All Terms

AML

Anti-Money Laundering — the laws, regulations and controls a financial institution runs to prevent, detect and report the movement of illicit funds through its products.

CFT

Countering the Financing of Terrorism — the parallel discipline to AML focused specifically on funds intended to support terrorist activity, often bundled together as "AML/CFT."

CAMP

Acronym for Certified Anti Money Laundering Professional. It is the certification course offered by Riskpro learning which provides simulation labs for the AML professionals to work in the real life investigation environment.

KYC

Know Your Customer — the process of verifying a customer's identity and understanding the nature of their expected activity at onboarding.

CDD

Customer Due Diligence — the standard level of KYC information and ongoing monitoring applied to every customer, risk-rated to match their profile.

EDD

Enhanced Due Diligence — a deeper level of scrutiny applied to higher-risk customers (e.g. PEPs, high-risk jurisdictions), involving additional evidence gathering and more frequent review.

PEP

Politically Exposed Person — an individual who holds, or has held, a prominent public function, or their immediate family/close associates, carrying elevated corruption risk.

UBO

Ultimate Beneficial Owner — the natural person(s) who ultimately own or control a legal entity, even if the ownership is structured through intermediary companies or nominees.

SAR

Suspicious Activity Report — a confidential report filed with a financial intelligence unit when an institution has reasonable grounds to suspect a transaction or relationship is linked to criminal activity.

STR

Suspicious Transaction Report — the term used in many non-US jurisdictions for the same filing concept as a SAR.

CTR

Currency Transaction Report — a mandatory report filed whenever a cash transaction (or series of related transactions) crosses a statutory threshold, regardless of whether it looks suspicious.

EFTR

Electronic Funds Transfer Report — a mandatory report on qualifying electronic transfers above a threshold, analogous to a CTR but for wire/EFT activity rather than cash.

FIU

Financial Intelligence Unit — the national government body that receives SARs/STRs from institutions, analyses them, and can pass actionable intelligence to law enforcement.

MLRO

Money Laundering Reporting Officer — the senior individual formally designated as responsible for an institution's AML programme, including SAR filing decisions.

RFI

Request for Information — a formal question sent to a relationship manager or, carefully, the customer, to resolve an open concern before a disposition is made.

Tipping-off

Illegally alerting a customer (directly or indirectly) that they are, or may be, the subject of a suspicious activity investigation or report — a criminal offence in most jurisdictions.

Four-Eyes / Maker-Checker

A control requiring that the person who recommends a decision cannot also be the person who approves it — a second, independent reviewer must sign off.

FATF

Financial Action Task Force — the global standard-setting body for AML/CFT policy; most national regulations are built around its 40 Recommendations.

OFAC

Office of Foreign Assets Control — the US Treasury body that administers and enforces US economic and trade sanctions, including the SDN List.

SDN List

Specially Designated Nationals List — OFAC's list of individuals and entities with whom US persons are generally prohibited from dealing.

Placement

The first stage of money laundering: introducing illicit cash into the financial system, e.g. via cash deposits.

Layering

The second stage: moving funds through multiple transactions, accounts or jurisdictions to obscure their origin.

Integration

The third stage: reintroducing laundered funds into the legitimate economy, e.g. via investments or purchases, so they appear clean.

Structuring / Smurfing

Breaking a large sum into multiple smaller transactions, each below a reporting threshold, to avoid triggering mandatory reporting.

TBML

Trade-Based Money Laundering — disguising criminal proceeds by misrepresenting the price, quantity or quality of goods in trade documentation.

Shell Company

A legal entity with no genuine business activity, employees or physical operations, often used to obscure the true source or owner of funds.

Funnel Account

An account that receives many small deposits from dispersed sources and consolidates them into large outbound transfers.

Money Mule

An individual (often unwittingly) who allows their account to be used to receive and forward funds on behalf of a criminal network, usually in exchange for a small fee.

Nested Account

A situation where a respondent bank allows a third bank to use its correspondent account without the correspondent institution's knowledge or approval.

VASP

Virtual Asset Service Provider — a business (exchange, custodian, etc.) that conducts activities involving virtual assets on behalf of customers, subject to its own AML obligations.

Travel Rule

The requirement that originator and beneficiary information travel with a funds transfer (including virtual asset transfers) so it can be screened at each step.

Red Flag

An individual indicator (not on its own proof of wrongdoing) that, especially in combination with others, raises the likelihood a transaction or relationship is suspicious.

Typology

A recognised pattern or method by which money laundering or terrorist financing is typically carried out, used to design detection rules and train investigators.

Risk-Based Approach

Allocating AML resources and control intensity in proportion to the actual money-laundering/terrorist-financing risk a customer, product or relationship presents.

Source of Funds

The origin of the specific funds involved in a particular transaction or relationship (e.g. "salary," "sale of property").

Source of Wealth

The origin of a customer's entire net worth accumulated over time, a broader concept than source of funds, typically required for higher-risk/PEP relationships.

De-Risking

An institution exiting or declining entire categories of customers or business considered too high-risk to manage, rather than managing the risk on a case-by-case basis.

Watchlist

A maintained list (sanctions, PEP, internal hotlist, adverse media) screened against customer and transaction data to surface potential matches.

Escalation

Formally routing a case to a more senior or specialised reviewer (e.g. L1 to L2, L2 to L3/MLRO) because it needs deeper investigation or higher authority to close.

Disposition

The final decision recorded against an alert or case (e.g. cleared, escalated, SAR filed) along with the rationale supporting it.

Reasonable Grounds to Suspect

The legal threshold in most jurisdictions for filing a SAR/STR — a level below certainty or proof, but more than a vague hunch, grounded in specific, articulable facts.

Adverse Media

Credible negative news coverage about a customer or associated party, screened for links to financial crime, corruption or other predicate offences.

Correspondent Banking

An arrangement where one bank (the correspondent) provides services to another bank (the respondent) to give it access to markets or currencies it can't reach directly.