This slide contains complete detail of money laundering and its stages and anti-money laundering process with its key elements.

1. Anti-Money Laundering
Combating Terrorist Financing
Presenter: Sharjeel Qasim (SP20-RCS-015)
Supervisor: Dr. Hikmat Ullah
6/30/2021
COMSATS University Islamabad, Wah Campus

2. Money Laundering?
• Criminals attempt to hiding the true source/origin of money.
• Attempt to avoid PROSECUTION (legal proceedings against criminal act), CONVICTION (decision
of guilty against any criminal act) and CONFISCATION (action of seizing illegal property) of
criminal funds.
• In simple, It is process in which dirty money converted to clean money.
• Estimated $800 billion to $2 trillion dollar laundered every year.
6/30/2021
COMSATS University Islamabad, Wah Campus

3. Sources of Dirty Money
• Drug trafficking
• Human trafficking
• Criminal offenses
• Gambling
• Smuggling
• Kidnapping etc.
COMSATS University Islamabad, Wah Campus 6/30/2021

4. Three Stages of Money Laundering
• Placement
– Initial stage where cash generated from criminal activity is converted to monetary instruments provided by banks
such as money order, travelers cheque or even deposited into financial institutions or banks.
• Layering
– Funds are further transferred into other accounts and to further separate the money from its criminal origin.
• Integration
– Funds are re-introduced into system or in the economy and used to purchase legitimate assets or to fund other
criminal business which come under legitimate business.
COMSATS University Islamabad, Wah Campus 6/30/2021

5. COMSATS University Islamabad, Wah Campus 6/30/2021

6. Anti-Money Laundering?
It refers to all policies that force financial institutions to monitor their clients to prevent money
laundering.
Objective
The objective of anti-money laundering (AML) is to deter criminals from feeding their illegal
funds into the financial system.
COMSATS University Islamabad, Wah Campus 6/30/2021

7. FATF (Financial Action Task Force)
• Founded 1989
• The FATF responsible for the creation of anti-money laundering standards, and it made a
framework for countries to follow
• FATF blacklists identify countries that are considered inadequate in money laundering and
counter-financing of terrorism for-example, North Korea and Iran are the countries on
the FATF Blacklist
COMSATS University Islamabad, Wah Campus 6/30/2021

8. Key Elements of AML
COMSATS University Islamabad, Wah Campus 6/30/2021

9. Cont.
• CDD (Customer Due Diligence)
– The process where related information of a customer’s profile is collected and evaluated for potential money
laundering risks mainly before opening of account.
• Record Keeping
– All records are retained in accordance with the holding policies.
• Suspicious Activity Monitoring
– The process of monitoring customer accounts.
• Watch-list Filtering
– Respond to transactions by compliance officers to decide that transaction must block or fine to go.
COMSATS University Islamabad, Wah Campus 6/30/2021

10. Cont.
• Customer Behavior
– The process of reviewing client transaction pattern.
• Know Your Customer (KYC)
– The process of verifying the identity of customers and calculating potential risk of business relationship.
• Case Management Services
– Critical step where analysts at financial institutions review suspicious activity.
COMSATS University Islamabad, Wah Campus 6/30/2021

11. Training/References
• https://www.trainingonrecord.net/
• https://aml-cft.net/
COMSATS University Islamabad, Wah Campus 6/30/2021