Anti money laundering (AML) refers to laws and regulations that are designed to prevent the practice of disguising illegally obtained funds as legitimate income. AML regulations are intended to prevent banks and other financial institutions from accepting deposits of issuing credit to people that are suspected of money laundering; the goal being to deter criminals from hiding money that has been obtained through illegal means. AML regulations require financial institutions to monitor transactions made by their customers and to report on any suspicious activity they find.
Criminals often attempt to disguise the money they obtain through illegal activities through an apparently legitimate business (that they own) in order to hide the money’s true origin. They do this by depositing the illicit cash in the business making it look as though it was earned legitimately. This money is deposited in a bank as earnings and the criminals can then access it legitimately.