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A
- AML/CFT/CPF Framework & methodology
- Anti-Money Laundering / Countering the Financing of Terrorism / Countering the Financing of Proliferation. The full umbrella under which the FATF Recommendations operate. Each prefix targets a specific threat: laundering of criminal proceeds, financing of terrorist acts, and financing of weapons-of-mass-destruction proliferation.
- Related: R.1 Risk-based approach R.2 National cooperation & coordination
- Asset recovery Enforcement
- The process of identifying, tracing, evaluating, freezing, seizing, confiscating, managing and ultimately disposing of (or returning) criminal property and property of corresponding value. Recommendation 4 demands countries treat this as a national priority — not an afterthought.
- Related: R.4 Confiscation & provisional measures R.30 Law enforcement responsibilities R.38 MLA: freezing & confiscation
B
- Bearer-negotiable instrument (BNI) Instruments & assets
- A monetary instrument that transfers ownership simply by physical delivery — examples include traveller's cheques, bearer cheques, promissory notes endorsed without restriction or signed but with the payee blank. BNIs are subject to cross-border declaration rules under Recommendation 32.
- Related: R.32 Cash couriers
- Beneficial owner Core concepts
- The natural person(s) who ultimately own or control a customer or legal arrangement — directly or indirectly through ownership chains, voting rights or other means of control. The aim of identifying the beneficial owner is to expose the human behind any corporate veil. In Mexico the LFPIORPI uses 'beneficiario controlador' (Art. 3 Fr. III); the CNBV financial regime uses 'propietario real'.
- Related: R.10 Customer due diligence (CDD) R.22 DNFBPs: customer due diligence R.24 Beneficial ownership of legal persons R.25 Beneficial ownership of legal arrangements
C
- Correspondent banking Core concepts
- The provision of banking services by one bank (the correspondent) to another bank (the respondent) — typically across borders, allowing the respondent's customers to access international payment networks. Because the correspondent does not directly know the respondent's customers, Recommendation 13 imposes specific due-diligence obligations.
- Related: R.13 Correspondent banking
- Criminal property Core concepts
- Property that is the proceeds of money laundering or any predicate offence — including income, benefits, assets and instrumentalities derived from criminal activity. Identifying, freezing and confiscating criminal property is the goal of Recommendation 4.
- Related: R.3 Money laundering offence R.4 Confiscation & provisional measures
- Cross-border transfer Operations & transactions
- Any wire transfer or value transfer where the originator and beneficiary financial institutions are located in different countries. Cross-border transfers above USD/EUR 1,000 trigger full Travel Rule obligations under Recommendation 16.
- Related: R.13 Correspondent banking R.14 Money or value transfer services (MVTS) R.16 Payment transparency (Travel Rule) R.32 Cash couriers
- Customer Due Diligence (CDD) Core concepts
- The set of measures financial institutions and DNFBPs must apply to identify their customers and beneficial owners, verify identification using reliable independent sources, understand the purpose of the relationship, and conduct ongoing monitoring of transactions. CDD is the operational core of the AML/CFT regime — Recommendation 10 is the longest in the framework for a reason.
- Related: R.10 Customer due diligence (CDD) R.17 Reliance on third parties R.22 DNFBPs: customer due diligence
D
- Designated categories of offences (predicate offences) Framework & methodology
- The 21 categories of crime that FATF requires every country to include as predicate offences for money laundering: trafficking in narcotics, terrorism, trafficking in human beings, sexual exploitation, illicit arms trafficking, corruption, fraud, counterfeiting, environmental crime, murder, kidnapping, robbery, smuggling, tax crimes, extortion, forgery, piracy, insider trading, and others.
- Related: R.3 Money laundering offence
- Designated person or entity Sanctions
- A person, group, undertaking or entity identified by the UN Security Council, a regional body or a competent national authority as subject to targeted financial sanctions for terrorism (R.6) or proliferation (R.7). Once designated, all funds and assets must be frozen without delay.
- Related: R.6 Targeted sanctions — terrorism R.7 Targeted sanctions — proliferation
- DNFBP (Designated Non-Financial Business or Profession) Sectors & entities
- Non-financial sectors that FATF subjects to AML/CFT obligations because they handle high-value transactions susceptible to abuse: casinos, real estate agents, dealers in precious metals/stones, lawyers, notaries, accountants and trust-and-company service providers (TCSPs). In Mexico the equivalent is 'actividades vulnerables' (Art. 17 LFPIORPI with 16 fracciones).
- Related: R.22 DNFBPs: customer due diligence R.23 DNFBPs: other measures R.28 Regulation of DNFBPs
E
- Egmont Group Organisations
- An informal international network of more than 170 financial intelligence units (FIUs) that exchange information on money laundering, terrorist financing and predicate offences through a secure portal. Mexico's UIF is a member. The group sets operational standards for FIU cooperation that complement Recommendation 29.
- Related: R.29 Financial intelligence units (FIUs) R.40 Other international cooperation
- Enhanced Due Diligence (EDD) Core concepts
- Stricter customer-due-diligence measures applied to higher-risk relationships — PEPs, complex ownership structures, customers from grey/black-list countries, large cash transactions, virtual-asset operators. Typically includes source-of-wealth verification, senior-management approval and enhanced ongoing monitoring.
- Related: R.10 Customer due diligence (CDD) R.12 Politically exposed persons (PEPs) R.19 Higher-risk countries
- Express trust Legal structures
- A trust created intentionally and explicitly by the settlor — by a written or verbal declaration — as opposed to a trust implied by law (resulting or constructive). FATF Recommendation 25 focuses primarily on express trusts and equivalent civil-law arrangements like Mexican fideicomisos.
- Related: R.25 Beneficial ownership of legal arrangements
F
- FATF-Style Regional Body (FSRB) Organisations
- Regional organisations modelled on the FATF that promote implementation of the 40 Recommendations among their members. There are 9 FSRBs covering virtually all jurisdictions. Mexico belongs to GAFILAT (the Latin American FSRB founded in 2000).
- Related: R.40 Other international cooperation
- Financial Intelligence Unit (FIU) Core concepts
- The national centre for receiving and analysing suspicious-transaction reports and other AML/CFT information, and disseminating intelligence to law enforcement and supervisors. Mexico's UIF is attached to the Secretaría de Hacienda. Recommendation 29 sets the standard for FIU operations.
- Related: R.20 Suspicious transaction reports (STRs) R.29 Financial intelligence units (FIUs)
- Funds or other assets Core concepts
- Any asset of any kind — corporeal or incorporeal, tangible or intangible, movable or immovable, however acquired — including legal documents or instruments evidencing title or interest. The wide definition is deliberate: it covers virtual assets, real estate, securities, art, gold and anything else that can be transferred.
- Related: R.4 Confiscation & provisional measures R.6 Targeted sanctions — terrorism R.7 Targeted sanctions — proliferation R.15 New technologies & virtual assets
H
- Humanitarian exemption Sanctions
- A carve-out ensuring that legitimate humanitarian aid — and goods and services meeting basic human needs — is not treated as a breach of terrorism-related asset freezes. Introduced into FATF Recommendation 6 in June 2026 to reflect UN Security Council resolutions 2664 (2022), 2761 (2024) and 2615 (2021). Mandatory for UN sanctions and optional for domestic designations; delivered via exemptions, general licences or legislative carve-outs.
- Related: R.6 Targeted sanctions — terrorism
I
- International Cooperation Review Group (ICRG) Organisations
- The FATF body that supervises the identification and review of jurisdictions with strategic AML/CFT deficiencies. The ICRG is the engine behind the grey and black lists — its assessments determine which countries are publicly identified as high risk.
- Related: R.19 Higher-risk countries
- Interpretive Note Framework & methodology
- Detailed guidance attached to specific Recommendations (29 of the 40 have one, marked with an asterisk in the FATF table). Interpretive Notes expand the operational meaning, define terms, and provide implementation criteria — they are part of the FATF Standards and binding on members.
L
- Legal arrangement Legal structures
- Express trusts and similar legal vehicles such as Mexican fideicomisos, French fiducies, German treuhand and Liechtenstein anstalten — structures that hold property for someone (the beneficiary) under the management of someone else (the trustee/fiduciary), without forming a separate legal person. Recommendation 25 governs them.
- Related: R.25 Beneficial ownership of legal arrangements
- Legal person Legal structures
- Any entity other than a natural person that can establish a permanent customer relationship with a financial institution or otherwise own property — including corporations, foundations, anstalt, partnerships, associations and similar bodies that can be created under domestic law. Recommendation 24 governs their beneficial-ownership transparency.
- Related: R.24 Beneficial ownership of legal persons
M
- Money laundering (ML) Core concepts
- The process of converting, transferring, concealing, disguising, acquiring, possessing or using property knowing that it derives from criminal activity — for the purpose of making it appear legitimate. Internationally criminalised under the Vienna and Palermo conventions; in Mexico under Article 400 Bis of the Federal Penal Code.
- Related: R.3 Money laundering offence R.4 Confiscation & provisional measures
- Money or Value Transfer Service (MVTS) Sectors & entities
- Financial services that involve receiving cash, cheques or other instruments and paying an equivalent sum to a beneficiary by communication or other means — including remittance houses, payment institutions, e-money issuers and informal value-transfer systems like hawala. Recommendation 14 requires their licensing and supervision.
- Related: R.14 Money or value transfer services (MVTS) R.16 Payment transparency (Travel Rule)
- Mutual evaluation Framework & methodology
- The peer-review process by which FATF and FSRBs assess each member country's compliance with the 40 Recommendations and the effectiveness of its AML/CFT system. Each evaluation produces a Mutual Evaluation Report (MER) that benchmarks the country against the global standard.
- Mutual Legal Assistance (MLA) International cooperation
- Formal cooperation between countries in criminal matters — production of documents, witness statements, search and seizure, freezing and confiscation, service of process. Recommendations 37 and 38 require MLA to be rapid, constructive and effective for ML, predicate offences and TF.
- Related: R.37 Mutual legal assistance R.38 MLA: freezing & confiscation
N
- Non-conviction-based confiscation Enforcement
- A legal mechanism that allows authorities to confiscate criminal property without first obtaining a criminal conviction — useful when the offender has died, fled, cannot be identified, or where the predicate offence was committed abroad. Mexico's Ley Nacional de Extinción de Dominio (2019) is a leading example in Latin America.
- Related: R.4 Confiscation & provisional measures R.38 MLA: freezing & confiscation
- Non-Profit Organisation (NPO) Sectors & entities
- Legal entities that primarily engage in raising or disbursing funds for charitable, religious, cultural, educational, social or fraternal purposes. Recommendation 8 (revised in 2023) targets risk-based, proportionate measures only on the subset of NPOs identified as at risk of TF abuse — not the entire sector.
- Related: R.8 Non-profit organisations
O
- Originator information Operations & transactions
- The data that must accompany every wire transfer or virtual-asset transfer to identify the sender of the funds: name, account number (or unique transaction reference) and address (or national ID, customer ID, or date and place of birth). Required by the Travel Rule (R.16).
- Related: R.16 Payment transparency (Travel Rule)
P
- Politically Exposed Person (PEP) Core concepts
- An individual entrusted with prominent public functions — heads of state, senior politicians, judges, military officers, executives of state-owned enterprises and senior officials of international organisations — together with their family members and close associates. PEPs are higher-risk customers under Recommendation 12 and require enhanced due diligence.
- Related: R.12 Politically exposed persons (PEPs)
- Predicate offence Core concepts
- The underlying criminal activity that generates the proceeds being laundered. Money laundering itself is impossible without a predicate offence — drug trafficking, fraud, corruption, smuggling, etc. FATF requires countries to apply the ML offence to the widest possible range of predicates (the 21 designated categories).
- Related: R.3 Money laundering offence
R
- Risk-Based Approach (RBA) Framework & methodology
- The cornerstone of the FATF framework: countries and obliged entities must identify, assess and understand their ML/TF/PF risks, and apply mitigation measures proportionate to those risks — more resources where risks are higher, simplified measures where they are lower. Recommendation 1 makes the RBA the foundation of everything else.
- Related: R.1 Risk-based approach
S
- Settlor Legal structures
- The person who creates a trust by transferring property to the trustee for the benefit of beneficiaries. In Mexican law (LGTOC Art. 381) this role is called 'fideicomitente'. Identifying the settlor is mandatory under Recommendation 25.
- Related: R.25 Beneficial ownership of legal arrangements
- Shell bank Core concepts
- A bank that has no physical presence in the country where it is incorporated and is not affiliated with a regulated financial group subject to effective consolidated supervision. Shell banks are inherently high-risk and Recommendation 13 prohibits financial institutions from establishing or maintaining correspondent relationships with them.
- Related: R.13 Correspondent banking
- Simplified Due Diligence (SDD) Core concepts
- Reduced CDD measures applied to lower-risk relationships, products or transactions — such as small-balance accounts, low-value remittances or government-related accounts. Permitted only after a documented risk assessment supports the conclusion. SDD is never zero diligence.
- Related: R.1 Risk-based approach R.10 Customer due diligence (CDD)
- Suspicious Transaction Report (STR) Core concepts
- A formal report filed by a financial institution or DNFBP with the FIU when there are reasonable grounds to suspect that funds are proceeds of crime or related to terrorist financing. Filing an STR is mandatory by law (R.20), regardless of any threshold, and disclosing its existence to the customer is a criminal offence (R.21, tipping-off).
- Related: R.20 Suspicious transaction reports (STRs) R.21 Tipping-off & confidentiality
T
- Targeted financial sanctions Sanctions
- Asset-freezing and prohibitions on providing funds or services to specifically designated persons and entities — implementing UNSC resolutions on terrorism (R.6) or proliferation (R.7). Targeted sanctions are surgical: they affect only the listed person, not the country or sector.
- Related: R.6 Targeted sanctions — terrorism R.7 Targeted sanctions — proliferation
- Terrorist Financing (TF) Core concepts
- The provision or collection of funds — from any source, lawful or unlawful — with the intention or knowledge that they will be used for terrorist acts, terrorist organisations or individual terrorists. Criminalised by the 1999 UN Convention and Recommendation 5. Unlike money laundering, TF often uses clean money.
- Related: R.5 Terrorist financing offence R.6 Targeted sanctions — terrorism
- Tipping-off Core concepts
- Disclosing — to the customer or any unauthorised person — that a suspicious transaction report has been filed, is being considered, or that an investigation is underway. FATF Recommendation 21 requires this to be a criminal offence. Without the prohibition, no compliance officer would ever file an STR.
- Related: R.21 Tipping-off & confidentiality
- Travel Rule Core concepts
- The popular name for Recommendation 16: the obligation to attach accurate originator and beneficiary information to wire transfers and virtual-asset transfers, so the data 'travels' with the payment along the entire chain of intermediaries. The de minimis threshold is USD/EUR 1,000.
- Related: R.16 Payment transparency (Travel Rule)
- Trust and Company Service Provider (TCSP) Sectors & entities
- Persons and businesses that, on a professional basis, provide any of these services for third parties: acting as a formation agent, director or registered office; arranging for someone else to act in those capacities; acting as trustee of an express trust or in equivalent civil-law roles; acting as a nominee shareholder. TCSPs are a DNFBP under Recommendation 22.
- Related: R.22 DNFBPs: customer due diligence R.23 DNFBPs: other measures R.25 Beneficial ownership of legal arrangements
- Trustee Legal structures
- The natural or legal person who holds the legal title to property of a trust or equivalent legal arrangement and manages it on behalf of the beneficiaries. In Mexico, only authorised institutions (banks, securities firms, regulated SOFOMes, insurance companies, bonded warehouses) may act as fiduciario under Article 385 of the LGTOC.
- Related: R.25 Beneficial ownership of legal arrangements
V
- Virtual asset Instruments & assets
- A digital representation of value that can be digitally traded or transferred and used for payment or investment. Does not include digital representations of fiat currencies, securities or other financial assets already covered by FATF. In Mexico, the Ley Fintech (LRITF Art. 30) provides the domestic definition aligned with the international standard.
- Related: R.15 New technologies & virtual assets R.16 Payment transparency (Travel Rule)
- Virtual Asset Service Provider (VASP) Sectors & entities
- Any natural or legal person that, as a business, conducts one or more of these activities for third parties: exchange between virtual assets and fiat currency or among virtual assets, transfer of virtual assets, safekeeping or administration of virtual assets, and participation in financial services related to issuers' offerings. Subject to Recommendation 15.
- Related: R.15 New technologies & virtual assets R.16 Payment transparency (Travel Rule)
W
- Wire transfer Operations & transactions
- Any transaction carried out on behalf of an originator through a financial institution by electronic means with a view to making an amount of funds available to a beneficiary at another financial institution — irrespective of whether the originator and beneficiary are the same person. Subject to the Travel Rule (R.16).
- Related: R.16 Payment transparency (Travel Rule)