Glossary

A tabletop exercise is a discussion-based simulation in which participants talk through how they would respond to a described crisis, to test plans, roles and decisions without disrupting real operations.

Tail risk is the chance of rare, extreme outcomes that sit at the far ends of a probability distribution and can cause losses much larger than usual.

Targeted financial sanctions are measures that freeze the assets of designated persons and entities and bar anyone from making funds or economic resources available to them, directly or indirectly.

Targeted sanctions are measures aimed at named individuals, entities or vessels, such as asset freezes, travel bans or arms embargoes, rather than at a whole country or its economy.

The TCFD was an industry-led task force that set out recommendations for how companies disclose climate-related risks and opportunities, organised under governance, strategy, risk management, and metrics and targets.

The TNFD is a market-led initiative whose framework helps organisations report and act on risks and opportunities that arise from their dependencies and impacts on nature, such as land, water, ecosystems and species.

A tax audit is an examination by a tax authority of a taxpayer's returns, records and transactions to check that tax has been correctly reported and paid.

Tax avoidance is the use of legal structures and rules to reduce the tax a person or company pays, often in ways that follow the letter of the law but go against its intended purpose.

Tax evasion is the deliberate, illegal act of avoiding tax by hiding income, overstating costs or giving false information to a tax authority.

A tax governance framework is the set of policies, roles, controls and board oversight an organisation uses to manage its tax risk and keep its tax affairs accurate and compliant.

A tax haven is a country or territory that offers very low or zero tax to foreign individuals and companies, often with limited transparency and little requirement for real local activity.

Tax planning is the lawful arrangement of financial affairs, transactions or business structures to reduce or defer tax, using reliefs and options that the law intends to be available.

Tax residency is the legal status that ties a person or company to a country for tax, usually determining whether it is taxed there on worldwide income or only on local income.

Tax transparency is the openness of taxpayers and governments about tax matters, including the sharing of information between tax authorities and the public disclosure by companies of their tax approach and payments.

Technology risk management is the organisation-wide process of identifying, assessing, controlling and monitoring risks that arise from using information and communication technology, from outages and cyber attack to ageing systems.

A thematic review is a regulator's examination of how many firms handle a single issue or product at the same time, used to compare practice, find common failings and publish findings or take action.

Thin capitalisation is when a company is funded mostly by debt, often from related parties, rather than equity. Tax rules then limit how much of the interest on that debt can be deducted.

These are the checks and contract terms a company applies to agents, suppliers, joint-venture partners and other outside parties, to stop them paying bribes on its behalf or exposing it to corruption.

Third-party risk is the risk of loss, disruption or compliance failure that comes from relying on an outside party, such as a supplier, contractor, agent or service provider, to deliver goods, services or access.

Third-party risk management is the set of policies and processes a firm uses to identify, assess, contract with, monitor and exit external suppliers so that the risks they bring stay within acceptable limits.

Threat intelligence is analysed information about who is attacking, how they work and what they want, shaped so that defenders can decide which threats to expect and where to spend effort first.

The Three Lines Model divides responsibility for managing risk among business management, the risk and compliance functions that oversee it, and internal audit that independently assures it, all answering to the board.

Tipping-off is telling a customer or other person that a suspicious report has been or will be filed, or that an investigation is under way, in a way that could harm the inquiry.

Tone at the top is the example that a board and senior executives set through their words, decisions and behaviour, which shapes how ethically and compliantly the rest of the organisation acts.

Trade finance risk is the exposure a bank takes when it funds, guarantees or pays for international trade, because the supporting documents can hide money laundering, sanctions breaches or fraud.

Trade mis-invoicing is deliberately stating a false price, quantity or description of goods or services on trade documents, so that value moves across borders in a way that hides its real purpose.

Trade sanctions are restrictions on exporting or importing goods, services and technology to or from a targeted country, sector or party, ranging from bans on single items to full embargoes.

Trade-based money laundering disguises the proceeds of crime by moving value through trade transactions, using false prices, quantities or shipments to make illegal money look like legitimate commerce.

Trade-based sanctions evasion is the use of false, misleading or altered trade documents and shipping arrangements to move goods or value for sanctioned parties, or to sanctioned places, without detection.

Training data governance is the set of controls over where AI training data comes from, how good it is and whether it may lawfully be used, covering provenance, quality, consent and bias.

Transaction monitoring is the review of customer payments and account activity, usually by software, to spot patterns that look unusual or suspicious so staff can investigate and report where needed.

Transaction screening is the checking of payments and trade messages against sanctions lists, usually before release, to catch prohibited parties, banks, places and goods in the transaction details.

Transfer pricing is the setting of prices for goods, services, loans and intangible rights exchanged between related companies in the same group, which decides how profit is split between countries for tax.

Transition finance is funding that helps high-emitting companies and sectors cut their emissions credibly over time, for example steel, cement or shipping, where few fully green options exist yet.

Transition risk is the risk of financial loss arising from the shift to a low-carbon economy, through changes in policy, technology, market demand, legal liability and reputation.

Transparency is the practice of making decisions, rules, performance and risks visible to people with a legitimate interest, so they can understand and question what an organisation or public body does.

Transshipment and diversion risk is the chance that goods or payments pass through a third country, port or zone on the way to a destination or end user that sanctions or export controls prohibit.

A travel ban is a sanctions measure that stops listed individuals from entering, or passing through, a country's territory. It is imposed with an asset freeze or on its own against named people.

The travel rule requires financial institutions and virtual asset providers to pass identifying details about the sender and recipient along with a transfer, so each firm in the chain can screen and monitor it.

Treating Customers Fairly is a regulatory principle, popularised by the UK's financial regulator in the 2000s, that firms must deliver fair outcomes for customers at every stage of the relationship, from design to complaints.

Treaty shopping is the use of an intermediary entity in a third country, only to obtain the tax benefits of a double taxation agreement that the real investor would not otherwise receive.

A true match is a screening alert that, after review, is confirmed to involve the actual person or entity named on a sanctions list or watchlist, not just someone with a similar name.

TCSPs are businesses and professionals that set up, run or administer companies and trusts for clients, for example by forming companies, supplying directors or providing a registered office.

Tunnelling is when controlling shareholders or managers siphon a company's assets or profits to themselves or their other firms, leaving minority shareholders and creditors worse off.

FIUs are commonly grouped into four models by where they sit and what powers they have: administrative, law enforcement, judicial or prosecutorial, and hybrid.