AML and KYC glossary for Canada
The language of financial-crime compliance is dense with acronyms. This glossary defines the AML, KYC, and identity verification terms that matter most to Canadian regulated firms, in plain English, with links to the deeper guides where each one is unpacked.
This glossary covers the AML, KYC, and identity verification terms a Canadian regulated firm runs into most often. Definitions are written for operators, not lawyers, and each links to the fuller guide where the topic is unpacked. Use it as a quick reference or a starting point.
Identity and verification terms
KYC (Know Your Customer). The process of verifying the identity of an individual customer before and during a business relationship. In Canada it has to be done by a FINTRAC-accepted method.
KYB (Know Your Business). The equivalent process for a corporate customer: verifying the entity, identifying and verifying its beneficial owners, and screening the structure.
Liveness detection. A check that the face in front of the camera belongs to a real, present human rather than a photo, mask, or replay. Passive liveness does this from a single selfie without asking the user to act.
Presentation attack. An attempt to fool verification by presenting a fake to the camera, such as a printed photo, a screen replay, or a mask. Defended by presentation attack detection, benchmarked against ISO/IEC 30107.
Injection attack. An attempt to bypass the camera entirely by feeding a synthetic video stream into the capture pipeline. Defended alongside liveness.
Deepfake. AI-generated or face-swapped video or imagery used to impersonate a person at onboarding. Screened by deepfake detection.
Synthetic identity. A fabricated identity that blends invented and sometimes real data to pass checks. See synthetic identity fraud.
OCR (Optical Character Recognition). Technology that reads the text on an identity document so it can be parsed and cross-checked. See document verification.
MRZ (Machine-Readable Zone). The coded lines on a passport or card that encode the holder's details, parsed and checked against the visible fields.
Screening terms
PEP (Politically Exposed Person). A person entrusted with a prominent public function, who carries higher money-laundering risk and triggers enhanced measures. Identified through screening.
Sanctions screening. Checking customers against Canadian and international sanctions lists, including lists from ministerial directives. A strict obligation.
Adverse media. Negative-news screening that surfaces risk-relevant information about a customer from public reporting.
Program and reporting terms
FINTRAC. The Financial Transactions and Reports Analysis Centre of Canada, the regulator that supervises reporting entities and receives their reports.
PCMLTFA. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the law that sets out reporting-entity obligations in Canada.
Bill C-12. The 2026 amendments that introduced the reasonably designed, risk-based, and effective standard and raised penalty ceilings. See the Bill C-12 guide.
CAMLO (Chief Anti-Money Laundering Officer). The compliance officer of record accountable for a firm's AML program. Can be engaged on a fractional basis.
CDD and EDD. Customer Due Diligence, and Enhanced Due Diligence for higher-risk customers: the structured assessment of who a customer is and the risk they present.
Beneficial ownership. The real humans who ultimately own or control a corporate customer. A material conflict with the federal registry can trigger a material discrepancy report.
STR (Suspicious Transaction Report). A report filed with FINTRAC when there are reasonable grounds to suspect a transaction relates to money laundering or terrorist financing.
LCTR and LVCTR. Large Cash Transaction Reports and Large Virtual Currency Transaction Reports, filed at defined thresholds.
Travel Rule. The requirement that originator and beneficiary information travel with a transfer. See the Travel Rule guide.
AMP (Administrative Monetary Penalty). A financial penalty FINTRAC can impose for non-compliance. Ceilings rose sharply in 2026, as covered in the AMP increase explainer.
RPAA (Retail Payment Activities Act). The framework governing payment service providers, alongside the PCMLTFA. See the RPAA explainer.
FAQ
What does CAMLO stand for?
CAMLO stands for Chief Anti-Money Laundering Officer, the compliance officer of record accountable for a firm's AML program in Canada. The role can be filled in-house or engaged on a fractional basis for smaller firms.
What is the difference between KYC and KYB?
KYC, Know Your Customer, verifies an individual. KYB, Know Your Business, verifies a corporate customer, which includes confirming the entity, identifying and verifying its beneficial owners, and screening the structure. KYB has more layers because ownership can run through several companies.
What is a PEP in AML?
A PEP, or politically exposed person, is someone entrusted with a prominent public function, who carries higher money-laundering risk. Identifying a PEP triggers enhanced due diligence measures, and screening for PEPs is a standard part of a Canadian compliance program.
What is liveness detection?
Liveness detection confirms that the face presented to a camera belongs to a real, present human rather than a photo, mask, screen replay, or injected video. Passive liveness does this from a single selfie without asking the user to perform any action.
Sources
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