“The fact that I can purchase a service, implement it across the entire company, and know that the search records are being maintained is just invaluable.”
DIRECTOR OF CORPORATE COMPLIANCE, MANUFACTURER, ARLINGTON
- A B C D E F G H I M N O P S T U
Unfavorable media coverage, something most companies work hard to avoid.
According to the United Nations, the term refers to “the import, export, acquisition, sale, delivery, movement or transfer of firearms, their parts and components and ammunition.”
Bank Secrecy Act
Created in 1970, this Act prevents criminals from using banks as a means to launder their funds. The BSA accomplishes this task by requiring financial institutions to provide any documentation that seems suspicious.
A beneficial owner is an entity that enjoys the benefits of ownership of a property, even though its title is in the name of another entity.
Also called “freezing,” this is a form of controlling assets under U.S. jurisdiction. While title to blocked property remains with the designated country or national, the exercise of the powers and privileges normally associated with ownership is prohibited without authorization from OFAC. Blocking immediately imposes an across-the-board prohibition against transfers or transactions of any kind with regard to the property.
U.S. law requires that assets and accounts of an OFAC-specified country, entity, or individual be blocked when such property is located in the United States, is held by U.S. individuals or entities, or comes into the possession or control of U.S. individuals or entities. For example, if a funds transfer comes from offshore and is being routed through a U.S. bank to an offshore bank, and there is an OFAC-designated party on the transaction, it must be blocked. The definition of assets and property is broad and is specifically defined within each sanction program. Assets and property includes anything of direct, indirect, present, future, or contingent value (including all types of bank transactions).
Bureau of Industry and Security
The mission of the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce is to advance U.S. national security, foreign policy, and economic interests. BIS’s activities include regulating the export of sensitive goods and technologies in an effective and efficient manner; enforcing export control, anti-boycott, and public safety laws; cooperating with and assisting other countries on export control and strategic trade issues; assisting U.S. industry to comply with international arms control agreements; and monitoring the viability of the U.S. defense industrial base and seeking to ensure that it is capable of satisfying U.S. national and homeland security needs. More information about BIS can be found on bis.doc.gov.
Any crime that evolves from the commission of a previous criminal act is deemed a collateral crime. False statements or obstruction to justice can be considered a collateral crime.
Company of Interest
An important publicly known company, which often includes an Influential Person or Persons in its management.
An encouragement to do wrong by unlawful means.
Directorate of Defense Trade Controls
The Directorate of Defense Trade Controls, Bureau of Political-Military Affairs, in accordance with Secs 38-40 of the Arms Export Control Act (AECA) (22 U.S.C. 2778-2780) and the International Traffic in Arms Regulations (ITAR) (22 CFR Parts 120-130), is charged with controlling the export and temporary import of defense articles and defense services covered by the United States Munitions List (USML). You can learn more on their website.
The originating entity for match information.
The term drug trafficking refers to the complex system which encompasses the cultivation, manufacturing, transportation and distribution of illegal substances.
See Excluded Parties List
Excluded Parties List
(EPLS) A statement issued by the U.S. government to keep agencies aware of exclusions taken throughout the Federal Government. The EPLS was created to prevent debarred, suspended, or excluded parties from participating in affected programs.
The Excluded Parties List (EPLS) of the United States Government is provided as a public service by General Services Administration (GSA) for the purpose of disseminating information on parties that are excluded from receiving Federal contracts, certain subcontracts, and certain Federal financial and non-financial assistance and benefits, pursuant to the provisions of 31 U.S.C. 6101, note, E.O. 12549, E.O. 12689, 48 CFR 9.404, and each agency’s codification of the Common Rule for Non-procurement suspension and debarment.
OFAC regulations often provide general licenses authorizing the performance of certain categories of transactions. OFAC also issues specific licenses on a case-by-case basis under certain limited situations and conditions. Guidance on how to request a specific license is found at 31 C.F.R. 501.801
A false positive is an incorrect positive result. The degree to which a system eliminates false positives while ensuring compliance determines its efficiency.
The Financial Action Task Force is a government body that creates and promotes policies to combat money laundering.
The Foreign Corrupt Practices Act is a federal law enacted in 1977 to prohibit companies from paying bribes to foreign government officials and political figures for the purpose of obtaining business.
Created by the U.S. Department of Treasury, the Financial Crimes Enforcement Network’s goal is to punish criminals who participate in money laundering.
An algorithm used for matching processes by comparing specific search terms not only for precise matches but also for matches to very similar terms.
A regulatory provision authorizing certain transactions without the filing of an application with OFAC. Its terms are listed in the appropriate Regulations. The concept is similar in meaning to that employed by the U.S. Department of Commerce.
High Quality Match
A match in which there is a high probability that the client is the same person identified in the database records. A high probability match might be 95%, but this value is configurable.
The United Nations definition of human trafficking is “The recruitment, transportation, transfer, harboring or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation.”
An important publicly known figure, especially one who holds power.
The result of making an informed decision about identity by comparing known attributes with corresponding records.
A process through which the origin of illegal funds is concealed in order to appear as if they resulted from legitimate means.
An identification number issued by a country. For example, a Social Security number is a national ID in the US.
The Office of Foreign Assets Control (OFAC) (treasury.gov) is the U.S. Treasury office responsible for developing, administering and enforcing economic and trade sanctions. Some sanctions are based on United Nations and other international mandates; therefore, they are multilateral in scope, and involve close cooperation with allied governments. Others are specific to the foreign policy and national security goals of the United States. Sanctions are targeted against entities including foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction.
All U.S. persons must comply with the laws and OFAC-issued regulations. Some sanctions extend compliance to foreign branches and subsidiaries. In general, the regulations require the following:
- Block accounts and other property of specified countries, entities, and individuals.
- Prohibit or reject unlicensed trade and financial transactions with specified countries, entities, and individuals.
OFAC has the authority, through a licensing process, to permit certain transactions that would otherwise be prohibited under its regulations. OFAC can issue a license to engage in an otherwise prohibited transaction when it determines that the transaction does not undermine the U.S. policy objectives of the particular sanctions program, or is otherwise justified by U.S. national security or foreign policy objectives. OFAC can also promulgate general licenses, which authorize categories of transactions, such as allowing reasonable service charges on blocked accounts, without the need for case-by-case authorization from OFAC.
Specific licenses are issued on a case-by-case basis. A specific license is a written document issued by OFAC authorizing a particular transaction or set of transactions. To receive a specific license, the person or entity who would like to undertake the transaction must submit an application to OFAC. If the transaction conforms to U.S. foreign policy under a particular program, the license will be issued.
Exercise of the right to net out mutual indebtedness. Offset is a prohibited transfer of frozen assets in situations of blocked property. When foreign assets held by an American company (including a bank) are frozen, the assets and any claims which the American company may have against the foreign owner are kept separate.
Open Source Intelligence
Finding and gathering information that is available to the public through sources such as the internet, court records, and newspapers.
See Politically Exposed Person
Person Subject to the Jurisdiction of the United States
The universe which must comply with OFAC regulations. It includes American citizens and permanent resident aliens wherever they are located; individuals and entities located in the United States (including all foreign branches, agencies, rep offices, etc.); corporations organized under U.S. law, including foreign branches; and (under TWEA based sanctions) entities owned or controlled by any of the above, the most important being foreign-organized subsidiaries of U.S. corporations.
Politically Exposed Person (PEP)
Current or former senior foreign political figures, their immediate family, and close associates. While there is no uniform definition for PEP, there is an international consensus to identify politically exposed persons, their family members, business partners, as well as government owned entities for the purposes of reducing the chance of a violation under the FCPA.
Prohibited transactions are trade or financial transactions and other dealings in which U.S. persons may not engage unless authorized by OFAC or expressly exempted by statute. Because each program is based on different foreign policy and national security goals, prohibitions may vary between programs.
In some cases, an underlying transaction may be prohibited, but there is no blockable interest in the transaction. That is, the transaction should not be accepted, but there is no OFAC requirement to block the assets. In these cases, the transaction is simply rejected. For example, the Sudanese Sanctions Regulations prohibit transactions in support of commercial activities in Sudan. Therefore, a U.S. bank would have to reject a funds transfer between two companies, which are not Specially Designated Nationals or Blocked Persons (SDN), involving an export to a company in Sudan that also is not an SDN. Because Sudanese Sanctions would only require blocking transactions with the Government of Sudan or an SDN, there would be no blockable interest in the funds between the two companies. However, because the transactions would constitute support of Sudanese commercial activity, which is prohibited, the U.S. bank cannot process the transaction and would simply reject the transaction.
It is important to note that the OFAC regime specifying prohibitions against certain countries, entities, and individuals is separate and distinct from the provision within the BSA’s CIP regulation (31 CFR 103.121) that requires banks to compare new accounts against government lists of known or suspected terrorists or terrorist organizations within a reasonable period of time after the account is opened. However, OFAC’s requirements stem from other statutes not limited to terrorism, and OFAC sanctions apply to transactions, in addition to account relationships.
Anything of value. Examples of property include: money, checks, drafts, debts, obligations, notes, warehouse receipts, bills of sale, evidences of title, negotiable instruments, trade acceptance, contracts, and anything else real, personal, or mixed, tangible or intangible, “or interest or interests therein, present, future, or contingent.” Practically everything that banks do every day involves “property” within the meaning of the regulations. Likewise, “property interest” is defined as any interest whatsoever, direct or indirect.
A high-level grouping of sanctions, for example: Non-Proliferation, Narcotic Trafficking, Iran.
One or more official sanction lists maintained by governments.
See Specially Designated Nationals and Blocked Persons
Specially Designated Nationals and Blocked Persons
Individuals and entities which are owned or controlled by, or acting for or on behalf of, the governments of target countries or are associated with international narcotics trafficking or terrorism. These individuals and entities are listed on the Treasury Department’s Specially Designated Nationals and Blocked Persons list so that persons subject to the jurisdiction of the United States will know that they are prohibited from dealing with the listed entities and must block all property within their possession or control in which these individuals and entities have an interest.
A permit issued by OFAC on a case-by-case basis to a specific individual or company allowing an activity that would otherwise be prohibited by the embargo or sanctions program. OFAC specific licenses (which may take the form of a letter or a license) are always issued on U.S. Treasury Department stationary.
According to the UN, terrorism is the intention “to cause death or serious bodily harm to civilians or non-combatants with the purpose of intimidating a population or compelling a government or an international organization to do or abstain from doing any act.”
The financing of terrorism occurs when funds are made available with the intention of being used to carry out acts of terrorism.
Terrorism and Financial Intelligence (TFI)
The U.S. Department of the Treasury’s Office of Terrorism and Financial Intelligence (TFI) is charged with disrupting the financial networks of terrorists, drug traffickers, and weapons of mass destruction (WMD) proliferators. TFI includes the Office of Terrorist Financing and Financial Crimes (TFFC), the Office of Foreign Assets Control (OFAC), the Office of Intelligence Analysis (OIA), the Treasury Executive Office for Asset Forfeiture (TEOAF), and the Financial Crimes Enforcement Network (FinCEN). TFI works across a broad range of areas focusing on specific anti-money laundering/countering the financing of terrorism (AML/CFT) issues and illicit finance networks. TFI currently administers and enforces 33 major economic and trade sanctions programs based on U.S. foreign policy and national security goals.
Terrorist Finance Tracking Program
The Treasury Department initiated the Terrorist Finance Tracking Program to identify, track, and pursue terrorists and their networks.
Treasury Forfeiture Fund (TFF)
The Treasury Forfeiture Fund, administered by TEOAF, collected $868 million in forfeiture revenue during fiscal year 2011.
Treasury Executive Office for Asset Forfeiture (TEOAF)
The Treasury Executive Office for Asset Forfeiture (TEOAF) administers the Treasury Forfeiture Fund (TFF), used for the deposit of non-tax forfeitures made pursuant to regulations of participating Treasury and Department of Homeland Security agencies. The enabling legislation for TFF (Title 31 U.S.C. 9703) defines those purposes for which Treasury forfeiture revenue may be used.
USA Patriot Act
Created shortly after September 11th, 2001, the USA Patriot Act gave U.S. law enforcement increased power to investigate, prosecute, and prevent acts of terror. When the USA Patriot Act was introduced, the BSA was amended to strengthen U.S. measures to prevent, detect and prosecute international money laundering by adding the requirement for financial service companies to screen against U.S. Treasury Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list and to ensure compliance with OFAC country-based sanctions.