Glossary

An earnout is a contractual agreement in which the seller of a business receives additional payments based on the company’s future performance after the acquisition. This arrangement helps bridge valuation gaps between buyer and seller by tying part of the purchase price to achieving specific financial targets or milestones over a set period.

EU banking regulator AML and prudential risk compliance guidelines.

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company’s operating performance by showing earnings from core business activities, excluding the effects of financing and accounting decisions. EBITDA is widely used to compare profitability between companies and assess their ability to generate cash flow.

These provisions call for capacity-building support between States Parties. They encompass training investigators, support for mutual legal assistance, anti-corruption strategy development, research, and data-sharing. The goal is to build national and regional capabilities?especially in developing countries?to effectively prevent, detect, and prosecute corruption.

Only offenses involving ?100 crore or more are eligible for proceedings under the Act. This threshold ensures that the law targets serious economic crimes, including willful loan defaults, money laundering, and large-scale fraud, avoiding misuse for petty offenses.

Economic sanctions are a key foreign policy tool used by governments and multilateral organizations to influence the behavior of states, entities, or individuals. While their effectiveness in achieving specific policy goals is often debated, sanctions remain a common means of applying international pressure. This overview introduces the concept of sanctions, outlines their main types, and provides examples of how they are applied in practice.

Additional checks carried out on high-risk customers or transactions as well as routine CDD.

Created in 2018, ECOFEL provides advanced AML/CFT training and mentoring for FIU analysts and management. It enhances analytical capabilities, leadership skills, and organizational maturity?reinforcing global FIU capacity.

The Committee implements mandates from the Heads of FIU and oversees regional coordination, strategy development, working groups, and administrative functions. It ensures Egmont’s objectives are operationalized through collaboration and oversight.

The ESW is a secure online platform used exclusively by Egmont Group FIUs to share sensitive financial intelligence. It encrypts and safeguards transactional data, legal documents, and cooperation requests?ensuring confidentiality, control over shared data usage, and swift information exchange in AML/CFT operations worldwide.

An embargo is a trade restriction imposed by a government, group of countries, or international organization as a form of economic sanction. It may prohibit all trade or target specific goods, such as weapons. Embargoes aim to penalize a country for certain actions and limit its ability to pursue objectionable policies.

Embezzlement is the act of wrongfully taking or misusing money or property that one has been trusted to manage or control. It typically occurs in workplace settings where employees or officials divert funds for personal use. Embezzlement is a serious financial crime that violates trust and is punishable by law.

Embezzlement refers to a public official intentionally misappropriating public or private funds entrusted to them. UNCAC requires States to criminalize this offence, covering diversion of funds, theft of property, or unauthorised use of resources by officials.

NPCI retains the right to apply real-time throttling or rate-limits on UPI APIs in response to DDoS attacks or sudden traffic surges, preserving the availability of core payment services.

Employee training risk refers to the potential for mistakes, security breaches, or resistance to change due to insufficient training during digital transformation. When staff are not properly educated on new systems or technologies, it can hinder adoption, reduce efficiency, and increase risk exposure. Addressing this involves structured training programs and continuous support.

These regulations prescribe SEBI staff recruitment, terms of service, conduct, transfers, and disciplinary processes. They cover appointment procedures, probation, pay scales, ethics, and pension provisions. The rules ensure SEBI personnel are professionally qualified, accountable, and subject to a structured governance framework, supporting the regulator’s integrity and independence.

Encryption is a method used to protect sensitive information by converting it into a secret code that can only be read with the correct decryption key. It plays a vital role in cybersecurity by ensuring that even if hackers gain access to the data, they cannot understand or misuse it without the proper key.

Encryption risk refers to the potential issues arising from the improper implementation or management of encryption technologies. This includes weak algorithms, poor key management, or compliance failures, which can lead to unauthorized data access or loss. During digital transformation, securing sensitive data through proper encryption practices is vital to mitigate such risks.

Endpoint security risk refers to vulnerabilities and threats targeting devices like laptops, smartphones, and tablets that connect to a network. Compromised endpoints can serve as entry points for cyberattacks, leading to data breaches or malware infections. Effective endpoint protection is essential in digital transformation to safeguard organizational assets.

Formal action by a regulator against sanctions violations.

The ED is the primary agency responsible for implementing the Act. It investigates offenses, files applications before the Special Court, attaches assets, and ensures compliance with the provisions of confiscation and repatriation of proceeds of crime.

Prosecutors (SFO, CPS) weigh factors such as value, recurrence, policy compliance, and whether a case serves public interest before pursuing charges. Minor facilitation payments, if self-reported and isolated, may not be prosecuted?but repeated or concealed violations may trigger enforcement actions.

An officer authorized under the PMLA to carry out investigations, issue summons, and take actions such as attachment of property against persons involved in money laundering offences.

Increased monitoring triggered by certain risk markers (e.g., trade flow anomalies).

EFRM refers to NPCI’s internal dedicated function within its CRO-led Enterprise Risk Management team. It defines fraud-risk appetite, tracks Key Risk Indicators (KRIs), reviews incidents, and shapes mitigation policies under ISO/CSO and PFMI-aligned frameworks?making fraud governance a second-layer defense.

Enterprise Risk Management (ERM) is a comprehensive process used by organizations to identify, assess, and manage risks across all areas in order to achieve their strategic objectives. It involves coordination between the board, management, and staff to create a unified approach to risk, ensuring risks are understood and controlled at every level.

Enterprise value (EV) is a measure of a company’s total value, including market capitalization, debt, and cash. It represents the cost to acquire the entire business, reflecting both equity and debt holders? interests. EV is used in financial analysis to compare companies and assess takeover prices beyond just stock market value.

FATCA classifies entities as FFIs or NFFEs, based on their financial nature. FFIs include banks, investment funds, and insurers, while NFFEs are non-financial. This classification determines reporting duties and withholding risks under FATCA.

nvironmental criminology studies how the physical environment and spatial patterns influence criminal behavior and crime rates. It focuses on the locations where crimes occur and how factors like urban design, land use, and routine activities can create opportunities for crime.

Executive Order 14114, issued by President Biden, amends previous sanctions related to Sudan, lifting certain restrictions imposed after the 2021 military coup. It reflects updated U.S. policy by maintaining targeted sanctions against individuals undermining democratic transition, while removing broader economic measures. The order aims to support Sudan’s move toward civilian-led governance and human rights.

Executive Order 14024, issued by President Biden on April 15, 2021, authorizes sanctions against individuals and entities involved in harmful foreign activities by the Russian government. These include cyberattacks, election interference, and threatening international peace. The order enables the U.S. to freeze assets and block dealings with designated parties to counter malign Russian influence.

Parties must have laws allowing prosecution of bribery cases involving foreign public officials that occur within their territory or abroad by their nationals. Even if the conduct happens elsewhere, citizens and companies of a Party country can be held liable, preventing jurisdictional escape.

Internal organization that outlines sanctions alert examination levels.

Process for escalating outstanding risk or compliance issues.

Procedure for reviewing, investigating, and making a determination regarding suspected sanctions alerts.

Structure to evaluate corporate responsibility against environmental, social, and governance issues.

Essentialia negotii is a Latin term referring to the essential elements or terms that must be present in a contract for it to be legally valid and enforceable. These typically include the parties involved, the subject matter, the price or consideration, and the agreement to be bound by those terms.

States must create independent, adequately resourced national agencies or authorities to prevent and combat corruption?through investigation, policy, coordination, and public education. These bodies are central to effective national-level anti-corruption frameworks.

Ethical blindness is when individuals or organizations fail to recognize the ethical implications of their actions due to biases, pressure, or habitual practices. This lack of awareness can cause people to unintentionally engage in unethical behavior, even when they believe they are doing the right thing, leading to moral lapses in decision-making.

Ethical considerations are fundamental in shaping an organization’s culture and guiding its practices. They encompass the moral principles that influence decision-making and behavior within the business. Upholding ethical conduct builds trust and credibility among stakeholders, including employees, customers, investors, and the wider community

Ethical relativism is the idea that moral principles and judgments are not absolute but vary based on cultural, social, or individual perspectives. According to this view, what is considered right or wrong depends on the context, meaning ethical standards can differ across societies and situations.

An ethics and compliance program is a structured framework designed to promote ethical behavior and ensure adherence to laws and regulations. It includes codes of conduct, training, reporting mechanisms, and enforcement policies, helping organizations prevent misconduct, foster a culture of integrity, and manage compliance risks effectively.

Eu List of individuals and groups subject to EU restrictive measures.

Restrictive measures taken by the European Union's Council of the EU.

Structure enabling sanctions against human rights violations globally.

Sanctions by the EU for attainment of foreign policy and security objectives.

Consecutive waves of sanctions against Russia following Crimea (2014) and Ukraine war (2022).

The EU Sanctions Committee is responsible for managing and overseeing the implementation of the European Union’s restrictive measures. It coordinates sanctions policy among member states, ensures compliance with sanctions regulations, and updates sanctions lists to address threats to international peace and security.

Bans or limitations on issuance/trading of sovereign or corporate Eurobonds.

ESMA is an independent EU authority that regulates and supervises securities markets across Europe. It aims to enhance investor protection, ensure stable and orderly financial markets, and promote transparency and convergence of rules among member states. ESMA plays a key role in overseeing crypto asset regulations within the European Union.

This dynamic AML control mandates interim reviews of client data or activity when triggers occur?like address changes or adverse media hits?rather than only scheduled reviews. Wolfsberg encourages event?driven updates to risk profiles to maintain relevance.

Ex parte proceedings under the Act allow courts to proceed against the accused even in their absence. If the accused fails to appear after a public notice, the Special Court can declare them a Fugitive Economic Offender and pass orders of confiscation without further input from the accused.

NPCI monitors bulk refunds (e.g., hundreds of UPI refunds at once). If batch volume exceeds risk thresholds (e.g., % of daily transactions), human verification is triggered to prevent fraud or operational errors.

An exclusion is a specific condition or situation that is not covered by an insurance policy. It defines what risks, damages, or losses the insurer will not pay for, helping to limit the insurer’s liability and clarify the scope of the coverage for the policyholder.

An exit scam occurs when operators of a cryptocurrency project or exchange suddenly disappear with investors? funds after gaining their trust. They often promise high returns or services but vanish without warning, leaving investors with losses. Exit scams are common in unregulated crypto spaces and represent a severe risk to users and investors.

Explainability refers to the ability to interpret and clearly communicate how an AI model operates and makes decisions. For organizations, it is a critical governance capability essential for building trust, ensuring regulatory compliance, and maintaining business accountability.

Export control refers to laws and regulations that restrict the export of certain goods, technologies, software, and services for reasons related to national security, foreign policy, or economic protection. These controls aim to prevent sensitive items from reaching unauthorized users or countries, particularly in cases involving weapons, dual-use technologies, or embargoed nations.

An Export Credit Agency (ECA) is a government-backed institution that offers financing, insurance, and guarantees to domestic exporters involved in international trade. ECAs help reduce the risks associated with exporting?such as non-payment or political instability?by supporting companies in securing contracts and expanding into foreign markets.

the act of taking out of India any goods or providing services from India to any person outside India. Exporters must furnish declarations to the RBI regarding the full value of exports.

Expropriation occurs when a government takes private property for public use, usually providing compensation to the owner. It can affect foreign investors' assets and is often regulated by international treaties to ensure fair treatment and protect investors from unjust or discriminatory seizure.

Review by outsiders to ensure compliance and fiscal integrity.

ECBs are loans taken by Indian companies from foreign lenders in foreign currency. FEMA and RBI regulate ECBs by specifying who can borrow, from whom, and under what terms. It’s a source of low-cost funds for large-scale infrastructure or corporate projects but must follow strict end-use and repayment guidelines to avoid foreign debt misuse.

The act of disclosing wrongdoing, misconduct, or violations to entities outside the organization, such as regulatory agencies, law enforcement, or watchdog groups, especially when internal reporting is ineffective or unsafe.

To prevent fraud from vendors and service providers, insurers should perform periodic due diligence, audit performance, enforce contract compliance including anti-fraud clauses, and use service-level agreements (SLAs) to enforce accountability.

Extortion is the act of obtaining money, property, or services from a person or organization through threats, intimidation, or coercion. It involves forcing someone to comply with demands by using fear of harm, exposure, or other negative consequences. Extortion is a criminal offense punishable by law.

Under Article 44, State Parties must treat corruption offences as extraditable, regardless of whether dual criminality applies?assuming the crime is punishable under their law. This obligation forces cooperation even when terminology differs, preventing perpetrators from evading justice and ensuring cross-border accountability for corruption-related offences.

Identifying where the other jurisdictions' sanctions pose risk to the firm.

The application of a country's laws outside its territorial borders, against foreign entities.

Trading members must limit client or proprietary positions to ?50?cr daily. Exceeding this triggers continuous ASD levies until positions are trimmed below the threshold, disincentivizing outsized risk concentrations.