AML Implication Associated with Trust

Money laundering refers to any process that converts money, or any other property which has been acquired through unclean means such as criminal activities into lawful property that has been acquired in a legitimate manner. On the other hand, Anti money laundering (AML) refers to the set regulation and processes which have been put formulated to curb money laundering. The term trust refers to the legitimate arrangement which gives power to a trustee or another party to acquire properties in place of beneficiaries that involves the specification of when and the way in which the property would be passed to the beneficiary. This paper endeavors to illuminate on the various implications of anti money laundering on Trusts.

Criminal assets may take different forms which include: cash, securities tangible and intangible assets, and money used to fund terrorism. Major money laundering activities include: acquiring and using criminal assets, possessing crime payoffs such as tax evasion and theft, conscious involvement with criminal assets, being part of an arrangement to launder terrorist property, investing crime payoffs in property acquisition and the change of ownership of criminal assets.

At national and international levels there has been an increase in the number of organized crime with money laundering holding the top priority and Trusts being the preferred avenue of money laundering. According to the Bahamian law, it’s upon the responsibility of the trust firms to report any suspicious processes carried out in their firms. Trusts firms which fail to report suspicious transactions would face prosecution in a court of law. Trust firms which consciously take part in money laundering processes could lose their operating license and risk prosecution. The regulations on financial intelligence requires Trusts firm to appoint an officer who will be responsible for money laundering reporting. The regulation further require trust firms to equip its staff with the necessary training to enlighten them on the legal provisions concerning money laundery. According to the crime act proceeds of 2000 a person who conceals or disguises a criminal property would serve a jail term not less than five years or a fine not less than $100,000.

Despite the anti money laundery regulations being in place, money laundering processes have been on the increase. This calls for an amendment on the existing rules in order to make them more specific due to the diversity in the functioning of different Trusts.

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