AML - Anti money laundering is the definition of for activities directed at curbing the era of the money laundering. Money laundering is a location of focus for regulators, and an important tool in fighting against drug trafficking and terrorist financing.

BSA - The Bank Secrecy Act was an original US regulation targeting money laundering. In the beginning the regulation was primarily centered on tax evasion and organized crime. BSA focused entirely on establishing a paper trail for cash transactions over $10,000. Many people talk about your entire selection of anti money laundering regulations as the BSA.

KYC - Know your customer is the technique of understanding who your customer is. Various components of the law require banking institutions to substantiate the identity of customers. Banks also need to determine what normal activity is designed for given customers. , and without knowing what behavior should be expected it is difficult to name what activity is suspicious.

CIP - Section of KYC, the Customer Identification Program has been around since the USA PATRIOT Act. CIP requires banking companies to gather five items of information on new customers. That doctor needs to collect name, date of birth, an actual address, ss # (or tax id number), and evidence identity. CIP programs allow it to be more a hardship on criminals to start accounts without attracting attention.

CTR - A Currency Transaction Report is declared any cash transaction greater than $10,000. CTRs will also be filed for multiple transactions by a similar person that total $10,000 within a given period. Those who break transactions up to avoid the reporting threshold raise suspicion. So long as the supply of funds is legitimate, you don't see any negative consequences to a CTR filing. For example a cash intensive business say for example a bar that deposits business receipts are not suspicious.

SAR - Whenever a financial institution (very broadly defined) suspects a transaction will be the proceeds of illegal activity, they need to file a Suspicious Activity Report. An individual are not notified in case a SAR is filed against them, so that you can avoid tipping off potential criminals. SAR filings are shipped to the Financial Crimes Enforcement Network, who see whether further investigation is warranted.

FinCEN - The Financial Crimes Enforcement Network is the US Government entity tasked with fighting financial crimes 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 Uniting and Strengthening America by Providing Appropriate Tools Necessary to Intercept and Obstruct Terrorism Act was enacted soon after 9/11/2001. As it would seem, what the law states provided extensive tools for police in fighting terrorism. Legal issues also made significant enhancements to money laundering laws. suspect person it required the creation of CIP programs.

PEP - Politically Exposed Persons have become high-ranking foreign government officials along with their associates. Because of the high-ranking the logic follows they are a larger risk for corruption. There isn't a standard number of PEPs like there may be for OFAC specific designated nationals. Finance companies will need to pass a risk based way of working with PEPs and aren't expressly forbidden from getting as customers. To start, finance institutions must perform enhanced due diligence on PEPs.