Supervision Department - AML/CFT
Training
Definitions GlosSTRy
2
Branch
A place of business that forms a legally dependent part of a financial institution and carries out directly all
or some of the transactions inherent in the business of that financial institution.
Bureau de Change
Also called ―casa de cambio‖ or ―exchange office,‖ a bureau de change offers a range of services that are
attractive to money launderers: currency exchange and consolidation of small denomination bank notes into
larger ones; exchange of financial instruments such as travelers checks, money orders and personal checks;
and telegraphic transfer facilities. In some countries, such businesses are not
as heavily scrutinized for
money laundering as are traditional financial institutions. Also, their customers are often occasional,
making it more difficult for these businesses to ―know their customers.‖
Bust-Out
A scheme in which the use or extension of credit is obtained and is increased fraudulently while the
perpetrators avoid having to pay back the illegally obtained credit or goods. Typically, a bust-out ring will
operate a shell or front business that accepts credit purchases on stolen or fraudulently obtained credit cards.
The criminals run the cards or numbers through credit card terminals, but either do not provide any goods
or services or provide stolen or non-licensed goods. The innocent credit card company credits the account
of the front business. Before the
transactions can be reversed, the criminals have moved the funds from the
accounts of the front business.
The cardholders who knowingly participate in these bust-out schemes generally refuse to pay the credit card
companies for their ―purchases.‖ These people have either obtained cards with fraudulent or stolen
identification or otherwise cannot be found. Bust-out schemes have been very popular in creating large
bankruptcy frauds in which business entities secure loans in excess of the actual value of the company or
property and then disappear with the money, leaving the lender to take a substantial loss.
C
Cardholder
Person to whom a financial
transaction card is issued, or an additional person authorized to use the card.
Caribbean Financial Action Task Force (CFATF)
A FATF-style regional body comprising Caribbean states, including Aruba, the Bahamas, the British Virgin
Islands, the Cayman Islands and Jamaica.
Supervision Department - AML/CFT Training
Definitions GlosSTRy
2
Casa de Cambio
See Bureau de Change.
Cash-Based Business
Any business in which customers usually pay with cash for the products or services provided, such as
restaurants,
pizza delivery services, taxi financial institutions, coin-operated machines or car washes. Some
money launderers run or use cash-based businesses to commingle illegally obtained funds with cash
actually generated by the business.
Cash Collateralized Loans
A cash collateralized loan has cash deposits as the loan‘s collateral. The cash deposits can sometimes reside
in another jurisdiction.
Cash Deposits
Sums of money placed in a financial institution‘s accounts. Vulnerable to money laundering in the
―placement phase,‖ as criminals move their cash into the non-cash economy by making deposits into
accounts at financial institutions.
Cashier’s Check
Common monetary instrument often purchased with cash. Used for laundering purposes, cashier‘s checks
provide an instrument drawn
on a reputable institution, such as a bank or credit union.
CDD
See Customer Due Diligence.
CDPC (French: Comité Européen pour les Problèmes Criminels)
European Committee on Crime Problems of the Council of Europe. A subcommittee of the CDPC is
MONEYVAL, formerly PC-R-EV, the select committee of experts on the evaluation of anti-money
laundering measures in European countries that are not members of FATF.
Certification
A formal assertion in writing which, under the USA Patriot
Act, is used by U.S. regulators in different contexts, including a written statement
by a respondent bank
signed by its duly authorized representative certifying that the bank does not do business with shell banks
(under Section 313 of the USA Patriot Act). It can also be a written representation provided by a U.S.
federal agent stating that the matter for which he or she is seeking information from financial institutions
under Sec. 314(a) of the USA Patriot Act regulations is linked to money laundering or terrorist financing.
Supervision Department - AML/CFT Training
Definitions GlosSTRy
2
Chain Referral Scheme
See Pyramid Scheme.
Chiti Banking
See Alternative Remittance System.
Chop Shop Banking
See Alternative Remittance System.
CICAD (Spanish: Comisión Interamericana para el Control del Abuso de Drogas)
See Organization of American States—Inter-American Drug Abuse Control Commission.
Clearing Account
Also called an ―omnibus‖ or ―concentration account.‖ Held by a financial institution in its name, a clearing
account is used primarily for internal administrative or bank-to-bank transactions in which funds are
transmitted and commingled without personally identifying the originators. The USA
Patriot Act prohibits
the use of such accounts for customer transactions.
Collection Accounts
Immigrants from foreign countries deposit many small amounts of currency into one account where they
reside, and the collected sum is transferred to an account in their home country without documentation of
the sources of the funds. Certain ethnic groups from Asia or Africa may use collection accounts to launder
money.
Collective Knowledge
The sum of the knowledge held separately by a financial institution‘s directors, officers and employees
regarding a certain issue, customer or account. The notion of collective knowledge can be used to suggest
corporate responsibility for compliance and liability for non-compliance.
For example, the financial
institution‘s knowledge is the totality of what all of the employees know within
the scope of their
employment. So, if Employee A knows one facet of a customer‘s information, B knows another facet of it,
and C a third facet of it, the institution knows all the facets of the customer‘s information.
Commission Rogatoire
Also known as letters rogatory, commission rogatoires are written requests for legal or judicial assistance
sent by the central authority of one country to the central authority of another when seeking evidence from
the foreign jurisdiction. The letter typically specifies
the nature of the request, the relevant criminal charges
in the requesting country, the legal provision under which the request is made, and the information sought.