Subpoena
Compulsory legal process issued by a court to compel the appearance of a witness at a judicial proceeding,
sometimes requiring the witness to bring specified documents.
Suspicious Activity
Irregular or questionable customer behavior or activity that may be related to a money laundering or other
criminal offense,
or to the financing of a terrorist activity. May also refer to
a transaction that is inconsistent with a customer‘s known legitimate business, personal activities, or the
normal level of activity for that kind of business or account.
Suspicious Activity Report (STR)
See Suspicious Transaction Report.
Suspicious Transaction Report (STR)
A government form that includes a financial institution‘s account of a questionable transaction. Many
jurisdictions require financial institutions to report suspicious transactions to relevant government
authorities on a suspicious transaction report, also known as a suspicious activity report or STR.
T
Tax Haven
Countries that offer special tax incentives or tax avoidance to foreign investors and depositors.
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Tax Information Exchange Agreements
Bilateral agreements among national governments that can yield evidence for money laundering and tax
evasion prosecutions.
Terrorist Financing
The process by which terrorists fund their operations in order to perform terrorist acts. Terrorists need
financial support to carry out their activities and to achieve their goals. There is little difference between
terrorists and other criminals in their use of the financial system. A successful terrorist or terrorist group,
much like a criminal organization, is one that is able to build and maintain
an effective financial infrastructure. In order to do so, the group or the individual must develop sources of
funding and means of obscuring the links between those sources and the activities they support. They need
to find a way to make sure the funds are available and can be used to purchase goods or services for
terrorist acts. The sums needed to mount terrorist attacks are not always large, and the associated
transactions are not necesSTRily complex. There are two primary sources of financing for terrorist
activities. The first involves financial support from countries, organizations or individuals. The other
involves a wide variety of revenue-generating activities, some illicit, including smuggling and credit card
fraud.
Testimony
Witness‘ oral presentation, usually under oath, that describes facts known to the witness.
Tipping Off
Improper or illegal act of notifying a suspect that he or she is the subject of a Suspicious Transaction Report
or is otherwise being investigated or pursued by the authorities.
Trade Finance
See Letter of Credit.
Transparency International (TI)
Berlin-based, non-governmental organization dedicated
to increasing government accountability and curbing both international and national corruption. Established
in 1993, TI is active in approximately 100 countries. It publishes ―corruption news‖ on its website daily and
offers an archive of corruption- related news articles and reports. Its Corruption Online Research and
Information System, or CORIS, is perhaps the most comprehensive worldwide database on corruption. TI is
best known for its annual Corruption Perceptions Index (CPI), which ranks countries by perceived levels of
corruption among public officials; its Bribe Payers Index (BPI) ranks the leading exporting countries
according to their propensity to bribe. TI‘s annual Global Corruption Report combines the CPI and the BPI
and ranks each country by its overall level of corruption. The lists help financial institutions determine the
risk associated with a particular jurisdiction.
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Trust
Arrangement among the property owner (the grantor), a beneficiary and a manager of the property (the
trustee), whereby the trustee manages the property for the benefit of the beneficiary in accordance with
terms set by the grantor.
Trustee
May be a paid professional or company or unpaid person that holds the assets in a trust fund separate from
the trustee‘s own assets. The trustee invests and disposes of the assets in accordance with the settlor‘s trust
deed, taking into consideration any letter of wishes.
Typology
Refers to a money laundering method and is a term used by FATF.
U
Underground Banking
See Alternative Remittance System.
United Nations (UN)
An international organization that was established in 1945 by 51 countries committed to preserving peace
through cooperation and collective security. Today, nearly every nation in the world belongs to the UN. See
also Vienna Convention. The United Nations contributes to the fight against organized crime with
initiatives such as the Global Program against Money Laundering (GPML), the key instrument of the UN
Office of Drug Control and Crime Prevention in this task. Through the GPML, the UN helps member states
to introduce legislation against money laundering and to develop mechanisms to combat this crime. The
program encourages anti-money laundering policy development, monitors and analyzes the problems and
responses, raises public awareness about money laundering and acts as a coordinator of joint anti-money
laundering initiatives with other international organizations.
UN Security Council Resolution 1267
Adopted in 1999, the resolution imposed sanctions on Taliban- controlled Afghanistan for its support of
Osama Bin Laden and the Al-Qaeda organization.
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The sanctions have subsequently been modified and strengthened—they no longer exclusively target
Afghanistan and now extend to any individual, group, undertaking or entity participating in planning or
financing activities for Al-Qaeda or the Taliban. Member countries are obliged to adopt sanction
implementation programs so that financial institutions can block the transactions, and freeze the assets of
any person or entity on the list of designated terrorist entities maintained by the UN 1267 Committee.
UN Security Council Resolution 1373
Adopted in 2001, the resolution requires member nations
to take a series of actions to combat terrorism through the adoption of laws and regulations and the
establishment of administrative structures. The resolution also requires member nations to ―afford one
another the greatest measure of assistance for criminal investigations or criminal proceedings relating to the
financing or support of terrorist acts.‖
Unusual Transaction
Transaction that appears designed to circumvent reporting requirements, is inconsistent with the account‘s
transaction patterns or deviates from the activity expected for that type of account.
USA Patriot Act
The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56). Enacted on October 26, 2001, the historic U.S. law brought
about momentous changes in the anti-money laundering field, including more than 50 amendments to the
Bank Secrecy Act. Title III of the Act, the International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2001, contains most, but not all, of its anti- money laundering-related provisions.
V
Value Transfer Service
See Money Transfer Service.
Vienna Convention
Convention in 1988 against the Illicit Trade in Narcotic Drugs and Psychotropic Substances. Countries that
become parties to the Vienna Convention commit to criminalizing drug trafficking and associated money
laundering, and enacting measures for the confiscation of the proceeds of drug trafficking. Article III of the
Convention provides a comprehensive definition of money laundering, which has been the basis of much
subsequent national legislation.
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Vital Service Providers (VSPs)
People who help move the billions of dollars drug traffickers earn around the world. VSPs include
accountants, attorneys, broker-dealers, other financial institutions, communications and transportation
providers, and people who build concealment traps—sophisticated hiding places for drugs and money in
vehicles, boats, or houses.
Vostro Account
See Nostro Account.
W
White-collar crime
A type of crime generally seen as non-violent or involving
more sophisticated ―business-related‖ schemes rather than violence or the threat of violence. Such crimes
include tax fraud (evasion, false tax returns, failure to file tax returns), money laundering (any attempt to
hide money derived from illegal sources), bribery, bankruptcy fraud, environmental fraud, health care fraud
and many others.
Willful Blindness
Legal principle that operates in money laundering cases in the U.S. and is defined by courts as the
―deliberate avoidance of knowledge of the facts‖ or ―purposeful indifference.‖ Courts have held that willful
blindness is the equivalent of actual knowledge of the illegal source of funds or of the intentions of a
customer in a money laundering transaction.
Wire Transfer
Electronic transmission of funds among financial institutions on behalf of themselves or their customers.
Wire transfers are financial vehicles covered by the regulatory requirements of many countries in the anti-
money laundering effort.
Wolfsberg Group
Named after the castle in Switzerland where its first working session was held, the Wolfsberg Group is an
association of global financial institutions, including Banco Santander, Bank of Tokyo-Mitsubishi,
Barclays, Citigroup, Credit Suisse Group, Deutsche Bank, Goldman Sachs, HSBC, J.P. Morgan Chase,
Société Générale and UBS. In 2000, along with Transparency International and experts worldwide, the
institutions developed global anti-money laundering guidelines for international private banks.
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Since then, it has issued several other guidelines on correspondent banking and terrorist financing, among
others.
World Bank
The World Bank is a vital source of financial and technical assistance to developing countries. It is not a
bank in the usual sense, but is made up of two unique development institutions owned by 184 member
countries—the International Bank for Reconstruction and Development (IBRD) and the International
Development Association (IDA). Both organizations provide low-interest loans, interest-free credit, and
grants to developing countries. In 2002, the IMF and the World Bank launched a 12-month pilot program to
assess countries‘ anti-money laundering and counter-terrorist financing measures. The World Bank and the
IMF, in conjunction with FATF, developed a common methodology to conduct such assessments based on
the FATF‘s 40 Recommendations.
Z
Zakat
One of the Five Pillars of Islam and among the primary obligations that each Muslim must fulfill, zakat
means tithing, or alms-giving. Once every lunar year—approximately 355 days— zakat requires a donation
to charity representing a fixed portion of a Muslim‘s possessions, generally 2.5% of an individual‘s total net
worth, excluding obligations and family expenses.
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