Definitions of Key Terms in Anti-Money Laundering Regulations

As a regulatory body, it’s essential to understand the definitions of key terms used in anti-money laundering (AML) regulations. The following are explanations and definitions of critical terms as per the FATF Standards:

1. Shell Bank

A shell bank is defined for the purposes of Recommendations 10, 11, 26, 27, 28, and 31 of the FATF Standards.

2. Staff Member

For the purpose of Recommendations 1, 6, 7, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, and 38 of the FATF Standards, a staff member means any employee or officer of a reporting entity.

3. Strategic Ownership or Control

The term strategic ownership or control refers to an individual or company that has a direct interest in a reporting entity of at least 25% (either directly or indirectly) or where there is no publicly disclosed information on the ownership structure. This definition applies for the purposes of Recommendations 10, 11, and 12 of the FATF Standards.

4. Supervisory Authorities

Supervisory authorities are regulatory bodies that have supervisory responsibilities over a reporting entity in accordance with the laws and regulations applicable to Nauru. This term is defined for the purposes of Recommendation 1, 6, 7, 10, 11, 16, 17, 22, 23, 24, 25, 28, 31, 34, 35, and 40 of the FATF Standards.

5. Transaction

For the purposes of Recommendations 10, 16, 17, and 22 of the FATF Standards, a transaction means an electronic currency transfer executed by a reporting entity.

6. Virtual Asset Service Provider

A virtual asset service provider is any business that provides one or more of the following services:

• The provision of virtual assets or custodial wallet services to customers.
• The execution of orders on behalf of customers for virtual assets or custody services.
• The trading of virtual assets against fiat currencies.

This definition applies for the purposes of Recommendations 15, 16, and 22 of the FATF Standards.

7. Virtual Currency

A virtual currency is any digital representation of value that can be digitally traded or exchanged. This term is defined for the purposes of Recommendation 4, 5, 30, 31, 33, and 38 of the FATF Standards.

8. Wealthy Individual

The term wealthy individual has a meaning given under Clause 6, which is currently defined under Section 2 of the Anti-Money Laundering Act 2008. This definition applies for the purposes of Recommendations 10, 11, and 12 of the FATF Standards.

These definitions are crucial in understanding and implementing anti-money laundering regulations effectively.