Which are common channels used to circumvent sanctions? (Select Three.)

Sanctions evasion schemes exploit complex international financial systems. Trade finance is a high-risk channel due to its reliance on documentation (e.g., bills of lading, invoices) that can be falsified to hide the involvement of sanctioned parties, goods, or jurisdictions. Correspondent banking relationships are critical for accessing the global financial system and can be abused to process payments for sanctioned entities, often through nested accounts in jurisdictions with weaker controls. Shell companies are fundamental tools used to create opaque corporate structures, obscuring beneficial ownership and the true origin or destination of funds, thereby facilitating illicit transactions through various banking channels.

A. Corporate banking: This is a broad category of services, not a specific evasion channel. Evasion occurs through specific products within this category.

C. Online banking: This is a service delivery method, not a primary channel for the complex, large-scale schemes typical of sanctions evasion.

D. Retail banking: While possible for smaller-scale evasion, it is not a common channel for major, sophisticated sanctions circumvention schemes.

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1. ACAMS Certified Global Sanctions Specialist (CGSS) Study Guide, 2nd Edition. Chapter 3, "Sanctions Evasion Techniques," details the use of shell companies, trade finance manipulation, and the exploitation of correspondent banking as primary methods for sanctions circumvention.

2. Financial Action Task Force (FATF). (2020). Guidance on Proliferation Financing Risk Assessment and Mitigation. This guidance identifies shell companies and complex corporate structures as key vulnerabilities (p. 21) and highlights the abuse of international trade and correspondent banking as channels for evading sanctions (pp. 24-26).

3. The Wolfsberg Group. (2022). Statement on Effectiveness. The statement emphasizes the importance of controls over high-risk areas, including correspondent banking and trade finance, which are recognized as significant channels for illicit financial activities like sanctions evasion.

4. U.S. Department of the Treasury. (2024). 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing. The report identifies the misuse of legal entities like shell companies (p. 29) and the exploitation of correspondent banking services (p. 21) as primary vulnerabilities for illicit finance, including sanctions evasion.