AFC Entity Radar › AML glossary
AML and financial crime glossary
Short, plain-English definitions of the most important anti-money laundering (AML) and anti-financial crime (AFC) terms.
Glossary
- Anti-financial crime (AFC)
- Prevention of money laundering, terrorist financing, sanctions breaches, fraud, bribery and corruption.
- Anti-money laundering (AML)
- Laws, controls and procedures to stop criminals disguising illegal funds as legitimate income.
- Money laundering
- Making criminal proceeds appear legitimate, typically through placement, layering and integration.
- Terrorist financing (TF)
- Providing or collecting funds to support terrorism, whether from legal or illegal sources.
- Sanctions
- Restrictive measures (asset freezes, trade bans) imposed by the UN, EU, US, UK and other authorities on persons, companies or countries.
- OFAC SDN list
- The US Treasury list of Specially Designated Nationals whose assets are blocked.
- 50 % rule
- EU and US guidance that companies owned 50 % or more by sanctioned persons are treated as sanctioned.
- Politically exposed person (PEP)
- A person with a prominent public function, such as a minister or member of parliament.
- RCA
- Relative or close associate of a PEP.
- Customer due diligence (CDD)
- Identifying and verifying the customer and assessing the risk of the business relationship.
- Enhanced due diligence (EDD)
- Additional checks for higher-risk customers, such as PEPs or customers from high-risk countries.
- KYC / KYB
- Know your customer / know your business: the identification and screening of individuals and companies.
- Ultimate beneficial owner (UBO)
- The natural person who ultimately owns or controls a company, usually above 25 %.
- Shell company
- A company with no real operations, often used to hide ownership or move money.
- Layering
- Moving funds through many transactions or entities to hide their criminal origin.
- Smurfing / structuring
- Splitting cash deposits into small amounts to avoid reporting thresholds.
- Trade-based money laundering
- Disguising criminal funds through over- or under-invoicing of goods.
- Adverse media
- Negative news about a person or company relevant to financial-crime risk.
- Suspicious activity report (SAR / STR)
- A report filed with the financial intelligence unit (FIU) when money laundering is suspected.
- FIU
- Financial Intelligence Unit, the national agency receiving suspicious transaction reports.
- FATF
- Financial Action Task Force, the global standard setter for AML and counter-terrorist financing.
- FATF grey list
- Jurisdictions under increased monitoring for strategic AML deficiencies.
- FATF black list
- High-risk jurisdictions subject to a call for action (currently Iran, North Korea, Myanmar).
- AMLA
- The EU Anti-Money Laundering Authority based in Frankfurt.
- Transaction monitoring
- Automated review of payments to detect unusual or suspicious patterns.
- False positive
- A screening alert for a person or company that is not actually the listed party.
- Name screening
- Comparing customer names with sanctions, PEP and watchlists using fuzzy matching.
- Bank fraud
- Using deception to obtain money or assets held by a bank.
- Credit fraud / loan fraud
- Obtaining credit with false information, stolen identity or no intention to repay.
- Embezzlement
- Theft of funds entrusted to a person, for example by an employee or director.
- Bribery and corruption
- Offering or accepting undue advantages to influence a decision.
- Tax evasion
- Illegal non-payment of taxes, often using offshore structures.
- OSINT
- Open-source intelligence: information gathered from publicly available sources.
Frequently asked questions
What is the difference between AML and AFC?
AML focuses on money laundering; AFC is the broader umbrella that also covers sanctions, fraud, bribery and corruption.
Where can I check a name against sanctions and PEP lists?
Use the free check on this site: 3 searches per day without an account.