Mandatory Time Away is typically used in the financial industry or industries where there's a high chance that employees in a position of responsibility could commit fraud or steal from the company and manipulate the numbers in order to hide the theft.
This is especially common in the banking industry. The idea is that if there's some fraudulent activity occurring, sending away the manager or accountant for two weeks and having someone else fill in would likely uncover any discrepancies, since the offending party wouldn't be around to continue manipulating the data during the period while he/she is away.
There's at least one claim here, from an alleged bank employee, that the IT department of the bank locks employees out of all systems when they are on their mandatory time away period. See this Banker's Online forum thread for more details.
A better source is Section 4-2 of the FDIC Regulations and Safety Manual, which states the following about vacations in the banking industry:
All banks should have a vacation policy, which provides that officers and employees be absent from their duties for an uninterrupted period of not less than two consecutive weeks. Such a policy is considered an important internal safeguard largely because perpetration of an embezzlement of any substantial size usually requires the constant presence of the embezzler in order to manipulate records, respond to inquiries from customers or other employees, and otherwise prevent detection. Examiners and bank management should recognize that the benefits of this policy may be substantially, if not totally, eroded if the duties performed by an absent individual are not assumed by someone else.
As an aside, fraudulent activity can also be detected by rotating personnel at random:
Rotation of Personnel
Planned and unannounced rotation of duties is an important principle of internal control. The rotation should be of sufficient duration to be effective. Rotation of personnel, besides being an effective internal check, can be a valuable aid in the overall training program.
In summary, it's not incorrect to think of mandatory time away as a vacation, since an employee in this status would essentially be relieved of all work duties for a period of likely two consecutive weeks. Thus, assuming the mandatory time away is something the employee can plan in advance, it could be thought of as a vacation. In fact, the FDIC refers to this as a "vacation policy" in their regulation and safety manual.
However, a vacation is not the same as mandatory time away. They're not reciprocal. While MTA can be used as a vacation and is a vacation, it more importantly serves as a safety check to mitigate financial risk and to detect and reduce losses.
Note that, there's at least one person who alleges that they're able to meet the MTA requirements without using all of their vacation time simply by combining their leave time with time away on business at a conference. See this Banker's Online post. Since the FDIC's policy recommends two consecutive weeks absent from normal duties, it's conceivable that this time could be used for paid professional development approved by the bank or organization.
As far as the statement about paid vacations not being a common practice in the United States, it just depends on what kind of work you do. If you're an engineer, teacher, scientist, researcher, manager, historian, banker, or work in some kind of professional capacity, you most likely have some form of paid time off. This also includes some blue collar professional work. However, if you work at the local Plaid Pantry, 7 Eleven, Circle K, or whatever the local convenience store is around the corner from the section 8 housing, you most likely don't get paid time off and earn minimum wage. In general, if your work is in high demand or involves skilled labor, you're more likely to receive a better benefits package. Hope this helps!