8kss / glossary-of-acronyms-definitions

A repo of Anti-Money Laundering (AML), Counter Terrorist Financial (CTF) & Privacy jargon

Glossary of AML & CTF Compliance Acronyms & Definitions

A repo of Anti-Money Laundering (AML) and Counter Terrorist Financial (CTF) compliance jargon.

Greetings AML Nerds, AML Haters and everyone inbetween! We (the team at Outlier) have put together this repo to document, clarify and grow the insane amount of acronyms, definitions and other related jargon that exists. Please feel free to submit Pull Requests for additional definitions where you do, or more importantly don't, know the answer.

This has been designed with a North American focus, but if you are so inclined to provide European, Asian or Moon related PRs, we can evolve this repo into something really powerful.

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ACVM

Autorite's canadiennes en valeurs mobilieres

Administrative Monetary Penalties

Civil penalties that may be issued to reporting entities by FINTRAC for non-compliance with the PCMLTFA and related regulations.

http://www.fintrac-canafe.gc.ca/pen/2-eng.asp

AMF

Autorité des marchés financiers

AML

Anti-Money Laundering

AMP

Administrative Monetary Penalties

Anti-Money Laundering

Actions taken to detect, deter and prevent money laundering from occurring through our business.

ASTR

Attempted Suspicious Transaction Report

ATF

Anti-Terrorist Financing (this means the same thing as Counter Terrorist Financing and is often used interchangeably).

Attempted Suspicious Transaction Report

Occurs when an individual initiates a transaction and it does not result in the movement of funds or purchase of an asset because the transaction is not completed. For example, a potential client walks away from conducting a $10,000 cash deposit because they do not want to provide their identification.

http://www.fintrac-canafe.gc.ca/guidance-directives/transaction-operation/Guide2/2-eng.asp

Autorité des marchés financiers

The Autorité des marchés financiers is the organisation responsible for financial regulation in the Canadian province of Québec. It regulates the province's financial markets and provides assistance to consumers of financial products and services.

https://lautorite.qc.ca/en/general-public/

Beneficial Owner

Beneficial owners are the actual individuals who are the trustees, and known beneficiaries and settlors of a trust, or who directly or indirectly own or control 25% or more of a corporation or an entity other than a corporation or trust, such as a partnership. The ultimate beneficial owners cannot be another corporation or entity; they must be the actual individuals who are the owners or controllers of the entity.

http://www.fintrac-canafe.gc.ca/guidance-directives/client-clientele/bor-eng.asp

Beneficiary

A beneficiary is the individual or entity who will ultimately benefit from a transaction and be the final recipient of the funds.

Business Relationship

A business relationship is a relationship established between you, as a reporting entity, and a client to conduct financial transactions or provide services related to those transactions.

• Account-based business relationship: You are automatically in a business relationship with a client that holds an account with you. A business relationship begins as soon as you open an account for a client. Under the business relationship you must consider all transactions and activities relating to that account, as well as any other accounts that the client might have with you.

• Non-account-based business relationship: If a person or entity does not have an account with you, a business relationship is formed once the customer has conducted two transactions or activities for which you have to:

  • verify the identity of the individual; or

  • confirm the existence of the entity.

http://www.fintrac-canafe.gc.ca/guidance-directives/client-clientele/brr-eng.asp

Compliance Officer

The individual you appoint to be responsible for the implementation of your compliance program. Your compliance officer should have the authority and the resources necessary to discharge his or her responsibilities effectively.

Compliance Program

All elements that you, as a reporting entity, are legally required to have under the PCMLTFA and associated Regulations to ensure that you meet all of your reporting, record keeping, client identification, and know-your-client requirements.

http://www.fintrac-canafe.gc.ca/guidance-directives/compliance-conformite/Guide4/4-eng.asp

Counter Terrorist Financing

Actions taken to detect, deter and prevent terrorist financing from occurring through our business.

CTF

Counter Terrorist Financing

EFT

Electronic Funds Transfer

Electronic Funds Transfer

An electronic funds transfer (money transfer) means the transmission of instructions for the transfer of funds to or from Canada. An electronic funds transfer does not include the instructions for the transfer of funds from one place in Canada to another in Canada.

http://www.fintrac-canafe.gc.ca/reporting-declaration/Info/rptEFT-eng.asp

Electronic Funds Transfer Report

An electronic funds transfer report is submitted to FINTRAC upon a transmission of instructions for the transfer of CAD 10,000 or more out of or into Canada in a single transaction or in two or more transactions totaling CAD 10,000 or more made within 24 consecutive hours by or on behalf of the same individual or entity.

http://www.fintrac-canafe.gc.ca/guidance-directives/transaction-operation/Guide8A/nseft-eng.asp

FATF

Financial Action Task Force

Financial Action Take Force

The Financial Action Task Force is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering. In 2001 its mandate expanded to include terrorism financing.

http://www.fatf-gafi.org/

Financial Transactions and Reports Analysis Centre of Canada

Canada’s financial intelligence unit and our regulator for AML and CTF. We submit reports to FINTRAC and they have the right to examine us to test our compliance with Canadian requirements. All FINTRAC correspondences and inquiries should be passed immediately to the Compliance Officer.

http://www.fintrac-canafe.gc.ca/intro-eng.asp

FINTRAC

The Financial Transactions and Reports Analysis Centre of Canada

KYC

Know Your Client/Customer

Know Your Client/Customer

Know your customer is the process of a business verifying the identity of its clients and assessing potential risks of illegal intentions for the business relationship.

http://www.fintrac-canafe.gc.ca/guidance-directives/client-clientele/1-eng.asp

KYM

Know Your Member (this is more common in the Credit Union space where customers are members of the Credit Union)

Large Cash Transaction

Any cash transactions valued at CAD 10,000 or more (or the equivalent in a foreign currency) that take place within the same 24 hour period for the same customer. This may include one or several transactions.

http://www.fintrac-canafe.gc.ca/reporting-declaration/Info/rptLCTR-eng.asp

Large Cash Transaction Report

A report that is filed with FINTRAC when a large cash transaction has taken place. This report must be filed with FINTRAC within 15 calendar days of the transaction. Staff are required to report large cash transactions to the Compliance Officer on the day that they occur using our internal Large Cash Transaction Reporting form.

http://www.fintrac-canafe.gc.ca/guidance-directives/transaction-operation/Guide7A/lctr-eng.asp

LCTR

Large Cash Transaction Report

Listed Person

A listed person means anyone on a list published in the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism issued under the United Nations Act. You can consult that list of names on the Office of the Superintendent of Financial Institutions' Web site:

http://www.osfi-bsif.gc.ca/Eng/fi-if/amlc-clrpc/atf-fat/Pages/default.aspx.

A listed person includes an individual, a corporation, a trust, a partnership or fund or an unincorporated association or organization that is believed to:

• have carried out, attempted to carry out, participated in or facilitated a terrorist activity; or
• be controlled directly or indirectly by, be acting on behalf of, at the direction of, or in association with any individual or entity conducting any of the above activities.

Ministerial Directives

• The authority to issue directives that require reporting entities to apply measures (which this document calls "countermeasures") to transactions originating from or destined to designated foreign jurisdictions and entities; and

• The authority to recommend that the Governor-in-Council issue regulations limiting or prohibiting reporting entities from entering into a financial transaction originating from or destined to designated foreign jurisdictions and entities.

These authorities allow the Minister of Finance to take steps to protect the integrity of Canada's financial system from foreign jurisdictions and foreign entities that are deemed to pose high risks for facilitating money laundering and terrorist financing.

https://www.fin.gc.ca/legislation/pcmltfa-lrpcfat-1-eng.asp

ML

Money Laundering

Money Laundering

The process of taking money obtained by committing a crime and disguising the source to make it appear legitimate. Under the Criminal Code of Canada, it is illegal to launder money or to knowingly assist in laundering money. Under the PCMLTFA and Regulations, we must take steps to be sure that our business is not used to launder money and if we suspect that money laundering may be taking place, we must report it.

http://www.fintrac-canafe.gc.ca/guidance-directives/overview-apercu/Guide1/1-eng.asp#s2

Money Services Business

A business that provides services in Canada: foreign exchange, remittance and/or issuing or redeeming monetary instruments. A business may also be considered a money service business in the province of Québec by providing any of the mentioned services and/or cheque cashing and/or the operation of automated teller machines.

http://www.fintrac-canafe.gc.ca/msb-esm/intro-eng.asp

MSB

Money Services Business

Ongoing Monitoring

Means monitoring on a periodic basis based on the risk assessment undertaken by a reporting entity of their business relationship with a client for the purpose of:

• detecting any transactions that are required to be reported to FINTRAC;
• keeping client identification information and KYC information up to date;
• reassessing the level of risk associated with the client’s transactions and activities; and
• determining whether transactions or activities are consistent with the information obtained about the client, including the risk assessment of the client.

http://www.fintrac-canafe.gc.ca/guidance-directives/client-clientele/omr-eng.asp

PIN

Purpose and Intended Nature

PINBR

Purpose and Intended Nature of a Business Relationship

Production Order

A judicial order that compels a person or entity to disclose records to peace officers or public officers.

Purpose and Intended Nature (of a Business Relationship)

It is a record that documents the purpose and intended nature of a business relationship, and includes information that would help you anticipate the types of transactions and activities your client may conduct. It should best describe your business dealings with a client.

http://www.fintrac-canafe.gc.ca/guidance-directives/client-clientele/brr-eng.asp

RBA

Risk-based Approach

Reasonable Grounds to Suspect

Is a step above simple suspicion and is a conclusion you reach based on an assessment of facts, context, and ML/TF indicators associated with the financial transaction. Your suspicion must be reasonable, meaning, for example, that it cannot be biased or prejudiced.

http://www.fintrac-canafe.gc.ca/guidance-directives/transaction-operation/Guide2/2-eng.asp

Reasonable Measures

Means that you must take steps to collect certain information but it is not mandatory. For example, this can include doing one or more of the following:

• asking the client,
• conducting open source searches, or
• consulting commercially available information.

http://www.fintrac-canafe.gc.ca/guidance-directives/recordkeeping-document/record/msb-eng.asp

Reporting Entity

Reporting entities are regulated by the PCMLTFA and its regulations, and must report certain transactions to the FINTRAC. This includes the following industries:

• Accountants;
• Agents of the Crown;
• British Columbia notaries;
• Casinos;
• Dealers in precious metals and stones;
• Financial entities;
• Life insurance companies, brokers and agents;
• Money services businesses;
• Real estate; and
• Securities dealers.

http://www.fintrac-canafe.gc.ca/re-ed/intro-eng.asp

RGS

Reasonable Grounds to Suspect

Risk Assessment

A risk assessment is an analysis of potential risks and vulnerabilities that could expose your business to money laundering/terrorist financing (ML/TF) activities. This assessment will allow you to identify your inherent risk and will assist you and those authorized to act on your behalf in developing mitigation measures to deal with these risks.

http://www.fintrac-canafe.gc.ca/guidance-directives/compliance-conformite/rba/rba-eng.asp

Risk-based Approach

This is different terminology used for a Risk Assessment. They are used interchangeably.

Senior Officer

In respect of an entity, means (if applicable):

• a director of the entity who is one of its full-time employees;
• the entity’s chief executive officer, chief operating officer, president, secretary, treasurer, controller, chief financial officer, chief accountant, chief auditor or chief actuary, or any person who performs any of those functions; or
• any other officer who reports directly to the entity’s board of directors, chief executive officer or chief operating officer.

Shell Bank

Means a foreign financial institution that does not have a physical presence in a foreign country.

STR

Suspicious Transaction Report

Suspicious Transaction Report

A report that is filed with FINTRAC when we have reasonable grounds to suspect that a transaction is related to money laundering or terrorist financing. The Compliance Officer files FINTRAC reports within 30 days of the date that the transaction is deemed to be suspicious. If you suspect that a transaction is related to money laundering or terrorist financing, you must submit an unusual transaction form to the Compliance Officer on the date that the transaction occurs.

http://www.fintrac-canafe.gc.ca/guidance-directives/transaction-operation/Guide2/2-eng.asp

Terrorism

Is any attempt to influence or intimidate a government or the public at large through violent or illegal means or means that are intended to induce fear or panic.

Terrorist Financing

Funding any act of terrorism or committing any act or omission that facilitates the funding of terrorism.

Terrorist Property Report

A report that is filed with several government bodies, including FINTRAC, when we believe that we may be in possession of property or funds that are owned or controlled by terrorists. The Compliance Officer files these reports as soon as possible. If you suspect that we are in possession of terrorist property or funds, you must submit a Possible Terrorist Property Report to the Compliance Officer on the same day.

http://www.fintrac-canafe.gc.ca/guidance-directives/transaction-operation/Guide5/5-eng.asp

TF

Terrorist Financing

Third Party

Any individual or entity that instructs someone to act on their behalf for a financial activity or transaction. The third party is not the person who owns or benefits from the money, or who is carrying out the activity, but rather the entity or individual who gives the instructions to handle the money or conduct a particular activity. For example, a third party may instruct someone to deposit cash into an account.

http://www.fintrac-canafe.gc.ca/guidance-directives/client-clientele/tpdr-eng.asp

TPR

Terrorist Property Report

Unusual Transaction Report

An internal form that is used to record the details of any transactions (attempted or completed) that is suspected of being related to money laundering or terrorist financing.

UTR

Unusual Transaction Report

Voluntary Information Report

A report that is filed, by non-reporting entities, when there is suspicion of money laundering or terrorist financing.

http://www.fintrac-canafe.gc.ca/reporting-declaration/vol/1-eng.asp

VIR

Voluntary Information Report

https://www15.fintrac-canafe.gc.ca/vir-drtv/public/