AML stands for anti money laundering. To understand AML you need to know what money laundering is.
So what is money laundering?
Money laundering is a criminal activity.
The definition being;
‘The concealment of the origins of illegally obtaining money typically by means of transfer involving foreign banks or illegitimate businesses
In short, making dirty money clean. AML policies prevent criminals from concealing the origin of funds linked to illegal activities through transactions.
A business which deals with large cash transactions will be a target for money laundering. As the legal sector deals with large cash transactions, AML policies / checks will need to be accurate!
AML check within wills and probate
The legal sector exchanges large amounts of money. Within probate and wills, the risk of money laundering activities are prominent.
All Solicitors have a duty to carry out sufficient checks to comply with anti money laundering legislation.
Furthermore, Solicitors will carry out due diligence checks on all clients which will include photo I.D. They will have to ensure the client is who they say they are.
What if AML is not carried out?
It is worth being aware that by failing to carry out AML checks or not doing them correctly, problems can arise!
Moreover, if you have responsibility to carry out due diligence and do not you could face a fine.
A top UK law firm did exactly this. Having failed to carry out due diligence, the firm was fined a record amount for money laundering.
In addition to a fine, by failing AML you may be seen as facilitating transactions which give rise to the risk of facilitating money laundering.
Either way, the outcome if you fail to carry out AML checks is not a good one!