Identifying Suspicious Transactions
Transactions may give rise to reasonable grounds to suspect that they are related to money laundering or terrorist financing regardless of the sum of money involved. A suspicious transaction may involve several factors that may on their own seem insignificant, but together raise suspicion that the transaction is related to the commission of a money laundering offence, a terrorist financing offence or both or any other serious offence.
The context in which the transaction occurs is a significant factor in assessing suspicion. This will vary from business to business and from one client to another. As an entity, or an employee of an entity, you should evaluate transactions in terms of what seems appropriate and is within normal practices in your particular line of business, and based on your knowledge of your client. An assessment of suspicion should be based on a reasonable evaluation of relevant factors, including the knowledge of the customer’s business, whether the transactions are in keeping with normal industry practices, financial history, background and behaviour.
Institutions should be constantly vigilant in deterring criminals from making use of any of their systems to launder money or finance terrorism and be able to react to possible attempts at being used to assist in the above. The duty of vigilance consists of Verification, Recognition of suspicious transactions, Record Keeping, Reporting of suspicions and Training. The duty of vigilance begins with the start of a business relationship or a significant one-off transaction and continues until either comes to an end; you must Know Your Customer.
All circumstances surrounding a transaction should be reviewed. As the transaction occurs, you have to assess whether there are reasonable grounds to suspect that a transaction is related to a money laundering offence or terrorist financing activity.