Debit Card
A card issued by a financial institution that permits an account- holder to draw funds from a pre-existing account in his or her name for the purpose of paying obligations or for making purchases in other locations or businesses. Debit cards have been found to be convenient tools to launder criminal proceeds, especially if they are issued by financial institutions in secrecy havens because they leave few, if any, traces of the debited sources of funds.
Debit Transaction
A transaction that involves the use of a bankcard to purchase goods and services or to obtain cash. The transaction automatically debits the cardholder’s deposit account.
Designated Categories of Offense
In its 40 Recommendations of 2003, FATF issued for the first time a list of “designated categories of offense” that enumerates crimes that may lead to money laundering prosecutions. Each country may decide how it will define those offenses and their elements. Many nations do not specify which crimes can serve as predicates for laundering prosecutions and merely state that all serious felonies may be predicates. Others, such as the U.S., specify long lists of crimes that must be present in order for a money laundering prosecution to proceed. Under the FATF definition, the designated categories are:
  • Participation in an organized criminal group and racketeering;
  • Terrorism, including terrorist financing;
  • Trafficking in human beings and migrant smuggling;
  • Sexual exploitation, including sexual exploitation of children;
  • Illicit trafficking in narcotic drugs and psychotropic substances;
  • Illicit arms trafficking;
  • Illicit trafficking in stolen and other goods;
  • Corruption and bribery;
  • Fraud;
  • Counterfeiting currency;
  • Counterfeiting and piracy of products;
  • Environmental crime;
  • Murder, grievous bodily injury;
  • Kidnapping, illegal restraint, and hostage-taking;
  • Robbery or theft;
  • Smuggling;
  • Extortion;
  • Forgery;
  • Piracy; and
  • Insider trading and market manipulation.
Designated Non-Financial Businesses and Professions
With its 2003 revisions, FATF indicated the following businesses should comply with the 40 Recommendations.
  • Casinos (including Internet casinos).
  • Real estate agents.
  • Dealers in precious metals.
  • Dealers in precious stones.
  • Lawyers, notaries, other independent legal professionals and accountants. Refers to sole practitioners, partners and employed professionals within professional firms. It is not meant to refer to “internal” professionals who are employees of other types of businesses, or to professionals working for government agencies who may already be subject to measures that would combat money laundering.
  • Trust and company service providers. Refers to all persons or businesses that are not covered elsewhere under the Recommendations, and which provide any of the following services to third parties:
  • Acting as a formation agent of legal persons.
  • Acting as (or arranging for another person to act as) a director or secretary of a company, a partner of a partnership, or a similar position in relation to other legal persons.
  • Providing a registered office, business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement.
  • Acting as (or arranging for another person to act as) a trustee of an express trust.
  • Acting as (or arranging for another person to act as) a nominee shareholder for another person.
Disclosure Order
A document that requires a person who has information relevant to an investigation to answer questions at an interview, to provide information, or to produce documentation. The order can be exercised not only against a person whose assets are under investigation, but also against a third party, such as a financial institution.
Domestic Transfer
Wire transfer in which the originator and beneficiary institutions are located in the same jurisdiction. A domestic transfer therefore refers to any chain of wire transfers that takes place entirely within the borders of a single jurisdiction, even though the system used to send the wire transfer may be located in another jurisdiction.
Downstream Correspondent Clearer
A correspondent banking client who receives correspondent banking services from one institution and provides correspondent banking services to other financial institutions in the same currency as the account it maintains with the institution.
Dry Trust
See Bare Trust.