Financial Crimes Institute

What is a Suspicious Transaction/Activity Report (STR/SAR) ❓ An STR/SAR, also referred as Subject Matter Report(SMR), is a formal notification filed with the Financial Intelligence Unit (FIU) of a country by financial institutions (or other regulated entities) when they detect a transaction or activity that raises suspicions for money laundering or other illegal activities. 𝗜𝘀 𝗶𝘁 𝗼𝗯𝗹𝗶𝗴𝗮𝘁𝗼𝗿𝘆? Absolutely! Financial Institutions and other regulated entities have a legal obligation to report suspicious activity in accordace with AML/CFT regulations. Legal Obligation = Failure to report suspicious transaction or activity can result in significant penalties for the institution. 𝗪𝗵𝗮𝘁 𝗰𝗼𝗻𝘀𝘁𝗶𝘁𝘂𝘁𝗲𝘀 𝘀𝘂𝘀𝗽𝗶𝗰𝗶𝗼𝘂𝘀 𝘁𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻 𝗼𝗿 𝗮𝗰𝘁𝗶𝘃𝗶𝘁𝘆? It generally refers to transactions that: 👉 Match criminal typology - known patterns used by criminals to launder money or finance illegal activities. 👉 Are inconsistent with a customer’s profile. 👉 Raise concerns about the legitimacy of the funds involved. 𝗛𝗼𝘄 𝗮𝗿𝗲 𝘀𝘂𝘀𝗽𝗶𝗰𝗶𝗼𝘂𝘀 𝘁𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻𝘀 𝗶𝗱𝗲𝗻𝘁𝗶𝗳𝗶𝗲𝗱? STR/SAR procedures usually include: 🔸 Frontline staff are trained to spot suspicious activity based on red flags and customer profiles. 🔸 The frontline employee investigates the transaction to understand its nature and context. 🔸 If there are grounds for suspicion, the employee reports the transaction or activity to the AML officer. 🔸 The AML officer investigates further and decides whether to file an SAR with the FIU through dedicated channels. Failure to report suspicious transactions is a breach of AML/CFT laws and can result in legal and financial consequences. Here's a strong, recent real-world example: The Monetary Authority of Singapore (MAS) recently fined Swiss-Asia Financial Services S$2.5 million (US$1.8 million) for multiple breaches of AML/CFT requirements, including failure to report STRs. Yes, regulators are taking STR reporting seriously! How do you spot suspicious activity? --------- Visit my profile and subscribe to my newsletter to receive these updates and other bit-size content in your inbox. Today's topic: Suspicious Activity Reporting (SAR): Knowing When to Report

Perpetual KYC refers to the continuous, real-time monitoring and updating of customer information, as opposed to the traditional method of conducting periodic KYC reviews. This innovative approach to customer due diligence enables financial institutions to maintain up-to-date information on their customers and promptly identify and respond to changes in risk. By leveraging advanced technologies such as artificial intelligence, machine learning, and big data analytics, pKYC can help compliance teams detect and prevent financial crime, improve operational efficiency, and enhance the customer experience. Adopting a perpetual KYC approach can provide financial institutions with several key benefits, including: Increased Profitability Implementing KYC solutions and maintaining compliance with ever-changing regulations can be costly for financial institutions. By adopting a Perpetual KYC due diligence approach, organizations can reduce the need for periodic reviews and associated expenses, resulting in increased profitability. Enhanced Data Quality Perpetual KYC due diligence requires access to large volumes of data from multiple sources, enabling financial institutions to gain valuable insights into customer behavior and potential risks. Furthermore, real-time analysis of suspicious transactions facilitates improved security and the early detection of potential threats. Reduced Risk Exposure By continuously updating customer information and risk profiles, perpetual KYC (pKYC) enables financial institutions to manage risk better and mitigate the likelihood of financial crime. In contrast, periodic KYC reviews may result in outdated information and increased risk exposure between review cycles. Streamlined Remediation Process Perpetual KYC eliminates the need for time-consuming and resource-intensive KYC remediation as customer information is continuously updated and maintained. This results in a more efficient and cost-effective compliance process. Improved Customer Experience pKYC streamlines the customer onboarding and due diligence process by minimizing the need for periodic documentation requests and reducing customer friction. Furthermore, continuous, real-time customer information updates allow financial institutions to provide a more personalized and efficient customer experience.

🚀 Exciting Developments Alert! 🚀 🔍 FCA's Proposed Changes to Financial Crime Guide (CP24/9) 🔍 On April 25th, 2024, the Financial Conduct Authority (FCA) released Consultation Paper CP24/9, unveiling proposed amendments to its Financial Crime Guide. These changes are designed to keep pace with the evolving landscape of financial regulations and to empower firms to bolster their financial crime defenses. Here's a breakdown of what's on the horizon: 1️⃣ Sanctions: The FCA intends to amend this section of the Guide to reflect what it and firms have learned from thorough examinations of firms' sanctions systems and controls following Russia's invasion of Ukraine in 2022. 2️⃣ Proliferation Financing (PF): PF will now receive explicit mention throughout the guide, aligning with the 2022 Money Laundering Regulations update. 3️⃣ Transaction Monitoring: Key guidance will be provided for firms on implementing and monitoring transaction monitoring systems, embracing innovative approaches like Artificial Intelligence. 4️⃣ Cryptoassets: Cryptoasset businesses under MLRs supervision since June 2020 are now explicitly directed to consult the Guide. 5️⃣ Consumer Duty: Firms are encouraged to assess the proportionality and consistency of their systems and controls with the Consumer Duty. 6️⃣ Consequential Changes: Outdated references will be replaced, and case studies refreshed to reflect recent enforcement notices. These proposals impact all FCA financial crime supervised firms and those supervised under the MLRs, including crypto asset businesses. While the Guide doesn't introduce new rules, it's a valuable resource for firms to enhance their financial crime resilience. 📅 Mark Your Calendars! The deadline for responses to CP24/9 is June 27th, 2024. 💡 Let's spark a conversation! What are your thoughts on these proposed changes? How might they shape the future of financial crime prevention? Share your insights below! 🔗 Respond to CP24/9 here: https://lnkd.in/gzQSqqBe

🚨 Major Breakthrough in Financial Crime Battle! 🚓💸 📣 The National Crime Agency reports a landmark victory against money laundering: the ringleader of a vast network, Abdullah Alfalasi, is hit with a multi-million pound confiscation order!

🚨 Major Breakthrough in Financial Crime Battle! 🚓💸 📣 The National Crime Agency reports a landmark victory against money laundering: the ringleader of a vast network, Abdullah Alfalasi, is hit with a multi-million pound confiscation order! Back story: ( £100m drug gang kingpin recruited British women as cash mules to Dubai https://lnkd.in/gHufJ6Dy ) 🔑 Key Takeaways: 💰 Huge Financial Impact: Alfalasi's network smuggled £104 million from the UK to the UAE, an important sum revealing the scale of organized financial crime. ✈️ Sophisticated Operation: Couriers, carrying cash in vacuum-packed bundles, showcased the elaborate methods used in such schemes. 📉 Fighting Back: The confiscation order and Alfalasi's 9-year sentence demonstrate the effectiveness of law enforcement in tackling such crimes. 🌐 Global Implications: This case sheds light on the complexities and global nature of financial crime. It underlines the importance of international cooperation in combating these issues. 🤔 Your Insights: How can businesses and governments further strengthen their defenses against such sophisticated financial crimes? Share your thoughts! #FinancialCrime #MoneyLaundering #LawEnforcement #GlobalEconomy

Canada is Raising the Bar on Anti-Money Laundering and Counter-Terrorist Fundraising Compliance. Scrutiny of the anti-money laundering (AML) and counter-terrorist fundraising (CTF) practices of Canadian banks and institutions has many questioning whether enough is being done to defend against current threats. Recent non-compliance findings by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) imply there is room for the private sector to do better. https://lnkd.in/e64cPchr

PATRIOT ACT

U𝒏𝒊𝒕𝒊𝒏𝒈 𝒂𝒏𝒅 𝑺𝒕𝒓𝒆𝒏𝒈𝒕𝒉𝒆𝒏𝒊𝒏𝒈 𝑨𝒎𝒆𝒓𝒊𝒄𝒂 𝒃𝒚 𝑷𝒓𝒐𝒗𝒊𝒅𝒊𝒏𝒈 𝑨𝒑𝒑𝒓𝒐𝒑𝒓𝒊𝒂𝒕𝒆 𝑻𝒐𝒐𝒍𝒔 𝑹𝒆𝒒𝒖𝒊𝒓𝒆𝒅 𝒕𝒐 𝑰𝒏𝒕𝒆𝒓𝒄𝒆𝒑𝒕 𝒂𝒏𝒅 𝑶𝒃𝒔𝒕𝒓𝒖𝒄𝒕 𝑻𝒆𝒓𝒓𝒐𝒓𝒊𝒔𝒎 (𝑼𝑺𝑨 𝑷𝑨𝑻𝑹𝑰𝑶𝑻) 𝑨𝒄𝒕📑 𝑱𝒖𝒓𝒊𝒔𝒅𝒊𝒄𝒕𝒊𝒐𝒏: 𝑼𝒏𝒊𝒕𝒆𝒅 𝑺𝒕𝒂𝒕𝒆s. 𝑻𝒉𝒆 𝑼𝑺𝑨 𝑷𝑨𝑻𝑹𝑰𝑶𝑻 𝑨𝒄𝒕 𝒘𝒂𝒔 𝒆𝒏𝒂𝒄𝒕𝒆𝒅 𝒊𝒏 𝒓𝒆𝒔𝒑𝒐𝒏𝒔𝒆 𝒕𝒐 𝒕𝒉𝒆 𝒂𝒕𝒕𝒂𝒄𝒌𝒔 𝒐𝒇 𝑺𝒆𝒑𝒕𝒆𝒎𝒃𝒆𝒓 11, 2001, 𝒂𝒏𝒅 𝒃𝒆𝒄𝒂𝒎𝒆 𝒂 𝒍𝒂𝒘 𝒊𝒏 𝒍𝒆𝒔𝒔 𝒕𝒉𝒂𝒏 𝒕𝒘𝒐 𝒎𝒐𝒏𝒕𝒉𝒔 𝒂𝒇𝒕𝒆𝒓 𝒕𝒉𝒐𝒔𝒆 𝒂𝒕𝒕𝒂𝒄𝒌𝒔. 𝑻𝒉𝒆 𝑷𝑨𝑻𝑹𝑰𝑶𝑻 𝑨𝒄𝒕 𝒊𝒔 𝒊𝒏𝒕𝒆𝒏𝒅𝒆𝒅 𝒕𝒐 𝒅𝒆𝒕𝒆𝒓 𝒂𝒏𝒅 𝒑𝒖𝒏𝒊𝒔𝒉 𝒕𝒆𝒓𝒓𝒐𝒓𝒊𝒔𝒕 𝒂𝒄𝒕𝒔 𝒊𝒏 𝒕𝒉𝒆 𝑼𝒏𝒊𝒕𝒆𝒅 𝑺𝒕𝒂𝒕𝒆𝒔 (𝒂𝒏𝒅 𝒂𝒓𝒐𝒖𝒏𝒅 𝒕𝒉𝒆 𝒘𝒐𝒓𝒍𝒅) 𝒂𝒏𝒅 𝒕𝒐 𝒆𝒏𝒉𝒂𝒏𝒄𝒆 𝒍𝒂𝒘 𝒆𝒏𝒇𝒐𝒓𝒄𝒆𝒎𝒆𝒏𝒕 𝒊𝒏𝒗𝒆𝒔𝒕𝒊𝒈𝒂𝒕𝒐𝒓𝒚 𝒕𝒐𝒐𝒍𝒔 𝒂𝒏𝒅 𝒑𝒐𝒘𝒆𝒓𝒔. 𝑰𝒏 𝒂𝒏 𝒆𝒇𝒇𝒐𝒓𝒕 𝒕𝒐 𝒄𝒍𝒂𝒎𝒑 𝒅𝒐𝒘𝒏 𝒐𝒏 𝒕𝒆𝒓𝒓𝒐𝒓𝒊𝒔𝒕 𝒇𝒖𝒏𝒅𝒊𝒏𝒈, 𝒕𝒉𝒊𝒔 𝒂𝒄𝒕 𝒂𝒍𝒔𝒐 𝒊𝒏𝒕𝒓𝒐𝒅𝒖𝒄𝒆𝒅 𝒎𝒆𝒂𝒔𝒖𝒓𝒆𝒔 𝒕𝒐 𝒕𝒂𝒓𝒈𝒆𝒕 𝒇𝒊𝒏𝒂𝒏𝒄𝒊𝒂𝒍 𝒄𝒓𝒊𝒎𝒆 𝒂𝒔𝒔𝒐𝒄𝒊𝒂𝒕𝒆𝒅 𝒘𝒊𝒕𝒉 𝒎𝒐𝒏𝒆𝒚 𝒍𝒂𝒖𝒏𝒅𝒆𝒓𝒊𝒏𝒈 𝒂𝒏𝒅 𝒕𝒆𝒓𝒓𝒐𝒓𝒊𝒔𝒎 𝒇𝒊𝒏𝒂𝒏𝒄𝒊𝒏𝒈, 𝒓𝒆𝒒𝒖𝒊𝒓𝒊𝒏𝒈 𝒂𝒍𝒍 𝒃𝒂𝒏𝒌𝒔 𝒂𝒏𝒅 𝒇𝒊𝒏𝒂𝒏𝒄𝒊𝒂𝒍 𝒊𝒏𝒔𝒕𝒊𝒕𝒖𝒕𝒊𝒐𝒏𝒔 𝒊𝒏 𝒕𝒉𝒆 𝑼𝒏𝒊𝒕𝒆𝒅 𝑺𝒕𝒂𝒕𝒆𝒔 𝒕𝒐 𝒖𝒏𝒅𝒆𝒓𝒔𝒕𝒂𝒏𝒅 𝒕𝒉𝒆𝒊𝒓 𝑨𝑴𝑳 𝒄𝒐𝒎𝒑𝒍𝒊𝒂𝒏𝒄𝒆 𝒐𝒃𝒍𝒊𝒈𝒂𝒕𝒊𝒐𝒏𝒔 𝒑𝒖𝒓𝒔𝒖𝒂𝒏𝒕 𝒕𝒐 𝒕𝒉𝒆 𝑼𝑺𝑨 𝑷𝒂𝒕𝒓𝒊𝒐𝒕 𝑨𝒄𝒕. 𝑨𝒄𝒄𝒐𝒓𝒅𝒊𝒏𝒈𝒍𝒚, 𝑼.𝑺. 𝒇𝒊𝒏𝒂𝒏𝒄𝒊𝒂𝒍 𝒊𝒏𝒔𝒕𝒊𝒕𝒖𝒕𝒊𝒐𝒏𝒔 𝒎𝒖𝒔𝒕 𝒃𝒖𝒊𝒍𝒅 𝒕𝒉𝒆𝒊𝒓 𝑨𝑴𝑳 𝒄𝒐𝒎𝒑𝒍𝒊𝒂𝒏𝒄𝒆 𝒑𝒓𝒐𝒈𝒓𝒂𝒎 𝒇𝒐𝒍𝒍𝒐𝒘𝒊𝒏𝒈 𝒕𝒉𝒆 𝒓𝒆𝒒𝒖𝒊𝒓𝒆𝒎𝒆𝒏𝒕𝒔 𝒈𝒊𝒗𝒆𝒏 𝒖𝒏𝒅𝒆𝒓 𝒕𝒉𝒆 𝑼𝑺𝑨 𝑷𝑨𝑻𝑹𝑰𝑶𝑻 𝑨𝒄𝒕. 𝑻𝒐 𝒂𝒅𝒉𝒆𝒓𝒆 𝒕𝒐 𝒕𝒉𝒊𝒔, 𝑭𝑰𝒔 𝒎𝒖𝒔𝒕: 𝑬𝒔𝒕𝒂𝒃𝒍𝒊𝒔𝒉 𝑨𝑴𝑳 𝒑𝒐𝒍𝒊𝒄𝒊𝒆𝒔, 𝒑𝒓𝒐𝒄𝒆𝒅𝒖𝒓𝒆𝒔, 𝒂𝒏𝒅 𝒊𝒏𝒕𝒆𝒓𝒏𝒂𝒍 𝒄𝒐𝒏𝒕𝒓𝒐𝒍𝒔 𝑨𝒑𝒑𝒐𝒊𝒏𝒕 𝒂𝒏 𝑨𝑴𝑳 𝒄𝒐𝒎𝒑𝒍𝒊𝒂𝒏𝒄𝒆 𝒐𝒇𝒇𝒊𝒄𝒆𝒓 𝑬𝒔𝒕𝒂𝒃𝒍𝒊𝒔𝒉 𝒐𝒏𝒈𝒐𝒊𝒏𝒈 𝑨𝑴𝑳 𝒕𝒓𝒂𝒊𝒏𝒊𝒏𝒈 𝒇𝒐𝒓 𝒆𝒎𝒑𝒍𝒐𝒚𝒆𝒆𝒔 𝑷𝒆𝒓𝒇𝒐𝒓𝒎 𝒊𝒏𝒅𝒆𝒑𝒆𝒏𝒅𝒆𝒏𝒕 𝒂𝒖𝒅𝒊𝒕𝒔 𝒐𝒇 𝒕𝒉𝒆 𝑨𝑴𝑳 𝒑𝒓𝒐𝒈𝒓𝒂𝒎 𝑻𝒉𝒆 𝑼𝑺𝑨 𝑷𝑨𝑻𝑹𝑰𝑶𝑻 𝑨𝒄𝒕 𝒂𝒍𝒔𝒐 𝒊𝒎𝒑𝒂𝒄𝒕𝒆𝒅 𝒆𝒙𝒊𝒔𝒕𝒊𝒏𝒈 𝒍𝒂𝒘𝒔 𝒂𝒏𝒅 𝒓𝒆𝒈𝒖𝒍𝒂𝒕𝒊𝒐𝒏𝒔, 𝒔𝒑𝒆𝒄𝒊𝒇𝒊𝒄𝒂𝒍𝒍𝒚, 𝒕𝒉𝒆 𝑴𝒐𝒏𝒆𝒚 𝑳𝒂𝒖𝒏𝒅𝒆𝒓𝒊𝒏𝒈 𝑪𝒐𝒏𝒕𝒓𝒐𝒍 𝑨𝒄𝒕 𝒐𝒇 1986 𝒂𝒏𝒅 𝒕𝒉𝒆 𝑩𝒂𝒏𝒌 𝑺𝒆𝒄𝒓𝒆𝒄𝒚 𝑨𝒄𝒕 (𝑩𝑺𝑨) 𝒐𝒇 1970. 𝑭𝑰𝒔 𝒕𝒉𝒂𝒕 𝒗𝒊𝒐𝒍𝒂𝒕𝒆 𝒐𝒓 𝒃𝒓𝒆𝒂𝒄𝒉 𝒕𝒉𝒆 𝑼𝑺𝑨 𝑷𝑨𝑻𝑹𝑰𝑶𝑻 𝑨𝒄𝒕 𝒇𝒂𝒄𝒆 𝒇𝒊𝒏𝒆𝒔 𝒐𝒇 𝒆𝒊𝒕𝒉𝒆𝒓 $1 𝒎𝒊𝒍𝒍𝒊𝒐𝒏 𝒐𝒓 𝒅𝒐𝒖𝒃𝒍𝒆 𝒕𝒉𝒆 𝒗𝒂𝒍𝒖𝒆 𝒐𝒇 𝒕𝒉𝒆 𝒕𝒓𝒂𝒏𝒔𝒂𝒄𝒕𝒊𝒐𝒏 (𝒘𝒉𝒊𝒄𝒉𝒆𝒗𝒆𝒓 𝒊𝒔 𝒈𝒓𝒆𝒂𝒕𝒆𝒓).

#KYC and #AML act as the castle's 🏰 strong walls and watchful guards, safeguarding the financial system from the dangers of money laundering and other financial crimes. 💵

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