For financial crime professionals, AML officers, or anyone seeking clarity on fraud and AML terms, Edifice offers a glossary of common acronyms and definitions.
We’ll continuously update this resource to reflect industry developments.
A nominee director is an individual who is appointed to act on behalf of the actual directors or shareholders of a company. While they may not have direct involvement in the company’s operations or decision-making, their role is primarily to fulfill legal requirements or provide confidentiality for the actual owners. Although the use of nominee shareholders is declining, the practice of appointing nominee directors remains common in certain jurisdictions.
Not-for-profit organisations that are not directly linked to specific countries’ governments perform various services and humanitarian functions, including bringing citizen concerns to governments, advocating for causes, and encouraging political participation. Some countries’ AML regulations for NGOs still have loopholes that some worry could be exploited by terrorists or terrorist sympathisers trying to move money secretly.
These can take on a variety of forms, depending on the jurisdiction and legal system, including associations, foundations, fund-raising committees, community service organisations, corporations of public interest, limited companies and public benevolent institutions. FATF has suggested practices to help authorities protect organisations that raise or disburse funds for charitable, religious, cultural, educational, social or fraternal purposes from being misused or exploited by financiers of terrorism.
The UN Treaty on the Non-Proliferation of Nuclear Weapons was signed in 1968 and went into effect in March 1970. The NPT solidified the commitment of signing countries to prevent the spread of nuclear weapons. Its goal was to minimise the risk of the use of nuclear weapons in conflict, which could result in significant destruction. Likewise, the NPT sought to keep the weapons out of the hands of rogue nations and terrorists.
The agency within the US Department of the Treasury is responsible for administering and enforcing economic sanctions issued as part of US foreign policy and by international organisations like the United Nations against targeted foreign countries. It often collaborates with other agencies, such as the Department of State, to oversee national security goals. A core component of the agency’s responsibilities is creating and maintaining the Specially Designated Nationals (SDN) list.
Literally, away from one’s own home country—if one lives in Europe, the U.S. is “offshore.” In the money laundering lexicon, the term refers to jurisdictions deemed favourable to foreign investments because of low or no taxation or strict bank secrecy regulations.
A license that prohibits a bank from doing business with local citizens or in local currency as a condition of its license.
In literal terms, “offshore” means away from one’s home country; for example, for someone living in Europe, the U.S. would be considered “offshore.” In the context of money laundering, the term refers to jurisdictions that are considered favourable for foreign investments due to factors such as low or no taxation and strict bank secrecy regulations.
Institutions that cater to or otherwise encourage banks, trading companies, and other corporate or legal entities to physically or legally exist in a jurisdiction but limit their operations to “offshore,” meaning outside the jurisdiction (see Offshore). OFCs have historically been located in the Caribbean or on Mediterranean islands to be in reasonable proximity to the major financial centres of the U.S. and Europe.
An ODD assessment refers to conducting thorough due diligence on potential customers or business partners during onboarding. This assessment aims to gather comprehensive information about the customer’s identity, background, business activities, and financial history to assess the risk of money laundering, terrorist financing, or other illicit activities.
