These days we read about money laundering and the Anti Money Laundering Act in the newspaper on a daily basis. According to expert Gavin Neilson, Sweden is five to ten years behind the UK and US in our work against money laundering. So what can we do to catch up? Something to focus on is digitization for cheaper, faster and more secure Know Your Customer processes.
Which laws apply?
In Sweden, there are mainly two laws that regulate the fight against money laundering. The first is the Anti Money Laundering Act (AML), which aims to stop money laundering and financing of terrorism. The second is the Law on penalties for money laundering, which is the criminal law framework that covers money laundering and terrorist financing.
Who are covered by the Anti Money Laundering Act?
The Anti Money Laundering Act covers both financial and non-financial companies. Most people know that banks, finance companies and money brokers are covered by the law. But brokers, accountants, accounting firms, lawyers, law firms, tax advisers, mortgage banks and gambling companies must also comply with the requirements of the AML.
How to follow the Money Laundering Act?
To follow the law companies need to make an assessment of the risk of their products or services being used for money laundering or terrorist financing. You must document, regularly evaluate and update the general risk assessment at least once a year.
Customer Knowledge (KYC)
The company must have good knowledge of its customers in order to avoid their business being used for money laundering. Without sufficient knowledge of the customer, a company may not establish or maintain a business relationship or perform single transactions.
The requirement to identify the customer means that the company must ask about the customer’s name and other relevant information. For instance, if the customer is the beneficial owner in any company, if the customer is politically exposed (PEP) or is included in any of the EU sanction lists. This can be sensitive issues, which is another reason to digitize and automate your KYC controls.
What happens if you fail to follow the Anti Money Laundering Act?
If a customer commits a crime in money laundering and you lack proper KYC-controls it can result in severe sanctions.
Money laundering is an area that many people are worried about and where the demands are high for the individual companies. That is why it is time for companies to take a step into the future. Automatic, digital KYC-processes is the only way to go. In this way you reduce manual routines in the on-boarding of new customers and can instead focus on creating good customer relationships!
Roaring helps you to digitize the KYC process
Roaring can help all companies, organizations, and agencies implement automated and digital control of beneficial owner, PEP, and sanctions lists. You choose for yourself if you want to integrate it into your own systems with our API:s or if you want to use Roaring Web.
Click here for a more detailed explanation of the Money Laundering Act!