Institutions of all sizes use KYC processes to ensure that they know enough about each person with whom they are doing business. These processes are often necessary to ensure that the institution complies with regulations such as the US Department of Treasury’s Office of Foreign Asset Controls (OFAC) and other asset control regulations applicable in different jurisdictions.
Anti-money laundering laws, regulations, and policies are intended to prevent criminal individuals, organizations and enterprises from shielding illegally obtained funds from scrutiny or disguising them as legitimate legal income. AML rules require that businesses actively take part in preventing and combating money laundering, terrorism financing, and other financial crimes.