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Alert Investigation is a critical step within any Anti-Money Laundering framework. It is the process of determining whether a system-generated alert has any potential involvement in Money Laundering (ML), Terrorist Financing (TF), or Proliferation Financing (PF).
AML Compliance is an institutional framework that requires financial institutions to follow laws and regulations to prevent, detect, and report suspicious activities linked to money laundering and terrorist financing.
AML policies are a framework that financial institutions need to follow to prevent, detect, and report illegal money.
Anti-Money Laundering (AML) Regulations are a set of rules, laws, controls, and procedures to prevent the disguise of illicit funds as legitimate income within the financial system.
AML risk assessment is a compliance procedure that involves identifying and evaluating money laundering and terrorist financing risks associated with customers, geographies, delivery channels, and transactions.
Anomaly detection means identifying the unusual transaction patterns or customer behaviours that do not align with the customer’s expected financial activity.
An Audit Trail is a detailed log that captures all activities, events, and changes within a financial system or institution.
Batch Screening is an integral part of the AML/CFT compliance procedures and involves simultaneously screening a large pool of customers, accounts, transactions, or counterparties against sanctions lists, Politically Exposed Persons (PEP) databases, watchlists, and adverse media sources.
A beneficial owner (BO) is a natural person (or persons) who possesses ultimate ownership or control of an entity’s operations or profits.
Bonded Warehouse is a secure storage facility to store imported goods that are subject to customs duties.
Bribery refers to the offering, receiving, giving, or soliciting of something valuable to unfairly influence someone’s decisions or actions.
A business entity is an organisational structure created by a person or a group of individuals to carry out lawful business and maintain a separate legal presence for tax purposes.
The anonymous nature of physical cash deposits significantly enhances the AML risks for organisations, as it makes it very difficult to trace the origin of funds.
A cash-intensive business is one that deals in cash transactions and experiences a large volume of cash flows.
A compliance officer is a person appointed by an organisation to watch over adherence to regulatory obligations and ensure AML/CFT compliance.
Cross-border payments are any financial transactions that occur between two countries, with the sender and recipient located in different jurisdictions.
Customer Due Diligence (CDD) is a regulatory requirement under the AML/CFT program, which requires organisations to verify the identity of their prospective customer
Data Governance refers to the process of managing customer, supplier, regulatory, screening, KYC, due diligence, and transaction monitoring records in a systematic manner.
Enhanced Due Diligence (EDD) is a process that involves performing more critical KYC checks on customers who pose a high risk to regulated entities.
A false positive in AML systems is an alert generated that wrongly identifies a legitimate activity as suspicious. False positives occur in an entity’s AML screening and monitoring software
The FATF Recommendations are a holistic and consistent framework of measures set by the Financial Action Task Force (FATF), an international body responsible for setting standards to prevent financial crime
The Financial Conduct Authority (FCA) is an independent body that regulates the financial markets and firms in the UK.
Financial crime means illegal activities that abuse financial systems for personal or organisational gain.
Free trade zones are designated areas where goods are imported, stored, processed, or re-exported without paying taxes or customs duties.
Funnel accounts are bank accounts that are used to receive deposits from other accounts in different locations.
Ghost shipping, also called dark fleet, is a deceptive shipping practice in which criminals use vessels (such as old tankers) to conceal their identity, location, or ownership.
Hawala is a traditional fund transfer system that is operated by brokers (commonly called hawaladars) across multiple jurisdictions.
Human trafficking involves human exploitation through fraud, force, or coercion for economic gain.
Insider trading refers to the illegal practice of buying or selling securities based on non-public information, which is obtained through privileged access.
Integration is the final stage of money laundering, where criminals reintroduce illicit funds into the legitimate financial system as clean money.
Layering is the second stage of money laundering, following placement, where illicit funds are moved through complex transactions to obscure their origin and make tracing difficult.
Money Laundering is a systematic process by which criminals attempt to conceal the illicit sources of funds to make them appear legitimate.
Money Market Instruments are financial assets purchased and sold in short-term with a maturity period of a day to a year.
A money mule refers to an individual who transfers or moves illicit funds on behalf of criminals, often unknowingly, and plays a crucial role in money laundering schemes.
A money order is defined as a prepaid negotiable instrument issued by financial institutions, post offices, or retail outlets.
Multiple invoicing in AML is a fraudulent practice in which the same shipment of goods or services is invoiced more than once,
Non-profit organisation refers to an organisation created and operated for social and charitable purposes and not for making profits.
The Office of Foreign Assets Control (OFAC) is a part of the US Department of the Treasury responsible for administering and enforcing economic and trade sanctions in furtherance of US national security goals and foreign policy.
An offshore company incorporation is the process of establishing a legal entity in a foreign jurisdiction outside the owner’s country of residence.
Placement is the first stage of money laundering, where illicit funds are introduced into the financial system to make them appear legitimate.
AML Product Risk is the vulnerability of a product to money laundering and terrorist financing (ML/TF) activities.
The anonymous nature of physical cash deposits significantly enhances the AML risks for organisations, as it makes it very difficult to trace the origin of funds.
Regulatory compliance means adherence to laws, regulations, and requirements made to prevent, identify, and report financial crimes.
Sanctions Lists are formal registers comprising individuals, entities, or jurisdictions subject to legal, economic, or financial restrictions.
Sanction screening software is an automated compliance tool used by financial institutions to identify prohibited individuals, entities, and transactions, to prevent the organisations from facilitating money laundering and terrorism financing risks.
Understand secondary sanctions in AML/CFT, key typologies, red flags, and how advanced solutions help in managing secondary sanctions and cross-border risks.
Shell companies refer to legally incorporated entities that exist only on paper and have no active business operations, used to disguise the origin of funds.
A suspicious activity report (SAR) is a formal document that financial institutions or regulated entities file with required authorities when they detect risk, including money laundering, terrorist financing, and other financial crimes.
Terrorist Financing (TF) refers to the act of supporting terrorists or terrorist organisations to carry out terrorist activities.
Tontine refers to a joint financial agreement among people in which they pool a certain amount of money, which is awarded entirely to the participant who survives to the end.
Trade Finance refers to the financial instruments that support domestic and international trade by ensuring the smooth flow of goods and payments and mitigating risks.
Trade-Based Money Laundering (TBML) is the process of concealing the proceeds of crime and misusing trade transactions to legitimise illicit funds.
Transaction logs are detailed records of financial transactions that institutions maintain to detect suspicious activity, serving as an auditable trail of events that document what occurred, when it occurred, who was involved, and how the transactions were processed.
A Travel Ban functions as a gatekeeping mechanism in which legal restrictions are imposed on individuals or groups by the government or international bodies (such as the UN or EU).
The terminology for trust accounts varies by sector. In legal services, they are known as client trust accounts or client money accounts.
Wash trading is a fake trading activity in which the trader simultaneously buys and sells the same financial instruments (or assets) to create artificial activity.
Watchlist Screening refer to screening against official lists of individuals, organisations, and entities that are potentially high-risk, prohibited, or restricted and require careful checking and monitoring.
Wealth Management refers to a financial service that provides asset management, investments, and financial planning for high-net-worth individuals.
