Screening glossary

Short, practical definitions of the terms used in sanctions and PEP name screening — from CDD and EDD to false positives and beneficial owners. Written for Hong Kong compliance work.

Sanctions list: An official list of persons, companies, vessels, or other entities that a government or international body has designated for restrictions — typically asset freezes, transaction bans, or trade limits. Dealing with a listed party is usually prohibited or tightly controlled. Screening compares your customer’s name against these lists before and during a business relationship.
UNSC Consolidated List: The United Nations Security Council’s single consolidated list of all individuals and entities subject to UN sanctions measures. UN designations bind member states, so they flow into local law — in Hong Kong through the United Nations Sanctions Ordinance and gazetted regulations. For Hong Kong TCSPs, this is the core mandatory screening list.
OFAC SDN List: The Specially Designated Nationals and Blocked Persons List maintained by the US Treasury’s Office of Foreign Assets Control. It is a unilateral US list, not a Hong Kong statutory obligation, but its enforcement reach (US dollar clearing, correspondent banking) means banks worldwide screen against it and expect their customers to be clean of it.
PEP (politically exposed person): A person entrusted with a prominent public function — heads of state, senior politicians, senior government, judicial or military officials, senior executives of state-owned enterprises, and important political party officials — plus their family members and close associates. Being a PEP is not an offence; it triggers enhanced due diligence rather than refusal.
RCA (relative or close associate): A family member or close associate of a politically exposed person — spouses, parents, children, and business partners or persons with close professional ties. RCAs carry similar corruption and money-laundering risk exposure to the PEP themselves, so PEP databases and screening rules generally include them.
CDD (customer due diligence): The process of identifying a customer and verifying their identity, identifying beneficial owners, and understanding the purpose and intended nature of the business relationship. In Hong Kong, CDD duties for financial institutions and DNFBPs (including TCSPs) are set by the AMLO and sectoral guidelines; name screening is one component of CDD.
EDD (enhanced due diligence): Additional measures applied to higher-risk relationships — most commonly PEPs. Typical steps: senior management approval to establish or continue the relationship, establishing the customer’s source of wealth and source of funds, and closer ongoing monitoring of the relationship and its transactions.
Ongoing monitoring: The continuing side of AML compliance: keeping CDD information current, scrutinising transactions against the expected profile, and re-screening customers when sanctions and PEP lists update. A customer screened cleanly at onboarding can be designated later, so a one-off check is not enough — records should show the date and dataset version of each re-screen.
Adverse media: Negative news coverage connecting a person or company to crime, corruption, sanctions evasion, or other conduct relevant to money-laundering risk. Adverse media checks supplement list screening — a subject can be reputationally compromised long before any formal designation. Commercial databases curate it; targeted web searches are the common alternative.
False positive: A screening hit that, on review, is not actually your customer — usually caused by common names, transliteration variants, or partial matches. False positives are normal and expected; what matters is the disposition record showing which identifiers you compared (date of birth, nationality, registration numbers) and why the match was cleared.
Beneficial owner: The natural person who ultimately owns or controls a customer — in Hong Kong, generally a person holding more than 25% of shares or voting rights, or exercising ultimate control, traced through any chain of companies. Screening obligations extend to beneficial owners, not just the customer entity itself.
TCSP (trust or company service provider): A business providing services such as company formation, acting as or arranging directors and secretaries, providing registered offices, or acting as trustees. In Hong Kong, TCSPs must hold a Companies Registry licence and comply with the AMLO and the Registry’s AML/CFT Guideline — including customer and beneficial-owner name screening.
AMLO (Cap. 615): The Anti-Money Laundering and Counter-Terrorist Financing Ordinance, Hong Kong’s principal AML statute. It imposes CDD and record-keeping duties on financial institutions and DNFBPs, and underpins the sectoral guidelines — for TCSPs, the Companies Registry’s Guideline — that spell out screening obligations in practice.