You have these criminals. Drug cartels. They sell their drugs and send the profits back to Colombia where they own the government and are immune from prosecution. The theory is supposed to be that you prevent them from getting the money or using it to pay their operatives in the US, since you can't actually put them in jail.
The problem is that it can't make their business unprofitable. It can't because the demand is relatively inelastic. Heroin addicts gonna buy heroin. You make it less convenient, the price goes up, the drug cartels make more money and use the money to bribe whoever they need to or buy submarines etc. And all the AML rules can ever do is make it more inconvenient to launder their money. Can't ever actually win that way.
It even makes it worse, because higher barriers to entry induce market consolidation. You get bigger, more violent cartels. Because AML drives some producers out of the market, but the others figure out how to evade AML and keep the higher margins from the reduction in competition, and increase their production to satisfy the demand left by the exit of the weaker producers. It puts more money into the hands of the cartels. It's a dumpster fire and should be utterly dismantled.
The answer is to solve the underlying problem. Do the opposite on the supply side; increase competition so much that nobody is making any money at all. Decriminalization. And then address the problem on the demand side through regulation and treatment programs etc. rather than prohibition.