Source: Transparency International

  1. Access to Information/Right to Information: The right by law – often through freedom of information legislation (acts or laws) – to access key facts and data from the government and any public body based on the notion that citizens can obtain information which is in the possession of the state.
  2. Accountability: The concept  that individuals, agencies and organisations (public, private and civil society) are held responsible for reporting their activities and executing their powers properly. It also includes the responsibility for money or other entrusted property.
  3. Asset Recovery: Asset recovery is the legal process through which a country, government and/or its citizens recover from another jurisdiction the resources and other assets that were stolen through corruption.
  4. Audit: An internal or external examination of an organisation’s accounts, processes, functions and performance to produce an independent and credible assessment of their compliance with applicable laws and regulations.
  5. Automatic Exchange of Information: Automatic Exchange of Information (AIE) is when the tax authorities of two or more states share financial information related to all types of wealth (including immovable property such as houses or land) and taxable activity (e.g. dividends, interests, royalties, salaries, pensions, VAT refunds, etc.) on an automatic, periodic basis. In this system information is routinely collected in the country where the taxable activity occurs or the wealth is held, and shared with the country where taxes are due without a formal request being required. The system can be formalised in either bilateral or multilateral agreements between state parties.
  6. Base Erosion and Profit Shifting (BEPS): Base Erosion and Profit Shifting (BEPS) refers to the erosion of a national tax base and one process by which this happens. This process is when multinational companies shift the profits generated in the country outside and into jurisdictions such as offshore financial centres with lower or zero tax, thus minimising their tax burden. This practice is legal, but aside from eroding the tax base of countries where the profits have been made it also creates an unbalanced playing field, since small and medium sized businesses do not normally have access to these profit shifting schemes and therefore pay much higher taxes than multinationals.
  7. Beneficial Ownership Secrecy: A beneficial owner is the real person who ultimately owns, controls or benefits from a company or trust fund and the income it generates. The term is used to contrast with the legal or nominee company owners and with trustees, all of whom might be registered the legal owners of an asset without actually possessing the right to enjoy its benefits. Complex and opaque corporate structures set up across different jurisdictions, make it easy to hide the beneficial owner, especially when nominees are used in their place and when part of the structure is incorporated in a secrecy jurisdiction. 
  8. Bribery: The offering, promising, giving, accepting or soliciting of an advantage as an inducement for an action which is illegal, unethical or a breach of trust. Inducements can take the form of gifts, loans, fees, rewards or other advantages (taxes, services, donations, favours etc.).
  9. Civil Society: The arena, outside of the family, state and market where people associate to advance a common set of interests. Voluntary and community groups, non-governmental organisations (NGOs), trade unions and faith-based organisations commonly are included in this sphere, making the term broader than an NGO.
  10. Clientelism: An unequal system of exchanging resources and favours based on an exploitative relationship between a wealthier and/or more powerful ‘patron’ and a less wealthy and weaker ‘client’.
  11. Code of Conduct: Statement of principles and values that establishes a set of expectations and standards for how an organisation, government body, company, affiliated group or individual will behave, including minimal levels of compliance and disciplinary actions for the organisation, its staff and volunteers.
  12. Collusion: A secret agreement between parties, in the public and/or private sector, to conspire to commit actions aimed to deceive or commit fraud with the objective of illicit financial gain. The parties involved often are referred to as ‘cartels’. 
  13. Compliance: Refers to the procedures, systems or departments within public agencies or companies that ensure all legal, operational and financial activities are in conformity with current laws, rules, norms, regulations, standards and public expectations.
  14. Conflict of Interests: Situation where an individual or the entity for which they work, whether a government, business, media outlet or civil society organisation, is confronted with choosing between the duties and demands of their position and their own private interests.
  15. Conventions: International and regional agreements signed or formally adopted through ratification by multiple states that establish rules, laws and standards on issues which are typically cross-border in nature and require a common approach for effective, multilateral cooperation. 
  16. Corporate Governance: Procedures and processes for how private sector organisations are directed, managed and controlled, including the relationships between, responsibilities of and legitimate expectations among different stakeholders (Board of Directors, management, shareholders, and other interested groups).
  17. Corruption: The abuse of entrusted power for private gain. Corruption can be classified as grand, petty and political, depending on the amounts of money lost and the sector where it occurs. Also see ‘grand corruption’, ‘petty corruption’ and ‘political corruption’. 
  18. Country By Country Reporting: Country by country reporting is a form of financial reporting in which multinational corporations produce certain financial data disaggregated by country and for each country in which they operate. This data includes sales and purchases within the corporation and externally, profits, losses, number of employees and staffing costs, taxes paid and tax obligations, summaries of assets and liabilities. Currently, consolidated financial statements are the norm. 
  19. Debarment: Procedure where companies and individuals are excluded from participating or tendering projects. Governments and multilateral agencies use this process to publicly punish businesses, NGOs, countries or individuals found guilty of unethical or unlawful behaviour. 
  20. Disclosure: Provision of information as required under law or in good faith, regarding activities of a private individual, public official, company or organisation. Information can include a political candidate’s assets, a company’s financial reports, an NGO’s donors or a whistleblower’s accusations. 
  21. Embezzlement: When a person holding office in an institution, organisation or company dishonestly and illegally appropriates, uses or traffics the funds and goods they have been entrusted with for personal enrichment or other activities. 
  22. Enhanced Due Diligence: Enhanced Due Diligence is the term used to refer to Know Your Customer money laundering measures that include validation and documentation by third parties and applies to situations where higher risk clients and political exposed persons such as senior politicians, are concerned. 
  23. Ethics: Based on core values and norms, a set of standards for conduct in government, companies and society that guides decisions, choices and actions.
  24. Extortion: Act of utilising, either directly or indirectly, one’s access to a position of power or knowledge to demand unmerited cooperation or compensation as a result of coercive threats.
  25. Facilitation Payments: A small bribe, also called a ‘facilitating’, ‘speed’ or ‘grease’ payment; made to secure or expedite the performance of a routine or necessary action to which the payer has legal or other entitlement.
  26. Fraud: To cheat. The offence of intentionally deceiving someone in order to gain an unfair or illegal advantage (financial, political or otherwise). Countries consider such offences to be criminal or a violation of civil law.
  27. Governance: A concept that goes beyond the traditional notion of government to focus on the relationships between leaders, public institutions and citizens, including the processes by which they make and implement decisions. The term can also be applied to companies and NGOs.  ‘Good’ governance is characterised as being participatory, accountable, transparent, efficient, responsive and inclusive, respecting the rule of law and minimising opportunities for corruption.
  28. Grand Corruption: The abuse of high-level power that benefits the few at the expense of the many, and causes serious and widespread harm to individuals and society. It often goes unpunished. See also ‘corruption’, ‘petty corruption’, and ‘political corruption’.
  29. Illicit Financial Flows: Illicit financial flows describe the movement of money that is illegally acquired, transferred or spent across borders. The sources of the funds of these cross-border transfers come in three forms: corruptopn, such as bribery and theft by government officials; criminal activities, such as drug trading, human trafficking, illegal arms sales and more; and tax evasion and transfer mispricing. 
  30. Integrity: Behaviours and actions consistent with a set of moral or ethical principles and standards, embraced by individuals as well as institutions, that create a barrier to corruption. See ‘ethics’. 
  31. Know Your Customer: Know Your Customer (KYC) is a term used to describe a set of money laundering measures normally mandated by law which are employed by banks and other financial services to document the true identity of a customer/client and his or her source of wealth to make sure it is legitimate. The KYC information is compiled and retained in a client “profile” that is periodically updated.  Actual activity over the account is compared to the KYC profile to identify activity that raises suspicions of money laundering.
  32. Lobbying: Any activity carried out to influence a government or institution’s policies and decisions in favour of a specific cause or outcome. Even when allowed by law, these acts can become distortive if disproportionate levels of influence exist – by companies, associations, organisations and individuals.
  33. Money Laundering: Money laundering is the process of concealing the origin, ownership or destination of illegally or dishonestly obtained money by hiding it within legitimate economic activities to make them appear legal. 
  34. Mutual Legal Assistance (MLA): Mutual Legal Assistance is the formal process of cooperation between two or more jurisdictions, for example on cross-border money laundering, asset recovery,and tax evasion cases. Through this cooperation, which is usually enacted through a treaty, a state can ask for and receive assistance in gathering information and evidence from private and public sources for use in official investigations and prosecutions. 
  35. National Integrity Systems: A holistic approach to analyse both the extent and causes of corruption in a particular country by looking at the system of checks and balances and institutional pillars that form a society, including the executive, legislature, judiciary, ombudsman, media, civil society and business sector.   Developed by Transparency International, this framework is useful for evaluating a country’s institutional strengths and weaknesses and developing an anti-corruption strategy. 
  36. Nepotism: Form of favouritism based on acquaintances and familiar relationships whereby someone in an official position exploits his or her power and authority to provide a job or favour to a family member or friend, even though he or she may not be qualified or deserving. Also see ‘clientelism’
  37. Nominee (Nominee Director/Nominee Owner/Nominee Shareholder, etc.): Nominees act as the legal manager, owner or shareholder of limited companies or assets. They act on behalf of the real manager, owner or shareholder of these entities. These nominees obscure the reality of who is really operating or benefiting from the company and are often used when the beneficial owners do not wish to disclose their identity or role in the company. Professional nominees are paid a fee for their services but otherwise have no interest in the transactions. Nominees could also be family members or friends. Often, nominees pre-sign documentation, such as letters of resignation, which the beneficial owner can choose to effect at any time.
  38. Offshore Financial Centres: Countries or jurisdictions, some times called ‘fiscal paradises’ or ‘tax havens' that provide financial services to non-residents on a disproportionate scale to the domestic economy as a result of financial incentives, such as minimum government interference and very low or zero tax rates. 
  39. Oversight: The process of independently monitoring and investigating – internally or externally – the operations and activities of a government agency, company or civil society organisation to ensure accountability and efficient use of resources.
  40. Pacts: Voluntary agreement among different parties (i.e. businesses, government agencies, contract bidders) to formally commit to mutually-agreed ‘rules of the game’, including the refusal to engage in bribery and the promise to uphold human rights. 
  41. Patronage: Form of favouritism in which a person is selected, regardless of qualifications or entitlement, for a job or government benefit because of affiliations or connections.
  42. Petty Corruption: Everyday abuse of entrusted power by public officials in their interactions with ordinary citizens, who often are trying to access basic goods or services in places like hospitals, schools, police departments and other agencies. See ‘corruption’ and ‘grand corruption’. 
  43. Political Contribution: Any contribution, made in cash or in kind, to support a political cause. Examples include gifts of property or services, advertising or promotional activities endorsing a political party, and the purchase of tickets to fundraising events.
  44. Political Corruption: Manipulation of policies, institutions and rules of procedure in the allocation of resources and financing by political decision makers, who abuse their position to sustain their power, status and wealth.  See ‘corruption’, ‘grand corruption’, and ‘petty corruption’
  45. Political Will: Demonstration and commitment by political leaders to address the challenges facing society or to fulfil a political pledge, such as fighting corruption or increasing political participation, by pursuing the appropriate policy responses, including wide-spread reforms. 
  46. Politically Exposed Persons (PEPS): Politically Exposed Persons are individuals who hold or held a prominent public function, such as the head of state or government, senior politicians, senior government, judicial or military officials, senior executives of state-owned corporations, or important political party officials. The term often includes their relatives and close associates. Banks and other financial institutions are supposed to treat these clients as high-risk, applying enhanced due diligence at both the start of the relationship and on an ongoing basis, including at the end of a relationship to ensure that the money in their bank account is not the proceeds of crime or corruption.
  47. Private Sector: Any company, household and institution that is not controlled by the public sector and which is run for private profit. Private sector corruption is characterised by groups from this sector influencing decisions and actions that lead to abuses of entrusted power.
  48. Procurement: A multi-step process of established procedures to acquire goods and services by any individual, company or organisation — from the initial needs assessment to the contract’s award and service delivery. 
  49. Public Sector: The government and its decentralised units — including the police, military, public roads and transit authorities, primary schools and healthcare system — that use public funds and provide services based on the motivation to improve citizens’ lives rather than to make a profit. 
  50. Revolving Door: The term ‘revolving door’ refers to the movement of individuals between positions of public office and jobs in the same sector in the private or voluntary sector, in either direction. If not properly regulated, it can be open to abuse. A cooling off period is the minimum time required between switching from the public to the private sector intended to discourage the practice and minimise its impact
  51. Rule of Law: Legal and political systems, structures and practices that condition a government’s actions to protect citizens’ rights and liberties, maintain law and order, and encourage the effective functioning of the country. 
  52. Secrecy Jurisdiction: Secrecy jurisdictions are territories, including cities, states/provinces and countries that encourage the relocation of otherwise foreign economic and financial transactions through strong privacy protection rules. These jurisdictions ensure that the identity of those relocating their money through them cannot be disclosed. This often undermines legislation and regulation of another jurisdiction. Many secrecy jurisdictions are also  tax havens. 
  53. Shell Company: A shell company or corporation is a limited liability entity having no physical presence in their jurisdiction, no employees and no commercial activity. It is usually formed in a tax haven or secrecy jurisdiction and its main or sole purpose is to insulate the real beneficial owner from taxes, disclosure or both. Shell companies are also referred to as international business companies, personal investment companies, front companies, or "mailbox"/”letterbox” companies. 
  54. Solicitation: The act of a person asking, ordering or enticing someone else to commit bribery or another crime. 
  55. State Capture: A situation where powerful individuals, institutions, companies or groups within or outside a country use corruptionto influence a nation’s policies, legal environment and economy to benefit their own private interests. 
  56. Tax Evasion/Tax Avoidance: Tax evasion is the illegal non-payment or under-payment of taxes, usually by deliberately making a false declaration or no declaration to tax authorities – such as by declaring less income, profits or gains than the amounts actually earned, or by overstating deductions. It entails criminal or civil legal penalties. Tax avoidance is the legal practice of seeking to minimise a tax bill by taking advantage of a loophole or exception to the rules, or adopting an unintended interpretation of the tax code. It usually refers to the practice of seeking to avoid paying tax by adhering to the letter of the law but opposed to the spirit of the law. Proving intention is difficult; therefore the dividing line between avoidance and evasion is often unclear. 
  57. Tax Haven: Tax havens are jurisdictions, including cities, states or countries that grant favourable tax treatment which can benefit non-residents. They attract relocation of economic transactions to their territory by applying no or minimal tax rates. They typically host a range of financial service providers. Many tax havens are also secrecy jurisdictions.
  58. Transfer Pricing/Transfer Mispricing: Transfer pricing is the process through which parent companies and/or subsidiaries of the same parent, in different countries, establish a price for goods or services between themselves. Transfer mispricing is the abusive manipulation of this process for the purpose of avoiding or reducing taxes across all entities. This takes place when related firms agree to manipulate the price of their internal transactions in order to declare less profit in higher-tax jurisdictions and therefore reduce their total tax payments. It deliberately generates profit and hides or accumulates money in the jurisdiction where the tax bill is low. 
  59. Transparency: Characteristic of governments, companies, organisations and individuals of being open in the clear disclosure of information, rules, plans, processes and actions. As a principle, public officials, civil servants, the managers and directors of companies and organisations, and board trustees have a duty to act visibly, predictably and understandably to promote participation and accountabilityt and allow third parties to easily perceive what actions are being performed. 
  60. Whistleblowing: Making a disclosure in the public interest by an employee, director or external person, in an attempt to reveal neglect or abuses within the activities of an organisation, government body or company (or one of its business partners) that threaten public interest, its integrity and reputation. The term in English is largely positive although many languages lack a similar concept with the same connotation.


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