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AML/CTF explained
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.
According to UNODC:
It is estimated that 2 to 5% of global GDP is laundered each year. That’s between EUR 715 billion and 1.87 trillion each year. To reduce these numbers, EU AML/CTF has been formed.United Nations Office on Drugs and Crime on money launderingUNODC
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
EU AML/CTF is an organization that is 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:
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.
Building AML/CFT institutional capacity
Increasing the international, regional, and national corporation on issues regarding AML/CFT
What’s included in an AML/CTF program?
Individual regulators need 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.
Business oriented guidelines
Consumer focused guidelines
Financial institutions must follow AML/CTF legislation
These types of financial organizations 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.
Making safe international money transfers
Have you ever asked, are money transfer operators safe? Is it as secure as bank transfers? Or can I trust money transfer providers with my money?
The answer to all is yes. Money transfer operators must follow the same strict guidelines as any other financial institution such as banks.
In addition, all money transfer operators we compare and recommend are safe to use with many layers of security and safety:
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.
A bit more about AML/CFL
Do AML/CTF regulations slow down money transfers?
Do AML/CTF Regulations Affect Sending Money Abroad?
Help & FAQ
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