This document explains the AML Compliance in the context or domain of Money Service Business (MSB).
The competitive world of foreign exchange business and new regulatory environment, have created an increasing pressure on MSB and other financial companies to conform with new government Anti-Money-Laundering AML regulations. AML Compliance is a short term for referring to all systematic methodologies used to conform with these regulations.
A complete AML program should consist of:
Money Service Businesses (MSBs) are businesses offering check cashing, money orders, travelers checks, money transfer and remittance service, currency dealing or exchange, and pre-paid access (formerly stored value) products.
For your next AML Compliance audit make sure you have the following documents in order:
The AML & ATF Compliance Manual (Anti-Money-Laundering & Anti-Terrorist Financing) is a documentation that outlines the policies and procedures of how an MSB organization is addressing its Anti-Money-Laundering obligations under the law.
This may depend on the size of your company and different products and services that you offer. It may also depend on the availability of our compliance staff. We normally outsource your compliance program to individuals and companies that we have come to trust over the years. Since our core business is software development, we will not charge any extra fees or commissions as a middle men. Our goal is to make sure that our customers stay in business and we will make sure to guide them every step of the way.
If you are not aware, there has been an increasing trend about banks and other financial institutions closing down accounts of MSB (Money Service Businesses). This phenomenon is more prevalent in the US and Canada, but have been followed in other countries such as Australia, UK, New Zealand, and so on.
This question may seem out of place, but we have been continuously receiving this question for several years. If you are a new Money Service Business, you have to stop and read this before you approach your bank. Remember that you only get one chance to make it right, so you better prepare for this challenge ahead of time. We certainly recommend that you talk to an AML expert before you approach your bank. This short note will explain what you need to know ahead of time.
The general impression is that banks are trying to kill their competition by eliminating their ability to bank. Although this may seem like a valid incentive, it is not the real reason behind their decision.
The reason comes down to risk-control and mitigation. MSBs are inherently very risky clients for the banks, as they are easy targets for money launderer and terrorist financers. The banks do not have the time and resources to make sure all their clients are following the rules and regulations, so they try to mitigate their risk by elliminating the cause. Having said that, we are not trying to imply that it is impossible to open a bank account in any financial institution, but it is definitely a big challenge.
There are more than one factor or two that determine the risk score of an MSB. Banks have to go through a very sophisticated and thorough process of risk-assessment to evaluate the capacity of an MSB in terms of fighting money laundering and terrorist financing. Basically, you have to make it easy for the banks to realize that you have thought of their problem and approached them with a feasible solution.
You may be aware of the concept of a score-based risk evaluation. Perhaps you know that when an individual applies for a loan, the creditor will evaluate the risk based on different factors. One of these factors is the credit score of the individual. This credit score is calculated and evaluated over the years.
you Banks have different risk-assessment matrix but they all share some common properties. These are some
of the issues that could influence the bank's decision one way or another: