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.

CFT: Countering Financing of Terrorism
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.

UBO: Ultimate Beneficial Owner
The real person who owns or controls a company, even if their name does not appear on official paperwork.

SAR: Suspicious Activity Report
A report you must file if you suspect a customer's activity is linked to money laundering.

PTR: Prescribed Transaction Report
A report required for certain cash transactions over a set threshold, regardless of suspicion.

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

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

FIU: Financial Intelligence Unit
Part of the New Zealand Police that receives and analyses STRs and other AML reporting.

DIA: Department of Internal Affairs
Now New Zealand's sole AML/CFT supervisor across all reporting sectors, following recent regulatory changes.

AML/CFT Act: The Anti Money Laundering and Countering Financing of Terrorism Act 2009.
The core legislation underpinning New Zealand's AML regime.

IVCOP: Identity Verification Code of Practice
Guidance setting out acceptable ways to verify a customer's identity under New Zealand law.

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.