Supervision Department - AML/CFT Training
Definitions GlosSTRy
2
Designated Non-Financial Businesses and Professions
According to FATF, the following businesses should comply with its 40 Recommendations of 2003:
- Casinos (including Internet casinos).
- Real estate agents.
- Dealers in precious metals.
- Dealers in precious stones.
- Lawyers, notaries, other independent legal professionals and accountants. Refers to sole practitioners,
partners and employed professionals within professional financial institutions. It
is not meant to refer to ―internal‖ professionals who are employees of other types of businesses, or to
professionals working for government agencies who may already be subject to measures that would combat
money laundering.
- Trust and company service providers. Refers to all persons or businesses that are not covered elsewhere
under the Recommendations, and which provide any of the following services to third parties:
- Acting as a formation agent of legal persons.
- Acting as (or arranging for another person to act as) a director or secretary of a company, a partner of a
partnership, or a similar position in relation to other legal persons.
- Providing a registered office, business address or accommodation, correspondence or administrative
address for a company, a partnership or any other legal person or arrangement.
- Acting as (or arranging for another person to act as) a trustee of an express trust.
-
Acting as (or arranging for another person to act as) a nominee shareholder for another person.
Disclosure Order
A document that requires a person who has information relevant to an investigation to answer questions at
an interview, to provide information, or to produce documentation. The order can be exercised not only
against a person whose assets are under investigation, but also against a third party, such as a financial
institution.
Domestic Transfer
Wire transfer in which the originator and beneficiary institutions are located in the same jurisdiction. A
domestic transfer therefore refers to any chain of wire transfers that takes place entirely within the borders
of a single jurisdiction, even though the system used to send the wire transfer may be located in another
jurisdiction.
Downstream Correspondent Clearer
A correspondent banking client who receives correspondent banking services from one institution and
provides correspondent banking services to other financial institutions in the same currency as the account
it maintains with the institution.
Dry Trust
See Bare Trust.
Supervision Department - AML/CFT Training
Definitions GlosSTRy
2
E
Eastern and Southern African Anti-Money Laundering Group (ESAAMLG)
A FATF-style regional body comprising fourteen countries from the Eastern region of Africa down to the
Southern tip of Africa. It was established in 1999.
Egmont Group of Financial Intelligence Units
In 1995, a number of national financial intelligence units (FIUs) began working together in an informal
organization known as the Egmont Group, named for the site of its first meeting in the Egmont-Arenberg
Palace in Brussels. The goal of the group is to provide a forum for FIUs to improve support to their national
anti-money laundering programs and to develop protocols for information sharing. The FIUs‘ support
includes expanding and systematizing the exchange of financial intelligence, improving expertise and
capabilities of the personnel of such organizations, and fostering improved communications among FIUs
through application of new technologies and sharing of information for financial crimes investigations.
Electronic Banking
A form of banking in which funds are transferred through an exchange of electronic signals among financial
institutions rather than through an exchange of cash, checks or other negotiable instruments.
Electronic Cash (E-Cash)
A payment mechanism designed for the Internet, electronic cash represents a series of monetary value units
electronically stored on the hard drive of a computer or microchip of a
plastic card. It is anonymous like cash, and has immediate value. E-cash is attractive to money launderers
because of its anonymity and the ease it provides in ―transporting‖ large sums quickly and easily via the
Internet. It is also called ―e-money.‖
Electronic Funds Transfer (EFT)
The movement of funds between financial institutions electronically. The two most common electronic
funds transfer systems in the U.S. are FedWire and CHIPS. (SWIFT is often referred to as the third EFT
system, but in reality it is an international messaging system that carries instructions for wire transfers
between institutions, rather than the wire transfer system itself.) Other systems that facilitate funds
movement, but are not technically EFT systems, include automated clearing houses (ACH), which are
networks that conduct batch processing of messages for book transfers between institutions.
Supervision Department - AML/CFT Training
Definitions GlosSTRy
2
Electronic Money (E-Money)
See Electronic Cash.
Enhanced Due Diligence (EDD)
Additional examination and cautionary measures aimed at identifying customers and confinancial
institutioning that their activities and funds are legitimate.
Eurasian Group on Combating Money Laundering and Terrorist Financing (EAG)
A FATF-style regional body formed in October 2004 in Moscow. Member countries include Belarus,
China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan and Uzbekistan.
European Union (EU)
The European Union is a family of democratic European countries. Its member states have set up common
institutions to which they delegate part of their sovereignty so that decisions on specific matters of
collective interest can be made democratically at the European level.
European Union Directive on Prevention of the Use of the Financial System for the Purpose of Money
Laundering and Terrorist Financing
First adopted by the European Union in June 1991, the directive requires EU member states to achieve
certain results by amending national laws, if necesSTRy, to prevent their domestic financial systems from
being exploited for money laundering. The directive was confined to drug trafficking as defined in the
Vienna Convention. The scope of the directive was also confined to credit and financial institutions as the
most vulnerable to abuse by money launderers, but member states were encouraged to cover other sectors
too that might become involved in laundering. The directive was revised in December 2001 by extending
the money laundering offenses beyond credit and financial institutions to corporate service providers,
casinos, lawyers and accountants. A third directive in September 2005 replaced the previous two. In line
with the FATF money laundering recommendations, the Third EU Directive extended the scope of the
earlier directives by:
- Defining ―money laundering‖ and ―terrorist financing‖ as separate crimes.
- Extending customer identification and suspicious transaction reporting obligations to trusts and company
service providers, life insurance intermediaries and dealers selling goods for cash payments above a certain
amount.
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Detailing a risk-based approach to customer due diligence.
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Protecting employees who report suspicions of money laundering or terrorist financing.
- Obligating member states to keep comprehensive statistics regarding the use of and results obtained from
suspicious transaction reports.
- Requiring all financial institutions to identify and verify the ―beneficial owner‖ of all accounts held by
legal entities or persons.
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