The world of regulations can sometimes seem like a bowl of alphabet soup. US regulations on money laundering are no exception. We have compiled a list of the top ten money laundering acronyms and their definitions.

AML – Anti money laundering is the term for activities aimed at curbing the practice of money laundering. Money laundering is an area of ​​concern for regulators and an important tool in the fight against drug trafficking and terrorist financing.

BSA – Tea Bank secrecy law it was the original United States regulation targeting money laundering. At first, the regulation focused mainly on tax evasion and organized crime. BSA focused on establishing a document register for cash transactions over $ 10,000. Many people refer to the entire collection of anti-money laundering regulations as the BSA.

KYC – Know your customer It is the concept of understanding who your customer is. Various aspects of the law require financial institutions to verify the identity of clients. Banks also need to understand what normal business is for certain customers. Without knowing what behavior to expect, it is difficult to identify which activity is suspicious.

CIP – Part of KYC, the Customer identification program It was introduced in the US PATRIOT Act CIP requires financial institutions to collect five pieces of information about new customers. They should collect name, date of birth, physical address, social security number (or tax identification number), and proof of identity. CIP programs make it difficult for criminals to open accounts without attracting attention.

CTR – TO Currency Transaction Report is presented for any cash transaction over $ 10,000. The same person will also submit CTR for multiple transactions totaling $ 10,000 in a given period. People who split transactions to avoid the notification threshold are suspicious. As long as the source of funds is legitimate, there are no negative consequences for a CTR submission. For example, a cash-intensive business, such as a bar that deposits business receipts, will not be suspicious.

HE – When a financial institution (defined very broadly) suspects that a transaction may be the product of illegal activity, it must file a Suspicious Activity Report. A person will not be notified if a SAR is filed against them, to avoid alerting potential criminals. SAR submissions are forwarded to the Financial Crimes Enforcement Network, which determines if further investigation is warranted.

FinCEN – Tea Financial crime execution network is the entity of the US government charged with combating financial crime, including money laundering. SAR reports are filed with FinCEN. Periodically, FinCEN provides analysis based on the information provided in SAR reports.

USA Patriot Act – The Act to Unite and Strengthen the United States by Providing the Proper Tools Needed to Intercept and Obstruct Terrorism was enacted shortly after September 11, 2001. As its name implies, the act provided extensive tools for the enforcement of the law in the fight against terrorism. The law also made significant improvements to money laundering laws. In particular, it required the creation of CIP programs.

ENERGY – Politically exposed people they are very high ranking foreign government officials and their associates. Due to their high rank, the logic follows that they have a higher risk of corruption. There is no standard list of PEPs like there is for specific OFAC designated nationals. Financial institutions must adopt a risk-based approach to dealing with PEPs and are not expressly prohibited from having them as clients. At a minimum, financial institutions should conduct enhanced due diligence on PEPs.

OFAC – Tea Foreign Assets Control Office it is not directly related to money laundering. OFAC applies economic sanctions against foreign countries. Under OFAC rules, banks are prohibited from conducting monetary transactions with certain foreign countries. The assets of specific individuals and organizations can also be frozen. Since OFAC’s rules refer to the transmission of money in connection with the financing of terrorism, many institutions combine these functional departments. OFAC also maintains a list of specific designated nationals with whom financial institutions are prohibited from doing business.