Red flags for sanctions and AML risk often involve activities designed to obscure the origin of funds, beneficial ownership, or the true purpose of a transaction. Privately held companies (Option B) offer less transparency than public ones, and routing international transfers through institutions in jurisdictions unrelated to the company's registration is a classic method for layering funds and concealing their nexus to a sanctioned party. Similarly, new accounts (Option C) with a sudden, unexplained influx of value from high-risk jurisdictions are a significant red flag, suggesting that assets are being moved rapidly to evade newly imposed sanctions, especially without a clear economic or business rationale.

A. Publicly traded corporate vehicles: These are generally lower risk due to stringent regulatory oversight, public disclosure requirements, and transparent ownership structures, which are contrary to the characteristics of a red flag.

D. Established accounts that send or receive funds from non-sanctioned institutions or institutions active on SWIFT: Transacting with non-sanctioned entities via SWIFT is standard, legitimate international business practice and does not, by itself, indicate heightened risk.

E. Regulated entities with a clear web presence with a verifiable business background: These attributes indicate transparency and legitimacy, making the entity a lower risk. Red flags are typically associated with a lack of transparency.

1. ACAMS Certified Global Sanctions Specialist (CGSS) Study Guide, 6th Edition. Chapter 4, "Sanctions Evasion Typologies," details common evasion techniques. It highlights the use of front and shell companies (often privately held) to obscure ownership and the movement of funds through third countries to conceal the ultimate origin or destination, which directly supports option B. It also discusses unusual transaction patterns, such as sudden high-volume activity, as a key indicator, supporting option C.

2. Financial Crimes Enforcement Network (FinCEN). "FinCEN Advises Financial Institutions to Be Vigilant for Potential Russian Sanctions Evasion Attempts" (FIN-2022-A001), March 7, 2022. This advisory explicitly lists red flags for sanctions evasion, including:

"Use of legal entities, such as shell companies... to conduct international wire transfers, often involving financial institutions in jurisdictions distinct from the company’s country of registration" (supports Option B).

"New accounts that are experiencing a sudden rise in the value and volume of transactions, without a clear business rationale" (supports Option C).

3. Financial Action Task Force (FATF). Guidance on Countering Proliferation Financing, February 2018. Section 3, "Risk Indicators," pp. 18-22, identifies several red flags relevant to sanctions evasion. It notes the use of front or shell companies that have no clear commercial purpose and transactions that are routed through several countries or financial institutions for no apparent business reason, aligning with the scenario in option B.