By Linda Athanasiadou, expert in audit, anti-money laundering (AML), and fraud prevention
Anti-Money Laundering (AML) compliance is no longer a regulatory checkbox—it’s a core business function that intersects with operational risk, reputational exposure, and board-level accountability. In 2025, global regulators have expanded expectations, enforcement actions have intensified, and even small compliance gaps can lead to multi-million-dollar penalties, license suspensions, or criminal investigations.
Whether you operate a financial institution, fintech platform, crypto exchange, law firm, or any business with exposure to financial transactions, you are subject to AML obligations. This checklist reflects the current international standards, including the latest updates from the Financial Action Task Force (FATF), EU AML Directives, and national regulators. Each point below is based on existing legal requirements, regulatory guidance, and real-world enforcement trends.

✅ 1. Is Your AML Risk Assessment Current, Documented, and Dynamic?
FATF Recommendation 1 and nearly all national frameworks require a risk-based approach (RBA) to AML. This starts with a comprehensive, documented risk assessment that evaluates the company's exposure across:
Customer types (e.g., high-risk clients, politically exposed persons)
Products and services (e.g., cross-border payments, digital wallets)
Delivery channels (e.g., remote onboarding)
Geographies (e.g., sanctioned jurisdictions, high-risk countries)
In 2025, risk assessments must be dynamic—not one-time exercises. You must update your risk model in response to:
Regulatory changes
Business expansion or new markets
Emerging typologies (e.g., virtual asset abuse, AI-enabled laundering)
Proof of periodic review and board approval is mandatory in many jurisdictions, especially in the EU and under FinCEN guidelines.

✅ 2. Do You Have a Written AML/CTF Policy Aligned with Applicable Law?
Every company subject to AML obligations must have a written AML/CTF (counter-terrorist financing) policy that aligns with its risk profile and legal obligations. This policy must:
Reflect all relevant legal sources (e.g., Bank Secrecy Act, 6th EU AML Directive, national legislation)
Include detailed procedures for due diligence, monitoring, and reporting
Define governance, escalation paths, and internal controls
The policy must be available to staff, regularly reviewed, and updated to reflect legal and regulatory developments. Regulators expect to see version control, training alignment, and formal board adoption.

✅ 3. Is Your Customer Due Diligence (CDD) Framework Fully Implemented?
Under FATF Recommendation 10, CDD is a core AML requirement. As of 2025, the following are minimum standards:
Standard CDD: Identity verification of all customers before entering into a business relationship.
Enhanced Due Diligence (EDD): Applied to high-risk clients, including PEPs, complex ownership structures, and clients from high-risk jurisdictions.
Ongoing Monitoring: Periodic reviews of customer information and transaction behavior, including automated alerts for deviations.
Beneficial Ownership Verification: Identify and verify the natural persons who ultimately own or control the client entity, with documentation.
Non-compliance in CDD is one of the most common causes of AML enforcement action globally. Many countries now mandate electronic identity verification and screening tools, especially for remote onboarding.

✅ 4. Are You Conducting Real-Time Sanctions and PEP Screening?
All AML-regulated businesses must screen customers, vendors, and transactions against:
UN Sanctions Lists
OFAC SDN List (for U.S.-linked entities)
EU Consolidated Sanctions List
National Watchlists
Politically Exposed Persons (PEPs) databases
Screening must be conducted:
At onboarding
On a continuous basis (daily updates from screening providers)
When clients update their information or change ownership
Screening failures led to some of the largest fines in AML history, including Standard Chartered and BNP Paribas. In 2025, regulators expect automated screening with auditable logs—manual spreadsheets are no longer sufficient.

✅ 5. Do You Have an Effective Transaction Monitoring System (TMS)?
A core expectation in 2025 is that companies have a real-time or near-real-time TMS that flags suspicious activity based on:
Amount thresholds
Unusual patterns (structuring, rapid movement, inconsistent with customer profile)
Behavior anomalies (first-time beneficiaries, multiple countries, cash-heavy patterns)
Your TMS must be:
Risk-based (tailored rules by customer segment)
Reviewed regularly and calibrated
Capable of generating alerts for manual review
Integrated with case management and SAR/STR filing
Using a third-party provider is acceptable—but the company remains fully responsible for oversight, configuration, and documentation of the system.

✅ 6. Are You Filing SARs/STRs Correctly and Promptly?
Suspicious Activity Reports (SARs) or Suspicious Transaction Reports (STRs) are mandatory when there is knowledge, suspicion, or reasonable grounds to suspect money laundering, terrorist financing, or predicate offenses.
Key facts for 2025:
Reporting timelines are strictly enforced (e.g., 24–72 hours in many jurisdictions).
Reports must contain complete and accurate details. Boilerplate language or vague narratives are grounds for penalties.
Companies must retain proof of submission and maintain internal logs of deliberation.
Non-reporting of suspicious activity is considered wilful blindness and has resulted in criminal prosecution of compliance officers in several EU and U.S. cases.

✅ 7. Is Your Staff Regularly Trained in AML Obligations and Red Flags?
Training is a statutory requirement under virtually all AML laws. Your program must be:
Role-specific (front-line, onboarding, compliance, IT)
Refreshed at least annually
Supported by records of attendance, testing, and feedback
Updated to reflect current typologies (e.g., trade-based money laundering, virtual assets)
Failure to train adequately has led to findings of systemic compliance failure, even in companies with written policies.

✅ 8. Do You Have a Designated Compliance Officer with Real Authority?
The MLRO (Money Laundering Reporting Officer) or compliance officer must:
Be formally appointed and reported to regulators if required
Have direct access to senior management
Be independent from sales and revenue-generating teams
Oversee the implementation of AML controls, SAR filing, audits, and regulatory reporting
Inadequate authority, understaffing, or lack of access to decision-making has been cited in multiple enforcement cases as a serious compliance failure.

✅ 9. Have You Conducted an Independent AML Audit in the Past 12–24 Months?
FATF and regulatory guidance universally recommend independent testing of AML controls. This can be internal (via separate audit/compliance) or external (third-party firm), but must be:
Comprehensive in scope (policies, systems, transactions, staff interviews)
Documented with findings and action plans
Presented to the board or senior management
Auditors often uncover serious deficiencies in transaction monitoring, documentation, and risk scoring logic. Audits are no longer optional—they are part of proving your AML program is effective in practice, not just on paper.

✅ 10. Do You Maintain Records in Line with Regulatory Requirements?
Recordkeeping obligations vary by jurisdiction, but core requirements include:
Customer due diligence records (typically 5–10 years after relationship ends)
Transaction data
SAR filings and internal deliberations
Training records and audit findings
Data must be securely stored, easily retrievable, and accessible to regulators upon request. Failure to maintain adequate records has led to supervisory sanctions and obstructed investigations.

Final Thoughts
AML compliance in 2025 is not about box-ticking—it is about proving that your systems, staff, and culture can prevent financial crime in a measurable, auditable way. Global regulators have made it clear: if your policies don’t match your practices, you’re exposed.
Using this checklist as a benchmark allows businesses to identify weaknesses before regulators do. It also demonstrates a proactive compliance posture—something increasingly expected by investors, partners, and regulators alike.