Money laundering is a process of legalizing money in which an individual takes steps to disguise the origin of the funds in order to make their nature lawful. Anti-Money Laundering (AML) is a set of measures aimed at preventing the use of the financial system or banks for money laundering or terrorist financing. AML measures and tools are standardized worldwide and implemented by international and national institutions, banks and companies. Every bank and other financial institution, as well as other businesses, must implement anti-money laundering laws and regulations. To obtain a banking license, the bank must approve compliance with AML requirements and provide AML policies. The AML Policy may be updated as needed or in response to current trends in the AML field and current practice.

AML policy core principles
Although the AML policy may differ from bank to bank, the major principles are common customer due diligence procedures (CDD) based on know your client principle. Due diligence procedure is based on client provided information in the questionnaire. Such questionnaire must be frequently updated.. If the person transfers funds significantly exceeding the indicated cash flow - the bank may ask additional questions in order to verify the purpose of such transfer. If the company changes the business profile, it must notify the bank. In addition, if the company starts co-operation with a new company, it must notify the bank in order to provide smooth transfer process. Usually banks or other large financial institutions incorporate a specific department that challenges AML. Such department are called Legal Compliance Department.

AML and customer due diligence definitely affect client's privacy. However, the purpose of investigation is solely based on protection of public interests and prevention of financial crimes and support of terrorism. Consequently, lack of investigation would greatly threaten the internal market of the Europe Union.

Goals of AML policy
AML policy was introduced with the ultimate goal to establish a general framework to fight against money laundering, terrorism, corruption and other financial crimes. The other goal is to protect community from money legalization and to ensure that the organization complies with relevant laws and regulations.

By introducing AML policy, it is planned to provide transparent and trackable cash flow that must be maintained in order to prevent terrorist financing and to control its usage by suspected terrorists and criminal groups and their own financial resources. The full transparency and traceability of transfers of funds is an important and valuable mechanism in the prevention process, identification and investigation of money laundering and terrorist financing. If the bank detects a suspicious transaction,it may freeze the funds until the client provides an explanatory reasoning.