AML, KYC, and Sanctions: A Beginner Guide
Understand how anti-money laundering, know-your-customer, and sanctions screening work together.
What Are AML and KYC?
Anti-Money Laundering (AML) and Know Your Customer (KYC) prevent financial crimes. KYC verifies customer identity before establishing a business relationship. AML encompasses broader policies to detect and prevent money laundering.
Where Sanctions Screening Fits
Sanctions screening is critical to both AML and KYC. During onboarding, businesses must verify customers are not sanctioned. Ongoing AML monitoring requires periodic re-screening against updated lists.
Regulatory Landscape
FATF sets international standards adopted by most countries. In the US, the Bank Secrecy Act and PATRIOT Act provide the legal foundation. In the EU, Anti-Money Laundering Directives provide the framework.
Building a Compliance Program
An effective AML program includes risk assessment, written policies, customer due diligence with sanctions screening, transaction monitoring, suspicious activity reporting, staff training, and independent testing.
Technology Solutions
Isarud automates sanctions screening and provides risk intelligence briefs. API integrations embed screening directly into business workflows, making compliance efficient and scalable.