Encyclopedia of Frequently Asked Questions

The 1970 Bank Secrecy Act was the first major piece of AML legislation enacted in the United States. It aimed to thwart organized crime by requiring banks to report cash deposits of more than $10,000, identify those individuals conducting large transactions, and maintain thorough records.

The 6th Money Laundering Directive came into effect in the European Union in late 2020 and aims to empower financial institutions and governments to do more in the fight against money laundering and terrorism financing by toughening criminal penalties across the region.

Anti-money laundering refers to any effort that seeks to make it harder for criminal networks to disguise illicit funds as legitimate profits.

The Australia Modern Slavery Act, formally known as Modern Slavery Act 2018, is a disclosure-based statute requiring business entities to report on their potential exposure to forced labor and the steps they’ve taken to assess and address those risks.

The BIOSECURE Act is intended to bolster U.S. biosecurity by restricting federal funding and contracts with biotechnology companies deemed as risks, particularly those connected to foreign adversaries.

Brand protection is the process of protecting a brand’s intellectual property from infringement like counterfeiting, copyright piracy, patent violations, and more.

The Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) is a trade agreement intended to promote economic integration, enhance market access, and improve trade relations between the United States, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic.

Chinese State-owned Assets Supervision and Administration Commissions (SASACs) operate and manage state-owned enterprises (SOEs), playing a key role in exerting state influence over the economy.

The Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (CHIPS and Science Act) was enacted to increase semiconductor manufacturing and development in the US.

The Corporate Sustainability Due Diligence Directive (CSDDD) imposes legally enforceable obligations for both European companies and those operating within the EU’s borders to embed responsible business conduct into due diligence policies and procedures.

The “Countering America’s Adversaries Through Sanctions Act” (CAATSA) became law on August 2, 2017. It created a rebuttable presumption that significant goods, wares, merchandise, and articles mined, produced, or manufactured wholly or in part by North Korean nationals or North Korean citizens anywhere in the world are made with forced labor and prohibited from importation under the Tariff Act of 1930.

Aimed at deterring the flow of illicit funds into the American financial system and preventing the proliferation of shell corporations, the Corporate Transparency Act, passed in 2021, called for the creation of a beneficial ownership registry within the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

Critical minerals are essential for energy, economic security, and national security. The Critical Mineral Consistency Act is intended to boost the domestic supply of critical minerals through governmental support for exploration, mining, and processing.

A Cybercrime is any criminal activity that involves a computer, networked device or a network, generally with the intent of financial gain.

The Department of Homeland Security (DHS) is targeting illegal trade practices in the textile industry with enforcement actions intended to eliminate fraudulent imports, protect American manufacturers, and enhance supply chain security.

The EU Deforestation Regulation (EUDR) aims to ensure that commodity products that are major drivers of deforestation will no longer be sold in the EU if sourced from areas affected by deforestation or forest degradation practices.

The EU Forced Labour Regulation (EUFLR) enhances the EU’s legislative framework by banning products made with forced labor from the market. The regulation applies to a wide range of global companies selling products in, and exporting products from, the EU.

Export controls are policies issued by governments to protect national security interests and promote foreign policy objectives. Export control legislation regulates the export of goods, software, and technology that could potentially be useful for purposes that are contrary to the interest of the exporting country.

The Grey List is a list of jurisdictions under increased monitoring by the Financial Action Task Force. These jurisdictions have also committed to addressing the deficiencies in their anti-money laundering processes.

The Financial Action Task Force is an intergovernmental organization founded in 1989 with the mission to standardize AML efforts internationally.

The Financial Crimes Enforcement Network and the U.S. Department of Commerce’s Bureau of Industry and Security (FinCEN BIS) joint alert urges financial institutions to be vigilant against efforts by individuals or entities to evade BIS export controls implemented in connection with the Russian invasion of Ukraine.

Forced labor occurs when individuals are compelled against their will to provide work or service through the use of force, fraud, or coercion. Forced labor has become an area of focus with the enactment of the UFLPA in June 2022.

The Foreign Investment Risk Review Modernization Act (FIRRMA) is a regulatory framework that imposes stringent review processes for foreign investments, requiring disclosure and assessment of potential risks.

The United Nations created a Universal Declaration of Human Rights that outlines the 30 fundamental human rights that should be universally protected. Any person or country that does not respect the rights in the declaration is committing a human rights violation.

Vulnerabilities within the Information and Communications Technology (ICT) industry can be exploited, affecting all users of a technology or service. The ICT Supply Chain Assessment proposes recommendations to mitigate risk and strengthen supply chain resiliency across the ICT industrial base.

Import Controls are policies issued by governments to prevent the importation of goods that are potentially harmful to the safety of their citizens or the national economy.

Know Your Customer, or KYC, is the critical first step in the fight against financial crime and money laundering. KYC is part of the onboarding process for financial institutions and comprises customer identification and collecting information on a client’s financial dealings.

List screening is the process of vetting entities against various watchlists to identify and prevent financial crimes such as money laundering, terrorist financing, fraud, or other illicit activities.

Money laundering is the process of concealing the origin of money, obtained from illicit activities by disguising it as funds coming from a legitimate source.

Sanctions compliance is how businesses meet regulations that prohibit them from transacting with any sanctioned individuals or entities.

The Stopping Harmful Offers on Platforms by Screening Against Fakes and E-commerce (SHOP SAFE) act is legislation aimed at tackling the rampant sale of counterfeit goods online by holding online platforms accountable for the sale of such goods.

A state-owned enterprise (SOE) is a legal entity created by a government for the purpose of engaging in commercial activity on the government’s behalf. Because SOEs offer a number of advantages to the operating government, doing business with SOEs in adversarial jurisdictions poses regulatory risk to exporters.

Strategic competition refers to the deepening rivalry between the United States and a number of countries with conflicting interests, and the country’s efforts to innovate new tools of economic security and lawfare to maintain strategic advantage.

Supply chain mapping is the process of creating a comprehensive overview of the companies and individuals in a business entity’s supplier network for the purpose of driving supply chain resilience.

Terrorist financing refers to the concealment, or laundering, of money designated to known terrorist groups or to fund terrorist actions of any kind.

Third-Party Risk Management (TPRM) is the process of analyzing and minimizing risks associated with outsourcing to third-party vendors or service providers.

Trade based money laundering (TBML) is a form of money laundering where criminals undergo the process of disguising the proceeds of crime by moving money using trade transactions to legitimize their illicit origins.

Trade compliance is an aspect of corporate compliance which requires that organizations ensure that any import or export is in compliance with the laws of all countries involved.

The Uyghur Forced Labor Prevention Act (UFLPA) aims to ensure that no product made wholly or in part in China’s Xinjiang Uyghur Autonomous Region gets imported into the U.S., due to the widespread use of forced labor and human rights violations against the Uyghurs and other ethnic minorities in the region.

Ultimate beneficial ownership (UBO) refers to the natural person who ultimately owns or controls a company, or the ultimate beneficiary when an institution initiates a transaction.