Supervision Department - AML/CFT
Training
Definitions GlosSTRy
2
Futures
Contracts that require delivery of a commodity of specified quality and quantity at a specified price on a
specified future date.
G
GAFISUD (Spanish: Grupo de Acción Financiera de Sudamérica)
See Financial Action Task Force on Money Laundering in South America.
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. Their role is important because they can
block or facilitate the entry of illicit money into the financial system. Some countries, such as the U.K. and
the Cayman Islands, impose due diligence requirements on gatekeepers that are similar to those of financial
institutions. Two critical milestones in international gatekeeper regulation have been the European Union‘s
revised anti-money laundering directive of 2001 and the FATF 40 Recommendations of 2003, both
containing anti-money laundering provisions for these professionals.
Giro House
See Remittance Services.
Global Program against Money Laundering (GPML)
Key instrument of the United Nations Office of Drug Control and Crime Prevention
in its fight against
organized crime. Through GPML, the UN helps member states introduce legislation against money
laundering and helps the countries develop and maintain mechanisms that combat the crime. The program
encourages anti-money laundering policy development, monitors and analyzes problems and responses,
raises public awareness, and acts as a coordinator of joint anti-money laundering initiatives between the UN
and other international organizations.
Grantor
Creator
and fund provider of a trust, usually for the benefit of another.
Supervision Department - AML/CFT Training
Definitions GlosSTRy
2
Group of Eight Industrialized Nations (G-8)
Entity composed of the U.S., Japan, Germany, France, Italy, the U.K., Canada and Russia.
Group of Eleven Industrialized Nations (G-10)
The group is made up of the original G-7 group of industrialized nations, plus Sweden, Belgium, the
Netherlands, and Switzerland, which was the 11th country to join in 1964.
Although it now has 11 members, the group continues to be called the G-10.
Group of Seven Industrialized Nations (G-7)
Body made up of seven countries: U.S., Japan, Germany, France, Italy, the U.K. and Canada.
Gulf Cooperation Council (GCC)
Formed in 1981, the GCC promotes cooperation between its member states in the fields of economy and
industry. These member states include Kuwait, Bahrain, Qatar,
Saudi Arabia, Oman and the United Arab
Emirates. The GCC is a member of FATF, although its individual members are not.
H
Harmful or Preferential Tax Regimes
The United Nations and the Organization for Economic Cooperation and Development have taken the
controversial position that a country that has no or low tax rates to encourage foreign business development
is engaged in ―harmful tax practices.‖ Their position is that offshore tax regimes
are not maintained with the
intent to attract real business and direct foreign investment, but to foster predatory tax policies that divert
business from another country and encourage tax evasion.
Hawala
A funds exchange system in Indian and Chinese civilizations used to facilitate the secure and convenient
cross-border movement of funds. Hawala was born centuries before Western financial systems. Merchant
traders wishing to send funds to their homelands would deposit them with a hawala broker or hawaladar
who normally owned a trading business. For
a small fee, the banker would arrange for the funds to be
available for withdrawal from another banker, normally also a trader, in another country. The two bankers
would settle accounts through the normal process of trade. Today, the technique works much the same, with
businesspersons in various parts of the world using their corporate accounts to
move money internationally
for third parties.
Supervision Department - AML/CFT Training
Definitions GlosSTRy
2
Deposits and withdrawals are made through hawaladars, rather than traditional financial institutions. The
practice is vulnerable to terrorist financing and money laundering—funds do not actually cross borders, and
transactions tend to be confidential, as records are not stringently kept. In Pakistan,
the system is called
hundi. See Alternative Remittance System.
Hedge Fund
A hedge fund is a privately offered investment vehicle—typically high-risk— in which participants‘
contributions are pooled and invested in a portfolio of securities, commodity futures contracts or other
assets. Investors are usually of high net-worth, and can generally redeem investments on a quarterly, semi-
annual, or annual basis.
Hundi
See Hawala.
I
Identity Theft
The assumption of another person‘s identity without authorization for use in fraudulent transactions that
results in a loss to the financial institution or the victim whose identity was used.
Informal Value Transfer System (IVTS)
See Alternative Remittance System.
Integration
The integration phase, often referred to as the third and last stage of the classic money laundering process,
places laundered funds back into the economy by re-entering the funds into the
financial system and giving
them the appearance of legitimacy.
Intermediary Financial Institution
Receives funds from a wire transfer transmitter‘s financial institution and relays or transmits the order of
payment to the recipient‘s financial institution. In an international funds transmission, intermediary
financial institutions are usually located in different countries.
