Three different kinds of agreement
In commercial contracts, AML terms usually have a counterparty represent that its funds are lawful and promise to cooperate with verification requests, which matters in real estate, art, payments, and other businesses where outside money passes through. Between financial institutions, agreements can let one rely on another for certain customer identification steps, but federal rules allow that reliance only in limited circumstances, and each institution generally remains responsible for its own program. At the other end are resolution agreements, such as consent orders with banking regulators or New York's Department of Financial Services, and deferred or non-prosecution agreements with the Department of Justice. The drafting questions and the stakes are very different across the three.
Reading what you are signing
For commercial AML clauses, the important questions are practical: what information you must provide, whether the other side can freeze or reject payments, and what happens if a bank or regulator asks about a transaction. Overbroad representations can create breach claims later, while vague ones offer little protection. Regulatory resolutions often require remediation, look-back reviews of past transactions, periodic reporting, and sometimes an independent monitor or consultant, and missing a deliverable can bring further action. Admissions in a resolution can also affect civil litigation and how other regulators respond. Ask, too, how the clause interacts with confidentiality and data protection terms elsewhere in the contract.
Negotiating and living with the terms
We help businesses draft and negotiate AML provisions that match how the deal actually works, so they are neither boilerplate nor unworkable in practice. For institutions facing a regulatory resolution, negotiating scope, timelines, and the role of any monitor is often as consequential as the penalty itself. After signing, the work shifts to tracking obligations and documenting compliance so regulators can see progress. If you are reviewing an anti money laundering agreement now, bring the draft and a description of how funds move through the transaction to the first meeting. Changes in the business after signing, such as new products or markets, can make a commitment harder to meet than it looked at the outset.
