AML CFT terms. In plain English.

The words Pakistani compliance teams use every day, defined in one or two sentences.

Adverse media: Negative news that links a person or company to financial crime or a related offense. Screening it shows reputational risk before it reaches your books. Related
AML CFT: Anti-money laundering and countering the financing of terrorism. In Pakistan the core law is the Anti-Money Laundering Act 2010, applied through rules from SBP, SECP and other regulators.

Beneficial owner: The natural person who ultimately owns or controls a customer, or on whose behalf a transaction is made. Institutions must identify and verify beneficial owners of entity customers. Related

CDD (customer due diligence): Identifying and verifying a customer, understanding the purpose of the relationship and monitoring it over time. It is the baseline every reporting entity applies. Related
CNIC: Computerized National Identity Card, issued by NADRA with a 13-digit number. It is the main identity document for KYC and screening in Pakistan. Related
Counter proliferation financing (CPF): Measures that stop funds reaching the development of weapons of mass destruction. Pakistan's AML framework now covers CPF alongside AML and CFT.
CTR (currency transaction report): A report of cash transactions of PKR 2 million or more, filed with the Financial Monitoring Unit through goAML.
Customer risk assessment: Rating each customer low, medium or high risk from factors such as occupation, geography, product, channel and screening results. The rating decides how much due diligence applies. Related

Delta screening: Running only the changes in a list against your existing customers. A new entry is checked across the whole book without rescreening everyone. Related
Domestic PEP: A person who holds or held a prominent public function in Pakistan, such as a senior politician, judge, military officer or head of a state-owned enterprise. Their family members and close associates are treated as PEPs too. Related

EDD (enhanced due diligence): Extra checks for higher-risk customers: source of funds and wealth, senior management approval and closer monitoring. PEPs and high-risk ratings trigger it. Related

False positive: A screening match that turns out to be a different person. Pakistani names repeat often, so matching on father's name, date of birth and CNIC matters. Related
FATF: The Financial Action Task Force, the global standard-setter for AML CFT. Pakistan was on its increased-monitoring list, often called the grey list, from June 2018 to October 2022.
First Schedule (ATA 1997): The list of organizations proscribed under Pakistan's Anti-Terrorism Act 1997. NACTA publishes it, and institutions must screen against it. Related
FMU (Financial Monitoring Unit): Pakistan's financial intelligence unit, set up under the AML Act 2010. It receives STRs and CTRs from reporting entities and shares intelligence with law enforcement.
Fourth Schedule (ATA 1997): The list of persons proscribed under the Anti-Terrorism Act 1997. Listed persons face restrictions, and institutions must not provide them financial services. Related
Fuzzy matching: Matching names that are spelled differently but refer to the same person, such as Muhammad, Mohammad and Muhammed. Related

goAML: The reporting system, built by the UN Office on Drugs and Crime, that Pakistan's FMU uses to receive STRs and CTRs. Related

KYC (know your customer): Collecting and verifying who a customer is before and during the relationship. It is the identity part of customer due diligence. Related

Liveness detection: A check that a real person is in front of the camera, not a photo, video or mask. It stops impersonation in remote onboarding. Related

NACTA: Pakistan's National Counter Terrorism Authority. It publishes the consolidated lists of proscribed organizations and persons under the Anti-Terrorism Act 1997. Related
NADRA: Pakistan's National Database and Registration Authority. It issues CNICs and provides identity verification services. Related
National Risk Assessment (NRA): Pakistan's own assessment of its money laundering and terrorist financing threats. Institutions are expected to reflect it in their risk models. Related

Ongoing monitoring: Watching a relationship after onboarding: rescreening when lists change and reviewing transactions against the customer's profile. Related

PEP (politically exposed person): Someone entrusted with a prominent public function, at home or abroad, plus their family and close associates. PEPs need enhanced due diligence. Related
PVARA: The Pakistan Virtual Assets Regulatory Authority, which licenses and supervises virtual asset service providers under the Virtual Assets Act 2026. Related

Regulatory sandbox: A supervised route that lets a firm operate under limits while the regulator watches. PVARA's sandbox is Track A for VASP applicants. Related
Reporting entity: Any institution with duties under the AML Act 2010, such as banks, brokers, insurers, exchange companies and DNFBPs. Reporting entities file STRs and CTRs.
Risk-based approach: Spending compliance effort where the risk is highest: lighter checks for low-risk customers, deeper ones for high-risk customers. Related

Sanctions screening: Checking customers and transactions against sanctions and watch lists, such as the UNSC list, NACTA schedules and SROs, before and during the relationship. Related
SRO (Statutory Regulatory Order): A government notification with legal effect. In AML CFT, SROs give effect in Pakistan to UN Security Council sanctions designations. Related
STR (suspicious transaction report): A report to the FMU when a reporting entity suspects a transaction involves crime proceeds or terrorist financing. It is filed through goAML, and the customer must not be told. Related

Targeted financial sanctions (TFS): Freezing the funds of designated persons without delay and making no funds available to them, as required by UN Security Council resolutions. Related
Transaction monitoring: Reviewing customer transactions with rules that flag unusual patterns, such as structuring, rapid movement or activity that does not fit the profile. Related
Travel rule: FATF's requirement that virtual asset transfers carry originator and beneficiary information between providers. Related

UNSC consolidated list: The UN Security Council's list of individuals and entities under UN sanctions. Pakistan gives effect to it through SROs. Related

VASP (virtual asset service provider): A business that exchanges, transfers, holds or issues virtual assets for customers. In Pakistan VASPs need a PVARA license. Related

Whitelisting: Recording a cleared false match so the same person is not flagged again for the same list entry. Related

Definitions are general guidance, not legal advice. Your regulator's rules govern your obligations.

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