Page 29 - Insurance Times March 2023

Insurers and

Regulator

Collaborate on

Sustainable Anti-

money Laundring Jagendra Kumar

Ex. CEO,
Strategy Pearl Insurance Brokers

Business Continuity Management is inextricably linked to the Risk Management - one is the
consequence of the other. Where Business continuity Management (including Planning and Testing)
comes into force is through impact.

nti-money laundering (AML) has been a hot topic, smuggling, illegal arms sales, embezzlement, insider trading,
A and an intensifying regulatory pain point, for bribery and computer fraud schemes. It's also common with
financial institutions for decades. Money
organized crime including human, arms or drug trafficking,
laundering is a type of financial crime. It involves and prostitution rings.
taking criminally obtained proceeds (dirty money) and
disguising their origins so they appear to be from a legitimate Anti-money laundering is closely related to counter-financing
source. Anti-money laundering (AML) refers to the activities of terrorism (CFT), which financial institutions use to combat
financial institutions perform to achieve compliance with legal terrorist financing. AML regulations combine money
requirements to actively monitor for and report suspicious laundering (source of funds) with terrorism financing
activities. The United States was one of the first nations to (destination of funds). Beyond the moral imperative to fight
enact anti-money laundering legislation when it established money laundering and terrorist financing, financial institutions
the Bank Secrecy Act (BSA) in 1970. An early effort to detect also use AML tactics. In 1989, multiple countries and
and prevent money laundering, the BSA has since been organizations formed the global Financial Action Task Force
amended and strengthened by additional anti-money (FATF). Its mission is to devise and promote international
laundering laws. standards to prevent money laundering. Shortly after the 9/
11 attacks on the US, FATF expanded its mandate to include
The Financial Crimes Enforcement Network is now the AML and combating terrorist financing.
designated administrator of the BSA - with a mission to
"safeguard the financial system from the abuses of financial The International Monetary Fund (IMF) is another important
crime, including terrorist financing, money laundering and organization. With 189 member countries, its primary
other illicit activity The estimated amount of money purpose is to ensure stability of the international monetary
laundered globally in one year is 2% to 5% of global GDP, or system. The IMF is concerned about the consequences money
US$800 billion to US$2 trillion - and that's a low estimate. laundering and related crimes can have on the integrity and
Money laundering often accompanies activities like stability of the financial sector and the broader economy. In

24 March 2023 The Insurance Times