Eastern and Southern African Anti-Money Laundering Group (ESAAMLG)
A FATF-style regional body comprising fourteen countries from the Eastern region of Africa down to the Southern tip of Africa. It was established in 1999. See www.esaamlg.org.
Egmont Group of Financial Intelligence Units
In 1995, a number of national financial intelligence units (FIUs) began working together in an informal organization known as the Egmont Group, named for the site of its first meeting in the Egmont-Arenberg Palace in Brussels. The goal of the group is to provide a forum for FIUs to improve support to their national anti-money laundering programs and to develop protocols for information sharing. The FIUs’ support includes expanding and systematizing the exchange of financial intelligence, improving expertise and capabilities of the personnel of such organizations, and fostering improved communications among FIUs through application of new technologies and sharing of information for financial crimes investigations.
Electronic Banking
A form of banking in which funds are transferred through an exchange of electronic signals among financial institutions rather than through an exchange of cash, checks or other negotiable instruments.
Electronic Cash (E-Cash)
A payment mechanism designed for the Internet, electronic cash represents a series of monetary value units electronically stored on the hard drive of a computer or microchip of a plastic card. It is anonymous like cash, and has immediate value. E-cash is attractive to money launderers because of its anonymity and the ease it provides in “transporting” large sums quickly and easily via the Internet. It is also called “e-money.”
Electronic Funds Transfer (EFT)
The movement of funds between financial institutions electronically. The two most common electronic funds transfer systems in the U.S. are FedWire and CHIPS. (SWIFT is often referred to as the third EFT system, but in reality it is an international messaging system that carries instructions for wire transfers between institutions, rather than the wire transfer system itself.) Other systems that facilitate funds movement, but are not technically EFT systems, include automated clearing houses (ACH), which are networks that conduct batch processing of messages for book transfers between institutions.
Electronic Money (E-Money)
See Electronic Cash.
Enhanced Due Diligence (EDD)
Additional examination and cautionary measures aimed at identifying customers and confirming that their activities and funds are legitimate.
Eurasian Group on Combating Money Laundering and Terrorist Financing (EAG)
A FATF-style regional body formed in October 2004 in Moscow. Member countries include Belarus, China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan and Uzbekistan. See http://www.eurasiangroup.org/.
European Union (EU)
The European Union is a family of democratic European countries. Its member states have set up common institutions to which they delegate part of their sovereignty so that decisions on specific matters of collective interest can be made democratically at the European level. See http://europa.eu/index_en.htm.
European Union Directive on Prevention of the Use of the Financial System for the Purpose of Money Laundering and Terrorist Financing
First adopted by the European Union in June 1991, the directive requires EU member states to achieve certain results by amending national laws, if necessary, to prevent their domestic financial systems from being exploited for money laundering. The directive was confined to drug trafficking as defined in the Vienna Convention. The scope of the directive was also confined to credit and financial institutions as the most vulnerable to abuse by money launderers, but member states were encouraged to cover other sectors too that might become involved in laundering. The directive was revised in December 2001 by extending the money laundering offenses beyond credit and financial institutions to corporate service providers, casinos, lawyers and accountants. A third directive in September 2005 replaced the previous two. In line with the FATF money laundering recommendations, the Third EU Directive extended the scope of the earlier directives by:
  • Defining “money laundering” and “terrorist financing” as separate crimes.
  • Extending customer identification and suspicious transaction reporting obligations to trusts and company service providers, life insurance intermediaries and dealers selling goods for cash payments above a certain amount.
  • Detailing a risk-based approach to customer due diligence.
  • Protecting employees who report suspicions of money laundering or terrorist financing.
  • Obligating member states to keep comprehensive statistics regarding the use of and results obtained from suspicious transaction reports.
  • Requiring all financial institutions to identify and verify the “beneficial owner” of all accounts held by legal entities or persons.
European Law Enforcement Organization, which aims to improve the effectiveness and cooperation of competent authorities in member states in preventing and combating terrorism, unlawful drug trafficking and other serious forms of international organized crime. In the area of anti-money laundering, Europol provides European Union member states’ law enforcement authorities with operational and analytical support via the ELOs (Europol Liaison Officers) and its analysts.
Exchange Office
See Bureau de Change.
Exempt Account
In some countries, a distinction is granted to certain customers of a financial institution permitting the institution to waive its responsibility to report certain transactions that are otherwise required. Exempt accounts must be documented and the financial institutions that secure the exemptions must still monitor their transactions.
Express Trust
A trust created by the settlor, usually in the form of a document such as a written deed of trust. An express trust contrasts with trusts that come into being through the operation of the law and do not result from the clear intent or decision of a settlor to create a trust or similar legal arrangements (e.g., constructive trust).
The surrender by one country to another of an accused or convicted person under a bilateral agreement that specifies the terms of such exchanges, such as the persons subject to being exchanged and the crimes for which exchanges will be permitted. The 1988 Vienna Convention against Illicit Traffic in Narcotics and Psychotropic Substances makes money laundering an internationally extraditable offense.
Extraterritorial Reach
The extension of one country’s policies and laws to the citizens and institutions of another. U.S. money laundering laws contain several provisions that extend its prohibitions and sanctions into other countries. For example, the “extraterritorial jurisdiction” of the principal U.S. anti-money laundering law can apply to a non-U.S. citizen if the “conduct” occurs “in part” in the U.S. (Title 18, USC Sec. 1956(f)).