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Anti-Money Laundering TermsLaunderers process criminal proceeds to hide their illegal origin. Criminals disguise thesources of funds, changing their form or moving the funds to a place less likely to attractattention. They legitimize or "launder" money to control and use it ithout attracting

attention to the underlying criminal activity or to the persons involved.

!ote The items #elo are designed to clarify collo$uial and legal usage in anti-moneylaundering discussions. They have no standing as legal definitions and some might ellchange ith conte%t.

Account -a formal, continuing banking or business relationship established to provide regularservices, dealings and other financial transactions.

Alternative remittance systems -means of transferring funds and sometimes gold throughtraditional "underground" banking networks buy which trading companies accept money at onelocation and make it available in another. These systems are common in the Middle East(called Hawala , !frica, outh !sia (called Hundi and !sia.

A&ML' - !sset #orfeiture and Money $aundering ection, %epartment of &ustice

AML- !nti-Money $aundering.

Anti-money laundering program re$uirement- "%ealers in precious metals, 'ewels and stones"shall develop and implement a written anti-money laundering program reasonably designed toprevent the dealer from being used to facilitate money laundering and the financing of terroristactivities. The program must be approved by senior management. ! dealer shall make its anti-money laundering program available to the %epartment of Treasury or its designee upon re uest.

A()C - !sia )acific Economic *ooperation

AT&- +ureau of !lcohol, Tobacco and #irearms, %epartment of Treasury

A(* - !sia )acific roup on Money $aundering

+ank 'ecrecy Act -(+ ! passed in /0, was amended by the 1 ! )!T234T !ct of 500 .*onsists of a number of record-keeping and reporting re uirements designed to overcomeforeign bank secrecy laws and to deter money laundering. The re uirement to file #orm #in*E67800 reporting currency transactions above 9 0,000 (*T2 is a +ank ecrecy !ct rule.

+'A -+ank ecrecy !ct

+eneficial ner- the natural person(s who ultimately owns or controls a customer and:or theperson on whose behalf a transaction is being conducted and who has the authority to fund,direct or manage the account.

+lack List - ee 6on-cooperative countries or territories.

+ulk cash smuggling -physical movement of currency as a means of secreting proceeds fromcriminal activity.

Channeling account -used to receive, consolidate and retransfer laundered funds.

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Concentration account -also called clearing or omnibus account. !ccount used by a financialinstitution for bank-to-bank or administrative transactions. The 1 ! )!T234T !ct prohibits useof concentration accounts for customer business because they hide the identity of the customer.

Confiscation -#orfeit funds or assets to a overnment regulatory agency. *onfiscation can resultif the account holder commits a crime or holds fund from a money-laundering scheme. ! key

!M$ tool, it assumes all assets of a money launderer are derived from money laundering. o, inan account of 9 million, even if only 9 000 can be directly tied to money laundering, theovernment can confiscate all 9 million.

C & - *ommittee on ;emispheric Money $aundering

C ( -*ustomer 3dentification )rogram.

CM / -*urrency and Monetary 3nstrument Transportation 2eport.

Core (rinciples -2efers to the *ore )rinciples for Effective +anking upervision issued by the+asel *ommittee on +anking upervision, the 4b'ectives and )riciples for ecurities 2egulationissued by the 3nternational 4rgani

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precious stones, and 'ewelry composed of 'ewels, precious metals, or precious stones.

The term BBdealerCC does not include?(! ! retailer, i.e., a person engaged in the business of sales to the public of 'ewels, preciousmetals, or precious stones, or 'ewelry composed thereof, other than a retailer that, during theprior calendar or ta> year, purchased more than 9@0,000 in 'ewels, precious metals, preciousstones, or 'ewelry composed of 'ewels, precious metals, or precious stones, from persons otherthan dealers (such as members of the general public or persons engaged in other businesses A or (+ ! person who engages in transactions in 'ewels, precious metals, or precious stones forpurposes of fabricating finished goods that contain minor amounts of, or the value of which isnot significantly attributable to, such precious metals, precious stones, or 'ewels.

0epartment of omeland 'ecurity- (%; The new cabinet-level #ederal overnment%epartment created to coordinate the anti-terrorist activities of 55 overnment agencies. Theseinclude the *oast uard, *ustoms and 3mmigration, #+3, Treasury, #EM! etc.

0esignated non-financial #usinesses and professions ?

. *asinos

5. 2eal estate agents8. %ealers in precious metals=. %ealers in precious stones@. $awyers, notaries, other independent legal professionals and accountants (within

professional firmsD. Trust *ompany ervice )roviders that?

!ct as a formation agent of legal persons !ct as a director or secretary of a company, partner, or similar position in relation to other legalpersons.)rovide a registered officeA business address or accommodation, correspondence oradministrative address for a company, a partnership or any other legal person or arrangement.

!ct as a trustee of an e>press trust.

!ct as a nominee shareholder for another person.

%esignated Threshold-!mount above which transaction might be sub'ect to analysis as money-laundering or terrorist finance. #or instance, the #!T# sets 9 @,000 or euros as the level atwhich cash transactions in precious metals or stones should be reported. The 1. . sets this levelat 9 0,000.

0 ' -%epartment of ;omeland ecurity.

)gmont *roup -!n unofficial forum for #inancial 3ntelligence 1nits to establish standards andmechanisms for cooperation and establish protocols for e>changing information.

)scalation - hen an employee reports suspicious activity to the !M$ *ompliance 4fficer, asenior manager or enforcement agency

)%tradition -)ersons are surrendered by one country to another according to terms of bilateraltreaties. 4ften, an accused or convicted person is returned to the country in which he or she is anational.

&AT&-*A& -or &AT& -#inancial !ction Task #orce on Money $aundering.

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&+A/ -#oreign +ank and #inancial !ccounts 2eport

&ederal receiver -appointed by the court to collect, marshal and take custody, control andpossession of laundered assets.

&inancial Action Task &orce on Money Laundering -(#!T#- !#3-or #!T# 3nternational anti-

money laundering organipertise. Monitors !M$ policies in different countries, sets !M$ standards, etc. http?::www .oecd.org:fatf:

&inancial Crimes )nforcement !et ork -(#in*E6 -bureau in the 1. . %epartment of theTreasury formed in 0 to oversee, centralichangee>change, interest rate and inde> instrumentstransferable securitiescommodity futures trading

7. )articipation in securities issues and the provision of financial services related to suchissues.

. 3ndividual and collective portfolio management.0. afekeeping and administration of cash or li uid securities on behalf of other persons.

. 3nvesting, administering or managing funds or money on behalf of other persons.5. 1nderwriting and placement of life insurance and other investment related insurance.8. Money and currency changing.

&inancial ntelligence 4nit - (#31 ! centrali

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&'& - #inancial tability #orum

*A& - roupe dC!ction #inanciere sur le blanchiment de capitau>. 6ame in #rance for #inancial !ction Task #orce.

*atekeepers -professionals such as lawyers, accountants, investment advisors that can block or

e>pedite funds from entering the banking system. 3n certain cases, they can use their ownaccounts to effect entry and thereby hide the identity of the beneficial owner. The #!T#recommendations encourage countries to apply their !M$ re uirements for financial institutionsto gatekeepers.

*CC - ulf *ooperation *ouncil

*eographic targeting order -

&CA-;igh 3ntensity Money $aundering and 2elated #inancial *rime !rea

a ala - ee alternative remittance system.

undi - ee alternative remittance system.

2oint and Travel /ule -2e uires certain information to be recorded for wire transfers of 98,000 ormore. 3ncludes? name, address or transmitter and recipient, amount, identity of recipientCsfinancial institution, account number

))(A - 3nternational Emergency Economic )owers !ct

&- 3nternational financial 3nstitution

M&- 3nternational Monetary #und

!L - +ureau for 3nternational 6arcotics and $aw Enforcement !ffairs, %epartment of tate

ntegration -Mentioned in the 1 ! )!T234T !ct as the third and final stage of money launderingin which funds introduced into the financial system are invested or applied. The stages are)lacement, $ayering and 3ntegration.

nter#ank account -an account held by one financial institution at another, primarily for facilitatingcustomer transactions. $aundered funds deposited into a foreign bank can be sei

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89) -Fnow your employee. 1nderstanding an employees background, conflicts of interest andsusceptibility to money laundering complicity.

Large Currency Transaction &orm -#orm =/7 , on which cash transactions over 9 0,000 mustbe reported.

$ayering-in the 1 ! )!T234T !ct, the stage of laundering in which the origin and trail of fundsintroduced into the financial system are hidden by creating layers of transactions. The stages are)lacement, $ayering and 3ntegration.

Legal persons -bodies corporate, foundations, anstalt, partnerships, associations, or any similarbodies that can establish a permanent customer relationship with a financial institution orotherwise own property.

Long arm :urisdiction -describes a countryCs e>traterritorial reach. #or inistance, under the 1 !)!T234T !ct, the 1 can convict non-residents of crimes in which they participated while outsidethe 1 .

MLAT -Mutual $egal !ssistance Treaty

MLCA - Money $aundering *ontrol !ct of 7D

MLCC -Money $aundering *oordination *enter, 1. . *ustoms ervice, %epartment of theTrreasury

ML'A - Money $aundering uppression !ct of =.

Money Laundering -There is no single definition. 3n general, hiding the e>istence, origin, use,movement or disposition of illegally derived funds to make them appear legitimate. The 1 !)!T234T !ct mentions three stages of the process--placement, layering and integration.

Money Laundering Control Act of 7;changers, check cashers and travelers check issuers.

Mutual Legal Assistance Treaty - +ilateral treaty to permit cooperation between countries toconduct investigations, gather evidence and secure witnesses.

!CCT Cs-6on-cooperative countries or territories.

!&T+ -6on-financial trades and businesses

!on-cooperative countries or territories -(6**T *ountries designated by the #!T# asconsistently ignoring money laundering or unwilling to pass or enforce laws to prevent moneylaundering. The "black list" is revised annually.

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!on-financial trades and #usinesses -(6#T+ businesses sub'ect to the +ank ecrecy !ct thatare not financial institutions, eg. dealers in precious metals and stones, real estate agents,lawyersand car dealers.

A' - 4rgani

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or more parts per thousandA and an alloy containing @00 or more parts per thousand, in theaggregate, of two or more of the metals listed (above .

(recious 'tone -%efined in proposed regulations of the 1 ! )atriot !ct "to include inorganicsubstances that have a market-recogni

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'tructured transaction -!ttempt to evade cash or other reporting re uirements by a composite ofsmall transactions or by other devices.

'u#stitute property -3f funds or assets are transferred out of 1. . 'urisdiction by a suspectedlaunderer, #in*E6 may obtain a subpoena to seitradition.

illful #lindness -%eliberate avoidance of knowledge of the facts. )ermitting illegal activityknowing it was taking place. The standard of what constitutes knowledge is a legal definition. 3nthe 1 , this generally means knowing or suspecting. The fringe uestion is whether a partyshould have known, given the facts or circumstances, or whether knowledge was deliberately

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avoided. ! person found willfully blind is treated under the law as though he or she had hadactual knowledge.

ofs#erg *roup -$eading international banks formulating !M$ guidelines, procedures andpreventive measures.