Which of the following might be considered a red flag in AML compliance?

Multiple transactions just below reporting thresholds are considered a red flag in AML compliance because such patterns may indicate that an individual or business is intentionally trying to evade reporting requirements. Financial institutions are required to report transactions that exceed certain thresholds, often set for regulatory scrutiny. By keeping transactions just below these thresholds, individuals may be attempting to hide their activities from regulators, which raises suspicion.

This behavior aligns with common money laundering tactics where individuals structure transactions to avoid detection, known as "smurfing." Such patterns can alert compliance departments to potential illicit activities, prompting further investigation to ensure that funds are legitimate and not derived from criminal activities.

On the other hand, consistent account activity, routine withdrawals for business expenses, and regular deposits from paychecks are generally seen as normal financial behavior and do not inherently raise concerns or warrant heightened scrutiny within AML compliance frameworks.