AML (anti-money laundering)

Anti-money laundering (AML) is the body of legislation, regulation, and internal bank compliance designed to stop criminals from converting the proceeds of crime into apparently legitimate assets. Money laundering has three classic stages: placement (introducing criminal cash into the financial system), layering (moving it through complex transactions to obscure its origin), and integration (reintroducing it as 'clean' money).

AML obligations require financial institutions to monitor transactions for suspicious patterns, report unusual activity to financial intelligence units, freeze accounts where money laundering is suspected, and conduct ongoing customer due diligence.

For fraud victims and the public, AML is relevant because much of the money lost to scams passes through financial systems via money mules and is ultimately laundered. Reporting fraud to authorities enables AML units to trace and sometimes recover funds.