The Financial Action Task Force (FATF) recently released a special report on professional money launderers (PMLs) who provide money laundering expertise and services. Significantly, PMLs tend to use methods that exploit poorly controlled weaknesses in the larger global AML system, including trade-based money laundering, shell companies, and third-party or proxy agents.
The non-public version of the report outlines practical recommendations for the prevention and detection of related money laundering techniques. A&M recommends emphasis on the following controls to reduce risk exposure:
- Enhanced due diligence for high-risk customers, entities and geographies including third party, agent and carrier due diligence
- Comprehensive Ultimate Beneficial Owner (UBO) disclosures (addressed in part by recent legislation in the US and Europe)
- Investigations of nominee incorporation services-affiliated shell companies
- Automated document scanning, aggregation and analysis solutions
- Leveraging updated technology for ID verification
PMLs have various levels of involvement in the laundering process. Some act more as consultants; others handle discrete, specialized services like providing false documentation or setting up sham companies. Recognizing that the individual PMLs may perform a unique function or perform several roles simultaneously, the Report recognizes the following, non-exhaustive list of functions performed by a given PML: Leading and controlling the direction of the money laundering activities; Introducing and promoting PMLs to prospective clients; Establishing, managing, and maintaining a money laundering infrastructure; Managing documentation necessary to facilitate the laundering process; Transporting goods; Investing or purchasing assets; Collecting illicit funds; and Transmitting illicit funds.