In specialized policies, companies establish internal control systems, a list of anti-money laundering procedures, including Know-Your-Customer (KYC ) procedures. The document reflecting the description of the internal control system may have different names: AML/CFT Policy, AML/KYC Policy, AML/CFT Policy.
The AML/KYC Policy is formalized to take into account all necessary risk monitoring and prevention options.
Generally, the following measures are provided:
- Customer identification and verification measures (KYC, CDD (Customer Due Diligence), EDD (Enhanced Customer Due Diligence));
- increased control measures for certain categories of customers;
- procedures for risk assessment and management;
- analyzing, monitoring, controlling operations;
- information storage rules;
- the procedure for transferring information on illegal transactions to state authorities;
- training of the company's employees to implement the introduced measures;
- appointment of an employee responsible for the implementation of the entire internal control system;
- et al.
Such documents are used by the well-known banks, stock exchanges and other financial market players control the transactions to be monitored and identify those that are potentially illegal. The document takes into account both national legislation and local regulatory requirements, as well as international standards and recommendations, such as those of the Financial Action Task Force (FATF).
Non-compliance with anti-money laundering legislation, in particular the absence of appropriate policies, results not only in fines but also in the inability to conduct certain activities: in some jurisdictions, the existence of regulated internal control systems is mandatory for obtaining financial licenses.