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Glossary

Anti-Money Laundering

Also known as AML, this refers to processes, actions, laws and compliance regulations that are designed to make it harder for criminals to profit from crime.

Transaction Monitoring

Transaction monitoring refers to the monitoring of customer transactions, including assessing historical/current customer information and interactions to provide a complete picture of customer activity. This can include transfers, deposits, and withdrawals.

Regulators & Key Institutions

Financial regulators and Key Institution refers to the rules and laws firms operating in the financial industry, such as banks, credit unions, insurance companies, financial brokers and asset managers must follow.

AML Compliance

Processes, policies and controls designed to ensure that companies comply with the requirements Anti-Money Laundering regulations and understand the AML relevant risks of conducting business.

Countering Terrorism Financing

Terrorist Financing is the provision of funds or providing of financial support to individual terrorists, terrorist groups and/or campaigns and non-state actors.

Regulations

Requirements created by regulatory and supervisory authorities. These are usually designated by lawmakers or governments to ensure stability or to protect the rights of consumers.

Money Muling

A money mule is a person who transfers illegally obtained money between different payment accounts, very often in different countries, on behalf of others.
Money mules are also recruited by criminals to receive money into their bank account, in order to withdraw the money and in most cases wire it overseas, receiving a commission payment in return for the provided services.

False-Positives

Cases that don’t warrant review, but which are flagged and as such must be reviewed.

RegTech

From ‘Regulatory Technology’, referring to the use of technology to facilitate compliance regulations. The FCA was the first international body to promote the use of this term widely.

Know Your Customer (KYC)

Also known as ‘KYC’, refers to the identification and verification of the identity of customers/clients. Regulatory requirements differ but the central aim is to remove anonymity from the financial system and deter criminal behaviour.

Politically Exposed Persons (PEPs)

A person who holds an important public function. This can include heads of state, heads of government and senior politicians, but extends to a wide range of positions such as (in some jurisdictions) board members of publicly owned companies. Local requirements differ on the definition of a PEP and the extent to which this status applies to their family members and/or associates.

 

Sanctions

Diplomatic measures used to try and defend the international law and protect natural security. These come in many forms and lead to restrictions on trade and economic activity, travel, cultural activity and diplomacy.

API

‘Application Programming Interface’.

Essentially this allows different elements to communicate within one another. Think ‘tunnel’ for information.

Adverse Media

Adverse media or negative news  defined as any kind of unfavorable information found across a wide variety of news sources – both ‘traditional’ news outlets and those from unstructured sources. The risks associated with conducting business with persons or companies having an adverse media profile are many and varied.

Financial Crime

Crime committed against a form of property, often involving the attempt to convert ownership to one’s own benefit.

Enhanced Due Diligence (EDD)

Often mistaken as being ‘part of the KYC process’ Enhanced Due Diligence refers to the obligation to have a range of deeper, more stringent checks and controls designed to mitigate the risk in a particular customer relationship.

This can include stronger KYC measures but should also include stricter measures within transactions monitoring.

FATF

The Financial Action Taskfroce is an Intergovernmental body established in 1989. The objectives of FATF are to set standards and promote effective implementation of legal, compliance regulations and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. There are currently 39 members of the FATF; 37 jurisdictions and 2 regional organisations (the Gulf Cooperation Council and the European Commission). There are also 31 international and regional organisations which are Associate Members or Observers of the FATF and participate in its work.

Know Your Business (KYB)

Another way of saying ‘KYC’ but referring specifically to the identification of businesses and legal persons. The major aim is to remove anonymity and identify structures that could be used to hide the ultimate beneficial owner.

GoAML

The United Nations has launched GoAML as a software tool which is available to member countries designed to interface with international law enformcement entities like Interpol.

AML Directives

The First AML directive was introduced on 10 June 1991, the second was introduced on 4 December 2001 and third was introduced on 26 October 2005. More or less it took 12 years to introduce the 4 th AMLD. The Fourth Anti-Money Laundering Directive came into force on 26 June 2017.
A year after the enactment of AMLD 4, the EU released the 5th AntiMoney Laundering Directive. Published on 19 June 2018, the directive should have been transposed into local legislation by 10 January 2020. AMLD 6 is upcoming.

Wolfsberg Group

The Wolfsberg Group is a non-governmental association of thirteen global banks. Its goal has been to develop financial industry standards for anti-money laundering (AML),  (KYC) and counter terrorist financing (CTF).

FinCen Files

The FinCEN Files are leaked documents from the Financial Crimes Enforcement Network (FinCEN) that have been investigated by the International Consortium of Investigative Journalists (ICIJ).

UWO

Unexplained Wealth Order is a new legal tool in the form of a  court order issued by a British court to compel the target to reveal the sources of their unexplained wealth.
Persons who fail to account are liable to have assets seized after an enforcement authority, such as the National Crime Agency (NCA), makes a successful appeal to the High Court. The power of UWOs in fighting money laundering lies in their reverse onus principle.
As of October 2020, the NCA is the only body to have secured UWOs. The Serious Fraud OfficeHM Revenue & CustomsFinancial Conduct Authority and Crown Prosecution Service have authority but have so far not used the legislation

Fawri Tick

Fawri Tick is a smart platform launched in September in the UAE that supports communication and coordination between relevant government authorities and facilitates the rapid detection of financial risks.

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