What are typical "red flags" for money laundering?
FATF, AUSTRAC, FinCEN and EBA all publish red-flag typologies. Common indicators:
- Transactions inconsistent with the customer's profile or stated business.
- Use of multiple accounts to fragment activity (structuring).
- Unexplained third-party fund flows.
- Round-amount transactions with no commercial rationale.
- Reluctance to provide identification, beneficial ownership, or source of funds.
- Use of nominees, complex layering, or jurisdictions with weak transparency.
- Rapid in-and-out movement of funds.
- Reliance on cash in a sector where electronic settlement is normal.
A red flag is not proof of wrongdoing; it triggers escalation and EDD.
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