Which government regulation is designed to prevent money laundering and financing terrorism?

The regulation designed to prevent money laundering and financing terrorism is the Anti-Money Laundering (AML) framework. AML encompasses various laws and regulations aimed specifically at stopping the laundering of money obtained through illegal activities as well as preventing financing for terrorism. To this end, AML governs how financial institutions and other regulated entities must monitor transactions and report suspicious activities to the authorities.

While Know Your Customer (KYC) regulations also play an integral role by requiring institutions to verify the identity of their customers and understand their financial behaviors, KYC is considered part of the broader AML framework. KYC helps ensure that the financial system is not used for illicit purposes, but it is the AML regulations that directly tackle the broader issues of money laundering and terrorism financing.

The remaining options address different aspects of compliance and regulatory requirements. For instance, the General Data Protection Regulation (GDPR) deals with data protection and privacy rights within the European Union, while the Payment Card Industry Data Security Standard (PCI DSS) is focused strictly on protecting payment card information during transactions. Neither of these regulations specifically targets money laundering or terrorism financing.