Mail-Forwarding or Mail-Drop Service
A legal commercial enterprise that uses a stable, physical address as a delivery destination for letters or parcels on behalf of fee-paying clients who do not live on the premises. Mail can be held or forwarded at the client’s request. Some mail-drops provide similar services for faxes as well. Money launderers often use mail drop addresses as their address, sometimes referring to their box number as either a “suite” or an “apartment” number. Often, “shell” or unlicensed banks are found to have mail drop addresses.
Manipulation of Import and/or Export Prices
A money laundering method that uses the overpricing or underpricing of products or services traded in international commerce to move money from one country to another.
Memorandum of Understanding (MOU)
Agreement between two parties establishing a set of principles that govern their relationship on a particular matter. An MOU is often used by countries to govern their sharing of assets in international asset-forfeiture cases or to set out their respective duties in anti-money laundering initiatives. Financial Intelligence Units (FIUs), with the task of receiving and analyzing suspicious transaction reports on an ongoing basis and maintaining close links with police and customs authorities, share information among themselves informally in the context of investigations, usually on the basis of an MOU. The Egmont Group of FIUs has established a model for such MOUs. Unlike the Mutual Legal Assistance Treaty (see below), this gateway is ordinarily used not for obtaining evidence, but for obtaining intelligence that might lead to evidence.
Middle East and North Africa Financial Action Task Force (MENAFATF)
A FATF-style body established for the Middle Eastern and North African regions in 2004. See www.menafatf.org.
Mock Trial on Money Laundering
Program launched by the United Nations Office on Drugs and Crime (UNODC) and the Organization of American States Inter-American Drug Abuse Control Commission (CICAD) in various Latin American countries. The program’s objective is to equip investigators, prosecutors and judges with the know-how to crack money laundering cases. It uses cases that are built around authentic events. Since the program was launched in Ecuador in September 2002, a number of mock trials have been conducted.
Monetary Instruments
Travelers checks, negotiable instruments, including personal checks and business checks, official bank checks, cashier’s checks, promissory notes, money orders, securities or stocks in bearer form. Monetary instruments are normally included, along with currency, in the anti-money laundering regulations of most countries, and financial institutions must file reports and maintain records of customer activities involving them.
Money Laundering
The process of concealing or disguising the existence, source, movement, destination or illegal application of illicitly- derived property or funds to make them appear legitimate. It usually involves a three part system: Placement of funds into a financial system, layering of transactions to disguise the source, ownership and location of the funds, and integration of the funds into society in the form of holdings that appear legitimate. The definition of money laundering varies in each country where it is recognized as a crime.
Money Laundering Reporting Officer (MLRO)
A term used in various international rules to refer to the person responsible for overseeing a firm’s anti-money laundering activities and program and for filing reports of suspicious transactions with the national FIU. The MLRO is the key person in the implementation of anti-money laundering strategies and policies.
Money Order
A monetary instrument usually purchased with cash in small (generally under Euro/$500) denominations. It is commonly used by people without checking accounts to pay bills or to pay for purchases in which the vendor will not accept a personal check. Money orders may be used for laundering because they represent an instrument drawn on the issuing institution rather than on an individual’s account.
Money Services Business (MSB)
Term used in the U.S. and elsewhere for money remittance companies; check cashers; issuers, sellers and redeemers of money orders and travelers checks; currency exchange houses; and stored value product companies.
Money Transfer Service or Value Transfer Service
Financial service that accepts cash, checks other monetary instruments that can store value in one location and pay a corresponding sum in cash or other form to a beneficiary in another location by means of a communication, message, transfer or through a clearing network to which the money/ value transfer service belongs. Transactions performed by such services can involve one or more intermediaries and a third-party final payment. A money or value transfer service may be provided by persons (natural or legal) formally through the regulated financial system (for example, bank accounts), informally through non-bank financial institutions and business entities or outside of the regulated system. In some jurisdictions, informal systems are referred to as alternative remittance services or underground (or parallel) banking systems.
MONEYVAL
Council of Europe Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures. Formerly PC- R-EV, the committee was established in 1997 by the Committee of Ministers of the Council of Europe to conduct self and mutual assessments of anti-money laundering measures in place in Council of Europe countries that are not FATF members. MONEYVAL is a sub-committee of the European Committee on Crime Problems of the Council of Europe (CDPC).
Monitoring
An element of an institution’s anti-money laundering program in which customer activity is reviewed for unusual or suspicious patterns, trends or outlying transactions that do not fit a normal pattern. Transactions are often monitored using software that weighs the activity against a threshold of what is deemed “normal and expected” for the customer.
Mutual Fund
An investment company that continually offers new shares and buys existing shares back on demand, using its capital to invest in diversified securities of other companies. Money is collected from individuals and is invested on their behalf in varied equity or debt portfolios.
Mutual Legal Assistance Treaty (MLAT)
Agreement among countries allowing for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial resources in the respective countries, in private and public sectors, for use in official investigations and prosecutions.