Key AML (Anti-Money Laundering) legal issues in the EU and USA

AML (Anti-Money Laundering) is a set of administrative, legal, IT, financial and other measures aimed at monitoring, preventing and combating the legalisation of criminal funds (known as "money laundering").

AML is mandatory for financial institutions (banks, payment systems and others) as well as for crypto market participants. They all have to implement and comply with modern AML practices.

AML in the EU
In the European Union, AML is governed by a number of directives and regulations. There is an decentralised EU’ decentralised Anti-Money Laundering and Countering the Financing of Terrorism Authority (AML/CFT), which was established in 2002 to ensure that EU AML rules are correctly and consistently applied.

EU AML legislation implements coordination between EU members in their efforts to investigate and prevent crime, specific rules on the relationship between crime and AML, criminal liability for legal persons who fail to comply with AML requirements, etc.

AML in the USA
In the United States, AML is governed by several laws (including the Bank Secrecy Act and the Patriot Act) that require financial institutions to monitor, report and disclose suspicious (including) transactions.

The main agency responsible for collecting and analysing data on suspicious financial transactions is FinCEN (Financial Crimes Enforcement Network).

US AML legislation is largely cross-border in nature and requires the collection and processing of information of different types and from different persons. Much attention has been given to the use of specific tools for the identification of suspicious transactions, and transactions involving digital assets (including cryptocurrencies) are subject to particular scrutiny. 

Output

All financial market participants, including the crypto industry, must take into account the requirements of local and international AML regulations when planning their activities.

In any case, financial institutions (including crypto actors) are recommended to: 1) use AML clauses in contracts (offers); 2) implement internal AML policies and compliance systems; 3) use special software to identify risky transactions and counterparties; 4) collect information on counterparties; 5) train personnel; 6) monitor AML legislation; 7) implement self-monitoring system, etc.

AML is not a fully standardised set of regulations and is constantly evolving. Therefore, financial institutions (including crypto actors) have to make efforts not only to follow the AML trends, but also to create them.

The assistance of lawyers and IT specialists is highly recommended when developing the AML model of any financial (crypto) project.