Question 1

Terroristic act

Accepted Answer

A terroristic act is a deliberate, unlawful action involving violence or the threat of violence, intended to instill fear, intimidate a population, or coerce a government or international organization to achieve political, ideological, religious, or social goals.

Question 2

AML (Anti-Money Laundering)

Accepted Answer

AML refers to a set of laws, regulations, policies, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. The primary goal of AML is to detect and report suspicious financial activity that may be related to crimes such as drug trafficking, corruption, tax evasion, terrorism financing, or organized crime.

Question 3

AML compliance

Accepted Answer

AML compliance refers to the process by which financial institutions and other regulated entities ensure they adhere to anti-money laundering laws, regulations, and standards. It involves implementing a structured internal framework to prevent, detect, and report potential money laundering or terrorism financing activities

Question 4

AMLA (Anti-Money Laundering Authority)

Accepted Answer

The Anti-Money Laundering Authority (AMLA) is a planned European Union body established under the EU’s AML legislative package. Its primary purpose is to enhance the effectiveness and consistency of anti-money laundering and counter-terrorist financing (AML/CFT) supervision across the EU.

Question 5

AMLD (Anti-Money Laundering Directive)

Accepted Answer

A set of EU directives establishing rules and obligations for preventing money laundering and terrorist financing, applicable to obliged entities within the European Union.

Question 6

AMLRO (Anti-Money Laundering Reporting Officer)

Accepted Answer

A designated person responsible for overseeing AML compliance within an organization, including detecting suspicious activities and reporting them to the relevant authorities.

Question 7

AML audit (Anti-Money Laundering audit)

Accepted Answer

An independent review of an organization's AML policies, procedures, and controls to ensure compliance with AML laws and identify weaknesses or risks in the system.

Question 8

Basel AML Index

Accepted Answer

An independent ranking that measures countries’ risk of money laundering and terrorist financing based on factors like AML regulations, corruption, financial transparency, and political risks. Published annually by the Basel Institute on Governance.

Question 9

BCBS (Basel Committee on Banking Supervision)

Accepted Answer

An international body that sets global standards for banking regulation, including guidelines on anti-money laundering, risk management, and financial stability.

Question 10

UBO (Ultimate Beneficial Owner)

Accepted Answer

Any natural person who directly or indirectly exercises control over the customer through rights resulting from legal or factual circumstances, enabling them to exercise a decisive influence over the actions or activities undertaken by the customer, or any natural person on whose behalf a business relationship is established or an occasional transaction is carried out, including:a) in the case of a legal person other than a company whose securities are admitted to trading on a regulated market subject to disclosure requirements under the law of the European Union or equivalent provisions of the law of a third country:– a natural person who is a shareholder or stockholder holding ownership rights of more than 25% of the total number of shares or stocks of that legal person,– a natural person who holds more than 25% of the total number of votes in the governing body of that legal person, also as a pledgee or usufructuary, or based on agreements with other persons entitled to vote,– a natural person exercising control over a legal person or legal persons which together hold ownership rights of more than 25% of the total number of shares or stocks, or which together hold more than 25% of the total number of votes in the governing body of that legal person, also as a pledgee or usufructuary, or based on agreements with other persons entitled to vote,– a natural person exercising control over a legal person through the rights referred to in Article 3(1)(37) of the Act of 29 September 1994 on Accounting (Journal of Laws of 2023, items 120 and 295), or– a natural person holding a senior management position in the event of a documented inability to determine or doubts regarding the identity of the natural persons referred to in the first to fourth indents, and where no suspicion of money laundering or terrorist financing has been identified;b) in the case of a trust:– the settlor, including the founder within the meaning of the Act of 26 January 2023 on Family Foundations (Journal of Laws, item 326),– the trustee, including a member of the management board within the meaning of the Act of 26 January 2023 on Family Foundations,– the supervisor, if appointed, including a member of the supervisory board within the meaning of the Act of 26 January 2023 on Family Foundations,– the beneficiary, including the beneficiary within the meaning of the Act of 26 January 2023 on Family Foundations, or – where the natural persons benefiting from the given trust have not yet been determined – the group of persons in whose main interest the trust was established or operates,– any other person exercising control over the trust,– any other natural person holding rights or obligations equivalent to those specified in the first to fifth indents;c) in the case of a natural person conducting business activity, where there are no grounds or circumstances indicating that control is exercised over them by another natural person or persons, it is assumed that such a natural person is also the beneficial owner.

Question 11

Blending

Accepted Answer

A money laundering technique where illicit funds are mixed with legitimate business revenues, typically cash-intensive businesses, to disguise the illegal origin of the money.

Question 12

Dirty money

Accepted Answer

Funds obtained through illegal activities such as drug trafficking, corruption, fraud, human trafficking, illegal arms trade, or other criminal acts; often subject to money laundering to hide their illicit origin.

Question 13

CDD (Customer Due Diligence)

Accepted Answer

A set of procedures used by financial institutions and other entities to verify the identity of their clients, assess risks, and monitor transactions to prevent money laundering and terrorist financing.

Question 14

Transfer prices

Accepted Answer

Prices set for goods, services, or intangibles exchanged between related entities within a multinational company, used to allocate income and expenses across jurisdictions, which can affect tax liabilities.

Question 15

CFT (Countering the Financing of Terrorism)

Accepted Answer

Measures and regulations aimed at detecting, preventing, and combating the financing of terrorist activities to protect national and international security.

Question 16

Compliance

Accepted Answer

Adherence to laws, regulations, and internal policies by an organization to ensure lawful and ethical operations, including in areas such as anti-money laundering and counter-terrorism financing.

Question 17

Compliance Officer

Accepted Answer

The act of delaying, suspending, or refusing to execute a financial transaction, typically due to compliance concerns such as suspicion of money laundering, terrorist financing, or violations of regulatory requirements.

Question 18

CRBR (Central Register of Beneficial Owners)

Accepted Answer

A centralized government database that contains information about the ultimate beneficial owners of companies and legal entities to increase transparency and prevent money laundering and tax evasion.

Question 19

Clean money

Accepted Answer

Funds obtained from legal, legitimate sources that comply with all applicable laws and regulations, free from any association with criminal activities.

Question 20

De-risking

Accepted Answer

The practice by financial institutions of reducing or terminating business relationships with clients, sectors, or regions perceived as high-risk for money laundering or terrorist financing, to minimize regulatory and reputational risks.

Question 21

DNFBPs (Designated Non-Financial Businesses and Professions)

Accepted Answer

Non-financial entities and professionals such as lawyers, accountants, real estate agents, casinos, and dealers in precious metals or stones, which are subject to AML/CFT regulations due to their risk of being used for money laundering or terrorist financing.

Question 22

Dual-use goods

Accepted Answer

Products or technologies that can be used for both civilian and military purposes. Examples include drones (used for filming or reconnaissance/weapons), lasers (used in medicine or as weapon components), and encryption software (used for data protection but potentially for military communication).

Question 23

Due Diligence

Accepted Answer

Due Diligence — a thorough process of investigating and verifying the background, identity, and risk profile of clients or business partners to ensure compliance with legal and regulatory requirements, especially in AML/CFT contexts.

Question 24

Capital dislocation

Accepted Answer

A situation where normal flows of capital between markets or sectors are disrupted, often due to economic shocks, regulatory changes, or crises, causing inefficiencies and misallocation of financial resources.

Question 25

Egmont Group

Accepted Answer

An international network of Financial Intelligence Units (FIUs) that facilitates cooperation, information exchange, and coordination among member countries to combat money laundering and terrorist financing globally.

Question 26

False Negative

Accepted Answer

A failure to identify or detect a suspicious activity, transaction, or risk that actually exists, leading to missed cases of money laundering or terrorist financing during monitoring or screening processes.

Question 27

False Positive

Accepted Answer

An alert or warning triggered by a transaction or activity incorrectly identified as suspicious, despite being legitimate, which can lead to unnecessary investigations and resource use.

Question 28

FATCA (Foreign Account Tax Compliance Act)

Accepted Answer

A U.S. law requiring foreign financial institutions to report information about financial accounts held by U.S. taxpayers to the U.S. Internal Revenue Service (IRS), aimed at preventing tax evasion through offshore accounts.

Question 29

FATF (Financial Action Task Force)

Accepted Answer

An intergovernmental body established to develop and promote policies to combat money laundering, terrorist financing, and other related threats to the integrity of the international financial system. FATF sets global standards and monitors countries’ compliance through mutual evaluations.

Question 30

Financing of terrorism

Accepted Answer

Providing or collecting funds, directly or indirectly, with the intention or knowledge that they will be used to carry out terrorist acts or support terrorist organizations.

Question 31

Shell company

Accepted Answer

A business entity that exists only on paper without significant assets or operations, often used to conceal ownership, facilitate money laundering, or evade taxes.

Question 32

FIU (Financial Intelligence Unit)

Accepted Answer

A national agency responsible for receiving, analyzing, and disseminating financial information related to suspicious transactions to combat money laundering and terrorist financing.

Question 33

Funnel account

Accepted Answer

A bank account used to collect and consolidate funds from multiple sources, often to obscure the origin of illicit money during money laundering schemes.

Question 34

GIIF (General Inspector of Financial Information)

Accepted Answer

The Polish Financial Intelligence Unit (FIU) responsible for receiving, analyzing, and forwarding reports on suspicious financial transactions to combat money laundering and terrorist financing in Poland.

Question 35

Hawala

Accepted Answer

An informal value transfer system based on trust and family or community networks, used to transfer money without physical movement of cash or formal banking, often outside regulated financial channels.

Question 36

IAIS (International Association of Insurance Supervisors)

Accepted Answer

A global organization of insurance regulators and supervisors that develops standards, promotes effective supervision, and fosters cooperation to ensure the stability and integrity of the insurance sector worldwide.

Question 37

Customer Identification

Accepted Answer

The process of verifying the identity of a client using reliable documents, data, or information to ensure the legitimacy of the customer and comply with AML/CFT regulations.

Question 38

CPI (Corruption Perceptions Index)

Accepted Answer

An annual ranking published by Transparency International that measures perceived levels of public sector corruption in countries worldwide, based on expert assessments and surveys.

Question 39

Supervisory authorities

Accepted Answer

Authorities overseeing AML/CFT compliance, including the head of KAS, customs and tax office chiefs, National Bank of Poland (NBP), General Inspector of Financial Information (GIIF), Polish Financial Supervision Authority (KNF), and the Supreme Audit Office (NIK).

Question 40

Integration (Legitimization)

Accepted Answer

The stage of money laundering where illicit funds are made to appear legitimate, for example, through blending with legal funds, fictitious loans, or transfer pricing.

Question 41

Obligated institutions

Accepted Answer

Entities legally required to implement AML/CFT measures, including banks, financial institutions, insurance companies, auditors, lawyers, real estate agents, casinos, and other designated non-financial businesses and professions subject to anti-money laundering regulations.

Question 42

IOSCO (International Organization of Securities Commissions)

Accepted Answer

A global association of securities regulators that develops, implements, and promotes international standards for securities markets to protect investors, ensure fair and efficient markets, and reduce systemic risk.

Question 43

IVTS (Informal Value Transfer System)

Accepted Answer

A method of transferring money outside traditional banking channels, based on trust and personal networks, often used to move funds quickly and anonymously across borders.

Question 44

Cooperating units  (Jednostki współpracujące)

Accepted Answer

Authorities collaborating with the General Inspector of Financial Information (GIIF) in AML/CFT matters, including public administration, the National Bank of Poland (NBP), the Polish Financial Supervision Authority (KNF), and the Supreme Audit Office (NIK).

Question 45

Client

Accepted Answer

A natural or legal person who establishes or maintains a business relationship or conducts an occasional transaction with a financial institution or other obliged entity, subject to AML/CFT regulations.

Question 46

Corruption

Accepted Answer

The abuse of entrusted power for private gain, including bribery, fraud, nepotism, and other unethical or illegal actions that undermine integrity and trust in public or private institutions.

Question 47

National AML Risk Assessment

Accepted Answer

An official evaluation conducted by a country to identify, assess, and understand the risks of money laundering and terrorist financing within its jurisdiction, guiding the development of effective prevention and control measures.

Question 48

KYC (Know Your Customer)

Accepted Answer

A process by which financial institutions and other regulated entities verify the identity of their clients to prevent fraud, money laundering, and terrorist financing.

Question 49

KYE (Know Your Employee)

Accepted Answer

A process used by organizations to verify the background, qualifications, and integrity of their employees to prevent internal fraud, corruption, and compliance risks, especially in regulated industries like finance and AML/CFT.

Question 50

Layering

Accepted Answer

A stage in money laundering involving complex financial transactions designed to obscure the origin of illicit funds, making them difficult to trace by separating them from their illegal source.

Question 51

PEP’s list

Accepted Answer

A register of individuals who hold or have held prominent public positions, as well as their close associates and family members, requiring enhanced due diligence in AML/CFT processes due to higher risk of corruption or bribery.

Question 52

Sanctions list

Accepted Answer

An official registry of individuals, entities, or countries subject to economic or financial restrictions imposed by governments or international organizations to prevent illegal activities such as terrorism financing, money laundering, or violations of international law.

Question 53

Placement

Accepted Answer

The initial stage of money laundering when illicit funds are introduced into the financial system through deposits, purchase of securities, or other financial transactions to conceal their illegal origin.

Question 54

Layering

Accepted Answer

A stage in money laundering involving complex financial transactions designed to obscure the origin of illicit funds, making them difficult to trace by separating them from their illegal source.

Question 55

MLCO (Money Laundering Compliance Officer)

Accepted Answer

A designated person within an organization responsible for overseeing and ensuring compliance with anti-money laundering (AML) laws, policies, and procedures.

Question 56

MONEYVAL

Accepted Answer

A permanent monitoring body of the Council of Europe that assesses member states’ compliance with international standards on anti-money laundering (AML) and counter-terrorist financing (CFT), providing evaluations and recommendations to improve national frameworks.

Question 57

MVTS (Money or Value Transfer Services)

Accepted Answer

Services that transfer money or value outside traditional banking systems, often involving cash or payment instruments, enabling quick fund transfers through networks of agents or intermediaries, sometimes posing higher risks for money laundering and terrorism financing.

Question 58

Tax Haven

Accepted Answer

A country or jurisdiction with low or no taxes, financial secrecy, and favorable regulations that attract foreign individuals and businesses seeking to minimize tax liabilities, often used to hide assets or income.

Question 59

OCCRP (Organized Crime and Corruption Reporting Project)

Accepted Answer

International non-profit organization specializing in investigative journalism on organized crime and corruption to promote transparency and fight corrupt practices.

Question 60

AML Risk Assessment

Accepted Answer

The process of identifying, analyzing, and evaluating risks related to money laundering and terrorist financing to implement effective controls and reduce the likelihood of illicit activities within an organization.

Question 61

OCG (Organized Crime Group)

Accepted Answer

A structured group of three or more persons acting together over a period of time to commit serious crimes for financial or material gain.

Question 62

OFAC (Office of Foreign Assets Control)

Accepted Answer

A U.S. Treasury Department agency responsible for enforcing economic and trade sanctions based on U.S. foreign policy and national security goals, targeting countries, entities, and individuals involved in terrorism, narcotics trafficking, and other threats.

Question 63

Offshore

Accepted Answer

A term describing financial activities, accounts, or entities located outside a person’s or company’s home country, often used to benefit from favorable tax laws, privacy, or regulatory environments.

Question 64

Terrorist Organization

Accepted Answer

A group that uses violence, intimidation, or threats, especially against civilians, to achieve political, religious, or ideological goals.

Book Demo

FinAP CheckLists

API FinAP CheckLists

Features

Compliance

KYC & KYB

AML & CTF

History & Mission

Careers

Contact

Follow Us

What is AML & how it works

Who must comply with AML

AML GLOSSARY & TERMS

Terroristic act

AML (Anti-Money Laundering)

AML compliance

AMLA (Anti-Money Laundering Authority)

AMLD (Anti-Money Laundering Directive)

AMLRO (Anti-Money Laundering Reporting Officer)

AML audit (Anti-Money Laundering audit)

Basel AML Index

BCBS (Basel Committee on Banking Supervision)

UBO (Ultimate Beneficial Owner)

Blending

Dirty money

CDD (Customer Due Diligence)

Transfer prices

CFT (Countering the Financing of Terrorism)

Compliance

Compliance Officer

CRBR (Central Register of Beneficial Owners)

Clean money

De-risking

DNFBPs (Designated Non-Financial Businesses and Professions)

Dual-use goods

Due Diligence

Capital dislocation

Egmont Group

False Negative

False Positive

FATCA (Foreign Account Tax Compliance Act)

FATF (Financial Action Task Force)

Financing of terrorism

Shell company

FIU (Financial Intelligence Unit)

Funnel account

GIIF (General Inspector of Financial Information)

Hawala

IAIS (International Association of Insurance Supervisors)

Customer Identification

CPI (Corruption Perceptions Index)

Supervisory authorities

Integration (Legitimization)

Obligated institutions

IOSCO (International Organization of Securities Commissions)

IVTS (Informal Value Transfer System)

Cooperating units (Jednostki współpracujące)

Client

Corruption

National AML Risk Assessment

KYC (Know Your Customer)

KYE (Know Your Employee)

Layering

PEP’s list

Sanctions list

Placement

Layering

MLCO (Money Laundering Compliance Officer)

MONEYVAL

MVTS (Money or Value Transfer Services)

Tax Haven

OCCRP (Organized Crime and Corruption Reporting Project)

AML Risk Assessment

OCG (Organized Crime Group)

OFAC (Office of Foreign Assets Control)

Offshore

Terrorist Organization

AML Compliance Officer

KNF Warnings