money launderers usually stay a step ahead. Considering this possibility, many companies designed and developed effective AML software that can hinder the possibility of barging in. 




Irrespective of the fact that most people know about money laundering, certain sections are unaware of the ways that are used to launder huge amounts of money. 


Here are a few ways that are used to launder money from financial institutions and businesses-


  • Smurfing: Smurfing is a method that prevents reporting the transactions of authorized institutions. The process takes place within the scope of delivering constant or regular information and identification by conducting transactions under the legal limits of the country. 


  • Opening an Account With a Fake Name: Money launderers use this method the most. The process takes place by transporting the money from one account to another. Now, an account with a dark background is subject to quick identification. Keeping this in mind, the launderers take the help of a fictional account. 


  • Partnering in the Crime: Money launderers sometimes can be strictly restricted from entering the security boundaries of the institutions. This can force them to partner with financial institutions to conduct financial crimes. The companies that are involved and interested in laundering the dirty money get along with the accountants to wash off the records and stay safe to carry on the illicit activities. 


  • Benefitting From Multiple Companies: Money launderers sometimes find it hard to break into the safety grounds of financial institutions or companies. However, many launderers benefit from different companies, which include non-functional companies, legally operating companies, and shell corporations. 


  • Partnering with Foreign Financial Institutions: This method gives the money launderers access to cross-border centers and other foreign financial institutions. The cooperation between the launderers and the foreign financial institutions leads to successful money laundering. 


  • Cash Smuggling: Cash smuggling is one of the most common ways of laundering money today. Irrespective of the AML compliance program and AML software solutions, it is hard to ensure that there is no loophole left in the structured process. Cash smuggling is a popular and commonly used money laundering method. Here, the cash that is received from illegal activities is transferred to different countries that are free from legal obligations. 



The Final Words


AML compliance and software are the two most successful and effective solutions to money laundering. In the meantime, many companies have developed effective and convenient AML software like AML-TRACE that makes money laundering as rare as possible.


Get in touch with Smart Infotech to gather more information on money laundering and the effective AML-TRACE software.
Location: F9J7+V2Q - near Madinat Zayed Shopping Center - Madinat Zayed - Zone 1 - أبو ظبي - United Arab Emirates

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