Glossary of important concepts to know for compliance professionals in our digital age:
What is AML?
AML stands for Anti-Money Laundering. It refers to the laws, regulations, and procedures aimed at preventing criminals from disguising illegally obtained funds as legitimate income.
What is KYC?
KYC stands for Know Your Customer. It refers to the process of verifying the identity of a customer and assessing their potential risks before conducting business with them.
What is CFT?
CFT stands for Countering the Financing of Terrorism. It refers to the laws, regulations, and procedures aimed at preventing terrorists from raising and moving funds.
What is SAR?
SAR stands for Suspicious Activity Report. It refers to a report filed by financial institutions with authorities when they suspect that a customer's activity is indicative of illegal activity.
What is CIP?
CIP stands for Customer Identification Program. It refers to the process of collecting and verifying a customer's identity information in compliance with AML regulations.
What is OFAC?
OFAC stands for Office of Foreign Assets Control. It is an agency of the U.S. Treasury Department responsible for enforcing economic and trade sanctions against targeted foreign countries, individuals, and entities.
What is FATF?
FATF stands for Financial Action Task Force. It is an intergovernmental organization that develops and promotes policies to combat money laundering, terrorist financing, and other related threats to the integrity of the international financial system.
What is BSA?
BSA stands for Bank Secrecy Act. It is a U.S. law that requires financial institutions to assist in the detection and prevention of money laundering and other financial crimes.
What is EDD?
EDD stands for Enhanced Due Diligence. It refers to the additional steps taken to identify and verify high-risk customers and their transactions.
What is PEP?
PEP stands for Politically Exposed Person. It refers to an individual who holds a prominent public position or has close ties to someone who does, and is therefore considered to be at a higher risk of corruption and money laundering.
What is STR?
STR stands for Suspicious Transaction Report. It is similar to a SAR but is used in some jurisdictions outside of the U.S.
What is AML/CFT?
AML/CFT stands for Anti-Money Laundering/Countering the Financing of Terrorism. It refers to the combined efforts to prevent and detect money laundering and terrorist financing.
What is CDD?
CDD stands for Customer Due Diligence. It refers to the process of assessing and verifying a customer's identity, risk, and source of funds.
What is FinCEN?
FinCEN stands for Financial Crimes Enforcement Network. It is a bureau of the U.S. Treasury Department responsible for collecting, analyzing, and disseminating information about financial transactions in order to combat money laundering and other financial crimes.
What is STR Analysis?
STR Analysis stands for Short Tandem Repeat Analysis. It is a forensic technique used to analyze DNA samples in order to determine the identity of individuals.
What is MLD4?
MLD4 stands for Fourth Money Laundering Directive. It is an EU directive that requires financial institutions to take measures to prevent money laundering and terrorist financing.
What is SAR/CTR?
SAR/CTR stands for Suspicious Activity Report/Currency Transaction Report. It refers to the combined reporting requirements for suspicious activity and large cash transactions in the U.S.
What is FATCA?
FATCA stands for Foreign Account Tax Compliance Act. It is a U.S. law that requires foreign financial institutions to report information about U.S. account holders to the IRS.
What is PCI-DSS?
PCI-DSS stands for Payment Card Industry Data Security Standard. It is a set of security standards that merchants and payment processors must follow to protect credit card information.
What is EFT?
EFT stands for Electronic Funds Transfer. It refers to the transfer of money between accounts using electronic means.
What is UBO?
UBO stands for Ultimate Beneficial Owner. It refers to the person or entity that ultimately owns or controls a company or other legal entity.
What is RBA?
RBA stands for Risk-Based Approach. It refers to the approach used by financial institutions to identify, assess, and manage risks related to money laundering and terrorist financing.
What is CTR?
CTR stands for Currency Transaction Report. It is a report filed by financial institutions with authorities when a customer conducts a cash transaction over a certain amount.
What is AEOI?
AEOI stands for Automatic Exchange of Information. It refers to the international standard for the automatic exchange of tax and financial information between countries.
What is CAMELS?
CAMELS is a rating system used by regulators to evaluate the safety and soundness of financial institutions. It stands for Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, and Sensitivity to Market Risk.
What is Basel III?
Basel III is a set of international banking regulations developed by the Basel Committee on Banking Supervision. It aims to improve the resilience of the banking sector and reduce the risk of another financial crisis.
What is FATF Blacklist?
FATF Blacklist is a list of countries deemed to be non-cooperative in the fight against money laundering and terrorist financing by the Financial Action Task Force.
What is GDPR?
GDPR stands for General Data Protection Regulation. It is a regulation of the European Union that governs the collection, use, and storage of personal data.
What is TIN?
TIN stands for Tax Identification Number. It is a unique identification number used by tax authorities to track tax obligations.
What is ACAMS?
ACAMS stands for Association of Certified Anti-Money Laundering Specialists. It is a professional association for individuals working in the anti-money laundering field.
What is CISA?
CISA stands for Certified Information Systems Auditor. It is a certification for professionals who audit, control, monitor, and assess information technology and business systems.
What is SOC 1?
SOC 1 stands for Service Organization Control 1. It is a type of audit report that evaluates the effectiveness of a service provider's internal controls related to financial reporting.
What is OCC?
OCC stands for Office of the Comptroller of the Currency. It is a U.S. federal agency that charters, regulates, and supervises all national banks and federal savings associations.
What is the SEC?
SEC stands for Securities and Exchange Commission. It is a U.S. federal agency that regulates the securities industry and enforces securities laws.
What is FINRA?
FINRA stands for Financial Industry Regulatory Authority. It is a U.S. self-regulatory organization that regulates the securities industry.
What is FCPA?
FCPA stands for Foreign Corrupt Practices Act. It is a U.S. law that prohibits U.S. companies from bribing foreign officials to obtain or retain business.
What is FTR?
FTR stands for Foreign Tax Reporting. It refers to the reporting requirements for U.S. taxpayers who have foreign financial accounts or assets.
What is FIRPTA?
FIRPTA stands for Foreign Investment in Real Property Tax Act.