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Anti-Money Laundering Practices for Non-Financial Institution Creditors

Tuesday, May 30, 2017  
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Although nonfinancial institutions fall outside of the highly publicized Bank Secrecy Act’s anti-money laundering (AML) compliance requirements, all U.S. businesses are still expected to comply with 18 U.S. Code Sections 1956 and 1957. These regulations prohibit anyone from engaging in financial transactions involving tainted funds.  

 

Because credit departments are in the business of reducing risk for their companies, it may be wise to ensure policies and practices protect against becoming part of an illicit money-laundering scheme. 

 

A LexisNexis FCPA & Compliance Law Blog post provides 20 red flags for non-financial institutions to monitor as part of their AML due diligence practices. This article may provide a good starting point for companies reviewing their AML practices. A few of the red flags include:

  • A party insists on cash-only transactions.
  • A party requests that funds be transferred to an unrelated third party.
  • A party is a shell company and refuses to disclose the owner’s identity
  • Transactions appear to have been structured in a way to avoid government reporting requirements.
  • A party lacks general knowledge of its industry. 

See all 20 red flags and other information about AML policies for non-financial institutions from LexisNexis. Another useful resource is this Thomson Reuters white paper, written by the same author, Tom Fox.

 


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