Does OFAC screening replace AML compliance?

No. OFAC screening and AML compliance are separate obligations that address different requirements, and you need both.

TL;DR

TL;DR: No. OFAC screening checks names against the SDN List, while AML is a broader program covering money laundering risk. They are separate obligations and both are required.

Two different jobs

OFAC screening answers one question: is this counterparty on the SDN List? AML is a wider framework that includes customer due diligence, transaction monitoring, and reporting suspicious activity. Passing a sanctions check does not satisfy AML, and a clean AML file does not clear a sanctions match.

Where they overlap

• Both screen counterparties at onboarding and on transactions.
• Both require records you can produce in an audit.
• Both matter to payment flows, including crypto and agent payments.

What to run

Keep OFAC screening as a fast check in the payment path, under 100 ms, using a live SDN list. Run your AML program alongside it, not instead of it. Log every OFAC screen, and block on match. Treat the two as separate gates in the same pipeline.

Two programs, one pipeline

Operationally, the two run side by side. OFAC screening is the fast check in the payment path; AML is the broader program around it. Build both into the same pipeline so a transaction is screened for sanctions and monitored for laundering in one pass, but keep the results separate, because a sanctions match and an AML alert trigger different responses. Keeping them separate avoids the mistake of treating a sanctions pass as proof of a clean AML review.