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An Overview of AML/CTF

This article shares background information on AML/CTF and how it relates to international money transfers. Therefore, you can better understand the protections in place to reduce the instances of money transactions supporting crimes. Also, we share money transfer companies that abide by the implemented laws you can use to send money abroad safely.

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It can be confusing to understand the various laws and regulatory bodies that deal with crime prevention in the money transfer space. Hence, this article looks closely at the rules and processes in place to combat money laundering and terrorism financing. Furthermore, we offer the best specialist transfer companies that abide by these laws, so you can safely send money cross-borders. Top examples include TorFX, VertoFX, and WorldRemit.

What is AML/CTF?

AML/CTF (Anti-Money Laundering and Counter-Terrorism Financing) refers to a strong regime to fight against crimes such as money laundering and financing of terrorism. In the case of money laundering, it usually accompanies other crimes, including market manipulation, corruption, drug trafficking, tax evasion, and much more. To conceal the proceeds of illegal activity, criminals use various money transfer channels to send money abroad. Therefore, European member states and other countries must work together to reduce the instances of successful money laundering or terrorist financing.

AML/CTF controls vary based on the region of the world where you are sending money. The European Union has the European Banking Authority, which suggests possible standards for member states to follow. This includes rules like attaching payer and payee details for each transaction. In other parts of the world, the practices for following AML/CTF rules will differ, but the idea is the same - to reduce the instances of money laundering and terrorist financing.

The Role of the EU AML/CTF

Now let’s take a closer look at the role and actions of the EU AML/CTF, an organization that’s tasked with providing support to regulators and financial institutions in the pursuit of reducing the support of crime through money transfer channels.

We can break down the role of this organization into 3 pillars:

1. The strengthening of AML/CTF legislation, regulatory and policy framework

This includes providing frameworks to member country regulators so that strong laws can be implemented for payment services to follow. When the regulatory frameworks are coherent across member states, the process for PSPs is simplified, and it leads to consistency in the sector. Furthermore, the legislation must cover special cases such as non-profit organizations and civil society.

2. Building AML/CFT institutional capacity

The organization is also responsible for improving the support capacity of various regulators and law enforcement agencies to help reduce financial crimes. Also, other types of organizations are kept in the loop, including civil society actors, specialized asset recovery bodies, and the media.

3. Increasing the international, regional, and national corporation on issues regarding AML/CFT

This step includes the creation of an international standard that provides continuity across organizations worldwide. Therefore, bilateral agreements must be set into motion, and cooperative networks that allow organizations to communicate effectively in the pursuit of reducing crime.

What’s Included in an AML/CTF Program?

In this section, we will share some of the ideas that regulators must consider when creating a program that considers AML/CTF legislation. It’s important for individual regulators to create policies that reduce the risk of crime-related transactions getting through.

Therefore, a risk-based assessment is required for transactions, which indicates if they should be executed, suspended, or canceled. There is no one size fits all approach to dealing with transactions, since they could be consumer-based, like with money transfer companies, or business orientated. Money laundering takes many forms and channels, so creating custom legislation is the most effective to stop criminal activity.

Regulators like AUSTRAC provide guidelines for transaction entities to follow. In the following section, we share the kind of considerations that must be made when creating an AML/CTF program:

  • Creating a risk assessment that the organization constantly reviews is important to ensure that catching suspicious financial activity is optimized.

  • An approval process for the board and senior management to oversee the program. However, if a board doesn’t exist, a chief executive or another high-ranking member of the company must approve various program rules.

  • Investing in an AML/CTF compliance officer that specializes in the management of rules regarding combating financial crimes.

  • The creation and enforcement of an employee due diligence program, where individuals are vetted against the risk assessment program.

  • Implementation of a risk awareness training program that informs employees about what to look for in relation to the prevention of financial crimes.

  • The publication and sharing of guidance material handed down from regulators like AUSTRAC.

  • Controls and systems that allow the obligations of the AML/CTF reporting to be met.

  • Ongoing customer due diligence (OCDD) systems that allow customer information to be reported and effectively reviewed when required. Also, a system to collect extra information must be in place when a customer is suspected of questionable transactions.

  • The program based on the rules above should be independently verified to ensure there are no major gaps.

A second part of the AML/CTF program must be created that focuses on customers and politically exposed customers. These rules help assess the financial crime risk that’s posed by users that send money abroad.

  • Specify what information should be collected about customers and how it should be verified to ensure the customer is who they claim to be.

  • What information should be collected about beneficial owners?

  • The processes are used to determine if a customer or beneficial owner is politically exposed.

  • How to react in situations with a lack of information.

  • When to collect more information about a customer to ensure the transactions fall within the accepted risk assessment.

What Type of Financial Institutions Must Follow AML/CTF Legislation?

This section provides an overview of the type of financial organizations that must adhere to the laws and regulations of AML/CTF. The specific rules vary across countries worldwide. Therefore, the organizations must follow the rules in each country where they support money transfers.

  • Banks: Banks are one of the most popular ways of sending money abroad. If you are transferring funds between banks internationally, expect your personal information to be recorded and potentially shared with law enforcement agencies. There are many types of bank transfers, including wire transfers and SWIFT transfers.

  • Money transfer companies: The type of specialist transfer providers we recommend on this website comply with international AML/CTF laws. However, no extra action is required by you - your personal information is automatically provided on the back end to law enforcement authorities.

  • Challenger banks: Companies like Revolut were created to compete with established banks by offering flexible money transfers and other services. These companies allow customers to avoid the cumbersome in-branch registration process. Typically, customers can execute many functions via a mobile app.

Why Money Transfer Companies Are Safe for Transferring Funds Abroad?

In this section, we take a closer look at why sending money with specialist transfer providers is safe. Therefore, you can trust sending large amounts of money and that all laws and regulations are followed in the countries where you are sending funds.

  • Automated transaction monitoring: Many top-tier transfer providers have systems in place that monitor transactions and flag questionable ones for further inspection. Therefore, if someone were to gain access to your account and wanted to drain your funds, the system may halt the transactions and require ID verification from the customer support team.

  • Two-factor authentication: Most transfer providers require you to set up two-factor authentication when executing account-sensitive tasks. This includes logging into your account and sending money abroad. However, you can also add recipients to a list of money transfer destinations deemed safe, so there is no need for two-factor authentication after the first transfer.

  • Regulation: The money transfer companies we recommend have been vetted by regulators like the Financial Conduct Authority. Therefore, you can trust the financial practices of the services when sending large amounts of money.

  • Mobile app login: You can log into your mobile app using security protocols like fingerprint, facial recognition, and PIN. These measures help protect your account from unwanted logins. Also, some services allow your mobile app to be used for verifying two-factor authentication.

Top Companies for Sending Money That Meet AML/CTF Regulations

Now let’s take a closer look at the companies you should consider that do a great job of meeting regulations aimed at reducing money laundering and terrorist financing. The payer/recipient details are recorded and shared with the relevant enforcement agencies when sending money to the companies below.

Additionally, we selected the companies below based on important metrics like fees, FX rates, transfer time, extra features, reputation, and much more. Consider creating an account with each service to get first-hand experience of the advantages.

TorFX - Best for No Transfer Fees

TorFX does not charge transfer fees, and there are no sending limits. Therefore, you’ll save large amounts of money compared with banks. Furthermore, the FX rate margin is tiny, so the savings are impressive when converting currencies. Use the live rate calculator on the homepage to figure out how much you can save compared to alternative transfer channels.

Also, TorFX offers personal and business accounts, which means you can switch between them based on your needs. Business accounts receive personalized customer support since a single agent is assigned. Therefore, the provided help is effective and can help meet international money transfer challenges.

Finally, TorFX has a Trustpilot score of 4.9 out of 5 based on over 5,000 reviews. Many reviews share experiences of excellent customer support that helps overcome complicated issues. Also, the service has won several awards, signifying it’s a top choice.

Visit TorFX

2. Moneycorp - Best for Business Customers

Moneycorp is a business-orientated money transfer company that offers an impressive array of features. For example, you can use forward contracts to lock in desired rates. Therefore, you can somewhat control the currency prices in volatile markets.

Also, each account receives a dedicated manager to help determine the best way to cut costs for sending money abroad. Therefore, you can take advantage of the full suite of features at Moneycorp, some of which can be tricky to set up for beginners.

Finally, Moneycorp doesn’t charge fees, and the margin for currency conversion is about 0.25-0.3%, which is a fraction of what most banks charge. Therefore, the profitability of your business can be maintained as you save money on fees.

Visit Moneycorp

3. WorldRemit - Best for Sending to a Large Number of Countries

WorldRemit supports transfers to over 130 countries, so you can access the majority of destinations from a single platform. It’s ideal for users that want the flexibility of sending to various countries as their needs change. Also, it’s good for travelers that need to access money worldwide.

Furthermore, WorldRemit offers bank transfers that cost just $2.99, and the FX rates are in the region of 0.5% to 1.5%. The savings are massive compared to most banks and challenger banks. Don’t forget to compare the fees using the homepage fee calculator.

Finally, WorldRemit has a Trustpilot score of 4.1 out of 5 and an overall positive reputation on social media. Therefore, you can count on the provider for reliability in processing transactions to the intended destination.

Visit WorldRemit

Do AML/CTF Regulations Affect Sending Money Abroad?

Yes, transactions are affected since information about the payer and payee is recorded, which can be accessed by law enforcement agencies. However, no extra information must be supplied by the sender during the money transfer process. The KYC verification process during account registration is typically enough, and the data is used on the back end when transactions are processed.

We recommend you take advantage of the other articles on our website to learn more about the international money transfer process. You can start with Cheapest Way to Send Money and International Money Transfer Limits. These guides will help you find the best transfer providers and save money by enjoying lower fees and competitive FX rates.


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Martynas Pupkevicius
Martynas Pupkevicius
Martynas is a seasoned freelance writer that has written on a broad range of topics over his 10 year career. He enjoys diving into the research and sharing what he's learned with readers.