Glossary

ABC - Anti-Bribery and Corruption

ACH - Automated Clearing House - A system for digital money transfers from a sender bank to a receiver, established in the middle of the 1970s in the US

ACRA - The Accounting and Corporate Regulatory Authority (Singapore) - A regulatory body under the Ministry of Finance of the Government of Singapore and in charge of regulating businesses, financial reporting, public accountants and corporate service providers

Adverse Media - The negative news stories, reports, social media posts and other online material about an individual or organization

AFF - Advance Fee Fraud - A method of confidence fraud that is perpetrated using letters, emails and faxes that appear to be from officials of a foreign government or any business offer from an existing foreign company

Agent - Any natural or legal person providing MVTS on behalf of an MVTS provider, whether by contract with or under the direction of the MVTS provider

AI - Machine-driven capability to achieve a goal by performing cognitive tasks

AML - Anti-Money Laundering

AML/CTF - Anti-Money Laundering/Counter-Terrorism Financing Rules

AMLA - Anti Money Laundering Act (US) - One of the biggest amendment in the anti-money laundering (AML) laws of the USA since the Patriot Act of 2001

AMLA - Anti-Money Laundering Authority (EU)

AMLD - Anti-Money Laundering Directive - A set of regulatory requirements to fight with money laundering and terrorist financing in Europe created by the European Union

APG - Asia Pacific Group (FSRB)

API - Application Programming Interface

APTs - Asset Protection Trusts

ARS - Alternative Remittance System - The informal financial system to transfer value or money from and to specific geographical locations operating outside the regular and formal financial industry

Asset - Anything an individual or legal entity owns that has a monetary value

AST - Automated Screening Tool - Software systems used by large financial institutions to facilitate the screening process, as opposed to manual screening

ATM - Automatic Teller Machine - An electronic banking outlet that allows customers to complete basic transactions without the assistance of a bank employee

AUSTRAC -Australian Transaction Reports and Analysis Center - Australian Financial Intelligence Unit

AVM - Adverse Media - Any bad and negative information about the customer or business found in various sources

BaFin - Bundesanstalt fur Finanzdienstlestungsaufsicht (Germany) - The federal financial regulatory and supervisory authority of Germany

Bank Secrecy - Laws and regulations in countries that prohibit banks from disclosing information about an account—or even revealing its existence—without the consent of the account holder

Basel AML Index - An independent and research-based annual ranking tool that evaluates the risk of money laundering and terrorist financing in countries worldwide

Basel Committee - Basel Committee on Banking Supervision - An organization established by the G-10's central bank of governors in 1974 to promote sound supervisory standards worldwide

Batch Processing - A type of data processing and data communications transmission in which related transactions are grouped together and transmitted for processing, usually by the same computer and under the same application

Batch Screening - The process of screening a firm's entire customer base and other associated entities, such as vendors, with ASTs on a periodic basis

BCBS - Basel Committee on Banking Supervision

BCS - Bulk Cash Smuggling

Bearer negotiable instruments - Monetary instruments in bearer form such as: traveller’s cheques; negotiable instruments (including cheques, promissory notes and money orders) that are either in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title thereto passes upon delivery; incomplete instruments (including cheques, promissory notes and money orders) signed, but with the payee’s name omitted

Bearer share - Negotiable instruments that accord ownership in a corporation to the person who is in physical possession of the bearer share certificate, a certificate made out to "Bearer" and not in the name of an individual or organization

BEC - Business Email Compromise

Behavioral biometrics - A technology used to analyze the digital cognitive and physical user patterns at the beginning of a transaction to differentiate between legitimate customers and cybercriminals

Beneficial Owner - A natural person who holds the ownership or control of a legal entity although the public title of the owner of the property is in another name

Bill of Exchange - A shipping document that shows the means by which exporters are paid for the goods that are to be shipped, including information such as the names of the exporter, importer, issuing bank, and the bank where the funds will be drawn

Bill of Lading - A required document that a carrier issues as a receipt of cargo

BIN - Bank Identification Number

BIS - Bank for International Settlements

BIS - Bureau of Industry and Security (US) - A section of the US Department of Commerce responsible for ensuring that trade sanctions are properly understood, implemented, and enforced in the United States

BNI - Bearer-Negotiable Instrument

Blacklist - A list of names that are screened to identify any sanctions exposure, in addition to government and vendor-maintained sanctions lists

Blockade - The deployment of military resources by land, air, or sea, by a country or coalition to prevent the movement of goods or people into or out of a targeted country

BMPE - Black Market Peso Exchange - The most extensive money laundering methodologies in the Western Hemisphere

BO - Beneficial Owners - The natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those natural persons who exercise ultimate effective control over a legal person. Only a natural person can be an ultimate beneficial owner, and more than one natural person can be the ultimate beneficial owner of a given legal person

BOI - Beneficial Ownership Information

Boycott - A punitive withdrawal from business or social engagement with a government, organization, or individual as a sign of protest

BSA - Bank Secrecy Act (US) - The primary U.S. anti-money laundering regulatory statute (Title 31, U.S. Code Sections 5311- 5355) enacted in 1970 and most notably amended by the USA PATRIOT Act in 2001

BSBC - Basel Committee on Banking Supervision

BU - Business Unit

CASA de Cambio - A business that offers a range of services such as currency exchange and consolidation of small denomination bank notes into larger ones, exchange of financial instruments such as travelers checks, money orders and personal checks, and telegraphic transfer to money launderers

Cash-Intensive Business - A business in which customers usually pay with cash for the products or services provided, such as restaurants, pizza delivery services, taxi firms, coin-operated machines or car washes. Some money launderers run or use cash-based businesses to commingle illegally obtained funds with cash actually generated by the business

CASPs - Crypto-Asset Service Providers

Cash deposit - A sum of currency deposited in one or more accounts at a financial institution

CCO - Chief Compliance Officer

CDD - Customer Due Diligence - A set of internal controls that enable a financial institution to establish a customer's identity, predict with relative certainty the types of transactions in which the customer is likely to engage, and assess the extent to which the customer exposes it to a range of risks

CEF - Cyber-Enabled Fraud

CFATF - Caribbean FATF (FSRB)

CFT - Combating the Financing of Terrorism - The financing required by terrorists to carry out terrorist acts

Check fraud - A type of financial crime where a fraudster makes an illegal use of checks with the aim of gaining money unlawfully

Clean frauds - Transactions that appear to be legitimate but cannot be detected in a simple way

CLTs - Consolidated List of Terrorists

COAF - Council for Financial Activities Control - Financial intelligence unit in Brazil

Competent authorities - All public authorities with designated responsibilities for combating money laundering and/or terrorist financing

Compliance - An action or state of adhering to a set of legislation, regulations, rules, policy, specifications, or understood norms

Comprehensive sanctions - Sanctions that prohibit all transactions and activity with a sanctioned country by the sanctioning country except in rare, specific instances

Concentration account - An account held by a financial institution in its name, a clearing account is used primarily for internal administrative or bank-to-bank transactions in which funds are transmitted and commingled without personally identifying the originators

Confidentiality - Keeping certain facts, data and information out of public or unauthorized view

Confiscation - The permanent deprivation of funds or other assets by order of a competent authority or a court

Consolidation of goods - A method of sanctions evasion in which a person or organization either groups small shipments into one larger shipment or mixes restricted items in with other goods and does not declare those restricted items in shipping documentation

Control effectiveness - The measurement of the quality of controls used to mitigate a business' inherent risks

Corporate vehicles - Types of legal entities that may be subject to misuse such as private limited companies and public limited companies whose shares are not traded on a stock exchange, trusts, non-profit organizations, limited partnerships and limited liability partnerships, and private investment companies

Correspondent banking - The provision of banking services by one bank (the “correspondent bank”) to another bank (the “respondent bank”)

Counterparty - The other side of a transaction—the seller where one's customer is the buyer, or vice versa

CPF - Counter Proliferation Financing

CPI - Corruption Perceptions Index

CRA - Customer Risk Assessment - A series of evaluations made when a new business relationship or transaction is to be initiated with the customer

Credit card fraud - The fraudulent use of a person’s debit or credit cards to make purchases or withdraw money

Credit card skimming - An illegal technique used by criminals to get access to personal data from ATM, debit, or credit cards via a piece of equipment they place at ATMs or merchant locations

Criminal activity - All criminal acts that would constitute a predicate offence for money laundering in the country; or at a minimum to those offences that would constitute a predicate offence

Criminal law - A branch of law that deals with crimes, their definitions, classifications and the corresponding penalties

Criminal proceeds - A property derived from or obtained, directly or indirectly, through the commission of a crime

CRO - Chief Risk Officer - A position which assumes the pivotal role of fortifying organizations against an array of risks that threaten their stability and prosperity

CRS - Common Reporting Standard

Cryptocurrency fraud - A form of fraud in which criminals aim to get access to personal information like security codes or to deceive a user into transferring cryptocurrency to a broken digital wallet

CSP - Corporate Service Provider

CSSF - The Commission de Surveillance du Secteur Financier (Luxembourg) - The supervisory commission of Luxembourg that monitors and governs the financial industry

CTR - Currency Transaction Reporting - A report that documents a physical currency transaction that exceeds a certain monetary threshold

Currency - Banknotes and coins that are in circulation as a medium of exchange

Currency Smuggling - The illicit movement of large quantities of cash across borders, often into countries without strict banking secrecy, poor exchange controls or poor anti-money laundering legislation

Custodian - A bank, financial institution, or other entity that is responsible for managing, administering, or safekeeping assets for other persons or institutions

Custody - The act of or authority to safeguard and administer clients' investments or asset

DD - Due Diligence - The investigation and examination of a company or group, conducted in the process of preparing for a business transaction

DEA - Drug Enforcement Administration (US)

Delisting - The process of removing a sanctions target from a list after the restrictions imposed on them have been removed

Delivery Channels - The ways in which products and services are provided by a firm to its customer

De-Risking - A strategy that companies apply when they cannot manage the money laundering risks that they have obligations to

Designated categories of offences - Participation in an organized criminal group and racketeering; terrorism, including terrorist financing; trafficking in human beings and migrant smuggling; sexual exploitation, including sexual exploitation of children; illicit trafficking in narcotic drugs and psychotropic substances; illicit arms trafficking; illicit trafficking in stolen and other goods; corruption and bribery; fraud; counterfeiting currency; counterfeiting and piracy of products; environmental crime (for example, criminal harvesting, extraction or trafficking of protected species of wild fauna and flora, precious metals and stones, other natural resources, or waste); murder, grievous bodily injury; kidnapping, illegal restraint and hostage-taking; robbery or theft; smuggling; (including in relation to customs and excise duties and taxes); tax crimes (related to direct taxes and indirect taxes); extortion; forgery; piracy; and insider trading and market manipulation

Designated person or entity - individual, groups, undertakings and entities designated by the Committee of the Security Council established pursuant to resolution 1267 (1999) (the 1267 Committee), as being individuals associated with Al-Qaida, or entities and other groups and undertakings associated with Al-Qaida; individuals, groups, undertakings and entities designated by the Committee of the Security Council established pursuant to resolution 1988 (2011) (the 1988 Committee), as being associated with the Taliban in constituting a threat to the peace, stability and security of Afghanistan, or entities and other groups and undertakings associated with the Taliban; any natural or legal person or entity designated by jurisdictions or a supra-national jurisdiction pursuant to Security Council resolution 1373 (2001); any individual, natural or legal person or entity designated for the application of targeted financial sanctions pursuant to Security Council resolution 1718 (2006) and any future successor resolutions by the Security Council in annexes to the relevant resolutions, or by the Security Council Committee established pursuant to resolution 1718 (2006) (the 1718 Sanctions Committee) pursuant to Security Council resolution 1718 (2006); and any natural or legal person or entity designated for the application of targeted financial sanctions pursuant to Security Council resolution 2231 (2015) and any future successor resolutions by the Security Council

Designation - The identification of a person, individual or entity that is subject to targeted financial sanctions pursuant to: United Nations Security Council resolution 1267 (1999) and its successor resolutions; person or entity and the public communication of that determination; Security Council resolution 1718 (2006) and any future successor resolutions; Security Council resolution 1373 (2001), including the determination that the relevant sanctions will be applied to the person or entity and the public communication of that determination; Security Council resolution 2231 (2015) and any future successor resolutions; and any future Security Council resolutions which impose targeted financial sanctions in the context of the financing of proliferation of weapons of mass destruction

DHS - Department of Homeland Security (US)

DIFC - The Dubai International Financial Centre - A financial hub for the Middle East, Africa, and South Asia (MEASA) areas that incorporates 72 countries with a population around 3 billion people and GDP of $8 trillion

Dilution of Sanctioned Ownership - Complex ownership structures involving multiple entities in different jurisdictions can reduce the percentage of a business that is owned by a sanctioned party so that it falls below thresholds which would prevent trade

DOJ - Department of Justice (US)

Dollar Clearing - The process of converting clients' payments from a foreign currency into US dollars

Domestic PEPs - individuals who are or have been entrusted domestically with prominent public functions, for example Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations, important political party officials

Domestic Transfer - Electronic funds transfer in which the originator and beneficiary institutions are located in the same jurisdiction

DOS - Department of State (US)

DPMS - Dealers in Precious Metals or Stones - Businesses or individuals who buy, sell, or trade in precious metals or precious stones for the purpose of business or trade

DNFBPs - Designated Non-Financial Businesses & Professions - casinos; real estate agents; dealers in precious metals; dealers in precious stones; lawyers, notaries, other independent legal professionals and accountants; Trust and Company Service Providers

DPL - Denied Persons List (US) - A list, published by BIS, of individuals, entities, or companies that have been denied export privileges, most commonly because they have violated the Export Administration Act

Dual Control - A principle whereby at least two employees are required in order to complete an internal control task

DUG - Dual-Used Goods - The products or technology that can be used for either military or civilian purposes

EAG - Eurasian Group (FSRB)

EBA - European Banking Authority (EU) - An EU authority that regulates and supervises the banking sector across Europe to ensure financial stability and protect consumers

ECG - Evaluation and Compliance Group (FATF)

Economic Sanctions - The imposition of trade or financial restrictions and penalties by one or more countries against another country, entity, or individual with the purpose of changing a behavior

ECJU - Export Control Joint Unit (UK) - A UK-based agency responsible for administering licenses for export controlled goods (military and dual-use) that might otherwise be involved in an embargo

ECR - Enhanced Country Risk

EDD - Enhanced Due Diligence - An advanced KYC procedure that provides further risk investigation to detect high-risk customers and large transactions

EFT - Electronic Funds Transfer - The movement of funds between financial institutions electronically

Egmont group - An organization that consists of a numerous national of financial intelligence units (FIUs) that meet regularly to find ways to promote the development of FIUs and to cooperate, especially in the area of information exchange, training and the sharing of expertise

eIDV - Electronic Identification & Verification - A process of verifying a person's identity through electronic means

Embargo - An official government action to ban trade or commercial activity with a specific country, sometimes involving a specific trade product

Embezzlement - The unlawful act of taking or misappropriating funds entrusted by an employer or organization for one's own use

e-money - Electronic Money - Electronic cash represents a series of monetary value units in some electronic format, such as being stored electronically online, on the hard drive of a device, or on the microchip of a plastic card

End-User Certificate - A shipping document used to certify that a buyer is the final recipient of the materials and is not planning to transfer the materials to another party

EPI - The European Payments Initiative (EU) - A consolidated digital payments service that is supported by the European Commission, 14 European banks, and 2 payment service providers including all the leading banks from France and Deutsche Bank of Germany

ESAAMLG - Eastern and Southern Africa Anti-Money Laundering Group (FSRB)

ESG - Environmental, Social and Governance - Responsible investment strategies focusing on these factors

EU - European Union - A politico-economic union of member states located primarily in Europe

EU AML Package - A set of legislative proposals prepared by the European Commission and adopted by the European Union to strengthen its AML/CTF framework

Europol - The EU's law enforcement agency

Evasion - The act of avoiding or circumventing sanctions to engage in prohibited activity without being caught

Exclusions list - A list of names that are excluded from the screening process

Ex parte - proceeding without prior notification and participation of the affected party

Express trust - A trust clearly created by the settlor, usually in the form of a document e.g. a written deed of trust

Extradition - The surrender by one jurisdiction to another of an accused or convicted person under an agreement that specifies the terms of such exchanges

Extraterritorial Jurisdiction - A state making, applying, and enforcing laws, regulations, and other rules of conduct in respect to persons, property, or activity beyond its territory

Facilitation - Actions taken by one person to assist or support another person in engaging in activity

False Negative - A hit that is identified during the screening process as a possible alert, but is dismissed, when in fact there is a match to a target named on a sanctions list; or a screened activity that would have generated a hit if the screening process had been calibrated to catch such activity, such as a target match that is unidentified because thresholds are too high

False Positive - A hit identified during the screening process as a possible alert, but when reviewed, is found not to be a match to a target named on a sanctions list

FATCA - Foreign Account Tax Compliance Act (US) - A law that requires American citizens to provide details of their financial accounts outside the U.S. to the IRS

FATF - Financial Action Task Force - An intergovernmental organization established in 1989 by members of the G7 to develop standards around AML

FCA - Financial Conduct Authority (UK) - An organization that regulates financial firms and markets in the UK and acts as a warning regulator for these organizations

FDS - Fraud Detection System

FFIEC - Federal Financial Institutions Examination Council (US)

Final Rule Part 504 - Regulations issued by the New York State Department of Financial Services (DFS) on June 30, 2016, to emphasize the need for sound transaction monitoring and filtering programs (US)

FinCEN - Financial Crimes Enforcement Network (USA) - A department that collects and examines monetary transactions to prevent money laundering and terrorist financing

FINTRAC - Financial Transactions and Reports Analysis Centre of Canada (Canada)

Foreign counterparts - Foreign competent authorities that exercise similar responsibilities and functions in relation to the cooperation which is sought, even where such foreign competent authorities have a different nature or status (e.g. depending on the country, AML/CFT supervision of certain financial sectors may be performed by a supervisor that also has prudential supervisory responsibilities or by a supervisory unit of the FIU)

Forfeiture - The involuntary loss of property or assets as a result of legal action

FRAML - Fraud and Anti-Money Laundering

Fraudulent charities - Organizations that solicit donations to help the public, but collect them deceptively or use the money for purposes that the donors did not intend

Freeze - Prohibit the transfer, conversion, disposition or movement of any property, equipment or other instrumentalities on the basis of, and for the duration of the validity of, an action initiated by a competent authority or a court under a freezing mechanism, or until a forfeiture or confiscation determination is made by a competent authority

Front company - A business set up and controlled by another organization

FSRBs - FATF-Style Regional Bodies

FIs - Financial Institutions

FIU - Financial Intelligence Unit - A central national agency responsible for receiving, analyzing, and transmitting disclosures on suspicious transactions to appropriate authorities

FSE - Foreign Sanctions Evader - A foreign individual or entity determined to have violated, attempted to violate, conspired to violate, or caused a violation of US sanctions

FTZ - Free Trade Zone - Delimited geographic areas within a country with zone management that provides infrastructure and services to tenant companies

Fundamental principles of domestic law - The basic legal principles upon which national legal systems are based and which provide a framework within which national laws are made and powers are exercised

Funds - assets of every kind, whether corporeal or incorporeal, tangible or intangible, movable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such assets

Fuzzy Logic - A matching technique used by financial institutions to increase the effectiveness of the screening processes by overcoming problems such as flawed records and databases

FX - Foreign Exchange Market

GAFILAT - Groupe d'action financière (FSRB)

GAFISUD - Groupe d'action financière (FSRB)

Gatekeepers -Professionals such as lawyers, notaries, accountants, investment advisors, and trust and company service providers who assist in transactions involving the movement of money, and are deemed to have a particular role in identifying, preventing and reporting money laundering

GDPR - General Data Protection Regulation (EU)- A regulation that aims to protect all personal or professional data of the citizens of the EU member countries

GenAI - AI systems that can create new content. The most popular models, such as ChatGPT, generate text and images from text prompts, but some use other inputs such as images to create audio, video, and images

GIABA - Inter Governmental Action Group against Money Laundering in West Africa (FSRB)

Grandparents scam - A form of fraud that is highly common and also successful as it targets the emotional vulnerabilities of elders by abusing their love for their grandchildren

GRC - Governance, Risk & Compliance

GNCG - Global Network Coordination Group (FATF)
Governance - Governance is the allocation of power and decision-making authority among the board of directors and management to establish internal controls for the purposes of managing risk and compliance with laws, regulations, and internal policies

Grantor - The party who transfers title or ownership of property or assets. In a trust, typically the person who creates or funds the trust

GTO - Geographic Targeting Orders (US) - A tool used by the Financial Crimes Enforcement Network (FinCEN) to detect money laundering in real estate sector

Hawala - An informal value transfer system common in the Middle East, North Africa, and the Indian sub-continent

Hawalada - A hawala broker

Hit - A potential match or name match during the sanctions screening process that indicates a possible sanctioned person

HKMA - Hong Kong Monetary Authority (HK)

HM Revenue and Customs - The tax, payments, and customs authority of the United Kingdom

HMT - His Majesty’s Treasury (UK)

HNWI - High Net Worth Individual

Human Rights - The fundamental rights of humans which are conceived to be inherent to all human beings regardless of race, sex, nationality, ethnicity, language, religion, or any other status

Human Smuggling - The transport or illegal entry of a person across international borders in contravention of one or more countries' laws

Human Trafficking - The trade of humans, most commonly for the purpose of sexual slavery, forced labor or commercial sexual exploitation

IBC - International Business Company - A variety of offshore corporate structures, which are dedicated to business use outside the incorporating jurisdiction and feature rapid formation, secrecy, broad powers, low cost, low to zero taxation and minimal filing and reporting requirements

ICRG - International Cooperation Review Group (FATF)

Identification data - Reliable, independent source documents, data or information

Identifier - Type of information about a sanctions target that is recorded on a sanctions list, for example, name, date of birth, jurisdiction, national identification number, entity with which a target is linked, information about penalties imposed against a target, registered legal address, and website URL

ID Wallet - A digital system designed to securely keep personal data including identity information and documents, preferred payment methods, and other crucial data while enabling users to gain access to the global economy

ID&V - Identification & Verification

IEEPA - International Emergency Economic Powers Act (US) - An agreement that allows the president to use executive authority over emergencies even at peacetime

International sanctions - Restrictions on trade and economic relations between individuals, organizations or countries based on specific reasons

IVTS - Informal Value Transfer System

IBC - International Business Company

IMF - International Monetary Fund - An organization of more than 180 member countries, the IMF works to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world

Imposter scam - A method used by criminals to commit identity theft or gain illegal funds by calling, texting, or emailing victims and acting like they are someone of high authority like a government official, a business, or a charity

Inequalities list - A list of names that have the potential to be mistaken by the automated screening tools and to create false matches with the names on the sanction lists

International organizations - Entities established by formal political agreements between their member States that have the status of international treaties; their existence is recognized by law in their member countries; and they are not treated as resident institutional units of the countries in which they are located

Investigation - The process of obtaining, evaluating, recording, and storing information about an individual or legal entity with whom one is conducting business, in response to an alert indicating a possible sanctions violation

ISO 20022 - A framework that harmonizes financial information exchange, improving connectivity and accessibility within the financial system

Isolation Company - A company that helps evaders avoid the appearance of involvement of either a sanctioned entity or an entity that is trying to do business with a sanctions target

IRS - The Internal Revenue Service (US) - An administrative body of the United States federal government for the collection of the taxes and implementation of the Internal Revenue Code effectively within the country

IWL - Internal Watchlist

JMLIT - Joint Money Laundering Intelligence Taskforce (UK)

JMLSG - Joint Money Laundering Steering Group (UK)

Jurisdiction of Citizenship - The country in which an individual is a legal citizen

Jurisdiction of Residence - The country in which an individual resides most of the time; the country in which an individual lives in his or her primary residence

Kleptocrat - A corrupt leader who exploits the people and resources of a state for personal gain

KoFIU - Korea Financial Intelligence Unit (ROK)

KY3P - Know Your Third Party

KYB - Know Your Business - The process for identifying the businesses or the legal representative of a business and verifying that they are not involved in financial crimes such as money laundering and terrorist financing

KYC - Know Your Customer - A control procedure that financial institutions apply to verify the identities of their existing and new customers.

KYCC - Know Your Customer’s Customer

KYE - Know Your Employee - A control procedure that financial institutions apply to acquire a knowledge and understanding of the employees of an institution for the purpose of detecting conflicts of interests, money laundering, past criminal activity and suspicious activity

KYS - Know Your Supplier - A process that focuses on ensuring transparency and compliance in the supply chain

KYT - Know Your Transaction - The process of reviewing financial transactions for fake or suspicious activities like money laundering

Layering - The second phase of the classic three-step money laundering process between placement and integration, layering involves distancing illegal proceeds from their source by creating complex levels of financial transactions designed to disguise the audit trail and to provide anonymity

LC - Letter of Credit

LEA - Law Enforcement Agency

Legal arrangements - Express trusts and other similar legal arrangements

Legal persons - Any entities other than natural persons that can establish a permanent customer relationship with a financial institution or otherwise own property

Legal Risk - Risk defined by the 2001 Basel Customer Due Diligence for Banks Paper as the possibility that lawsuits, adverse judgments or contracts that cannot be enforced may disrupt or harm a financial institution

Letter of Credit - A credit instrument issued by a bank that guarantees payments on behalf of its customer to a third party when certain conditions are met

LLC - Limited Liability Company (US) - A specifically defined type of business in the United States, in which personal liability is separated from corporate liability

LLM - Models trained on large volumes of text-based data, typically from the internet

LOD - Line of Defense

Look-Back - The process of looking back at a customer's transaction activity over a specific time period in the past

Mandatory Sanctions Lists - Supranational sanctions lists, such as those including targets designated by the United Nations Security Council Resolutions (UNSCR), which must be screened against

MAS - Monetary Authority of Singapore (Singapore) - The central bank and financial regulator of Singapore

MENAFATF - Middle East and North Africa FATF (FSRB)

MER - Mutual Evaluation Report - Reports giving an in-depth description and analysis of a country's systems for limiting financial crimes based on FATF recommendations

METI - Ministry of Economy, Trade and Industry (Japan)

MFSA - Malta Financial Services Authority (Malta) - The only banking and finance sector supervisor in Malta

MFA - Multi-Factor Authentication - A security process that requires users to provide two or more forms of authentication in order to access a system or application

MiFID - Markets in Financial Instruments Directive

Mirror Trades - A type of trade that involves buying securities in one currency and then selling identical ones in another currency

MOU - Memorandum of Understanding - Agreement between two parties establishing a set of principles that govern their relationship on a particular matter

ML - Money Laundering - The process of turning the profit of illegal financial activity into a legitimate form

MLAT - Mutual Legal Assistance Treaty - Agreement among countries allowing for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial resources in the respective countries, in private and public sectors, for use in official investigations and prosecutions

MLCA - Money Laundering Control Act of 1986 (US)

MLRO - Money Laundering Reporting Officer - An authorized person in a company to control and report its activities regarding AML compliance

MLSA - Money Laundering Suppression Act of 1994 (US)

MSB - Money Service Businesses - Business dealing currency exchange and money transfer transaction

Money Mule - A person who transfers money acquired illegally in person, through courier service on behalf of others and receives a fee in return

Monetary Instruments - Travelers checks, negotiable instruments, including personal checks and business checks, official bank checks, cashier's checks, promissory notes, money orders, securities or stocks in bearer form

Money Order - A monetary instrument usually purchased with cash in small denominations

Monitoring - An element of an institution's anti-money laundering program in which customer activity is reviewed for unusual or suspicious patterns, trends or outlying transactions that do not fit a normal pattern

MONEYVAL - Committee of Experts on the Evaluation of Anti-Money Laundering Measures & the Financing of Terrorism (FSRB) - A body of the Council of Europe that evaluates compliance with international standards against money laundering and financing terrorism

MVTS - Money or Value Transfer Service(s) - Financial services that involve the acceptance of cash, cheques, other monetary instruments or other stores of value and the payment of a corresponding sum in cash or other form to a beneficiary by means of a communication, message, transfer, or through a clearing network to which the MVTS provider belongs

Name Screening - The process of matching an internal record against a sanctioned list record, either manually or through an automated screening tool

Naming Conventions - The ways in which an individual's name is given to or used by him or her

NCA - The National Crime Agency (UK) - A law enforcement agency in the United Kingdom that is dedicated to tackling serious and organized crime, including financial crime such as money laundering

Nesting - The practice where a respondent bank provides downstream correspondent services to other financial institutions and processes these transactions through its own correspondent account

NFTs - Non-fungible tokens - Unique digital assets that represent ownership of a particular thing, like a piece of art, music, or collectibles which means that the NFTs cannot be exchanged with each other as they carry incomparable values

NIS - National Intelligence Service (ROK)
NGOs - Non-Governmental Organizations

Non-conviction based confiscation - confiscation through judicial procedures related to a criminal offence for which a criminal conviction is not required

Nominator - An individual (or group of individuals) or legal person that issues instructions (directly or indirectly) to a nominee to act on their behalf in the capacity of a director or a shareholder, also sometimes referred to as a “shadow director” or “silent partner”

Nominee director - An individual or legal entity that routinely exercises the functions of the director in the company on behalf of and subject to the direct or indirect instructions of the nominator

Nominee shareholder - an individual or legal entity that routinely exercises the associated voting rights according to the instructions of the nominator and/or receives dividends on behalf of the nominator

NRA - The National Risk Assessment - A process conducted by the governments to fight risk-based money laundering and terrorist financing crimes by detecting, controlling, minimizing, and removing the risks

NPOs - Non-Profit Organizations

NRA - National Risk Assessment

OCC - Office of the Comptroller of the Currency, Department of the Treasury (US) - An independent bureau of the U.S. Department of the Treasury that has the authority to license, regulate and administer all the national banks, federal savings associations and branches, and foreign bank agencies in the United States

OECD - Organization for Economic Cooperation and Development - International organization that assists governments on economic development issues in the global economy

OFAC - Office of Foreign Asset Control, Department of the Treasury (US) - The agency within the US Department of the Treasury responsible for administering and enforcing economic sanctions issued as part of US foreign policy and by international organizations like the United Nations against targeted foreign countries

OFC - Offshore Financial Center - Institutions that cater to or otherwise encourage banks, trading companies, and other corporate or legal entities to physically or legally exist in a jurisdiction but limit their operations to offshore

Offshore Banking License - A license that prohibits a bank from doing business with local citizens or in local currency as a condition of its license

OFSI - Office of Financial Sanctions Implementation (UK)

OFSI - Office of the Superintendent of Financial Institutions (Canada) - The primary agency regulating financial institutions in Canada

Ongoing Due Diligence - The continuous process of screening the financial activities and risk profile of a customer even after the initial due diligence phase has been completed

Ongoing monitoring - The continuous process of reviewing and assessing a customer’s financial activity to ensure that it is consistent with the customer’s known legitimate business and personal activities, and to identify any suspicious activity that may indicate money laundering or terrorist financing

OOL - Other Official List

Operational Risk - The risk of direct or indirect loss of operations due to inadequate or failed internal processes, people or systems, or as a result of external events

Originator - The account holder or, where there is no account, the person which places the order with the financial institution to perform the wire transfer

Payment fraud - The conduct of a financial transaction without the consent of the beneficial owner of the asset in which the transaction takes place

Payment screening - A method of screening that focuses on screening payment messages

PDG - Policy Development Group (FATF)

PEPs - Politically Exposed Persons - individuals who are or have been entrusted with prominent public functions by a foreign country, for example Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations, important political party officials

PIC - Private Investment Company - A type of corporation that is often established in an offshore jurisdiction with tight secrecy laws to protect the privacy of its owners

Placement - The physical disposal of proceeds derived from illegal activity, which is known as the first phase of the money laundering process

PMLs - Professional Money Launderers

PPP - Public Private Partnership

PRA - Prudential Regulation Authority (UK)

Predicate crimes - Specified unlawful activities whose proceeds, if involved in the subject transaction, can give rise to prosecution for money laundering

Private banking - A department in a financial institution that provides high-end services to wealthy individuals

Proceeds - Any property derived from or obtained, directly or indirectly, through the commission of an offence

Procurement fraud - A type of scam generally conducted by a government employee or a contractor in the form of a wilful or deliberate execution of a scheme to swindle the government or to gain illegal financial benefits

Property - Assets of every kind, whether corporeal or incorporeal, moveable or immoveable, tangible or intangible, and legal documents or instruments evidencing title to, or interest in such assets

PSC - Person with Significant Control

PSP - Payment Services Provider

PTA - Payable-Through Account - Transaction account opened at a depository institution by a foreign financial institution through which the foreign institution's customers engage, either directly or through subaccounts, in banking activities and transactions in such a manner that the financial institution's customers have direct control over the funds in the account

R. - Recommendation

RA - Risk Assessment - A process that allows a business to identify and assess the extent to which it may be exposed to risks

Ransomware - A type of malicious software that prevents totally or limits users from accessing their data, making it unusable until a ransom is paid, usually in the form of cryptocurrency

RBA - Risk-Based Approach - The evaluation of the differing risks that can be related to various kinds of businesses, customers, accounts and transactions to make sure that the scope and effect of the anti-money laundering program are widened to maximum efficiency

RCAs - Relatives and Close Associates

Reasonable measures - Appropriate measures which are commensurate with the money laundering or terrorist financing risks

Red flag - A warning signal that should bring attention to a potentially suspicious situation, transaction or activity

Refund Fraud - A type of financial fraud where an individual deceitfully applies for a refund from a business or institution

RegTech - Regulatory Technology - The incorporation of the necessary technologies to facilitate the fulfillment of regulatory requirements

Regulatory Agency - A government entity responsible for supervising and overseeing one or more categories of financial institutions

Remittance - A payment of money which is sent to another party

Remittance services - Businesses that receive cash or other funds that they transfer through the banking system to another account

Reputational risk - The potential that adverse publicity regarding a financial institution's business practices and associations, whether accurate or not, will cause a loss of confidence in the integrity of the institution
Respondent bank - A bank for which another financial institution establishes, maintains, administers or manages a correspondent account

Return Fraud - The act of returning merchandise to a retailer that is not paid for in the first place in order to gain undue benefit and abuse the return policy of a business

Risk - The risk of money laundering and/or terrorist financing

Risk appetite - The amount of risk that a firm is willing to accept in pursuit of value or opportunity

RM - Risk Management

RNC - Risk and Compliance

RPA - Robotic Process Automation - A software technology designed to simplify the processes of creating, executing and managing software robots for the purpose of mimicking human interactions with digital systems and software

RTMG - Risk, Trends and Methods Group (FATF)

Safe Harbor - Legal protection for financial institutions, their directors, officers and employees from criminal and civil liability for breach of any restriction on disclosing information imposed by contract or by any legislative, regulatory or administrative prohibition, if they report their suspicions in good faith to the Financial Investigation Unit, even if they did not know precisely what the underlying criminal activity was, and regardless of whether illegal activity actually occurred

SAN - Sanctioned Individual

Sanctions - Punitive or restrictive actions taken by individual countries, regimes, or coalitions with the primary purpose of provoking a change in behavior or policy

Sanctions compliance - The act of adhering to the sanctions-related legislation, regulations, rules, and norms that make up the complex sanctions landscape

Sanctions evasion - The deliberate attempt to remove or conceal the involvement of sanctioned places, entities, or individuals in a transaction or series of transactions

Sanctions list - A document or database listing individuals, legal entities, and countries with whom it is illegal to do business

Sanctions regime - A set of sanctions that have a common nexus or theme

SAR - Suspicious Activity Report

SCP Sanctions Compliance Program - A program run by a firm to comply with regulator expectations concerning sanctions compliance and to manage the firm's sanctions risk

SDD - Sanctions Due Diligence - A similar process to Customer Due Diligence that focuses on the risks specific to sanctions, taking into account governance and risk assessment

SDD - Simplified Due Diligence - A less comprehensive and the most basic form of Customer Due Diligence applied by financial institutions when the risk of money laundering or terrorist financing is weak

SDJ - Strategic Deficiencies Jurisdictions

SDNs - Specially Designated Nationals (US) - Individuals, groups, businesses or entities that are classified under non country-specific programs and sanctions such as the narcotics traffickers or terrorists

SDN List - Specially Designated Nationals and Blocked Persons List (US) - A list of individuals and companies, published by OFAC, that are owned, controlled by, or acting on behalf of a targeted country

SDNT - Specially Designated Narcotics Trafficker

SDNTK - Specially Designated Narcotics Trafficking Kingpin

Seize - Prohibit the transfer, conversion, disposition or movement of property on the basis of an action initiated by a competent authority or a court under a freezing mechanism

Senior Foreign Political Figure - U.S. term for foreign politically exposed persons

Settlor - Natural or legal persons who transfer ownership of their assets to trustees by means of a trust deed or similar arrangement

Shelf company - A company that has been created months or years ahead of time, often by a law firm or an accounting firm

Shell bank - A bank that has no physical presence in the country in which it is incorporated and licensed, and which is unaffiliated with a regulated financial group that is subject to effective consolidated supervision

SI - Special Interest

SIE - Special Interest Entity

SIP - Special Interest Person

Smurfing - A commonly used money laundering method, smurfing involves the use of multiple individuals and/or multiple transactions for making cash deposits, buying monetary instruments or bank drafts in amounts under the reporting threshold

Social benefits fraud - An individual’s deliberate act of claiming rights for the benefits they are not entitled to

Social engineering fraud - A form of scam when fraudsters use manipulative ways to trick individuals into sharing personal or sensitive information to gain illegal money or obtain confidential information to commit a successive crime

SoF - Source of Funds - The origin of the money involved in a payment transaction or investment

SRO - Self-Regulated Organizations - A body, also known as SRB (Self-Regulated Body), that represents a professions, and which is made up of members from the profession, has a role in regulating the persons that are qualified to enter and who practice in the profession, and also performs certain supervisory or monitoring type functions. Such bodies should enforce rules to ensure that high ethical and moral standards are maintained by those practicing the profession

Sting operation - Investigative tactic in which undercover officers pose as criminals, sometimes through a front business, to win the confidence of suspected or known criminals to gather information and to obtain evidence of criminal conduct

STR - Suspicious Transaction Report - A government filing required by reporting entities that includes a financial institution's account of a questionable transaction

Straw man - A non-sanctioned person with a low public profile who acts for or stands in the place of a sanctions target

String matching - An algorithm for efficient searching that involves finding occurrence(s) of a pattern string within another string or body of text

Structuring - Illegal act of splitting cash deposits or withdrawals into smaller amounts, or purchasing monetary instruments, to stay under a currency reporting threshold

SUA - Specified Unlawful Activity

Subpoena - Compulsory legal process issued by a court to compel the appearance of a witness at a judicial proceeding, sometimes requiring the witness to bring specified documents

Supervisors - The designated competent authorities or non-public bodies with responsibilities aimed at ensuring compliance by financial institutions (“financial supervisors”) and/or DNFBPs with requirements to combat money laundering and terrorist financing

Suspicious Activity - Irregular or questionable customer behavior or activity that may be related to a money laundering or other criminal offense, or to the financing of a terrorist activity

S.W.I.F.T. - Society for Worldwide Interbank Financial Telecommunications - An organization that provides a messaging network that financial institutions use to securely transmit information and instructions

Targeted sanctions - Sanctions designed to achieve a particular result by acting against a particular target

Tax Haven - Countries that offer special tax incentives or tax avoidance to foreign investors and depositors

TBML - Trade-Based Money Laundering - The criminal method used by money launderers to abuse the international trade system for disguising the proceeds of crime and moving value

TCSPs - Trust and Corporate Service Providers

Terrorist - Any natural person who: commits, or attempts to commit, terrorist acts by any means, directly or indirectly, unlawfully and wilfully; participates as an accomplice in terrorist acts ; organizes or directs others to commit terrorist acts ; or contributes to the commission of terrorist acts by a group of persons acting with a common purpose where the contribution is made intentionally and with the aim of furthering the terrorist act or with the knowledge of the intention of the group to commit a terrorist act

Terrorist act - An act which constitutes an offence within the scope of, and as defined in one of the following treaties: Convention for the Suppression of Unlawful Seizure of Aircraft (1970); Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation (1971); Convention on the Prevention and Punishment of Crimes against Internationally Protected Persons, including Diplomatic Agents (1973); International Convention against the Taking of Hostages (1979); Convention on the Physical Protection of Nuclear Material (1980); Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation, supplementary to the Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation (1988); Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation (2005); Protocol for the Suppression of Unlawful Acts against the Safety of Fixed Platforms located on the Continental Shelf (2005); International Convention for the Suppression of Terrorist Bombings (1997); and International Convention for the Suppression of the Financing of Terrorism (1999). and/or any other act intended to cause death or serious bodily injury to a civilian, or to any other person not taking an active part in the hostilities in a situation of armed conflict, when the purpose of such act, by its nature or context, is to intimidate a population, or to compel a Government or an international organization to do or to abstain from doing any act.

Terrorist organizations - Any group of terrorists that: commits, or attempts to commit, terrorist acts by any means, directly or indirectly, unlawfully and wilfully; participates as an accomplice in terrorist acts; organizes or directs others to commit terrorist acts; or (iv) contributes to the commission of terrorist acts by a group of persons acting with a common purpose where the contribution is made intentionally and with the aim of furthering the terrorist act or with the knowledge of the intention of the group to commit a terrorist act

Testimony - Witness' oral presentation, usually under oath, that describes facts known to the witness

TF - Terrorist Financing - The financing of terrorist acts, and of terrorists and terrorist organizations

TFS - Targeted Financial Sanctions - Both asset freezing and prohibitions to prevent funds or other assets from being made available, directly or indirectly, for the benefit of designated persons and entities

Threshold calibration - A specific technique of re-arranging the thresholds in the algorithms of a screening tool for creating a logical harmony with the biggest areas of the sanctions risks of the financial institutions

TI - Transparency International - A Berlin-based, non-governmental organization dedicated to increasing government accountability and curbing both international and national corruption

Tipping off - Improper or illegal act of notifying a suspect that he or she is the subject of a Suspicious Transaction Report or is otherwise being investigated or pursued by the authorities

Title fraud - A fraud committed by a fraudster who illegally changes the title of a property as his own or someone else’s without the knowledge or approval of the actual owners

Toll Gates - The various parties that form the payment chain

TPPP - Third-party Payment Processors

Transaction Laundering - A type of money laundering used by illicit businesses to process their transactions via a legitimate business

Transshipment - The shipment of goods through intermediate countries, sometimes involving transfer from one vessel to another, before reaching an intended destination

Trust - Arrangement among the property owner, a beneficiary and a manager of the property (the trustee), whereby the trustee manages the property for the benefit of the beneficiary in accordance with terms set by the grantor

Trustee - A paid professional or company or unpaid person that holds the assets in a trust fund separate from the trustee's own assets

TMS - Transaction Monitoring System

2FA - Two-factor authentication - A type of authentication process that requires two types of authentic evidence from the users to verify their identity

UBO - Ultimate Beneficial Owner - The state of an ownership by a natural person who owns or controls a legal entity, such as a company, trust, or partnership or another person or an arrangement

UN - United Nations - An international organization that was established in 1945 by 51 countries committed to preserving peace through cooperation and collective security

UNSC - United Nations Security Council

UN Security Council Resolution 1373 (2001) - A resolution requires member nations to take a series of actions to combat terrorism through the adoption of laws and regulations and the establishment of administrative structures, which was adopted in 2001

UNSCR - United Nations Security Council Resolution

Unusual Transaction - Transaction that appears designed to circumvent reporting requirements, is inconsistent with the account's transaction patterns or deviates from the activity expected for that type of account

URL - Uniform Resource Locator

USA PATRIOT Act - The historic U.S. law brought about momentous changes in the anti-money laundering field, including more than 50 amendments to the Bank Secrecy Act

U-Turn Payment - A payment in which a bank or other institution from country A sends a transaction through a bank in country B using an offshore bank

VA - Virtual Asset - A digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes

VASPs - Virtual Asset Service Providers - Any natural or legal persons who conducts one or more of the following activities or operations for or on behalf of another natural or legal person: exchange between virtual assets and fiat currencies; exchange between one or more forms of virtual assets; transfer of virtual assets; safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets; and participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset

VDD - Vendor Due Diligence - A process of financial review of a sale on behalf of the seller that provides the potential buyers with a detailed analysis about the business they are planning to purchase

VIBAN - Virtual International Bank Account Number

Vienna Convention - A Convention agreed in 1988 against the Illicit Trade in Narcotic Drugs and Psychotropic Substances

Virtual Currency - A medium of exchange that operates in the digital space that can typically be converted into either a fiat or it can be a substitute for real currency

VPN - Virtual Private Network

WB - World Bank

WBL - Watch and BlackList

Whitelist - A specific group of individuals or entities that are alerted by an automated screening tool due to specific characteristics

Willful blindness - Legal principle that operates in money laundering cases in the U.S. and is defined by courts as the "deliberate avoidance of knowledge of the facts" or "purposeful indifference"

Wire transfer - Electronic transmission of funds among financial institutions on behalf of themselves or their customers

Without delay - Within a matter of hours of a designation by the United Nations Security Council or its relevant Sanctions Committee (e.g. the 1267 Committee, the 1988 Committee, the 1718 Sanctions Committee)

WLF - Watch List Filtering

Wolfsberg Group - An association of global financial institutions, including Banco Santander, Bank of America, Bank of Tokyo-Mitsubishi UFJ, Barclays, Citigroup, Credit Suisse Group, Deutsche Bank, Goldman Sachs, HSBC, J.P. Morgan Chase, Société Générale, Standard Chartered Bank and UBS, which developed global anti-money laundering guidelines for international private banks

WMD - Weapons of Mass Destruction

World Bank - A vital source of financial and technical assistance to developing countries