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Understanding Anti-Money Laundering Laws: Key Definitions

The Anti-Money Laundering Act

The Anti-Money Laundering Act is a law that aims to prevent and detect money laundering activities. A clear understanding of “money laundering” is essential to this act.

Definition of Money Laundering

Money laundering is defined as dealing with property that is connected to criminal conduct. This means that a person must have dealt with property, and such property must be connected to criminal activity. The following points highlight the characteristics of money laundering:

• Concealing or disguising the nature, source, location, disposition, movement, or ownership of the property.
• Deriving or realizing from, obtaining, using, or intended to be used in connection with criminal conduct.

Key Terms Related to Anti-Money Laundering

International Electronic Currency Transfer

An international electronic currency transfer is a single or chain of electronic currency transfers where one of the parties involved (the originating entity, intermediary entity, or beneficiary entity) is located outside Nauru.

Money or Value Transfer Service

A money or value transfer service involves accepting currency, cheques, monetary instruments, or other stores of value and paying a corresponding sum to a beneficiary through communication, message, or transfer.

Politically Exposed Person (PEP)

A PEP is an individual who has been entrusted with prominent public functions, such as:

• Heads of state
• Senior politicians
• Judges
• Military leaders
• High-ranking government officials
• Senior executives of state-owned corporations
• Important political party officials

Property

Property refers to assets of any kind, including real or personal property, corporeal or incorporeal, moveable or immovable, tangible or intangible. This can include documents or instruments in electronic, digital, or other forms evidencing title to or an interest in such assets.

Record

A record is any 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.

Roles and Responsibilities in Anti-Money Laundering Compliance

Reporting Entity

A reporting entity refers to individuals and organizations that are required to report suspicious transactions to the relevant authorities.

Secretary

The Secretary refers to the Secretary for Justice and Border Control.

Sender

A sender is an individual who requests a reporting entity to execute an electronic currency transfer.

Senior Management

Senior management refers to directors of the reporting entity or key employees appointed to ensure effective control on a day-to-day basis, with responsibility for overseeing the proper conduct of the reporting entity.

Shell Bank

A shell bank is a bank that:

• Is incorporated or licensed in a country where it has no physical presence.
• Is not affiliated with a financial group subject to effective consolidated supervision.

These definitions are crucial to understanding and implementing anti-money laundering laws and regulations.