What is a counterparty in AML?

Can you elaborate on what a counterparty is in the context of Anti-Money Laundering (AML)? I understand that AML measures are put in place to prevent financial crimes like money laundering and terrorist financing, but I'm curious about how the concept of a counterparty fits into this framework. Are there specific regulations or procedures that need to be followed when dealing with counterparties in an AML context? And how does understanding the role of counterparties help in identifying and mitigating potential risks associated with money laundering or terrorist financing?