Anti-money laundering—a guide for in-house banking and finance lawyers
Anti-money laundering—a guide for in-house banking and finance lawyers

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Anti-money laundering—a guide for in-house banking and finance lawyers
  • What is money laundering?
  • The UK AML regime
  • When might issues relating to AML arise on banking and finance transactions?
  • What to do if you know or suspect money laundering is taking place
  • Future developments and keeping up to date

STOP PRESS: Please note that this Practice Note is currently undergoing a detailed review.

What is money laundering?

Money laundering is the process by which the proceeds of crime are converted into assets which appear to have a legitimate origin so that they can be retained permanently or recycled into further criminal enterprises.

To use a basic example, a drug cartel may accumulate large sums of cash from its sales andin order to have more flexibility in the way in which this money can be used, andto avoid suspicion by dealing in large sums of cash, the cartel will want to get it into the financial system by depositing it in a bank or by purchasing assets with it (financial or otherwise). Once the cash (the proceeds of crime) has been deposited in a bank, it has been laundered (cleaned), andcan be transferred in andout of accounts around the world without arousing suspicion—unless appropriate systems andcontrols are in place at that bank to raise a 'red flag' when someone tries to deposit large sums of cash.

The anti-money laundering (AML) regime is also known as the AML/CTF (counter terrorist financing) regime.

The UK AML regime

The UK AML regime, as it applies to regulated entities, is governed mainly by the Money Laundering, Terrorist Financing andTransfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692 (2017 MLRs) (which implement the Fourth Money Laundering Directive (EU) 2015/849 (MLD4) andthe Second Wire Transfer Regulation (EU) 2015/847 (WTR2) in the UK andentered into force on 26 June 2017) andby requirements found in the Senior