How anti-money laundering standards are set
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Anti-money laundering standards are largely set through international bodies that establish shared expectations, which individual countries then translate into their own domestic law and regulatory guidance for banks and other regulated businesses. The aim is to make it considerably harder for illicit funds, including the proceeds of corruption, to enter the legitimate financial system unnoticed.
Core obligations typically include verifying a customer's identity before opening an account, monitoring transactions for unusual patterns, and reporting genuinely suspicious activity to a national authority for further investigation. These obligations apply not only to banks but increasingly to other gatekeepers, including lawyers, accountants and real estate agents handling large transactions.
Standards continue to evolve as laundering techniques themselves evolve, particularly around new payment technologies and increasingly complex corporate structures used to disguise ownership. Regulators generally try to stay a step ahead, though the practical reality is that standards are almost always written in response to a method that has already been observed in practice.