4 Tips To Help Prevent Money Laundering

By Guest Author | AML | April 11, 2021

Whether you’re in the US, Canada, Britain or Australia, large organizations such as financial institutions are usually what comes to mind when thinking about money laundering, small and medium-sized businesses are just as likely, if not more so, to be targeted by criminals on account of their inexperience and lack of knowledge regarding the crime. This is what makes reliable, trustworthy AML risk assessments more important than ever for businesses of any size.


Owners of these types of business often receive attractive offers from shady individuals promising deals that seem too good to be true. And they usually are, leading to the business unknowingly being used for money laundering schemes. Before the owner knows it, they could be knee-deep in criminal operations and could face some serious legal trouble.

Whether you’re part of a large-scale corporation or the proud owner of a small-time business, it’s important that you know the proper ways to protect yourself and your company from criminals looking to use it as a means of cleaning their dirty money. These are four tips you can keep in mind to help prevent your business from being involved in money laundering.

1.  Stay educated

With businesses relying more and more on digital platforms and transactions becoming primarily internet-based, convenience is at an all-time high for the average consumer. Unfortunately, this speed and convenience come at a pretty steep price. It has become easier for criminals to commit cybercrimes which include increasingly innovative forms of money laundering.

It’s up to you to stay educated about the latest in laundering schemes and to disseminate that information to the rest of your employees so they’re better informed and know exactly what to watch out for. Prepaid credit cards, for example, are often used by wrongdoers looking to launder money, so it’s best if the employees of your company are extra vigilant with potential customers who use them.

2.  Be nosy

Whether it’s from a customer, partner, investor, or even a vendor, if you’re offered a suspiciously large sum of money out of nowhere, then your alarms should be going off pretty loudly.

Normalize doing background checks on people to see if they’ve previously been charged with any crimes or if they’ve at least been investigated for any. It’s important that you know everyone involved in a deal before going through with it.

3.  You can never ask too many questions

If an individual approaches you and your business with a proposition, there are a few things you need to confirm for you to ascertain whether it’s legitimate or a possible money laundering scheme.

Step one is to inquire about all the individuals involved and how much money you’re dealing with. If the answers seem dodgy and unclear, then that’s a definite red flag. Next is if someone reaches out from nowhere wanting to invest large sums in your business. That calls from some deep detective work.

Last, be wary if your potential investors insist on dealing exclusively in cash. Make sure to probe for the reason and if their answers seem off or vague then you might want to turn them away.

4.  Create your own AML policy and programme

AML policies shouldn’t be limited to big businesses and should also be implemented by smaller companies to protect them from possible money laundering operations. The best way to go about it is to first conduct a money-laundering risk assessment. This is a systematic process that gauges the risk and likelihood of your company being used for money laundering purposes.

Not only will this help you better understand your business as a whole, but the risk assessment will also serve as the basis for designing and implementing your very own AML programme. You should continue to regularly schedule AML risk assessments even after creating your AML programme so that you remain updated regarding your company’s exposure to risk.