A.M.L. PROTECTIVE SERVICES

Confused with the acronmyms, names, terms?  Welcome to AML Terminolgy 101.  Let's see if we can clarify some of these for you.

ACH - Automated Clearing House - an electronic banking network that processes large volumes of both debit and credit transactions.  Common with processing payments for fund transfers and money order sales.

AML - Anti-Money Laundering

BSA - Bank Secrecy Act - the primary anti-money laundering statute.  It is part of Title 31 of the USC.

BMPE - Black Market Peso Exchange - a method of laundering money initially utilized by the Colombian drug cartels.  Referred to as one of the IVTS methods

CFATF - Caribbean Financial Action Task Force - a FATF style regional advisory body

Casa de Cambio - a currency exchanger

Correspondent Banking - provision of banking from one bank through another bank.  A correspondent will handle the transactions at the destination of the transaction.

CTR - Currency Transaction Report - the report filed within 15 days of a financial transaction where more than $10,000 in cash is either received or distributed

CIP - Customer Identification Program - the policies and procedures in place to identify the identity of the person attempting to conduct a transaction

Electronic Banking - a form of banking where funds are transferred through an electronic medium - such as through the use of the internet

FATF - Financial Action Task Force - international policy making body to address money laundering issues

FBAR - Foreign Bank Account Report

FIU - Financial Intelligence Unit - a central governmental organization that obtains financial reports and information for analysis

FinCEN - the Financial Crimes Enforcement Network - the US regulatory body charged with drafting regulations, overseeing BSA examinations, and assessing penalties

Hawala - another form of IVTS - a method of transferring funds outside of the regular banking channels.  Based on the Hindi word meaning "Trust".  Purported to be the method utilized by the 9-11 terrorists and the recent "Times Square Bombing" attempt.

IVTS - Informal Value Transfer System - see BMPE and Hawala

Integration - the third step in the money laundering process to enable the illegal funds to be placed into the financial system and appear legitimate

KYC - Know Your Customer - Policies and Procedures to identify the person attempting to conduct a financial transacton

KYE - Know Your Employee - Policies and Procedures utilized to identify your employees and their backgrounds, to ensure the safety and soundness of your company.

KYS - Know Your Supplier - Policies and Procedures utilized to identify who your suppliers are and where they obtain the products they hold out for sale to you. 

Layering - the second step in the money laundering process.  Attempting to create layers to make it more difficult to identify the source of the illegal funds

MSB - Money Service Business

Money Laundering Compliance Program - also known as the Anti-Money Laundering Program - the 4 part program under Section 352 of the USA PATRIOT Act required of all MSBs, financial institutions, and certain Insurance companies and certain dealers in precious metals and jewels.

OFAC - Office of Foreign Asset Control - under the Dept. of the Treasury, the office that administers and enforces ecocomic and trade sanctions against certain counties and persons that sponsor terrorism and drug trafficing

Placement - the first phase of money laundering - it is the physical disposal of cash derived from illegal activities.

PEP - Politically Exposed Person - a politically identified  person who is entrusted with prominent public functions

Red Flag - a warning signal to identify suspicious transactions

Structuring - illegal act of splitting transactions to avoid recordkeeping and reporting requirements

Suspicious Activity - irregular or questionable customer activity that appears out of the norm for that financial institution.  Suspicious activity does not necessarily mean criminal activity.