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Supervision Department - AML/CFT Training 
Definitions GlosSTRy
 
2
 
Seize 
To prohibit the transfer, conversion, disposition or movement of funds or other assets on the basis of an 
action initiated by a competent authority or a court under a freezing mechanism. However, unlike a freeze, a 
seizure allows the competent authority to take control of specified funds or other assets. The seized assets 
remain the property of the person(s) or entity(ies) that held an interest in them at the time of the seizure, 
although the competent authority will often take over possession, administration or management of the 
seized assets. 
Self-Regulatory Organization (SRO) 
A body that represents a profession (e.g., lawyers, notaries, other independent legal professionals or 
accountants), and which is made up of member professionals, has a role in regulating the persons who are 
qualified to enter and practice in the profession, and also performs supervisory or monitoring functions. For 
example, such a body would enforce rules to ensure that high ethical standards are maintained by those in 
the profession. 
Senior Foreign Political Figure 
U.S. term for foreign politically exposed persons. See Politically Exposed Persons. 
Settlors 
Persons or companies who transfer ownership of their assets to trustees by means of a trust deed. Where the 
trustees have some discretion as to the investment and distribution of the trust‘s assets, the deed may be 
accompanied by a non-legally binding letter setting out what the settlor wishes done with the assets. 
Shell Bank 
Bank that exists on paper only and that has no physical presence in the country where it is incorporated or 
licensed, and which is unaffiliated with a regulated financial services group that is subject to effective 
consolidated supervision. These banks are able to evade day-to-day regulation. Recommendation 18 of the 
FATF 40 Recommendations says that countries should not approve the establishment, and should not 
accept the continued operation, of shell banks. Financial institutions should refuse to enter into, or continue, 
correspondent banking relationships with shell banks, and should guard against establishing relations with 
respondent foreign financial institutions that permit their accounts to be used by shell banks. 
Simple Trust 
See Bare Trust. 
Smart Card 
Plastic card resembling traditional credit or debit cards that contains a computer chip capable of storing 
more information than a magnetic stripe, such as health insurance, e-cash, government identification and 
credit card data. 
 


Supervision Department - AML/CFT Training 
Definitions GlosSTRy
 
2
 
Smurfing 
A commonly used money laundering method, smurfing involves the use of multiple individuals and/or 
multiple transactions making cash deposits, buying monetary instruments or bank drafts in amounts under 
the reporting threshold. See Structuring. 
Smurfs 
Individuals hired by money launderers to go from financial institution to financial institution purchasing 
monetary instruments or depositing currency or monetary instruments in amounts under the reporting 
threshold. 
Special Recommendations 
FATF‘s international standards on terrorist financing. At an Extraordinary Plenary on the Financing of 
Terrorism held in Washington, D.C., in 2001, FATF expanded its mission beyond money laundering by 
issuing eight Special Recommendations dealing with terrorism financing. During the meeting, FATF issued 
new standards on terrorist financing, and called on all countries to adopt and implement them. In October 
2004, FATF issued the ninth Special Recommendation, addressing cross- border wires. The ―Special 
Recommendations‖ are designed to deny terrorists and their supporters access to the international financial 
system.   
Split Deposits 
A series of deposits in which a customer splits a sum of money and makes smaller deposits into two or 
more accounts that add up to the original amount. 
Sting Operation 
Investigative tactic in which undercover officers pose as criminals, sometimes through a ―front‖ business, to 
win 
the confidence of suspected or known criminals to gather information and to obtain evidence of criminal 
conduct. It is an effective means of identifying criminals, penetrating criminal organizations and identifying 
tainted property in money laundering and other cases. 
Stored Value Card 
Pre-paid payment card that stores a monetary value from which purchase amounts are deducted each time 
the card is used. 
STR 
See Suspicious Transaction Report. 
 
 
 


Supervision Department - AML/CFT Training 
Definitions GlosSTRy
 
2
 
Structuring 
Illegal act of splitting cash deposits or withdrawals into smaller amounts, or purchasing monetary 
instruments, to stay under a currency reporting threshold. The practice might involve dividing a sum of 
money into lesser quantities and making two or more deposits or withdrawals that add up to the original 
amount. Money launderers use structuring to avoid triggering a filing by a financial institution. The 
technique is common in jurisdictions that have compulsory currency reporting requirements. See Smurfing. 
Subpoena 
Compulsory legal process issued by a court to compel the appearance of a witness at a judicial proceeding, 
sometimes requiring the witness to bring specified documents. 
Suspicious Activity 
Irregular or questionable customer behavior or activity that may be related to a money laundering or other 
criminal offense, 
or to the financing of a terrorist activity. May also refer to 
a transaction that is inconsistent with a customer‘s known legitimate business, personal activities, or the 
normal level of activity for that kind of business or account. 
Suspicious Activity Report (STR) 
See Suspicious Transaction Report. 
Suspicious Transaction Report (STR) 
A government form that includes a financial institution‘s account of a questionable transaction. Many 
jurisdictions require financial institutions to report suspicious transactions to relevant government 
authorities on a suspicious transaction report, also known as a suspicious activity report or STR. 
T
 
Tax Haven 
Countries that offer special tax incentives or tax avoidance to foreign investors and depositors. 
 


Supervision Department - AML/CFT Training 
Definitions GlosSTRy
 
2
 
Tax Information Exchange Agreements 
Bilateral agreements among national governments that can yield evidence for money laundering and tax 
evasion prosecutions. 
Terrorist Financing 
The process by which terrorists fund their operations in order to perform terrorist acts. Terrorists need 
financial support to carry out their activities and to achieve their goals. There is little difference between 
terrorists and other criminals in their use of the financial system. A successful terrorist or terrorist group, 
much like a criminal organization, is one that is able to build and maintain 
an effective financial infrastructure. In order to do so, the group or the individual must develop sources of 
funding and means of obscuring the links between those sources and the activities they support. They need 
to find a way to make sure the funds are available and can be used to purchase goods or services for 
terrorist acts. The sums needed to mount terrorist attacks are not always large, and the associated 
transactions are not necesSTRily complex. There are two primary sources of financing for terrorist 
activities. The first involves financial support from countries, organizations or individuals. The other 
involves a wide variety of revenue-generating activities, some illicit, including smuggling and credit card 
fraud. 
Testimony 
Witness‘ oral presentation, usually under oath, that describes facts known to the witness. 
Tipping Off 
Improper or illegal act of notifying a suspect that he or she is the subject of a Suspicious Transaction Report 
or is otherwise being investigated or pursued by the authorities. 
Trade Finance 
See Letter of Credit. 
Transparency International (TI) 
Berlin-based, non-governmental organization dedicated 
to increasing government accountability and curbing both international and national corruption. Established 
in 1993, TI is active in approximately 100 countries. It publishes ―corruption news‖ on its website daily and 
offers an archive of corruption- related news articles and reports. Its Corruption Online Research and 
Information System, or CORIS, is perhaps the most comprehensive worldwide database on corruption. TI is 
best known for its annual Corruption Perceptions Index (CPI), which ranks countries by perceived levels of 
corruption among public officials; its Bribe Payers Index (BPI) ranks the leading exporting countries 
according to their propensity to bribe. TI‘s annual Global Corruption Report combines the CPI and the BPI 
and ranks each country by its overall level of corruption. The lists help financial institutions determine the 
risk associated with a particular jurisdiction. 
 
 
 


Supervision Department - AML/CFT Training 
Definitions GlosSTRy
 
2
 
Trust 
Arrangement among the property owner (the grantor), a beneficiary and a manager of the property (the 
trustee), whereby the trustee manages the property for the benefit of the beneficiary in accordance with 
terms set by the grantor. 
Trustee 
May be a paid professional or company or unpaid person that holds the assets in a trust fund separate from 
the trustee‘s own assets. The trustee invests and disposes of the assets in accordance with the settlor‘s trust 
deed, taking into consideration any letter of wishes. 
Typology 
Refers to a money laundering method and is a term used by FATF. 
U
 
Underground Banking 
See Alternative Remittance System. 
United Nations (UN) 
An international organization that was established in 1945 by 51 countries committed to preserving peace 
through cooperation and collective security. Today, nearly every nation in the world belongs to the UN. See 
also Vienna Convention. The United Nations contributes to the fight against organized crime with 
initiatives such as the Global Program against Money Laundering (GPML), the key instrument of the UN 
Office of Drug Control and Crime Prevention in this task. Through the GPML, the UN helps member states 
to introduce legislation against money laundering and to develop mechanisms to combat this crime. The 
program encourages anti-money laundering policy development, monitors and analyzes the problems and 
responses, raises public awareness about money laundering and acts as a coordinator of joint anti-money 
laundering initiatives with other international organizations. 
UN Security Council Resolution 1267 
Adopted in 1999, the resolution imposed sanctions on Taliban- controlled Afghanistan for its support of 
Osama Bin Laden and the Al-Qaeda organization. 
 


Supervision Department - AML/CFT Training 
Definitions GlosSTRy
 
2
 
The sanctions have subsequently been modified and strengthened—they no longer exclusively target 
Afghanistan and now extend to any individual, group, undertaking or entity participating in planning or 
financing activities for Al-Qaeda or the Taliban. Member countries are obliged to adopt sanction 
implementation programs so that financial institutions can block the transactions, and freeze the assets of 
any person or entity on the list of designated terrorist entities maintained by the UN 1267 Committee. 
UN Security Council Resolution 1373 
Adopted in 2001, the resolution requires member nations 
to take a series of actions to combat terrorism through the adoption of laws and regulations and the 
establishment of administrative structures. The resolution also requires member nations to ―afford one 
another the greatest measure of assistance for criminal investigations or criminal proceedings relating to the 
financing or support of terrorist acts.‖ 
Unusual Transaction 
Transaction that appears designed to circumvent reporting requirements, is inconsistent with the account‘s 
transaction patterns or deviates from the activity expected for that type of account. 
USA Patriot Act 
The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct 
Terrorism Act of 2001 (Public Law 107-56). Enacted on October 26, 2001, the historic U.S. law brought 
about momentous changes in the anti-money laundering field, including more than 50 amendments to the 
Bank Secrecy Act. Title III of the Act, the International Money Laundering Abatement and Anti-Terrorist 
Financing Act of 2001, contains most, but not all, of its anti- money laundering-related provisions. 
V
 
Value Transfer Service 
See Money Transfer Service. 
Vienna Convention 
Convention in 1988 against the Illicit Trade in Narcotic Drugs and Psychotropic Substances. Countries that 
become parties to the Vienna Convention commit to criminalizing drug trafficking and associated money 
laundering, and enacting measures for the confiscation of the proceeds of drug trafficking. Article III of the 
Convention provides a comprehensive definition of money laundering, which has been the basis of much 
subsequent national legislation. 
 


Supervision Department - AML/CFT Training 
Definitions GlosSTRy
 
2
 
Vital Service Providers (VSPs) 
People who help move the billions of dollars drug traffickers earn around the world. VSPs include 
accountants, attorneys, broker-dealers, other financial institutions, communications and transportation 
providers, and people who build concealment traps—sophisticated hiding places for drugs and money in 
vehicles, boats, or houses. 
Vostro Account 
See Nostro Account. 
W
 
White-collar crime 
A type of crime generally seen as non-violent or involving 
more sophisticated ―business-related‖ schemes rather than violence or the threat of violence. Such crimes 
include tax fraud (evasion, false tax returns, failure to file tax returns), money laundering (any attempt to 
hide money derived from illegal sources), bribery, bankruptcy fraud, environmental fraud, health care fraud 
and many others. 
Willful Blindness 
Legal principle that operates in money laundering cases in the U.S. and is defined by courts as the 
―deliberate avoidance of knowledge of the facts‖ or ―purposeful indifference.‖ Courts have held that willful 
blindness is the equivalent of actual knowledge of the illegal source of funds or of the intentions of a 
customer in a money laundering transaction. 
Wire Transfer 
Electronic transmission of funds among financial institutions on behalf of themselves or their customers. 
Wire transfers are financial vehicles covered by the regulatory requirements of many countries in the anti-
money laundering effort. 
Wolfsberg Group 
Named after the castle in Switzerland where its first working session was held, the Wolfsberg Group is an 
association of global financial institutions, including Banco Santander, Bank of Tokyo-Mitsubishi, 
Barclays, Citigroup, Credit Suisse Group, Deutsche Bank, Goldman Sachs, HSBC, J.P. Morgan Chase, 
Société Générale and UBS. In 2000, along with Transparency International and experts worldwide, the 
institutions developed global anti-money laundering guidelines for international private banks. 
 
 


Supervision Department - AML/CFT Training 
Definitions GlosSTRy
 
2
 
Since then, it has issued several other guidelines on correspondent banking and terrorist financing, among 
others. 
World Bank 
The World Bank is a vital source of financial and technical assistance to developing countries. It is not a 
bank in the usual sense, but is made up of two unique development institutions owned by 184 member 
countries—the International Bank for Reconstruction and Development (IBRD) and the International 
Development Association (IDA). Both organizations provide low-interest loans, interest-free credit, and 
grants to developing countries. In 2002, the IMF and the World Bank launched a 12-month pilot program to 
assess countries‘ anti-money laundering and counter-terrorist financing measures. The World Bank and the 
IMF, in conjunction with FATF, developed a common methodology to conduct such assessments based on 
the FATF‘s 40 Recommendations. 
Z
 
Zakat 
One of the Five Pillars of Islam and among the primary obligations that each Muslim must fulfill, zakat 
means tithing, or alms-giving. Once every lunar year—approximately 355 days— zakat requires a donation 
to charity representing a fixed portion of a Muslim‘s possessions, generally 2.5% of an individual‘s total net 
worth, excluding obligations and family expenses. 
 
 


Supervision Department - AML/CFT Training 
Notes
 
2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



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