AML Acronyms Explained
A comprehensive glossary explaining key anti-money laundering and financial compliance acronyms used across the industry — from AML and KYC to AUSTRAC and UBO.
The financial crime compliance 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 offences 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.
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.
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.
CP – Compliance Program
A CP is a company’s rulebook that outlines internal processes, training and controls to help ensure the business and its employees follow laws and regulations, ethical standards and company policies.
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 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.
EFT – Electronic Funds Transfers
EFTs are transactions that move money electronically between financial institutions, bank accounts or individuals. 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 and promoting strong laws and regulations.
FIU – Financial Intelligence Unit
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 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, licences) and biometrics (selfies, facial scans) against trusted data to ensure compliance and secure access.
IFTI – International Funds Transfer Instruction
An IFTI is a compulsory report for Australian financial institutions capturing details of money or property transfers into or out of Australia. Reports are submitted to AUSTRAC 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 ensure AML compliance. It is similar to KYC, but focused on business entities rather than individual customers.
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 is a core part of AML compliance.
MLRO – Money Laundering Reporting Officer
The MLRO is a senior compliance role within financial institutions and regulated businesses. They oversee AML and CTF efforts, manage risk, and act as the main contact with regulators.
OAIC – Office of the Australian Information Commissioner
OAIC is an independent government agency that safeguards privacy and freedom of information in Australia. It handles complaints, conducts investigations and provides guidance on how personal information should be managed.
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.
PEP – Politically Exposed Person
A PEP is someone who currently holds or previously held a prominent public role in a government or international organisation. 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. It considers both internal and external factors, evaluates likelihood and impact, and prioritises actions.
SCTR – Significant Cash Transaction Report
In Australia, SCTRs were required from cash dealers for physical cash transactions of A$10,000 or more under the now-repealed Financial Transaction Reports Act. Businesses must still report large cash transactions via Threshold Transaction Reports (TTRs).
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. Typically must be submitted within 24 hours for terrorism concerns and within 3 business days for other matters.
SoW/SoF – Source of Wealth / Source of Funds
SoW refers to how an individual’s overall assets were accumulated, while SoF relates to where the money used for a specific transaction originates. Both are essential components of AML checks.
TBML – Trade-Based Money Laundering
TBML is when criminals hide illegal money by using international trade, lying about the price, amount or quality of goods or services to legitimise funds and move money across borders.
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 in a single transfer. Reports must be lodged with AUSTRAC within 10 business days.
UAR – Unusual Activity Report
A 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.
UBO – Ultimate Beneficial Owner
A UBO is the person who ultimately owns or controls a company, typically owning 25% or more of the company. Identifying UBOs is an important part of discovering and preventing money laundering and terrorism financing.