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Definitions
Plain-language definitions for the terms and acronyms used across risk, compliance, and governance.
AML (Anti-Money Laundering)
The laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income.
Beneficial Owner
The natural person who ultimately owns or controls a legal entity, even if the entity is formally held through other parties or structures.
CDD (Customer Due Diligence)
The process of verifying a customer's identity and assessing the risk they pose before and during a business relationship.
CTF (Counter-Terrorist Financing)
Measures aimed at detecting and preventing the provision of funds intended for use in terrorist activity.
EDD (Enhanced Due Diligence)
A deeper level of customer due diligence applied to higher-risk customers, products, or relationships.
FATF (Financial Action Task Force)
An intergovernmental body that sets international standards for combating money laundering and terrorist financing.
Governance
The systems, principles, and processes by which an organisation is directed, controlled, and held accountable.
KYC (Know Your Customer)
The process organisations use to verify the identity of their clients and assess potential risks before doing business with them.
Money Laundering
The process of disguising the origins of illegally obtained money so it appears to come from a legitimate source, typically through placement, layering, and integration.
OFAC (Office of Foreign Assets Control)
A US Treasury agency that administers and enforces economic and trade sanctions against targeted countries, entities, and individuals.
PEP (Politically Exposed Person)
An individual who holds, or has held, a prominent public position and therefore presents a higher risk of involvement in bribery or corruption.
Risk Appetite
The level and type of risk an organisation is willing to accept in pursuit of its objectives, usually set by the board.
Sanctions
Restrictive measures imposed by governments or international bodies on countries, entities, or individuals to influence behaviour or respond to violations of international law.
SAR (Suspicious Activity Report)
A report filed with regulators when an institution detects activity that may indicate money laundering or other financial crime.
Three Lines of Defence
A risk governance model dividing responsibilities across operational management, risk and compliance functions, and independent audit.
UBO (Ultimate Beneficial Owner)
The individual who ultimately benefits from or controls an entity, regardless of how many layers of ownership separate them from it.
Whistleblowing
The act of reporting suspected wrongdoing within an organisation, typically through a protected internal or external channel.
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