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AML/KYC glossary
Canonical definitions for common compliance terms. Use these pages as anchors in your internal playbooks and onboarding docs.
Adverse Media
Negative news and information that may indicate financial crime, fraud, corruption, or other risk.
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AML (Anti-Money Laundering)
A set of laws, regulations, and controls designed to prevent criminals from disguising illicit funds as legitimate.
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CDD (Customer Due Diligence)
The baseline level of checks to understand a customer and their risk, required for most regulated onboarding flows.
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EDD (Enhanced Due Diligence)
Deeper verification and investigation for higher-risk customers, products, or geographies.
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KYC (Know Your Customer)
Customer identity verification and risk assessment performed during onboarding and throughout the relationship.
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OFAC
The US Office of Foreign Assets Control, which administers and enforces economic and trade sanctions.
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PEP (Politically Exposed Person)
An individual with a prominent public function, or a close associate/family member, who may pose elevated bribery or corruption risk.
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Risk Scoring
Assigning a risk rating based on customer attributes, list matches, and behavioral signals to drive controls and monitoring.
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Sanctions Screening
Checking customers, counterparties, and transactions against government and international sanctions and watchlists.
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SAR (Suspicious Activity Report)
A regulatory report filed when suspicious activity is detected (terminology and requirements vary by jurisdiction).
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SDN (Specially Designated Nationals)
A key OFAC list covering individuals and entities subject to blocking sanctions under US programs.
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Transaction Monitoring
Rules and analytics used to detect suspicious transaction patterns and generate alerts for review.
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UBO (Ultimate Beneficial Owner)
The natural person(s) who ultimately own or control a legal entity.
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Watchlist
A list of names used for risk screening, including sanctions lists and other sources like law enforcement or internal lists.
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