Literally, away from one’s own home country—if one lives in Europe, the U.S. is “offshore.” In the money laundering lexicon, the term refers to jurisdictions deemed favorable to foreign investments because of low or no taxation or strict bank secrecy regulations.
Offshore Banking License
A license that prohibits a bank from doing business with local citizens or in local currency as a condition of its license.
Offshore Financial Center (OFC)
Institutions that cater to or otherwise encourage banks, trading companies, and other corporate or legal entities to physically or legally exist in a jurisdiction but limit their operations to “offshore,” meaning outside the jurisdiction (see Offshore). OFCs have historically been located in the Caribbean or on Mediterranean islands to be in reasonable proximity to the major financial centers of the U.S. and Europe.
Operational Risk
The risk of direct or indirect loss of operations due to inadequate or failed internal processes, people or systems, or as a result of external events. Public perception that a bank is not able to manage its operational risk effectively can disrupt or harm the business of the bank.
Organization for Economic Cooperation and Development (OECD)
International organization that assists governments on economic development issues in the global economy. OECD houses the FATF secretariat in Paris.
CICAD (Comisión Interamericana para el Control del Abuso de Drogas or Inter-American Drug Abuse Control Commission)
CICAD has issued several sets of anti-money laundering recommendations, including amendments to the Organization of American States (OAS) Model Regulations issued in 1992.
The account holder or, where there is no account, the person (natural or legal) which places the order with the financial institution to perform the wire transfer.