Money laundering is a sophisticated process that disguises the origins of illegally obtained money, typically through a series of complex transactions, to make it appear legitimate. This process involves not just the movement of large sums of money worldwide but also serves as a means to fund other criminal activities such as terrorism, drug and arms trafficking, and human exploitation.

The consequences of money laundering extend far beyond financial transactions, impacting various aspects of society and posing serious risks to global security and stability. It disrupts economies, weakens financial systems, and supports criminal activities, leading to social inequality and political instability. Furthermore, it poses significant global security threats by financing terrorism and transnational crime.

As money laundering techniques become increasingly complex and sophisticated, no country is immune to this crime, making the fight against it a global priority. Key international actors, such as the Financial Action Task Force (FATF) and the European Union (EU), play pivotal roles in coordinating and implementing strategies to combat these illicit activities.

The starting point for strengthening AML and CFT mechanisms varies from country to country. Some nations may only begin this journey after experiencing the severe consequences of being included in the color-coded lists. Therefore, before proceeding with an action plan, each country must establish a baseline and conduct a comprehensive “as-is” analysis, considering factors such as the existing legal framework, institutional capacity, and the level of financial sector development.

Connecting the dots between the current situation and the desired robust AML/CFT environment, as well as paving the way forward, is challenging, especially with limited resources. After conducting a thorough analysis of best practices and international requirements, NRD Companies offers a constructive and effective approach to strengthening AML/CFT frameworks and addressing related challenges. This approach targets five specific pillars of the AML/CFT regime and introduces a key component for transparency – the beneficial ownership register.