This glossary is a plain-language educational aid created by BlueVerge to make this assessment understandable to people who are new to compliance. Definitions are simplified summaries, not legal definitions. Terminology and exact requirements vary by country and regulator — a term used in one jurisdiction (for example, the Philippines) may have a different name or scope in another (for example, the US, UK, EU, or Singapore). Always rely on your own regulator’s official definitions and seek professional advice for your specific obligations. Nothing here is legal or compliance advice.
- AML / CFT
- Anti-Money Laundering / Countering the Financing of Terrorism — the rules and controls that stop criminals from disguising illegal money or funding terrorism.
- AML/CFT Program (MTPP / MLTFPP / BSA Program)
- Your written plan of policies and controls to prevent money laundering. The Philippines often calls it an MTPP or MLTFPP; the US calls it a BSA program. Same idea, different names.
- Compliance Officer / MLRO
- The person responsible for your AML program. “MLRO” (Money Laundering Reporting Officer) is the common term in the UK and many other countries.
- Risk Assessment (ML/TF)
- A written review of where your money-laundering and terrorist-financing risks come from — your customers, products, channels, and countries.
- KYC (Know Your Customer)
- Verifying who your customer really is — name, address, date of birth, and the source of their funds when required — before and during the relationship.
- Due Diligence / EDD
- Checking a customer’s background. Enhanced Due Diligence (EDD) means doing extra, deeper checks for higher-risk customers.
- PEP (Politically Exposed Person)
- A person in a prominent public position (or their close family/associates) who carries higher corruption risk and needs extra scrutiny.
- Sanctions / Watchlists (UN, OFAC)
- Official lists of people, groups, or countries you are banned from dealing with. The UN and the US OFAC lists are widely used worldwide.
- Sanctions Screening
- Checking your customers and transactions against those watch lists to catch banned parties.
- Transaction Monitoring
- Watching transactions for unusual or suspicious patterns using rules, limits, or scenarios.
- CTR (Covered / Currency Transaction Report)
- A report to your regulator about large or cash transactions above a set threshold. Names and thresholds vary by country.
- STR / SAR (Suspicious Transaction / Activity Report)
- A report you file when you spot activity that may be linked to crime. Called an STR in some countries and a SAR in others.
- FATF
- The Financial Action Task Force — the global body that sets anti-money-laundering standards. Its “grey list” and “black list” flag higher-risk countries.
- Record Retention
- Keeping customer and transaction records for the period the law requires, and being able to retrieve them quickly.
- Customer Risk Rating
- Assigning each customer a documented risk level (such as low, medium, or high) using defined criteria, to decide how closely to monitor them.
- Ongoing Due Diligence
- Keeping customer information current over time — refreshing it on a risk-based schedule and re-checking when something important changes.
- Screening Alerts
- Possible matches flagged when you check a customer or transaction against a watch list, which must then be investigated and resolved.
- Independent Testing
- An internal-audit or outside review that checks whether your AML program actually works in practice.