What does AML sanctions screening aim to prevent?

AML sanctions screening primarily aims to prevent prohibited transactions. This process involves checking customers and transactions against lists of individuals, entities, and countries that are subject to sanctions imposed by governments or international bodies. By identifying and blocking transactions involving sanctioned parties, organizations protect themselves from financial crimes, including money laundering, terrorist financing, and other illicit activities.

Prohibited transactions can involve dealings with individuals or organizations that are known to facilitate criminal actions or are otherwise deemed a risk to national or international security. Essentially, sanctions screening is a critical component of anti-money laundering (AML) efforts, as it helps ensure compliance with legal requirements and mitigates the risk of financial penalties and reputational damage for businesses.

The other options, such as customer account verification, money laundering reports, and financial audits, may play important roles in the broader framework of AML compliance but do not specifically address the goal of screening against sanctioned entities and transactions.