Financial Crime World

Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Definitions

The proposed Bill of Nauru has introduced various definitions related to Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT). Here are the key points summarized:

Intermediary Entity

  • An intermediary entity is defined for the purposes of Recommendations 10, 16, and 17 of the FATF Standards.
  • An intermediary entity refers to a person that acts on behalf of another person in relation to an electronic currency transfer.

International Electronic Currency Transfer

  • This term refers to a single or chain of electronic currency transfers where one of the parties involved is located outside Nauru.
  • International electronic currency transfers are subject to stricter regulations and monitoring.

Money Laundering

  • Money laundering is defined as dealing with property that is criminal property, connected in some way to criminal conduct.
  • Money laundering is a serious offense that can have severe consequences.

Money or Value Transfer Service

  • This service involves accepting currency, cheques, monetary instruments, or other stores of value and paying a corresponding sum to a beneficiary through a communication, message, or transfer.
  • Money or value transfer services are subject to regulations and must adhere to AML/CFT standards.

Occasional Transaction

  • An occasional transaction is one that does not take place in the context of a business relationship.
  • Occasional transactions may be subject to stricter regulations and monitoring.

Originating Entity

  • This refers to a financial institution that receives a request from a person to execute an electronic currency transfer.
  • The originating entity must comply with AML/CFT regulations and due diligence requirements.

Politically Exposed Person (PEP)

  • A PEP is defined as per Section 2 of the Anti-Money Laundering Act 2008, and is used for Recommendations 10, 11, and 12 of the FATF Standards.
  • PEPs are subject to stricter regulations and monitoring due to their potential association with high-risk activities.

Property

  • This includes assets of any kind, whether real or personal, corporeal or incorporeal, moveable or immovable, tangible or intangible, situated within or outside Nauru.
  • Property can be used for various purposes, including money laundering and terrorism financing.

Record

  • A record is defined as material on which data or information is recorded or marked and capable of being read or understood by a person, computer system, or other device.
  • Records must be kept in accordance with AML/CFT regulations and due diligence requirements.

Reporting Entity

  • This has the meaning given under Clause 7 and is used for Recommendations 1, 6, 7, 10, 11, 16, 17, 22, 23, 24, 25, 28, 31, 34, 35, 37, and 40 of the FATF Standards.
  • Reporting entities must comply with AML/CFT regulations and due diligence requirements.

Secretary

  • The Secretary is defined as the Secretary for Justice and Border Control.
  • The Secretary plays a crucial role in implementing AML/CFT regulations and enforcing due diligence requirements.

Sender

  • A sender is a person who requests a reporting entity to execute an electronic currency transfer.
  • Senders must comply with AML/CFT regulations and due diligence requirements.

Senior Management

  • Senior management refers to directors of the reporting entity or key employees responsible for overseeing its proper conduct.
  • Senior management must ensure that their institution complies with AML/CFT regulations and due diligence requirements.

Shell Bank

  • A shell bank is a bank that is incorporated or licensed in a country with no physical presence and not affiliated with a financial group subject to effective consolidated supervision.
  • Shell banks are considered high-risk entities and are subject to stricter regulations and monitoring.