What is the difference between a sanctions list and a watchlist?
A sanctions list is legally binding: dealing with a listed party is a criminal offence. A watchlist is informational — examples include law enforcement most-wanted lists, regulatory enforcement actions, debarment lists (e.g. World Bank, ADB), and proprietary risk-intelligence databases. Watchlist hits do not by themselves prohibit a transaction but they trigger enhanced due diligence and inform the risk-based decision.