According to the Wolfsberg Group, a correspondent bank should evaluate the distribution of downstream correspondents and identify any direct or indirect issues when it permits "nested" relationships, which are arrangements where a respondent bank provides correspondent banking services to other banks that are not customers of the correspondent bank. This step is important to understand the types of financial institutions to whom the services are being offered and the potential risks they pose. The correspondent bank should also obtain information on the nature and extent of the nested activity, the due diligence performed by the respondent bank on the nested banks, and the controls and monitoring in place to prevent financial crime.
Wolfsberg Correspondent Banking Principles 20221, Section 4.5: Nested Relationships Guidance on Correspondent Banking Services2, Section 3.2.2: Nested Correspondent Banking Relationships Reference:
http://www.qfcra.com/en-us/whatwedo/AntiMoneyLaundering/Documents/Guidance%20on%
20Correspondent%20Banking%20May%202018.pdf (7)
P/6, Wolfsberg Anti-Money Laundering Principles for Correspondent Banking 2014https://www.wolfsberg- principles.com/sites/default/files/wb/pdfs/wolfsberg-standards/8.%20Wolfsberg-Correspondent-Banking- Principles-2014.pdf

FSRBs are regional bodies that work with FATF to promote the implementation of AML and CFT standards.
FSRBs are made up of member countries that have agreed to work together to combat money laundering and the financing of terrorism [1]. The tools used by FSRBs to promote the implementation of AML and CFT standards include training measures, mutual evaluations of its members, technical assistance, and the sharing of information. FSRBs may also adopt recommendations and best practices based on the FATF's 40 Recommendations.

According to the Certified Anti-Money Laundering Specialist (the 6th edition), Section 2.2.2 The EU Fourth AML Directive, the release of the EU's Fourth AML Directive resulted in the threshold for reporting suspicious transactions decreasing from 15,000 EUR to 10,000 EUR (Answer A) and all financial institutions were required to identify and verify the beneficial owner of legal entities (Answer B). The directive also defined money laundering and terrorist financing as separate crimes, which expanded the directive's measures (Answer C). Answer D is incorrect as the scope of obliged entities was not enlarged from casinos to all providers of gambling services, but rather to all providers of payment services. Answer E is also incorrect as the directive does not provide that knowledge of criminal conduct can be inferred from objective factual circumstances. Reference: Certified Anti-Money Laundering Specialist (the 6th edition), Section 2.2.2 The EU Fourth AML Directive, p. 12.

This is a common red flag of money laundering that involves layering, which is the process of moving funds through multiple accounts or entities to conceal their origin and ownership. Layering often involves cross- border transfers, especially to high-risk jurisdictions, and rapid movement of funds to avoid detection or tracing. A compliance officer should prioritize this red flag for investigation, as it may indicate a complex money laundering scheme or the financing of terrorism or proliferation.
AML Red Flags - What are the Top 10 Indicators? - ComplyAdvantage, section "Red flags related to transaction patterns" AML 101: The 10 Most Common Red Flags - KYC-Chain, section "Red flag indicators related to geographical risks" Anti-money laundering red flags, page 2, bullet point 5