A watchlist refers to a list of individuals, entities, or organizations that are monitored for suspicious activities, often related to financial crimes, such as money laundering, terrorist financing, or sanctions violations. These lists are typically maintained by government bodies, financial institutions, or regulatory agencies and include individuals flagged for high-risk activities. 

In the context of anti-money laundering (AML) and financial crime compliance, watchlists are used to identify entities involved in illicit financial activities. Compliance teams regularly screen customer data against these lists to ensure they are not conducting business with high-risk or sanctioned individuals. Common watchlists include the OFAC (Office of Foreign Assets Control) sanctions list, politically exposed persons (PEP) lists, and various criminal watchlists, all designed to mitigate financial risks and uphold regulatory standards. 

Watchlist monitoring is a crucial component in safeguarding the financial system from exploitation.