ACAMS Anti-Financial Crime Review Flashcards

Vocabulary practice flashcards covering key definitions, compliance rules, international regulations, and technology concepts from the ACAMS review notes.

Predicate Crimes in Money Laundering

Specified unlawful activities whose proceeds can give rise to money laundering.

Bribery vs. Corruption

Bribery is a specific act offering a benefit. Corruption is broader, involving power abuse.

Tax Avoidance vs. Tax Evasion

Tax avoidance is legal; tax evasion is illegal and involves concealing income or assets.

Fraud

An intentional act of deception to gain an unjust or illegal advantage.

Cyber-Enabled Crime

Illegal activities facilitated by digital technology, such as fraud and identity theft.

Environmental Crimes

Illegal activities that harm human health, nature, or natural resources.

Regulated vs. Obliged Entities

Regulated entities must follow AML/CFT; obliged entities include nonfinancial organizations.

Four Types of Financial Crime Risk

Operational, legal, concentration, and reputational risk.

Shell vs. Shelf Companies

Shell companies have no operations; shelf companies are preregistered for future use.

Beneficial Owner vs. UBO

Beneficial owner can be either a natural or legal person. UBO (Ultimate Beneficial Owner) is always a natural person.

Round Tripping in OFCs

Moving funds in and out of an Offshore Financial Center (OFC) without a legitimate economic purpose.

Three Types of PEPs

Foreign, domestic, and international organization Politically Exposed Persons (PEPs).

Blockchain

A decentralized ledger that securely records transactions.

Mixers and Tumblers

Services used for hiding the source of cryptoasset funds to make transaction tracing nearly impossible.

FATF 40 Recommendations

Global AML/CFT guidelines issued by FATF that are not legally binding.

UN Vienna Convention

Sets guidelines for the criminalization of money laundering and related offenses.

OECD Anti-Bribery Convention

Promotes measures to combat bribery of foreign public officials globally.

BCBS Mandate

To enhance the global banking system by strengthening regulation, supervision, and practices.

Egmont Group

Facilitates cooperation and information sharing among Financial Intelligence Units (FIUs) to combat money laundering.

IOSCO Objectives

To protect investors, ensure fair markets, and promote transparency.

Transparency International CPI

Assesses perceived levels of public sector corruption in jurisdictions worldwide.

Basel AML Index

Evaluates a country's vulnerability to financial crimes and its capacity to counter them.

USA PATRIOT Act Contributions

Enhances Customer Due Diligence (CDD), Know Your Customer (KYC), Anti-Money Laundering (AML) measures, and information sharing.

EU AML Package

Consists of 6AMLD, AMLR, AMLA-R, and FTR.

General Data Protection Regulation (GDPR)

Strictest data privacy framework for how organizations protect EU citizens' personal data and privacy, extending across the EEA.

Digital Operational Resilience Act (DORA)

Ensures the EU's financial sector can withstand IT disruptions and remain operational.

ESG Framework

An environmental, social, and governance framework designed to promote sustainable development.

J5 Partnership

A strategic collaboration between tax enforcement agencies from five countries.

Mutual Legal Assistance

A framework of agreements to assist in obtaining information, evidence, and law enforcement support across jurisdictions.

Quality Control (QC) vs. Quality Assurance (QA)

QC inspects output quality; QA evaluates process effectiveness, compliance, and risk management.

Five Pillars of an AML Program

Internal policies, AML compliance officer, employee training, independent audit, and CDD (Customer Due Diligence).

First Line of Defense (1LOD)

Business and product development and support, operations, risks, and controls.

Second Line of Defense (2LOD)

Oversight, promoting objectivity and independence of the business, and facilitating governance.

Third Line of Defense (3LOD)

Independent audit, evaluating first and second line effectiveness, and reporting findings.

Three Types of Control Activities

Preventive, detective, and corrective.

Batch Screening

Screening performed to detect emerging risk by comparing customers against updated sanctions, PEP, and adverse media lists.

Know Your Employee (KYE) Program

Manages the risk of employees who might commit financial crimes.

Duty to Report

The requirement that an organization must report when it suspects a customer is committing a financial crime.

SAR Narrative

The most critical component of a Suspicious Activity Report, detailing who, what, where, when, and how/why the activity is suspicious.

Geolocation Technology

Enables determining a user or device's physical location by analyzing signals such as IP addresses.

Open-Source Intelligence (OSINT)

The collection and analysis of information from publicly available sources.

Perpetual KYC (pKYC)

Maintains accurate customer data through near-real-time updates based on behavior changes.

Network Analysis Models

Identify and visualize relationships and interactions within data to reveal hidden networks.

Fuzzy Logic in Screening

Helps find matches in misspelled or partial names, and names with unlike spellings but similar phonetics.

Whitelisting

Maintaining a list of customer names or other data not to be flagged in certain situations.

Structuring

Conducting multiple transactions just below the reporting threshold to prevent alerts.

Data Taxonomy

A discrete system for classifying data into hierarchical structures.

Data Cleansing

Process that removes duplicates, standardizes data, validates accuracy, manages outliers, and fixes corrupted datasets.

Internal Static Data

Data from or about a customer that remains the same after collection.

Entity Resolution

The process of confirming whether multiple records are referring to the same data item.