Financial information
Money laundering
Money laundering is the illegal process of concealing the source of funds generated by illegal activities (such as drug trafficking, corruption, or economic crimes) and converting them into funds that appear legitimate. This process takes place in three main stages:
1- Deposit:
In this stage, illegal funds are introduced into the financial system.
This stage includes transferring cash into bank deposits or purchasing assets such as real estate and cars.
2-. Camouflage:
The goal of this stage is to make it difficult to trace the source of the funds.
This is done by transferring funds between multiple accounts, conducting fictitious business transactions, or investing in countries with strict banking laws.
3-. Integration:
The funds are returned to the formal economy to appear legitimate.
The funds are used in investment projects or to purchase legal assets.
Anti-Money Laundering
Legislation and laws
Create laws that criminalize money laundering and impose strict penalties.
Financial institutions
Implementing procedures such as Know Your Customer (KYC) and monitoring suspicious transfers.
International cooperation
Exchange of information between countries to pursue those involved.
Compliance
Compliance is adherence to laws, regulations, standards, and policies in place in an organization or industry. Compliance aims to ensure that activities and business are conducted in a legal, ethical, and regulatory-compliant manner.
Compliance Objectives:
- Protect the company from legal and financial penalties.
- Enhance the company’s reputation and build trust with customers and partners.
- Support an ethical and responsible business environment.
- Reducing risks such as corruption, money laundering, or data breaches.
Types of compliance
Legal Compliance
Compliance with national or international laws and regulations, such as taxes and labor laws.
Regulatory Compliance
Comply with rules imposed by industry regulatory bodies, such as banks or insurance companies.
Internal Compliance
Adherence to the company's internal policies and procedures
Financial Control
Financial control is the process of managing and reviewing financial resources to ensure that they are used effectively, legally, and in accordance with established objectives. It aims to enhance transparency, reduce waste, and combat corruption by ensuring compliance with financial policies and laws.
Financial Control Objectives:
Ensuring economic efficiency:
Ensuring maximum utilization of available resources.
Enhancing transparency:
Detecting any suspicious or illegal financial activities.
Ensuring compliance:
Ensuring that institutions adhere to financial laws and regulations.
Maintaining financial stability:
Reducing financial risks and achieving balance in budgets.
The importance of financial control
Anti-corruption
Detect and stop illegal financial activities.
Boost confidence
Building trust between institutions and stakeholders (such as investors and citizens).
Improve financial performance
Reduce costs and improve cash management efficiency.