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Anti-Money Laundering (AML) Is a MUST For Precious Metal Recyclers 

Anti-Money Laundering (AML) Is a MUST For Precious Metal Recyclers 

 

AMLMoney laundering is a high risk for all businesses involved in the precious metal recycling industry. AML (Anti-Money Laundering) is a method of preventing criminals from interfering with legitimate businesses. For a variety of reasons, the catalytic converter recycling market is a target for criminals, the most obvious of which is the abundance of readily available catalytic converters. The presence of precious metals in converters, such as platinum, palladium, and rhodium, is becoming more widely recognized. Of course, when it comes to catalytic converters, some criminals are a little more sophisticated and use this industry to launder.  

What Is Money Laundering? 

The process of making illegally obtained earnings appear legal is known as money laundering. The dirty money is metaphorically “washed.” It usually consists of three steps: placement, layering, and integration. To begin with, illegitimate funds are introduced into the legal financial system. The funds are then moved around to confuse people, sometimes by sending money through various accounts. Finally, it is blended into the financial system, mostly through additional transactions, until the “dirty money” shows up “clean.” Money laundering can support various types of organized crime and terrorism and has a negative impact on the global economy. 

The estimated amount of money laundered globally in one year is 2 – 5% of global GDP, or $800 billion – $2 trillion in current US dollars.

How It Can Affect Catalytic Converter Recycling 

Legitimate converters are purchased for cash from automotive shops that inherently obtain scrap converters across the country. The converters found in auto repair shops are typically given to the shop voluntarily after a necessary or requested replacement has been implemented for their customer. Criminals then could mix legitimate converters with illegitimately gathered converters. It is impossible to tell which items are legitimately owned and which are stolen after a load has been mixed. On top of that the buyer of the legitimate converters would have used cash without proper receipt making that purchase untraceable. AML protects legitimate business owners by ensuring that they are not inadvertently facilitating criminal activity.  

Knowing Your Customer 

AML compliance services support businesses by identifying suspicious activity related to criminal acts like money laundering. The very first rule of anti-money laundering is to “know your customer.” At a minimum AML should include the creation and maintenance of written policies and procedures, as well as supervisory controls; the appointment of a compliance officer; education and ongoing employee training for appropriate personnel. By incorporating AML into business, you are protecting it from criminals attempting to launder money through it. Money launderers use money laundering to disguise the true source of their funds, which have been obtained through various criminal activity. 

If you run any type of business that deals with automotive scrap, you must be aware of the legal business practices that we all must adhere to. Incorporating AML will strengthen a company’s legal authority and increase their confidence in doing business in the future. 

RESOURCES

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