Designated categories of offense refer to specific criminal activities identified by international organizations, such as the Financial Action Task Force (FATF), as predicate offenses for money laundering. These are crimes from which illicit proceeds can be generated and later laundered through the financial system. The list includes offenses like drug trafficking, human trafficking, corruption, fraud, tax evasion, and terrorism financing.

Financial institutions are required to implement stringent measures to detect and prevent transactions related to these offences. This includes conducting thorough Customer Due Diligence (CDD), ongoing transaction monitoring, and reporting suspicious activities to relevant authorities. Understanding and identifying designated categories of offense helps compliance teams in detecting suspicious activity that could indicate the movement of illicit funds. By adhering to AML regulations and flagging transactions related to these offenses, institutions help combat financial crime and prevent the misuse of the financial system for illegal purposes.