Understanding AML acronyms: A plain English glossary

Anti money laundering (AML) rules come loaded with acronyms, and it is easy to lose track of what each one means. If you work in an AML regulated business, that alphabet soup is part of the territory.

The good news is it doesn't have to be part of your job. This glossary gives you plain English definitions for reference, but with APLYiD, you won't need to memorise any of it. We live and breathe these terms so you don't have to.

Here they are anyway, for your interest:

AML: Anti Money Laundering
The laws and processes designed to stop criminals disguising illegal money as legitimate funds.

CTF: Counter Terrorist Financing
Rules aimed at stopping money being used to fund terrorism, often grouped together with AML. 

KYC: Know Your Customer
The process of checking who your customer actually is before you do business with them.

CDD: Customer Due Diligence
The standard checks you carry out on every customer, such as verifying identity documents.

EDD: Enhanced Due Diligence
Additional checks required for higher risk customers, such as those from high risk countries or with complex ownership structures.

PEP: Politically Exposed Person
Someone who holds, or has held, a prominent public role, such as an MP or senior civil servant. PEPs require extra scrutiny because of the higher risk of bribery or corruption.

BO: Beneficial Owner
The real person who ultimately owns or controls a company or trust, regardless of whose name is on the paperwork.

SMR: Suspicious Matter Report
A report filed when there are reasonable grounds to suspect a matter is linked to money laundering, terrorism financing, or other crime.

TTR: Threshold Transaction Report
A report required for cash transactions over a set amount, regardless of suspicion.

IFTI: International Funds Transfer Instruction
A report covering money sent or received internationally.

AUSTRAC: Australian Transaction Reports and Analysis Centre
Australia's AML/CTF regulator and financial intelligence unit, responsible for both oversight and enforcement.

DCE: Digital Currency Exchange
A reporting entity type under Australian law, covering crypto exchange businesses.

RE: Reporting Entity
Any business with obligations under the AML/CTF Act, such as real estate agents, lawyers, and accountants.

Tranche 2: The 2026 reform extending AML/CTF obligations
Covers real estate agents, lawyers, accountants, and other previously unregulated professions.

AML/CTF Act: The Anti Money Laundering and Counter Terrorism Financing Act 2006
The core piece of Australian legislation setting out these obligations.

FATF: Financial Action Task Force
The global body that sets international AML standards, which Australia's laws are designed to meet.

Getting comfortable with these terms makes conversations about compliance easier, whoever you are having them with. Even so, you do not need to become an expert – that's what APLYiD is for. We stay on top of the acronyms, the regulations, and the changes, so you can focus on what actually matters: knowing your customers and running your business.