The glossary provides structured definitions of key concepts in economic forensics, fraud prevention, and economic crime, forming the basis for a consistent and shared understanding of the field.
Definition: The glossary functions as a semantic reference system that structures and connects core concepts, terminology, and relationships within economic forensics.
A
Anti-Money Laundering (AML)
DEFINITION
Anti-Money Laundering (AML) refers to the set of legal, regulatory, and organizational measures designed to prevent money laundering and terrorist financing.
CONTEXT
Anti-Money Laundering (AML) is a core component of compliance frameworks and is closely linked to enhanced due diligence (EDD), customer due diligence (CDD), and risk-based control approaches. It applies to financial institutions and, increasingly, to non-financial businesses subject to regulatory obligations.
MEANING
Anti-Money Laundering (AML) is a key regulatory requirement that obliges organizations to implement effective controls to detect, assess, and report suspicious activities.
EXAMPLE
Requirement to identify and verify beneficial owners of customers.
B
Beneficial Owner
DEFINITION
The individual who ultimately owns or controls an entity.
CONTEXT
Transparency over beneficial ownership is essential for anti-money laundering (AML), know your customer (KYC) processes, and the identification of hidden conflicts of interest.
MEANING
Transparency is essential for anti-money laundering (AML) and fraud prevention.
EXAMPLE
A vendor is effectively controlled by one individual.
C
Compliance Breach Frequency
DEFINITION
Number of compliance violations.
CONTEXT
Compliance breach frequency is a key metric in compliance and governance frameworks and is often analysed in conjunction with internal controls, fraud risk assessment, and monitoring systems. It can be broken down by type of violation (e.g. regulatory, internal, ethical).
MEANING
Acts as an early indicator of weaknesses in governance, control environments, and organisational culture, and supports the management of compliance measures.
EXAMPLE
Multiple sanctions breaches.
Compliance Violation
DEFINITION
Failure to comply with laws, regulations, or internal policies.
CONTEXT
Compliance violations occur across various domains, including anti-money laundering (AML), data protection, competition law, and internal policies. They are often linked to weak internal controls, insufficient compliance governance, or lack of employee awareness.
MEANING
May lead to significant legal, financial, and reputational risks and serves as a key indicator of weaknesses in compliance and control frameworks.
EXAMPLE
Ignoring sanctions requirements.
Corporate Criminal Liability
DEFINITION
Criminal liability of corporations.
CONTEXT
Corporate criminal liability refers to the legal concept that corporations can be held criminally responsible for offences committed within the organisation. It typically applies where there are deficiencies in organisational structure, internal controls, or oversight. The concept is closely linked to compliance, corporate governance, internal control systems, and organisational failure.
MEANING
Establishes direct criminal risk for corporations and significantly increases the need for robust compliance, control, and governance frameworks.
EXAMPLE
Company liable for control failures.
Customer Due Diligence (CDD)
DEFINITION
Customer Due Diligence (CDD) refers to the risk-based assessment and ongoing monitoring of customers, transactions, and business relationships.
CONTEXT
CDD is a core component of anti-money laundering (AML) frameworks and is closely linked to know your customer (KYC) and enhanced due diligence (EDD). It is applied during onboarding and throughout the lifecycle of a business relationship.
MEANING
It ensures that controls and monitoring measures are proportionate to the risk profile of the customer.
EXAMPLE
Enhanced verification procedures applied to high-risk customers.
D
Data Protection Law
DEFINITION
Legal framework for personal data protection.
CONTEXT
Data protection law includes national and international frameworks such as the GDPR and the Swiss Data Protection Act and is closely linked to internal controls, forensic evidence handling, and internal investigations. It defines the legal boundaries for processing personal data, particularly in investigation, monitoring, and analytics contexts.
MEANING
Establishes legal constraints and requirements for data use and significantly shapes the design of control, analytics, and investigation processes.
EXAMPLE
Limits on employee monitoring.
Deferred Prosecution Agreement (DPA)
DEFINITION
Deferred Prosecution Agreement (DPA) is an agreement between prosecutors and an organization to suspend criminal prosecution subject to specific conditions.
CONTEXT
Deferred Prosecution Agreements (DPAs) are commonly used in compliance and corruption cases, particularly in connection with violations of anti-corruption laws or financial crime. Organizations typically agree to cooperate, conduct internal investigations, strengthen internal controls, and implement compliance enhancements.
MEANING
Deferred Prosecution Agreements (DPAs) are a key enforcement tool, allowing organizations to avoid conviction while accepting significant financial penalties and compliance obligations.
EXAMPLE
A company agrees to pay fines, cooperate with authorities, and enhance compliance programs in exchange for deferred prosecution.
E
Enhanced Due Diligence (EDD)
DEFINITION
Enhanced Due Diligence (EDD) refers to enhanced verification and assessment procedures applied to higher-risk customers or transactions.
CONTEXT
Enhanced Due Diligence (EDD) is part of risk-based compliance and anti-money laundering (AML) frameworks. It is applied in higher-risk situations, such as politically exposed persons (PEP), complex ownership structures, or cross-border relationships. EDD builds on Customer Due Diligence (CDD) by introducing more in-depth checks, particularly regarding source of wealth and source of funds.
MEANING
Enhanced Due Diligence (EDD) is mandatory in high-risk scenarios and is designed to identify and mitigate risks related to money laundering, corruption, and other forms of financial crime.
EXAMPLE
Additional verification of source of funds and source of wealth for a high-risk customer.
EU Whistleblower Directive
DEFINITION
EU-wide whistleblower protection framework.
CONTEXT
The EU Whistleblower Directive (EU 2019/1937) establishes minimum standards for whistleblower protection and is closely linked to whistleblower protection, tips and whistleblower reports, and internal investigations. It requires organisations to implement secure internal and external reporting channels and defined procedural safeguards.
MEANING
Provides a legally binding framework for whistleblowing systems and strengthens transparency, compliance, and fraud detection.
EXAMPLE
Internal reporting hotline.
Export Control Compliance
DEFINITION
Compliance with export control regulations.
CONTEXT
Export control compliance involves adherence to national and international regulations (e.g. EU dual-use regulation, sanctions regimes) and is closely linked to compliance violations, regulatory reporting obligations, and internal controls. It is particularly relevant for companies operating in global supply chains or dealing with sensitive technologies.
MEANING
Prevents unlawful transfers of goods and technology and mitigates regulatory, legal, and reputational risks.
EXAMPLE
License required for software export.
G
GDPR / DSGVO
DEFINITION
GDPR (General Data Protection Regulation) is a European Union regulation governing the processing of personal data and the protection of individuals’ privacy.
CONTEXT
The GDPR is a key element of compliance and directly affects how organizations handle personal data. It is closely linked to information security, internal controls, and regulatory requirements for data protection and processing.
MEANING
The GDPR requires organizations to handle personal data responsibly and imposes significant financial penalties and reputational risks in case of non-compliance.
EXAMPLE
Unlawful storage or processing of employee personal data without a valid legal basis.
K
Know Your Customer (KYC)
DEFINITION
Know Your Customer (KYC) refers to procedures used to identify and verify customers and business partners, including the assessment of identity, beneficial ownership, and risk profiles.
CONTEXT
KYC is a core component of anti-money laundering (AML) frameworks and is closely linked to enhanced due diligence (EDD) and risk-based compliance approaches. It is applied during onboarding, transactions, and ongoing monitoring.
MEANING
KYC provides the foundation for preventing money laundering, fraud, and sanctions violations and is a regulatory requirement in many industries.
EXAMPLE
Verification of customer identity and beneficial ownership before account opening.
M
Money Laundering
DEFINITION
Money Laundering is the process of concealing the origin of illicit funds to make them appear legitimate.
CONTEXT
Money Laundering typically involves multiple stages, including placement, layering, and integration. It is closely linked to Fraud, Corruption, and organised crime, and is a key focus of regulatory frameworks such as anti-money laundering regimes.
MEANING
Money Laundering enables criminal activities by legitimising illicit proceeds and exposes organisations to severe regulatory and reputational risks.
EXAMPLE
Complex transactions with no clear rationale.
P
Politically Exposed Person (PEP)
DEFINITION
A Politically Exposed Person (PEP) is an individual who holds or has held a prominent public function, as well as their close associates and family members, who present an elevated risk of corruption and money laundering.
CONTEXT
PEPs are a key focus of anti-money laundering (AML) frameworks and require enhanced scrutiny under know your customer (KYC) and enhanced due diligence (EDD) processes. They are particularly relevant in cross-border relationships and high-risk jurisdictions.
MEANING
PEPs are subject to enhanced monitoring and due diligence due to their increased exposure to corruption and financial crime risks.
EXAMPLE
A government minister identified as the beneficial owner of a corporate client.
R
Regulatory Enforcement Action
DEFINITION
Regulatory Enforcement Action refers to a formal action taken by a regulatory authority to enforce compliance with laws and regulations.
CONTEXT
Regulatory Enforcement Actions typically arise from violations of compliance requirements, particularly in areas such as anti-money laundering (AML), corruption, or financial regulation. They may result from audits, investigations, or external reporting.
MEANING
Regulatory Enforcement Actions are key mechanisms for enforcing regulatory standards and may have significant financial, operational, and reputational consequences for organizations.
EXAMPLE
A financial institution is fined for violating anti-money laundering (AML) regulations.
Regulatory Reporting Obligation
DEFINITION
A Regulatory Reporting Obligation refers to the legal requirement to report specific events or suspicions to supervisory or law enforcement authorities.
CONTEXT
Regulatory reporting obligations are a core element of anti-money laundering (AML) and compliance frameworks. They are closely linked to know your customer (KYC) processes, enhanced due diligence (EDD), and internal reporting mechanisms. Common examples include suspicious activity reporting.
MEANING
Compliance with reporting obligations is mandatory; failure to report can result in significant penalties, legal consequences, and reputational damage.
EXAMPLE
Filing a suspicious activity report with the relevant financial intelligence unit.
S
Sanctions Compliance
DEFINITION
Compliance with international sanctions regimes.
CONTEXT
Sanctions compliance refers to adherence to national and international sanctions regimes, particularly concerning individuals, organisations, and states, and is closely linked to anti-money laundering (AML), know your customer (KYC), as well as transaction monitoring and screening processes. It is critical for financial institutions and globally operating companies with elevated regulatory exposure.
MEANING
Violations can lead to severe legal, financial, and reputational consequences and therefore represent a key compliance risk.
EXAMPLE
Blocked payment to sanctioned entity.
Suspicious Activity Report (SAR)
DEFINITION
A Suspicious Activity Report (SAR) is a formal report submitted to authorities regarding suspicious transactions or activities in accordance with legal requirements.
CONTEXT
SARs are a core component of anti-money laundering (AML) frameworks and are closely linked to regulatory reporting obligations, know your customer (KYC), and customer due diligence (CDD). They are triggered by unusual or unexplained transaction patterns.
MEANING
They are a key mechanism for detecting and preventing money laundering, terrorist financing, and other financial crimes.
EXAMPLE
Filing a report on unusual transaction patterns identified during monitoring.
Swiss Data Protection Act (DPA)
DEFINITION
The Swiss Data Protection Act (DPA) is Switzerland’s federal law governing the protection and processing of personal data by private and public entities.
CONTEXT
The Swiss DPA is highly relevant in the context of internal investigations, forensic evidence handling, and IT controls. It is closely aligned with international frameworks such as the General Data Protection Regulation (GDPR) and influences data access, logging, and retention practices.
MEANING
Compliance with the Swiss DPA is mandatory and defines how personal data must be collected, processed, and protected, particularly in investigative and control environments.
EXAMPLE
Restricting access to employee data during an internal investigation.
T
Transaction Monitoring
DEFINITION
The systematic monitoring of transactions to detect anomalies.
CONTEXT
Transaction monitoring is a core tool within anti-money laundering (AML), fraud detection methods, and data analytics detection. It is typically implemented in financial systems and ERP environments and relies on both rule-based and analytical approaches to identify anomalies.
MEANING
Enables early detection of suspicious activities and is a key component of effective prevention and detection frameworks.
EXAMPLE
Alert triggered by unusual refund activity.
W
Whistleblower Protection
DEFINITION
Whistleblower Protection refers to legal and organizational measures designed to protect individuals who report misconduct, particularly from retaliation.
CONTEXT
Whistleblower protection is a core element of tips and whistleblower reports and compliance frameworks, and is closely linked to the prevention of whistleblower retaliation. It is often mandated by law in many jurisdictions.
MEANING
Effective protection encourages reporting, strengthens trust in reporting systems, and enhances fraud detection capabilities.
EXAMPLE
Legal protection against dismissal after reporting misconduct.