What type of transactions typically require reporting under AML regulations?

Large cash transactions and suspicious activities are the primary types of transactions that typically require reporting under Anti-Money Laundering (AML) regulations. AML frameworks are designed to identify and mitigate the risks associated with money laundering and financial crimes, and large cash transactions often attract scrutiny due to their potential association with illicit activities.

In many jurisdictions, financial institutions are required to report cash transactions that exceed a specific threshold, which indicates significant financial activity that could be part of money laundering schemes. Additionally, suspicious activities—meaning any transaction or behavior that appears irregular or anomalous in the context of a customer's financial pattern—must also be reported, regardless of the transaction amount. This is essential for maintaining compliance with AML laws and fostering a transparent financial system.

The focus on large cash transactions is particularly pertinent as they can be a means to obscure the source of funds, which is a core concern of AML regulations. Hence, institutions are mandated to monitor and report these transactions to help detect and prevent money laundering and associated risks effectively.