Acronyms Explained
A glossary you didn’t know you needed…
AML – Anti-Money Laundering
AML safeguards the integrity of financial systems, combats crime and supports economic stability. It involves identifying and reporting suspicious financial activity linked to offenses such as drug and human trafficking, terrorism and fraud. By law, financial institutions and designated services must verify customer identities, monitor transactions and report any suspicious behaviour.
APP – Australian Privacy Principles
The APPs are rules in Australia’s Privacy Act 1988 that outline how government agencies and most businesses must collect, use, store and protect people’s personal information. They give individuals the right to access and update their own data. The APPs apply to organisations with an annual turnover of more than $3 million, as well as some smaller businesses and overseas companies that handle Australian data. Breaking these rules can result in penalties.
ASIC – Australian Securities and Investments Commission
ASIC is Australia’s independent watchdog for companies, financial markets, financial services and consumer credit. It helps keep the financial system fair and transparent by overseeing businesses and professionals, enforcing the rules, and protecting consumers and investors. ASIC also licenses and monitors financial service providers, looks into misconduct and makes company information publicly available across areas like investments, superannuation, insurance and credit.
AUSTRAC – Australian Transaction Reports and Analysis Centre
AUSTRAC is Australia’s financial intelligence unit and the regulator for anti-money laundering and counter-terrorism financing. It works to prevent, detect and respond to the criminal exploitation of financial systems, helping to protect the community from serious and organised crime. In collaboration with financial institutions and regulated entities, AUSTRAC collects and analyses financial reports and information to produce financial intelligence that supports law enforcement and national security investigations.
CP – Compliance Program
A CP is a company’s rulebook that outlines internal processes, training and controls that helps ensure the business and its employees follow laws and regulations, ethical standards and company policies. Its purpose is to prevent potential problems, manage risks and promote ethical behaviour by setting clear expectations and providing ways to monitor and fix issues when rules are not followed.
CTF – Counter-Terrorism Financing
Working in unison with AML, CTF is a counter-measure to prevent money and assets from funding terrorist acts. CTF refers to the laws, regulations and measures used by governments and businesses to detect, disrupt, and prevent the flow of funds that support terrorism.
DNFBPs – Designated Non-Financial Businesses and Professions
DNFBPs include sectors like real estate, casinos, lawyers, accountants and precious metals dealers. Because they often handle large cash flows or complex transactions, they are vulnerable to money laundering and terrorist financing, so AML/CTF regulations require them to conduct customer due diligence (CDD) and report suspicious activity.
EFT – Electronic funds transfers
EFTs are transactions that move money electronically between financial institutions, bank accounts or individuals. Often called electronic bank transfers, eCheques or electronic payments, EFT is a broad term that covers many types of transactions. In essence, any transfer of funds carried out electronically is considered an EFT.
FATF – Financial Action Task Force
FATF is an international body that sets global standards to fight money laundering, terrorist financing and the financing of weapons proliferation. Founded in 1989, it helps protect the global financial system by monitoring countries, promoting strong laws and regulations, and identifying high-risk jurisdictions to prevent illegal funds from entering the system.
FIU – Financial Intelligence Unit
The FATF requires each country to have a national FIU to fight money laundering and terrorist financing. The FIU serves as a central hub for receiving Suspicious Transaction Reports (STRs) and Suspicious Matter Reports (SMRs) from financial and non-financial institutions, analysing them for signs of crime, and sharing relevant information with law enforcement, regulators and other FIUs worldwide.
IDV – Identity Verification
IDV is the digital process of confirming a person’s identity to prevent fraud in online services. It checks documents (passports, licenses) and biometrics (selfies, facial scans) against trusted data to ensure compliance and secure access. Using methods like document scanning, biometric matching and database checks, often during onboarding, it establishes confidence in a user’s real-world identity online.
IFTI – International Funds Transfer Instruction
An IFTI is a compulsory report for Australian financial institutions and certain businesses, capturing details of money or property transfers into or out of Australia. The purpose of IFTI reporting is to help detect and prevent financial crimes such as money laundering and terrorism financing. Reports are submitted to AUSTRAC and apply to both electronic transfers (IFTI-E) and non-electronic transfers (IFTI-DRA), and must be lodged within 10 business days.
KYB – Know Your Business
KYB is a due diligence process whereby companies verify the legitimacy of businesses they're connected with to prevent financial crime and to ensure they are compliant with AML regulations. Verification includes checking a businesses identity, ownership and registration, and is similar to KYB (see below), but is business focussed instead of customer focussed.
KYC – Know Your Customer
KYC is a mandatory process for financial institutions to verify client identities and assess risks to help prevent fraud, money laundering and terrorism financing. It involves collecting ID details (name, address, date of birth) and continuously monitoring for suspicious activity or sanctioned connections. KYC is a core part of AML compliance.
MLRO – Money Laundering Reporting Officer
MLRO is a senior compliance role within financial institutions and regulated businesses. They oversee AML and CTF efforts, making sure the organisation stays compliant, and they report any suspicious activity to the authorities. Acting as the main contact with regulators, the MLRO manages risk and helps protect the business from financial crime by putting strong AML systems and procedures in place. This role is also sometimes called the Nominated Officer.
OAIC – Office of the Australian Information Commissioner
OAIC is an independent government agency that safeguards privacy and freedom of information (FOI) in Australia. It handles complaints, conducts investigations and provides guidance on how personal information should be managed and how the public can access government documents.
OCDD – Ongoing Customer Due Diligence
OCDD is the continuous process of monitoring customer activity and updating information to prevent money laundering, terrorism financing and other financial crimes throughout the entire customer relationship. It includes tracking transactions, flagging unusual behaviour, keeping data current and applying enhanced due diligence for high-risk clients to manage evolving risks.
PEP – Politically Exposed Person
A PEP is someone who currently holds or previously held a prominent public role in a government or international organisation, such as a head of state, minister or senior executive. Because their position can increase the risk of bribery or corruption, financial institutions must apply enhanced due diligence to PEPs as well as their close associates and family members.
RA – Risk Assessment
RA is a company's process for identifying, analysing and evaluating potential hazards or threats that could adversely affect an organisation’s operations from finances and reputation, to safety. The aim is to implement effective controls and strategies to reduce or eliminate these risks. This process considers both internal factors (such as processes and staff) and external factors (including market conditions, cyber risks and legal requirements), evaluates the likelihood and potential impact of harm, and prioritises actions to protect people and assets.
SCTR – Significant Cash Transaction Report
In Australia, SCTRs were required from “cash dealers,” including solicitors, for physical cash transactions of A$10,000 or more under the now-repealed Financial Transaction Reports Act (FTR Act). While SCTR obligations for solicitors ended on 7 January 2025, businesses must still report large cash transactions via Threshold Transaction Reports (TTRs) and suspicious activity through Suspicious Matter Reports (SMRs) under the current AML/CTF regime.
SMRs – Suspicious Matter Reports
A SMR is a mandatory alert to a financial intelligence agency (such as AUSTRAC) when a business suspects a customer or transaction may be linked to crimes like money laundering or terrorism financing. Even without proof, businesses must report promptly, typically within 24 hours for terrorism concerns and within 3 business days for other matters, providing details of the activity, customer and transactions to support law-enforcement intelligence.
SoW/SoF – Source of Wealth / Source of Funds
SoW refers to how an individual’s overall assets were accumulated (such as through business ownership or inheritance), while SoF relates to where the money used for a specific transaction originates (for example, salary income or proceeds from an asset sale). Both are essential components of financial institutions’ anti-money laundering (AML) checks, helping verify the legitimacy of funds and ensure they are not derived from illegal activities such as money laundering or terrorist financing.
TBML – Trade-Based Money Laundering
TBML is when criminals hide illegal money by using international trade. They legitimise the money by lying about the price, amount or quality of goods or services. By abusing normal trade practices, such as over-invoicing or shipping fewer goods than claimed, they can move money across borders and hide that it came from crimes like drug trafficking or corruption.
TTRs – Threshold Transaction Reports
A TTR is a mandatory report in Australia for businesses that handle physical cash transactions of A$10,000 or more (or the foreign-currency equivalent) in a single transfer. These reports must be lodged with AUSTRAC within 10 business days and help combat financial crime by monitoring significant cash movements.
UAR – Unusual Activity Report
UAR is used in the context of a financial crime investigation and typically refers to the report generated before a SMR. An UAR is used during the investigative phase before a suspicion has been formally formed. While many parties may raise a UAR, only authorised individuals are permitted to submit an SMR or formally determine that suspicion of a matter is warranted.
UBO – Ultimate Beneficial Owner
A UBO is the person who ultimately owns or controls a company and who holds significant influence over a company's operations or finances. A UBO typically owns 25% or more of the company and plays an important part in discovering and preventing money laundering and terrorism financing.