The risk score associated with a wallet or address is calculated by looking at both direct and indirect interactions, incoming and outgoing. A wallet or address can still have a high-risk score even if it did not directly interact with a sanctioned criminal, depending on how many transactions they were away from a risky entity. For example, if you accepted money from a person who directly transacted with a criminal or terrorist, you would still incur some level of risk. The farther away you are from these high-risk wallets or addresses, the lower your risk score.