The AML/CTF glossary, in plain English.
Every term an Australian agency meets under Tranche 2 — defined the way you’d explain it to a colleague, not the way the Act does. Updated 9 August 2026.
- AML/CTF
- Anti-Money Laundering and Counter-Terrorism Financing — Australia's regime for detecting and disrupting criminal use of the financial system, established by the AML/CTF Act 2006 and regulated by AUSTRAC.
- AUSTRAC
- The Australian Transaction Reports and Analysis Centre: Australia's financial intelligence unit and AML/CTF regulator. Reporting entities enrol with AUSTRAC, lodge reports to it, and can be audited or penalised by it.
- Tranche 2
- The 2024 reforms extending AML/CTF obligations to lawyers, accountants, trust and company service providers, and real estate professionals. For real estate, obligations commence 1 July 2026.
- Reporting entity
- A business that provides a designated service and therefore carries AML/CTF obligations: enrolment, a compliance program, customer due diligence, reporting and record-keeping.
- Designated service
- A service listed in the AML/CTF Act that triggers obligations. For real estate, the core designated service is brokering the sale, purchase or transfer of real property on behalf of a client. Property management alone is not a designated service.
- CDD (Customer Due Diligence)
- The process of identifying a customer, verifying that identity against reliable and independent sources, understanding ownership and control where the customer is a structure, and assessing money-laundering risk — before providing a designated service, and on an ongoing basis afterwards.
- Enhanced Due Diligence (EDD)
- Deeper checks applied when risk is higher — typically source-of-funds and source-of-wealth enquiries and senior approval. Triggered by factors such as foreign politically exposed persons, opaque structures, or unusual transaction patterns.
- KYC (Know Your Customer)
- The identity-verification component of CDD: collecting and verifying who the customer actually is. Often used interchangeably with CDD, though CDD is the broader obligation.
- PEP (Politically Exposed Person)
- An individual who holds, or has held, a prominent public position — domestically, in a foreign country, or in an international organisation — plus their family members and close associates. PEP status is not an accusation; it mandates a risk assessment and, for foreign PEPs, enhanced due diligence.
- Sanctions screening
- Checking a customer against government sanctions lists (Australian and international). A sanctions match, unlike a PEP match, can make it unlawful to deal with the person at all.
- UBO (Ultimate Beneficial Owner)
- An individual who ultimately owns or controls a customer — commonly assessed at 25% or more ownership or control. Where a customer is a company, trust or SMSF, CDD requires tracing through the structure until the humans are identified.
- SMR (Suspicious Matter Report)
- The report a reporting entity must lodge with AUSTRAC when it forms a suspicion on reasonable grounds about a customer or transaction — within 3 business days, or 24 hours where the suspicion relates to terrorism financing.
- TTR (Threshold Transaction Report)
- The report required when a customer makes a physical currency transaction of A$10,000 or more, due within 10 business days.
- Tipping off
- The criminal offence of disclosing to a customer (or anyone else) that a suspicious matter report has been made or is contemplated, or information from which they could infer it. The prohibition is why compliance workflows restrict who can see SMR activity.
- AML/CTF program
- The written program every reporting entity must adopt and maintain: a risk assessment of the business, customer due diligence procedures, employee training, and oversight by a compliance officer, approved at senior-manager level and kept current.
- Compliance officer
- The person a reporting entity appoints to oversee its AML/CTF program — the accountable point of contact for AUSTRAC and the role that approves escalations, releases holds and owns the program's operation.
- Enrolment
- Registration with AUSTRAC as a reporting entity, required within 28 days of first providing a designated service.
- Record-keeping obligation
- The requirement to retain records of customer identification, due diligence, transactions and the compliance program for 7 years, in a form capable of being produced to AUSTRAC.
- Source of funds / source of wealth
- Two distinct enhanced-due-diligence enquiries: source of funds asks where the money in this transaction came from; source of wealth asks how the customer accumulated their overall assets. High-risk matters may require evidence of both.
- Ongoing customer due diligence (OCDD)
- The obligation to keep monitoring a business relationship after onboarding — re-screening, watching for transactions inconsistent with the customer's profile, and refreshing identification when risk changes.
Want the workflow behind the words?
The complete AML/CTF guide walks every obligation end to end, and the readiness checklist scores your agency in five minutes. Or see it running in the product demo.