The global AML landscape is diverse and financial institutions must keep pace with developing rules and regulations in order to remain compliant.
Where a business is functioning determines the local and international regulations they need to comply with in order to continue operating. In this post, we look to explore some of the most prominent regulatory bodies, the territories they cover and how they differ.
Major AML regulatory bodies around the world:
- Global – FATF
- EU – AMLD
- UK – FCA
- US – BSA
- Canada – FINTRAC
- China – CBIRC
- Hong Kong – HKMA
- Japan – FSA
- India – FIU
- Singapore – MAS
- Australia – AUSTRAC
- New Zealand – NZFIU
- South Africa – FICA
GLOBAL – Financial Action Task Force (FATF)
The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog. Its list of 97 Recommendations are the internationally endorsed global standards against money laundering and terrorist financing. They provide the framework for countries to build an effective system to combat money laundering and terrorist financing, and implement necessary measures.
The FATF currently comprises 37 member jurisdictions and 2 regional organisations, representing most major financial centres in all parts of the globe.
EU – Anti-Money Laundering Directive (AMLD)
In December 2020, an updated Anti-Money Laundering Directive, known as the 6AMLD, will come into effect around the world, and any organisations operating within the EU will need to comply with the new rules. Our in-depth guide details everything you need to know about the new directive.
The updated AMLD is designed to better counter cybercrime and the financing of terrorism. 6AMLD is likely to be part of an increasingly tough EU approach on AML and further changes are likely to come in the next few years. This might include an EU AML agency that can directly police regulatory compliance at an institutional level.
UK – The Financial Conduct Authority (FCA)
An independent, non-governmental body, the Financial Conduct Authority (FCA) is responsible for regulating the UK’s financial services industry, including combating money laundering and other criminal activities like the financing of terrorism.
The FCA’s broad objectives involve protecting consumers, ensuring market integrity and stability and promoting competition. It also has the authority to introduce and enforce rules and conduct investigations in pursuit of those objectives.
USA – The Bank Secrecy Act (BSA)
The Bank Secrecy Act (BSA) is the United States’ most important anti money laundering regulation and is administered by the Financial Crimes Enforcement Network (FinCEN); banks and other financial institutions operating in the USA must ensure they meet the compliance obligations it involves.
The BSA focuses on money laundering, but its scope has expanded to include other financial crimes including the countering of terrorist financing (CTF) measures.
Financial institutions that fail to comply with BSA regulations may be prosecuted under the US criminal code with punishments including imprisonment and fines of up to $250,000.
CANADA – Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is responsible for facilitating the detection, prevention and deterrence of money laundering, terrorist activity financing and other threats to the security of Canada. It has the mandate to detect, prevent and deter money laundering and terrorism financing.
CHINA – China Banking and Insurance Regulatory Commission (CBIRC)
The China Banking and Insurance Regulatory Commission (CBIRC) is responsible for overseeing the banking and insurance sectors across the People’s Republic of China, as an independent, ministry-level supervisory office that reports directly to the State Council. It is authorised to perform both supervisory and regulatory functions of business activities in banking and insurance, to maintain fair competition in the banking and insurance sectors and to protect the legitimate rights and interests of stakeholders including depositors and insurance policyholders. Its jurisdiction extends across the PRC, except for the territories of Hong Kong and Macau.
HONG KONG – Hong Kong Monetary Authority (HKMA)
The Hong Kong Monetary Authority (HKMA) is responsible for the stability of Hong Kong’s banking system and monetary policy. The HKMA is also the regulatory body responsible for combating money laundering and the financing of terrorism. In this capacity, it works to ensure that financial institutions in Hong Kong are meeting a variety of legal requirements, the most important being the development and implementation of an effective AML/CTF program.
JAPAN – Financial Services Agency (FSA)
The Financial Services Agency (FSA) is a Japanese government agency and an integrated financial regulator responsible for overseeing banking, securities and exchange, and insurance sectors in order to ensure the stability of the financial system of Japan. To comply with FSA regulations, financial institutions in Japan must implement a risk-based approach to AML/CFT, implementing screening mechanisms for international sanctions, adverse media and politically exposed persons (PEPs).
INDIA – Financial Intelligence Unit (FIU)
The Financial Intelligence Unit (FIU) is the central national agency responsible for receiving, processing, analysing and disseminating information relating to suspect financial transactions in India. It helps safeguard the financial system from the abuse of money laundering, terrorist financing and financial crimes.
SINGAPORE – Monetary Authority of Singapore (MAS)
The Monetary Authority of Singapore (MAS) is Singapore’s central bank and integrated financial regulator. It is responsible for monitoring and regulating the financial sector while ensuring all compliance requirements are met.
It is also responsible for well-functioning financial markets, sound conduct, and investor education. The MAS also works with the financial industry to promote Singapore as a dynamic international financial centre. It facilitates the development of infrastructure, adoption of technology, and upgrading of skills in the financial industry.
AUSTRALIA – Australian Transaction Reports and Analysis Centre (AUSTRAC)
The Australian Transaction Reports and Analysis Centre (AUSTRAC) is an Australian Government agency that uses financial intelligence and regulation to prevent money laundering, terrorism financing, organised crime, tax evasion and welfare fraud.
NEW ZEALAND – New Zealand Financial Intelligence Unit (NZFIU)
The New Zealand Financial Intelligence Unit (FIU) provides financial intelligence relating to suspicious transactions/activity, money laundering, the financing of terrorism and other serious offences. The FIU helps the New Zealand government fulfil its obligations to the inter-governmental Financial Action Task Force (FATF), the government’s organised crime strategy and the prevention and detection of serious crime.
SOUTH AFRICA – Financial Intelligence Centre Act (FICA)
South Africa’s Financial Intelligence Centre Act (FICA) lays down the basic framework for a strong financial system to accelerate South Africa’s economic development while bringing the country’s AML/CFT regulations into alignment with those of the wider international community. Its role is to curb money laundering, tax evasion, terror financing, financial crimes, and overseeing sanctions.
How we can help
Wherever your business is operating you need to comply with local and international regulations, but keeping on top of jurisdiction while retaining efficient business practice is no mean feat. This is where Hello Soda can help.
Our global suite of AML solutions satisfy and comply with all of the above regulatory bodies while helping onboard your customers faster and more efficiently with more accurate results. Using our single universal API, Sodium you can onboard up to 68% more customers compared with traditional identity verification methods. One simple integration; a flexible 360° solution which is scalable and secure.
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