Understanding Suspicious Transactions and Activities in Financial Investigations
This guidance note by Senior Analyst Westmore Jeffers provides assistance and practical advice on reporting suspicious financial activities. It outlines the legislation, obligations, and definitions related to suspicious transactions and activities. The document emphasizes the importance of vigilance and reporting any irregularities to combat money laundering and criminal conduct effectively.
- Financial Investigations
- Suspicious Activities
- Money Laundering
- Reporting Obligations
- Fraud Prevention
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GUIDANCE NOTE ON SUSPICIOUS TRANSACTION AND SUSPICIOUS ACTIVITY REPORTS ISSUED BY THE FINANCIAL INVESTIGATION AGENCY PRESENTER: WESTMORE JEFFERS SENIOR ANALYST 284-340-4598
INTRODUCTION THE PURPOSE OF THIS GUIDANCE NOTE IS TO RENDER ASSISTANCE AND PRACTICAL GUIDANCE TO PERSONS, FINANCIAL INSTITUTIONS, NON- FINANCIAL BUSINESSES AND ORGANISATIONS. IT IS IMPERATIVE FOR PERSONS TO FILE A REPORT OF ANY INFORMATION THAT COMES TO HIS/HER KNOWLEDGE IN THE NORMAL COURSE OF EMPLOYMENT OR BUSINESS OF ANY SUSPICIOUS FINANCIAL ACTIVITY
THE AUTHORITY LEGISLATION DRUG TRAFFICKING OFFENCES ACT 1992 AS AMENDED PROCEEDS OF CRIMINAL CONDUCT ACT, 1997 AS AMENDED THE TERRORISM (UNITED NATIONS MEASURES) (OVERSEAS TERRITORIES) ORDER 2001 THE ANTITERRORISM (FINANCIAL AND OTHER MEASURES) OVERSEAS TERRITORIES ORDER 2002 THE ANTI MONEY LAUNDERING AND TERRORIST FINANCING CODE OF PRACTICE 2008 AS AMENDED THE ANTI MONEY LAUNDERING REGULATIONS 2008, AS AMENDED
WHO IS OBLIGATED BASED ON SECTION 27(2) OF THE PROCEEDS OF CRIMINAL CONDUCT ACT, 1997 AS AMENDED, THE FOLLOWING PERSONS ARE; ENTITIES REGULATED BY THE FSC NON-FINANCIAL BUSINESSES AND PROFESSIONS (PUBLIC OR PRIVATE) INVOLVING TRANSACTIONS OF $10,000. OR MORE BUSINESSES INVOLVES IN HIGH VALUE ASSETS EX BOATS, VEHICLES, JEWELRY, BUILDINGS ETC ACCOUNTANTS OR ATTORNEYS ACTING ON BEHALF OF A CLIENT WHERE FROM PERSONAL KNOWLEDGE OF AN INDIVIDUAL OR ENTITY, OR HAS REASONABLE GROUNDS TO SUSPECT, THAT PERSON IS OBLIGED TO REPORT.
SUSPICIOUS TRANSACTIONS THESE ARE FINANCIAL TRANSACTIONS IN WHICH THERE ARE REASONABLE GROUNDS TO SUSPECT THAT THE FUNDS INVOLVED ARE RELATED TO THE PROCEEDS OF CRIMINAL CONDUCT
SUSPICIOUS ACTIVITY THESE DIFFER TO SUSPICIOUS TRANSACTIONS IN THAT THE ACTIVITIES ARE NOT TRANSACTIONS PER SE BUT ACTS THAT MAY DEVELOP INTO FINANCIAL TRANSACTIONS EG. A PERSON S DODGY ATTITUDE TOWARDS FULLY COMPLYING WITH KYC REQUIREMENTS THE BEST WAY TO GET A GOD GRASP OF SUSPICIOUS ACTIVITY IS TO HAVE IN-DEPTH KNOWLEDGE OF WHAT ARE THE NORMS OF ONE S CLIENTELE IN THIS WAY DEVIATIONS CAN BE EASILY RECOGNIZED.
IDENTIFYING TRANSACTIONS & ACTIVITIES RELEVANT FACTORS IS THE CUSTOMER KNOWN PERSONALLY? WHAT IS HIS FINANCIAL STATUS, EMPLOYMENT HISTORY AND GENERAL BACKGROUND? DOES THIS TRANSACTION APPEAR NORMAL FOR THIS PARTICULAR CUSTOMER? IS THIS TRANSACTION IN KEEPING WITH THE PRESENT STATE OF THE PARTICULAR MARKET. IS THE TRANSACTION TO BE SETTLED IN THE NORMAL MANNER IS THE ROLE OF ANY AGENT INVOLVED APPEAR UNUSUAL? ARE THE REASONS FOR THE TRANSACTION OR ACTIVITY LOGICAL AND TRANSPARENT ARE THE CLIENTS INSTRUCTIONS SO STRUCTURED THAT THE ECONOMIC PURPOSE IS ABSENT GENERALLY ANY TRANSACTION OR ACTIVITY THAT CREATES SOME FEELING OF UNEASINESS OR WARINESS SHOULD BE MONITORED CLOSELY.
RED FLAGS CUSTOMER PROFILE INADEQUATE INFORMATION IN THE DOCUMENTS REQUIRED TO BE SUBMITTED AN UNREASONABLE VOID BETWEEN JOB/PROFESSION FINANCIAL PROFILE & TRANSACTION DISPLAYING ABNORMAL CUSTOMER ATTITUDES USE OF FALSE IDENTIFICATION PARTIES TO TRANSACTION ARE FROM COUNTRIES KNOWN TO IN TERRORIST ACTIVITIES IT S VERY DIFFICULT TO VERIFY CUSTOMER INFORMATION & SOURCE OF FUNDS CLIENTS PERSONAL BUSINESS DEALINGS ARE HANDLED BY UNNECESSARY INTERMEDIARIES
RED FLAGS FINANCIAL TRANSACTIONS NO REASONABLE OR ECONOMIC JUSTIFICATION FOR TRANSACTION UNUSUAL MEANS OF PAYMENT (EG. MULTIPLE) LARGE UNUSUAL DEPOSITS FREQUENT CHANGE OF OWNERSHIP OF SAME ASSET DIVERGENCE FROM EXPECTED PURPOSE OF BUSINESS DEPOSITS ARE STRUCTURED TO FALL BELOW $10,000. THRESHOLD
HOW TO MAKE A SAR WHEN? AS SOON AS PRACTICABLE; WHEN A DETECTION THAT AMOUNTS TO REASONABLE GROUNDS TO SUSPECT THAT A TRANSACTION OR ACTIVITY IS RELATED TO THE ATTEMPTED COMMISSION OR COMMISSION OF A MONEY LAUNDERING OR TERRORIST FINANCING OFFENCE. EVEN IF THE MLRO IS UNCERTAIN AS TO WHETHER THE DETAILS OF THE REPORT RECEIVED BY HIM SUBSTANTIATES THE SUSPICION. WE RECOMMEND THAT YOU USE THE AGENCY S SAR/STR FORM THAT IS ANNEXED TO THE FIA S WEBSITE, WWW.FIABVI.VG
HOW TO MAKE A SAR (CONT D) TYPES OF DISCLOSURE INITIAL REPORT FIRST TIME FILE ON PERSON OF INTEREST SUPPLEMENTAL REPORT ACTIVITY REQUIRING FILING OF AN ADDITIONAL REPORT CORRECTION REPORT IF A PREVIOUSLY FILED REPORT IS BEING CORRECTED OR ALTERED (CHANGE BEING MADE SHOULD BE INCLUDED IN THE DETAILS SECTION)
HOW TO MAKE A SAR (CONT D) CONTENTS OF REPORT FILL ALL RELEVANT FIELDS WITH ACCURATE AND DETAILED INFORMATION DETAIL WHATEVER GIVES RISE TO ANY REASONABLE CAUSE FOR SUSPICION SET OUT CLEARLY AND CONCISELY THE BASIS FOR SUSPICION OF MONEY LAUNDERING EVEN IF INTERNAL REPORT SHOWS UNCERTAINTY IN SUBSTANTIATING SUSPICION, SAR/STR IT SHOULD BE FILED ANY INFORMATION OR DOCUMENT THAT MAY BE BENEFICIAL TO DEMONSTRATING THE REASON FOR STR/SAR
HOW TO MAKE A SAR (CONT D) TIPS FULL LEGAL NAMES OF MAIN SUBJECT(S) WHETHER INDIVIDUALS OR ENTITIES DATES SHOULD USE FORMAT DD/MM/YY, THE NUMBER 0 SHOULD PRECEDE ANY SINGLE DIGIT NUMBER, ALSO IF A DAY OR MONTH IS UNAVAILABLE ENTER ZEROS INFORMATION SHOULD FULLY IDENTIFY THE MAIN SUBJECTS, NON-SPECIFIC TERMS SHOULD NEVER BE USED THE AREA CODE OF TELEPHONE NUMBERS SHOULD ALWAYS BE INCLUDED WHERE ADDITIONAL INFORMATION IS FOUND NECESSARY INCLUDE IT IN THE ADDITIONAL NOTES SECTION
TIPPING OFF A BUSINESS ENTITY OR ORGANIZATION IS NEVER ALLOWED TO INFORM ANYONE INCLUDING A CLIENT ABOUT THE CONTENTS OF A SAR; THEREFORE A SAT/STR SHOULD NEVER BE MADE OR DISCUSSED IN THE PRESENCE OF A CLIENT ALSO, IT S IMPORTANT THAT THE REPORTING AUTHORITY DOES NOT REQUEST INFORMATION FROM THE INDIVIDUAL CONDUCTING OR ATTEMPTING THE TRANSACTION THAT WOULD NOT NORMALLY BE REQUESTED DURING A TRANSACTION.
METHODS TO FILING HAND DELIVERY IN A SEALED ENVELOPE STAMPED CONFIDENTIAL ELECTRONICALLY BY SECURE REPORTING SYSTEM (DIRECTED BY THE FIA) FACSIMILE (284) 494 1435 THE LATTER TWO CAN BE USED WHERE THE MATTER IS URGENT
AFTER FILING ONCE THE SAR/STR IS FILED THE FIA WILL FORWARD AN ACKNOWLEDGEMENT LETTER BACK TO THE MLRO WITHIN A REASONABLE TIME FROM THE DATE OF RECEIPT THE FIA ANALYSES THE REPORT TO IDENTIFY PROCEEDS OF CRIME THEN PASSES IT ON TO LAW ENFORCEMENT FOR FURTHER ACTION. FEEDBACK TO REPORTING ENTITY (TWO TYPES) NOTICE OF FOREIGN INVOLVEMENT; IN SUCH CASES ADDITIONAL INFORMATION MAY BE NEEDED. NOTICE THAT SAR/STR HAS BEEN FILED FOR INTELLIGENCE PURPOSES
ADDITIONAL INFORMATION A REPORTING ENTITY WILL NOT BE HELD LIABLE FOR DISCLOSING INFO TO THE STEERING COMMITTEE OF THE FIA, THE DISCLOSURE SHALL NOT BE TREATED AS A BREACH OF ANY RESTRICTION IMPOSED BY STATUTE IF A PERSON BECOMES AWARE OF MONEY LAUNDERING DURING THE NORMAL COURSE OF TRADE, AND DOES NOT REPORT IT TO THE STEERING COMMITTEE OF THE FIA AS SOON AS REASONABLY PRACTICABLE, HE HAS COMMITTED A CRIME.
PENALTIES FAILURE TO REPORT: SUMMARY CONVICTION - US$150,000.00 FINE OR THREE YEARS IMPRISONMENT, OR BOTH CONVICTION ON INDICTMENT -US$500,000.00 FINE OR FIVE YEARS IMPRISONMENT, OR BOTH
CONTACT FINANCIAL INVESTIGATION AGENCY 2NDFLOOR, RITTER HOUSE WICKHAMS CAY II, ROAD TOWN TORTOLA, BRITISH VIRGIN ISLANDS, VG1110 TEL: 284-494-1335 FAX: 284-494-1435 EMAIL: INFO@FIABVI.VG WEBSITE: WWW.FIABVI.VG
