What is Source of Wealth and Source of Funds - AML Training

Kick off this AML training by examining the impact of money laundering and crime on society, and learn to prevent it through knowledge, risk awareness, and KYC best practices.

Explore the basics of KYC, understand money laundering and terrorist financing, and identify red flags while assessing source of wealth and source of funds at onboarding.

Define money laundering as disguising crime proceeds to avoid detection and moving funds to appear clean. Terrorist financing is money generated by or intended for acts of terrorism.

Explore the money laundering cycle, including placement, layering, and integration. See how illicit funds enter banks, are obscured by complex transactions, and re-enter the economy through investments.

Money laundering occurs in places with weak anti-money laundering programs, moving funds through stable financial systems. It uses smurfing, offshore accounts, anonymous shell accounts, and virtual currencies, underscoring risk management.

Explore how money laundering harms society and the economy by compromising banking integrity, enabling organized crime, and eroding political and democratic institutions.

Explore the key organizational bodies leading AML/CTF efforts, including the Egmont Group, Wolfsberg Group, UNODC, and FATF, and how they promote secure information exchange, standards, and coordination.

Learn the aml cft framework under Fatf, including recommendations, risk-based due diligence, kyc programmes, political exposure, source of wealth and funds, sanctions, and reporting to fiu.

Source of wealth explains how a customer's total net worth arises from wealth-generating activities over time, not merely being rich, guiding onboarding and risk assessment under anti-money laundering rules.

Explore how to define source of funds and source of wealth, evidence methods, and when to perform due diligence during onboarding to comply with aml rules.

Identify who qualifies as the ultimate beneficial owner or ultimate controller by analyzing voting rights and shareholding; understand indirect ownership and ubo structures through chains of companies.

Identify the ultimate beneficial owner, a natural person with at least 25% (or 10% by risk) of a company. Understand due diligence and Fatf guidance to prevent money laundering.

Screening ultimate beneficial owners uses adverse media sanctions and politically exposed person checks to prevent opening accounts during onboarding for individuals with criminal history or blacklisted entities.

Identify and screen politically exposed persons (Pep) per Fatf guidelines, maintain a Pep register with close associates, conduct onboarding and periodic screening, assess risk by influence, and use data sources.

Identify when enhanced due diligence applies by evaluating customer risk factors, geographic exposure, and product or transaction features such as private banking, anonymity, or non face to face relationships.

Identify red flags as warning signs of potentially suspicious activity, and report promptly to the AML compliance officer, following FATF recommendation 20 and notifying the FIU.

Learn how to identify suspicious behavior and submit a suspicious activity report to law enforcement. Understand when to file, obligations, and post-submission handling to prevent money laundering and tipping off.

Understand money laundering and terrorist financing, the three phases of the money laundering cycle: placement, layering, and integration—and the concepts of source of wealth and source of funds.