Understanding AML

Essential Glossary for Industry Terminology

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.

Choose the exact letter to find your word:

Tipping-off

Definition:

Any natural person or legal person who discloses information or any other matter to any other natural person or legal person is likely to prejudice an investigation.

Trade-based money laundering

Definition:

There are three main methods by which criminal organisations and terrorist financiers move money to disguise its origins and integrate it into the formal economy. The first is through the use of the financial system; the second involves the physical movement of money (e.g. through the use of cash couriers); and the third is through the physical movement of goods through the trading system.

Transaction Monitoring

Definition:

Financial institutions and regulated licenced companies monitor transactions made by customers, in real-time or daily, using tools or processes as part of their transaction monitoring program that not only looks at current transactions but also analyzes a customer’s historical information and account profile to spot atypical behaviour, assess risk level, or predict future activity.

Trust or company service provider (TCSP)

Definition:

In many jurisdictions, TCSPs are regulated to prevent money laundering and other financial crimes by organisations or persons who provide services connected to forming, managing, or administrating legal entities such as trusts and corporations. TCSPs play a key role in the financial services industry by assisting clients in managing assets and structuring their businesses in accordance with local laws and regulations.

Ultimate Beneficial Owner (UBO)

Definition:

The natural person(s) who ultimately own or control a legal entity or arrangement, directly or indirectly.

United Nations

Definition:

An international organization that promotes peace, security, human rights, and international cooperation among its member states.

Unusual Transaction

Definition:

Transactions that appear designed to circumvent reporting requirements are inconsistent with the account’s transaction patterns or deviate from the activity expected for that type of account.

Virtual Asset Service Provider (VASP)

Definition:

In cryptocurrency and digital assets, a VASP refers to any business entity or person that provides services involving virtual assets, such as exchanges, wallet providers, and custodial services. VASPs are typically subject to regulatory requirements aimed at preventing money laundering, terrorist financing, and other illicit activities, like traditional financial institutions.

Virtual Currency

Definition:

ShapeVirtual currency is a type of unregulated digital currency. It is not issued or controlled by a central bank. Examples of virtual currencies include Bitcoin, Litecoin, and XRP. Digital currencies are stored in and transacted through designated software, applications, and networks in digital form.

Virtual International Bank Account Number (IBAN)

Definition:

An IBAN reference issued by a bank to allow incoming payments to be rerouted to a different physical bank account.

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