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175 Cards in this Set

  • Front
  • Back
Account Monitoring Order

UK = an order from a Gov. Auth. requiring a FI to provide transaction info on a suspect account for a specific time period
Asia/Pacific Group (APG)
FATF -style REGIONAL body = jurisdictions in Asia/Pacific Region

Alternative Remittance System (ARS)

underground banking (IVTS) - commonly involves countries outside of formal banking channels; no physical movement of funds and lack of recordkeeping; by coded information
Hawala, Hundi, Chiti, Chop Shop, Poey Kuan
names for Alternative Remittance Systems (aka Informal Value Transfer Systems)
AMLID (Anti-Money Laundering International Database)

a secure multilingual database (contains laws and regulations and contact names) used as a reference tool by LE officers involving cross-jurisdictional work

AML Program purpose and pillars

designed to assist FI in fight against ML and TF: written PP and controls, designated officer, training, independent review
Asset Manager
aka Private Banker; written contract to direct the entity's investment portfolio; charges fees based on performance or % of estate under management; TROUBLE - conflict between report SAR or Fiduciary duty
Asset Protection

reorganize how assets are held to make them less vulnerable to against claims and taxes

Asset Protection Trusts (APT)
special form of Irrev. Trust (offshore) usually tax neutral; to provide for beneficiaries- trustees not in control;

Automated Clearing House (ACH)

electronic banking network - process large volumes ( direct deposit and automatic payments); bulk orders payable days in advance; ability to send high dollar/international transactions;
Bank draft

international monetary instrument often made payable upon presentation
Bank for International Settlement (BIS)

international organization that serves as a bank for central banks - purpose of attaining stability in the world economy
Secretariat of the Basel Committee on Banking Supervision

hosted by Bank for International Settlements (BIS)- formulated broad supervisory standards/guidelines on KYC issues

Bank Secrecy

refers to laws/regulations in countries that prohibit disclosing info about an account without the acct holder's consent = impedes flow of info across borders

Bank Secrecy + FATF
ensure secrecy laws do not inhibit implementation of FATF recommendations
BSA - Bank Secrecy Act
imposes ML controls on FI (& other businesses) including the requirements to record and report various financial transactions

BSA Compliance Program

US based FI- to control ML and other financial crimes; written PP and controls, designated officer, training and independent review

Bare trust

dry, formal, naked, passive or simple trust = trustees only convey property; final beneficiary is unknown
Basel CDD Paper

guidance on CDD for banks issued by Basel Committee on Banking Supervision in 2001includes KYC; in 2003 guidelines for account opening & Customer identification
Basel Committee on Banking Supervision

G-10's central bank of governors in 1974 to promote sound supervisory standards worldwide; CDD, KYC risk management, transparency in payment messages specifically cross border wire, & sharing of financial records

Bearer form
enables a designated investment or deposit to be sold, transferred, surrendered or addressed to a bearer without further written instructions

Benami account

aka nominee account; held by one person or entity on behalf of another; associated with Hawalas; used to disguise true identity or identity of the recipient

Beneficial owner

natural person who ultimately owns/controls an account; persons who exercise ultimate effective control

science of identifying features that distinguish one person from another; fingerprinting, voice recognition, retinal scans

Black Market Peso Exchange (BMPE)

complex method of trade-based ML; bypass currency exchange; Columbian, Venezuela, Argentina, Brazil & Paraguay;

blank check company

used by private corporations intending to use publicly traded shares through "reverse mergers" without the high expenses involved in making their own initial public offering.
Bureau de Change

aka "Casa de cambio" or "exchange office"; offers a range of services that are attractive to ML: currency exchange & consolidation of small denomination bank notes into larger ones; exchange Monetary instruments.


a scheme in which the use or extension of credit is obtained while the perpetrators avoid having to pay back the illegally obtained credit or goods. front business charges stolen cards and move funds once credit card company credits business

Caribbean Financial Action Task Force (CFATF)

FATF-style REGIONAL body comprising Caribbean states, including Aruba, Bahamas, British Virgin Islands, Cayman Islands & Jamaica.
CDPC (French: Comite Europeen pour les Problemes Criminels)

European Committee on Crime Problems of the Council of Europe. subcommittee = MONEYVAL, experts on the evaluation of AML measures in European countries that are NOT members of FATF.
CICAD (Spanish: Comision Interamericana para el Control del Abuso de Drogas)

Organization of American States (OAS)- InterAmerican Drug Abuse Control Commission: training seminars for public officials & oversees AML efforts in Western Hemisphere
clearing account

omnibus or concentration accounts; FI holds in its name used for internal admin or bank to bank transactions in which funds are comingled and transmitted without personally identifying the orignators
collection accounts

immigrants from foreign countries deposit small amounts into 1 account where they reside, and the collected sum transfer to an account in their home country without documentation
collective knowledge

sum of knowledge held separately by a FI- suggests corporate responsibility for compliance or liability for non-compliance

Commission Rogatoire

aka letters rogatory; written requests for legal/judicial assistance sent by the central authority to central authority; contains nature of request, relevant criminal charges, legal provision and info sought.

concentration risk

limits to restrict bank exposure to singe borrowers or groups of related borrowers- related to connected lending defaults; risk of early, sudden withdrawal by large related depositors

constructive (involuntary) trust liability

imposition of trustee obligations upon a FI deemed to "know' that property in its possession belongs to a person other than its client.
Corporate vehicles

defined in FATF: Corporations, trusts, foundations, LLC

correspondent banking

banking services by one bank (correspondent bank) to another bank (respondent bank); large international banks typically act as correspondents for thousands of banks around the world; cash management, international wires, check clearing and foreign exchange
Council of Europe Convention on Laundering, Search, Seizure, and confiscation of the Proceeds from Crime
extended the offense of money laundering to include ML associated with all serious offenses, not just drug trafficking. ( committee of ministers of the council of Europe)
counter-terrorism committee (CTC)

all 15 security council members and monitors the implementation of UN Security Council Resolution, aims to increase the capacity of member states to fight terrorism financing
cuckoo smurfing

linked to alternative remittance systems in which criminal funds are transferred through the accounts of unwitting persons who are expecting genuine funds or payments from overseas

currency smuggling

illicit movement of large quantities of cash across borders, often into countries with strict banking secrecy, poor exchange controls or poor AML legislation

FI responsible fro managing or administering assets for other persons or institutions

Customer Due Diligence ( CDD)

implementing adequate PP that promote high ethical/professional standards for dealing with customers, designed to prevent banks from being used by criminals; establish identity, monitor account activity that are abnormal or unexpected
Customer Identification Program (CIP)

aim to identify and verify identity of its customers; in writing, board of director approval and procedures for customer notification

customer info order

requires all FI to provide the details of any accounts held by the person under investigation
Debit card
tools to launder criminal proceeds, if issued by FI in secrecy havens because leaves few traces of the source of funds
designated categories of Offense

enumerates crimes that may lead to ML prosecutions by FATF 40 recommendations 2003 (known as predicate crimes)
designated Non-Financial Businesses & Professions

FATF 40 Recommendations 2003 : businesses should comply
Disclosure Order

document that requires a person who has relevant info to an investigation to answer questions at an interview, to provide info, or to produce documentation
domestic transfer

any chain of wire transfers that takes place entirely within the borders of a single jurisdiction

Downstream Correspondent Clearer
a correspondent banking client who receives correspondent banking services from 1 institution and provides correspondent banking services to other FI in the same currency as the account it maintains with the institution
Eastern & Southern African AML Group (ESAAMLG)

FATF style REGIONAL body of 14 countries from the Eastern region of Africa down to the Southern tip of Africa (established in 1999)
Egmont Group of Financial Intelligence Units

1995, informal organization of national Financial Intelligence Units (FIUs) working together met in Brussels. goal = forum for FIUs to improve support to national AML programs & to develop protocols for info sharing
electronic cash (E-cash)

payment mechanism designed for the Internet, anonymous like cash with immediate value stored on hard drive of computer or microchip of a card. aka e-money
Electronic Funds Transfer (EFT)
2 most common in US are FedWire and CHIPS (SWIFT is an international messaging system that carries instructions for wire transfers not a wire transfer itself)
Eurasion Group on Combating ML & TF (EAG)
FATF style REGIONAL body (2004 in Moscow); Belarus, China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan & Uzbekistan
European Union Directive on Prevention of the Use of the Financial System for the Purpose of ML & TF

1991, it requires EU member states to amend laws to prevent their domestic financial systems from being exploited for ML; confined to drug trafficking; scope - confined to credit & FI
Revised EU Directive on Prevention of the Use of the Financial System

2001, extends money laundering offenses beyond credit/FI to corporate service provides, casinos, lawyers & accountants

Third EU Directive - 2005

define ML & terrorist financing as separate crimes;

extend customer id and suspicious transaction reporting obligations to trusts, service providers, life insurance and dealers selling goods for cash;

risk-based CDD;

protect employees who report;

require FI to id and verify "beneficial owner"


European Law Enforcement Org; improve the effectiveness/cooperation of competent authorities in preventing/combating terrorism, unlawful drug trafficking

provides EU member states LE authorities with operational/analytical support

exempt account

in some countries, a distinction is granted to certain customers of a FI permitting to waive the responsibility to report certain transactions.

must be documented and monitored


surrender by one country to another of an accused or convicted person under a bilateral agreement

1988 Vienna Convection makes money laundering an internationally extraditable offense

extraterritorial reach

extension of one country's policies & laws to the citizens and institutions of another. US money laundering laws contain several provisions that extend its prohibitions/sanctions into other countries

Financial Action Task Force (FATF)

1989 by the Group of Seven industrial nations to foster the establishment of national/global measures to combat ML

international policy-making body that sets AML standards & counter-terrorist financing measures - do not have the force of law

develops annual typology reports trends/reports

FATF on ML in South America (GAFISUD)

FATF-style regional body for South America established in 2000. Members: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Panama, Paraguay, Peru, Uraguay
FATF Style Regional Body (FSRB)
similar to FATF- efforts are targeted to specific regions


according to FATF 40 - any person or entity that conducts as a business one or more of these activities:

accept deposits, lending, transfer of money, issue/manage means of payment (credit and debit cards), money/currency changing, etc.

Financial Intelligence Unit (FIU)

central govt. office that obtains info from financial reports, processes it and discloses it to an appropriate govt. authority

-receives, analyzes and disseminating info and investigate violations

Financial Sector Assessment Program (FSAP)
1999, established by International Monetary Fund & World Bank, assess jurisdictions for their financial systems strengths & vulnerabilities
Forensic accountant

specializes in analyzing financial evidence & testifying as an expert witness in cases of white-collar crime


permanent loss of private property or assets as a result of legal action by a govt. authority


to prevent or restrict the exchange, withdrawal, liquidation, or use of assets or bank accounts by govt action.

prohibit the transfer, conversion, disposition or movement of any property equipment

properties frozen remain where they were frozen

front company

business that comingles illicit funds with revenue generated from the sale of legitimate products/services. give funds appearance of legitimate funds. keep prices below market level giving competitive edge


contracts that require delivery of a commodity of specified quality/quantity at a specified price on a specified future date

professionals such as lawyers, notaries, accountants, investment advisors, and trust and company service providers who assist in transactions involving the movement of money, are deemed to have a particular role in identifying, preventing and reporting money laundering - block/facilitate the entry of illicit money into financial systems

Global Program against Money Laundering (GPML)
key instrument of the UN in its fight against organized crime, helps member states introduce laws against ML, encourages AML policy development, acts as a coordinator of join AML initiatives between member states
Group of Eight Industrialized nations

US, Japan Germany, France, Italy, U.K, Canada & Russia
Group of Eleven Industrialized nations (G-10)

original G-7 plus Sweden, Belgium, Netherlands, Switzerland, (
Group of Seven Industrialized nations (G-7)

US, Japan, Germany, France, Italy, U.K. and Canada
Gulf Cooperation Council

1981, promotes cooperation between its member states in the fields of economy & industry: Kuwait, Bahrain, Qatar, Saudi Arabia, Oman & United Arab Emirates
Harmful or Preferential Tax Regimes
UN & Org for Economic Coop and Development says: a country that has no or low tax rates to encourage foreign business development is engaged in "harmful tax practices". Offshore tax regimes foster predatory tax policies that divert business and encourage tax evasion
Hedge fund
privately offered investment vehicle- typically high risk- participants contributions are pooled & invested in a portfolio of securities, commodity future contracts. High net worth investors can redeem quarterly, semi-annual or annually
Identity Theft

assumption of another person's identity without authorization for use in fraudulent transactions that result in loss to FI or victim


integration phase (third & last stage of classic ML) - places laundered funds back into economy by re-entering funds into the financial system = gives appearance of legitimacy

Intermediary FI

receives funds from a wire transfer transmitter's FI and relays or transmits the order of payment to the recipients financial institution. located in different countries international transactions

internal controls

policies/procedures in place within an FI that are designed to detect suspicious activity/criminal activity

International Association of Insurance Supervisors (IAIS)

issues global insurance principles, standards U guidance on issues including ML. est. 1994 represents insurance supervisory in 180 countries

International Business Company (IBC)

aka "exempt companies"

variety of offshore corporate structures which are dedicated to business use outside the incorporating jurisdiction, rapid formation, secrecy, broad powers, low cost, low/zero taxation, and minimal filing/reporting requirements
International Finance Corporation (IFC)

est. in 1956, the largest multilateral source of loan & equity financing for private sector projects in developing world. member of World Bank, headquartered in DC. promotes sustainable private sector investments to reduce poverty

International FI (IFI)

FI established or chartered by more than one country = International Monetary Fund and World Bank. protect the integrity of the international financial system from abuse. agenda = strengthening a country's capacity to combat ML
International Monetary Fund (IMF)

est. to promote monetary cooperation, to foster economic growth and high levels of employment, to provide countries with temp. financial assistance. active role 1999 in global AML effort helping countries meet FATF standards

International ML Abatement and Anti-Terrorist Financing Act

Title III of the USA Patriot Act of 2001, contains MOST of the provisions that deal directly with AML matters

International Narcotics Control Strategy Report (INCSR)

issued annually by the US Dept of State, the report includes a lengthy section on the status of ML efforts in most nations

International Police Organization (Interpol)
based in Lyon, France, provides services to national LE agencies in international criminal & ML matters through issuance of "alerts" or "flags" that seek assistance of member countries in locating fugitives or identifying financial activity connected to international crimes
Internet banking

main ML concern- difficulty of identifying the "faceless" customer that establishes a relationship with a FI and in applying CDD

Investment Banking

self standing dept or unit within FI provides strategic capitalizations, amassing huge amounts from diverse sources for corporate deal making and other alternatives to traditional banking

Kingston Declaration on ML

1992, US, UK, France, Canada, & Netherlands + 17 Caribbean nations. expressed solidarity with 1988 UN Convention on Illicit Trafficking in Narcotic drugs & agreed to implement the FATF 40 and 19 recommendations at CFATF

mental state accompanying a prohibited act. can be deemed, to include willful blindness (the deliberate avoidance of knowledge of the facts)

Know Your Correspondent Bank (KYCB)

Know Your Customer (KYC)

Know Your Emmployee (KYE)

set of AML control policies/procedures employed in determining the beneficial owners of a respondent bank & the type of activity that is normal and expected for the bank

NORMAL & EXPECTED for your customer

detecting conflicts of interest and ML of employees


2nd phase of classic ML process between placement & integration, involves distancing illegal proceeds from their source by creating complex levels of financial transactions designed to disguise audit trail and provide anonymity
Legal risk

2001 Basel CDD for Banks Paper as the possibility that lawsuits, adverse judgments or contracts that cannot be enforced may disrupt/harm a FI. Banks can suffer administrative/criminal penalties imposed by govts.
letter of credit

credit instrument issued by a bank that guarantees payments on behalf of its customer to a 3rd party when certain conditions are met. commonly used to finance exports. risk= transferring $ from a country with lax exchange controls and serve as a façade when laundering money through the manipulation of import/export prices.

loan back method of money laundering

criminal puts the illicit funds in offshore entity that he owns and "loans" back to himself or company he owns. risk= hard to determine who controls offshore accounts
mail-forwarding or mail-drop service
legal commercial enterprise that uses a stable, physical address as a delivery destination for letters/parcels on behalf of fee-paying clients who do not live on premises. mail held or forwarded as requested.

manipulation of Import/Export Prices

ML method that uses the overpricing/underpricing of products or services traded in international commerce to move money from one country to another.

Memorandum of Understanding (MOU)
used by countries to govern their sharing assets in international asset-forfeiture cases or to set out their respective duties in AML initiatives. FIUs share info among themselves informally in investigations on the basis of a MOU. Intelligence not evidence
Middle East & North Africa Financial Task Force (MENAFATF)
FATF style body est. 2004, Middle East & North Africa

Mock Trial on Money Laundering

program launched by UN Office on Drugs & Crime (UNODC) and Organization of American States Inter-American drug Abuse Control Commission (CICAD) in various Latin American countries. goal- equip investigators, prosecutors, judges with knowledge to crack ML cases

Money Laundering

process of concealing/disguising the existence, source, movement, destination of illicitly derived property or funds to make them appear legitimate. Placement-Layering-Integration.

Money Laundering Reporting Officer (MLRO)

term used in various international rules to refer to the person responsible for overseeing a firm's AML activities and program for filing reports of suspicious transactions with the national FIU.

Money transfer service or Value transfer service

financial service that accepts cash, checks or other monetary instruments that can store value in one location and pay a corresponding sum in cash to a beneficiary in another location by means of communication, message, transfer or through a clearing network.
sub-committee of the European Committee on Crime Problems of the Council of Europe (CDPC). est. 1997 to conduct self and mutual assessments of AML measures in place of non-FATF members

Mutual funds

investment company that continually offers new shares and buys existing shares back on demand, using its capital to invest in diversified securities of other companies. money is collected from individuals and is invested on their behalf in varied equity or debt portfolios.
mutual legal assistance treaty (MLAT)

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 for use in official investigations and prosecutions.
NCCT Criteria

Criteria published in the FATF Report on Non-Cooperative Countries & Territories issued in February 2000 used to determine which countries to designate to NCCT list

practice that involves the use of a foreign correspondent bank account by another foreign bank to conduct its own transactions

nominee company

a corporation that is formed for the express purpose of holding securities and other assets in its name on behalf of others, or providing nominee directors and/or officers on behalf of clients
Non-Cooperative Countries & Territories (NCCT) list

countries being non-cooperative in the global AML effort or as lacking adequate AML controls. last country removed in 2006
Non-governmental Organization (NGO)

International orgs that are not directly linked to governments of specific countries, such as Doctors without Borders and the International Red Cross.

Non-Profit Organizations
variety of forms, depending on jurisdiction and legal system, including associations, foundations, fund-raising committees, community service org, corp of public interest, limites companies and public benevolent institutions. FATF suggestions to keep from misuse/exploitation
nostro account

nostro/vostro accounts are mirror correspondent accounts maintained by 2 banks in different jurisdictions to facilitate transactions in each others local currency - essentially, clearing accounts that balance foreign currency transactions between the 2 institutions. concern- transparency of relationships (multiple layers of accounts)
Office of Forein Assets Control (OFAC)

administers/enforces economic/trade sanctions against targeted foreign countries, terrorism-sponsoring orgs, terrorists, international narcotics traffickers & others based on US foreign policy/national security goals. require US persons to block/file reports on their lists. require US persons outside of US to comply.

literally, away from one's own home country. jurisdictions deemed favorable to foreign investments because of low/no taxation or strict BSA regulations
Offshore bank

though licensed to conduct banking activities, an offshore bank is prohibited from doing business with local citizens in local currency as a condition of its license.

Offshore Financial Center (OFC)

institutions that cater to/encourage banks, trading companies to physically/legally exist in a jurisdiction but limit their operations to "offshore". historically Caribbean/Mediterranean for reasonable proximity to US & Europe

Offshore Group of Banking Supervisors (OGBS)
promotes supervision of banks in their jurisdictions and furthers international cooperation among Offshore Banking Supervisors, Basel committee member nations. provides guidance on the essential elements of KYC standards/implementation
operational risk

risk of direct/indirect loss of operations due to inadequate/failed internal processes, people or systems or as a result of eternal events. public perception that a bank is not able to manage its operational risk effectively can disrupt or harm the business of the bank

org for economic cooperation and development (OECD)

international org that assists govts on economic development issues in the global economy. houses the FATF secretariat in Paris

Org of American States: Inter-American drug abuse control commission (CICAD)

OAS several sets of AML recommendations through CICAD. sponsored/coordinated training seminars for public officials bankers on AML - western hemisphere

over-the-counter (OTC)

to deposits made of cash physically at a branch. the market for trading not listed on organized stock exchange.

payable through account

transaction account opened by foreign FI through which the FI customers engage, directly or through sub-accounts. difficult CDD on FI customers who use these accounts

Physical cross Border transportation of currency

transportation of currency or bearer negotiable instruments from one country to another. 1. by natural person in luggage/vehicle. 2. cargo containers. 3. mail

physical presence

existence of actual brick/mortar location with meaningful management of the institution physically located within a country, where it maintains business records and is subject to supervision


physical disposal of cash proceeds derived from illegal actitvity


FI operating regulations/internal rules that define how employees are expected to conduct themselves

Politically Exposed Person (PEP)
individual who has been entrusted with prominent public functions in a foreign country: head of state, sr politician, sr govt official, judicial/military official and families/close associates. also domestic
Ponzi Scheme/pyramid scheme
new investor money pays off prior investors. involve fake, non-existent investment schemes: investors tricked into investing on promise of unusually attractive returns. scheme collapses/promoter vanishes with remaining money. Bernie Madoff

predicate crimes

"specified unlawful activities" whose proceeds can give rise to prosecution for ML. most AML laws contain wide definition of underlying crimes.

private banking
provides high end services to wealthy individuals. confidentiality, complex beneficial ownership arrangements, offshore investment vehicles, tax shelters

private investment company (PIC)

type of corp. often established in an offshore jurisdiction with tight secrecy laws to protect the privacy of its owners.

remittance services/giro houses

/casas de cambio

receive cash or other funds that they transfer through the banking system to another account. the account is held by an associated company in a foreign jurisdiction where the money is made available to ultimate recipient
Report on the Observance of Standards and Codes (ROSC)
used by IMF and World bank summarizes the extent to which countries observe internationally recognized standards/codes for fiscal/monetary stability. results used in consideration for IMF/World bank loans. examine monetary/financial/fiscal transparency, banking supervision, etc.
reputational risk

potential that adverse publicity regarding FI business practices and associations (whether accurate or not) will cause a loss of confidence in the integrity of FI. protection through KYC programs

respondent bank

a bank for which another FI establishes, maintains, administers, or manages a correspondent account.

retrospective due diligence

examining identity/activity of existing customers and accounts to confirm their legitimacy. Cayman Islands require/ UK considered but no/US no

risk based approach

assessment of varying risks associated with different types of businesses, clients, accounts and transactions in order to maximize the effectiveness of AML program
risk matrix

document/chart that allows FI to assess the ML risk of a business/customer relationship. sets out critical elements or parameters of risk so that FI can calculate potential client risk of ML

safe harbor

legal protection for FI, directors, officers, employees from criminal/civil liability for breach of any restriction on disclosing info imposed by contract or by any legislative, regulatory or administrative prohibition if reported in good faith to the FIU, even if they did not know precisely and regardless if illegal activity occurred.

prohibit the transfer, conversion, disposition or movement of funds/assets on the basis of an action initiated by a competent authority or a court under a freezing mechanism. unlike freeze, take control of specified funds/assets and possession
self-regulatory org (SRO)

body that represents a profession made up of professionals, has a role in regulation the persons who are qualified to enter and practice the profession and performs supervisory/monitoring functions. (lawyers, accountants, etc)
shell bank

bank that exists on paper only. no physical presence in the country where it is incorporated or licensed. unaffiliated with a regulated financial services group that is subject to effective consolidated supervision. not approve establishment or accept continued operation.

smart card

plastic card that contains a computer chip capable of storing more info than a magnetic stripe, such as health insurance, govt id and credit card data

smurfing/ smurfs

involves the use of multiple individuals and/or multiple transactions for reportable transactions under reporting thresholds. individuals hired to go to FI and do transactions described above.
sting operation

investigative tactic in which undercover officers pose as criminals, to win the confidence of suspected unknown criminals to gather info and to obtain evidence of criminal conduct.

stored value card

pre-paid payment card that stores a monetary value from which purchase amounts are deducted each time the card is used


compulsory legal process issued by a court to compel the appearance of a witness at a judicial proceeding - specified documents.

suspicious activity/suspicious transaction report

irregular/questionable customer behavior/activity. inconsistent with a customer's known legitimate business, personal activities or normal level of activity for that kind of business/account. Govt form that includes a FI account of suspicious activity

tax haven

countries that offer special tax incentives/tax avoidance to foreign investors/depositors

tax information exchange agreements

bilateral agreements among national govts that can yield evidence for ML and tax evasion prosecutions

terrorist financing

process by which terrorists fund their operations. develop sources of funding and obscure the links between sources and activities. 1. financial support from countries, orgs or individuals. 2. revenue generating activities some illicit
transparency international (TI)
berlin-based, ngo dedicated to increasing govt. accountability and curbing both international/national corruption. publishes "corruption news" on its website daily/ offers an archive corruption related news. lists help FI determine risk associated with particular jurisdiction

united nations (UN)

international org committed to preserving peace through cooperation and collective security. contributes to fight against organized crime - Global Program against ML.encourages ML policy development, monitors/analyzes problems and responses.

UN Security Council Resolution 1267

1999, imposed sanctions on Taliban controlled Afghanistan for its support of Osama Bin Laden and Al-Qaeda. modified to include any individual, group, undertaking or entity participating in planning or financing activities for Al-Qaeda or the Taliban.

UN Security Council Resolution 1373

2001, members to take series of actions to combat terrorism through adoption of laws/regulations and the establishment of administrative structures.

USA Patriot Act

The United and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001. historic US law brought about momentous changes in the AML field
Vienna Convention

1988, countries commit to criminalizing drug trafficking/associated ML and enacting measures for the confiscation of the proceeds of drug trafficking.

Vital service providers (VSP)

people who move the billions of dollars drug traffickers earn around the world. include accountants, attorneys, broker-dealers, other FIs, communications and transportation providers, people who build concealment traps.

White-collar crime

non-violent or involving more sophisticated "business related" schemes rather than violence or the threat of violence. - tax fraud, ML, bribery, bankruptcy fraud, environmental fraud, health care fraud

willful blindness

legal principle that operates in ML. "deliberate avoidance of knowledge of the facts" or "purposeful indifference". equivalent of actual knowledge of the illegal source of funds or of the intentions of a customer in ML intentions
wire transfer

electronic transmission of funds among FI on behalf of themselves or customers. financial vehicles covered by the regulatory requirements of many countries in AML

Wolfsberg Group

in 2000 along with Transparency International and experts worldwide, developed global AML guidelines for international private banks.

World Bank

vital source of financial/technical assistance to developing countries. not a bank in the usual sense, but made up of two unique development institutions owned by 184 member countries - International Bank for Reconstruction Development (IBRD) & International Development Association (IDA). provide low interest loans, interest free credit, and grants
1 of 5 pillars of Islam and among the primary obligations that each Muslim must fulfill. means tithing or alms-giving. once every lunar year, requires donation to charity representing a fixed portion of Muslim's possessions - 2.5%