What is the difference between AML and CTF?

• A. They are different terms; AML stands for anti-money laundering and CTF for counter-terrorist financing; both aim to detect and prevent illicit activity.
• B. AML focuses on auditing; CTF on taxation.
• C. They are identical terms.
• D. AML is for individuals; CTF for corporations.

Answer: (B)

The key idea is that both AML and CTF deal with financial crime, but they target different improper uses of money. Anti-money laundering is about preventing and detecting the proceeds of crime being laundered through the financial system so they can appear legitimate. Counter-terrorist financing is about stopping funds that are being used to support terrorist activities or organizations. In practice, banks and other institutions use similar methods—customer due diligence, ongoing monitoring, and reporting suspicious activity—but the focus shifts: AML aims to disrupt the flow of criminal proceeds, while CTF aims to cut off funding that could enable terrorism. The other statements mix up concepts: auditing and taxation are separate functions, and AML/CTF are not identical terms; they apply to a range of customers and entities depending on risk, not fixed by whether the subject is an individual or a corporation.