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Suspicious Transaction Report
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How do identify a Suspicion?

An effective systemic approach to identify suspicious financial activity may safeguard you and your institution, business or profession from the risk of being involved with terrorist financing and money laundering crimes.  Consider the “SAFE” approach which may assist you in legal compliance and staff training.

Examination of the STR's received by JFIU reveals that many reporting institutions do not use the system outlined above. Commonly, institutions make a STR merely because a suspicious activity indicator has been recognized, i.e. only step (1) of the systemic approach is followed, steps (2), (3) and (4) are not followed. This failure to use the systemic approach leads to a lower quality of STRs.

Each of the four steps of the systemic approach to suspicious activity identification are discussed in more detail in the following paragraphs.

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Find out the customer's records : Review Of Information Already Known When Deciding If The Apparently Suspicious Activity Is To Be Expected

The third stage in the systemic approach to suspicious activity identification is to review the information already known about the customer and his, or her, previous transactions and consider this information to decide if the apparently suspicious activity is to be expected from the customer. This stage is commonly known as the "know your customer principle".

Institutions, Businesses or Professions hold various pieces of information on their customers which can be useful when considering if the customers' financial activity is to be expected or is unusual. Examples of some of these information items and the conclusions which may be drawn from them are listed below.
 
a.
The customers occupation. Certain occupations imply the customer is a low wage earner e.g. driver, hawker, waiter, student. High levels of activity on the accounts of such customers would not therefore be expected.
b.
The customers residential address. A residential address in low cost housing, e.g. public housing, may be indicative of a low wage earner.
c.
The customers age. As neither very young nor very old persons tend to be involved in frequent high value transactions such activity by a very young or old customer would not be expected.
d.
Regular monthly or weekly deposits seen on an account may be salary deposits and, if so, may give an indication of the level of financial activity which could reasonably be expected of a customer. For example, if a customer receives low value salary deposits then other frequent, high value, transactions would not be expected.
e.
The average balance and the number and type of transactions seen on an account over a period of time give an indication of the financial activity which is normal for the customer. Markedly increased activity or activity of a different type to these norms would therefore be considered to be unusual.
 
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2007© | Important Notices Last revision date: 07 February 2007