CAMS key terms

The process of disguising the criminal origin of funds so they appear legitimate, usually described in three stages: placement, layering, and integration.

The stage of money laundering in which illicit cash or assets first enter the financial system, for example through deposits, purchases, or commingling with legitimate business revenue.

The laundering stage that separates proceeds from their criminal source through transfers, currency conversions, and complex chains of accounts that obscure the audit trail.

The final laundering stage, in which funds that appear legitimate are reintroduced into the economy as investments, property, business capital, or ordinary income.

Deliberately splitting cash transactions into amounts below reporting thresholds and spreading them across branches, accounts, or individuals to avoid triggering currency transaction reports.

The underlying crime that produces illicit proceeds, such as fraud, drug trafficking, or corruption; money laundering is charged as a separate offense built upon it.

Raising, moving, or providing funds or resources to support terrorist acts or organizations; the money may be legitimately earned as well as criminally derived.

An informal value transfer system in which brokers settle obligations through trust and netting rather than a formal banking channel, often leaving little documentation.

Moving value across borders by misstating the price, quantity, or quality of goods, or by using trade finance, so that payments appear to be legitimate trade.

A bank with no physical presence in any jurisdiction and no affiliation to a regulated financial group, often used to conceal ownership and move funds.

The natural person who ultimately owns or controls an account, legal entity, or transaction, identified through ownership percentages or evidence of control.

An individual entrusted with a prominent public function, together with close family members and associates, who presents elevated corruption and bribery risk.

A person who receives and transfers illicit funds on behalf of others, frequently recruited unwittingly through fake job offers, romance scams, or online schemes.

Providing or moving funds and financial services that support the development, acquisition, or transfer of weapons of mass destruction and their delivery systems.

A documented framework of policies, procedures, controls, training, and independent testing that an institution maintains to prevent and detect money laundering and terrorist financing.

Directing compliance effort and controls in proportion to the assessed likelihood and impact of money laundering or terrorist financing risk for each customer, product, channel, and geography.

Identifying and verifying a customer and its beneficial owners, understanding the expected nature of the relationship, and assessing risk before and during onboarding.

Additional scrutiny applied to higher-risk relationships, such as politically exposed persons or high-risk jurisdictions, including deeper source-of-funds checks and senior management approval.

Reduced identification and monitoring measures allowed where risk is demonstrably low, provided the decision is documented and the relationship remains under review.

The identification and verification of a customer's identity and business profile at onboarding, forming the first building block of customer due diligence.

The systematic review of customer activity against expected patterns, thresholds, and scenarios to detect transactions that may indicate money laundering or terrorist financing.

A confidential report filed with a financial intelligence unit when an institution knows, suspects, or has reasonable grounds to suspect criminal proceeds or terrorist financing.

Disclosing to a customer or another person that a suspicious activity report has been or may be filed, which legislation generally prohibits.

The designated person accountable for running the AML/CTF program, including oversight of monitoring, reporting, training, and communication with regulators.

Periodic assessment of the AML/CTF program by internal audit or an outside party independent of its operation, intended to measure effectiveness and identify gaps.

Requirements to keep customer identification, transaction, and investigation records for a set period and to make them available to regulators and law enforcement.

Comparing customers, beneficial owners, and transactions against sanctions and watchlists to prevent dealings with prohibited persons, entities, or jurisdictions.

The first review of a system-generated alert to decide whether it should be closed, escalated for investigation, or reported as suspicious.

An alert or screening match that resembles suspicious activity but, after review, is explained by legitimate facts.

Evidence of where the money for a specific transaction came from, compared with how the customer accumulated overall wealth; both are standard investigative checks.

The recorded chronology of an investigation, including the alert, evidence reviewed, decisions taken, and rationale, supporting the report and any later examination.

Referring a matter from front-line staff or analysts to senior compliance or the AML officer when suspicion or risk exceeds the analyst's authority or defined thresholds.

International standards issued by the Financial Action Task Force covering criminalization, preventive measures, transparency, and cooperation that countries are expected to implement.

A peer review by the Financial Action Task Force or a regional body that judges whether a country meets the standards and how well its regime performs in practice.

An association of major global banks that publishes non-binding guidance on AML/CTF practices, including customer due diligence, correspondent banking, and payment transparency.

A relationship in which one bank holds accounts for and provides services to another bank, creating cross-border exposure that requires enhanced due diligence.

A national agency that receives, analyzes, and disseminates suspicious activity reports and other financial intelligence to law enforcement and foreign counterparts.

A worldwide network of financial intelligence units that cooperate and exchange information to support money laundering and terrorist financing investigations.

Withdrawing from or restricting whole categories of customer relationships to avoid risk rather than managing it, a practice regulators generally discourage.