RECOGNITION OF SUSPICIOUS TRANSACTIONS
A suspicious transaction will often be one which is inconsistent with a customer’s known, legitimate business or personal activities or with the normal business for that type of facility. Therefore, the first key to recognition is knowing enough about the customer’s business to recognise that a transaction or series of transactions is unusual. Efforts to recognise suspicious circumstances should commence with the request to open a facility or execute the initial transaction.
Pursuant to section 25 of the Financial Transactions Reporting Act, 2018 where any person conducts or seeks to conduct any transaction by, through or with a financial institution (whether or not the transaction or proposed transaction involves cash), and the financial institution knows, suspects or has reasonable grounds to suspect that the transaction or the proposed transaction involves proceeds of criminal conduct as defined in the POCA, 2018, or any offence under the POCA, 2018, the financial institution MLRO shall, as soon as practicable after forming that suspicion, report that transaction or proposed transaction to the FIU.
INTERNAL REPORTING OF SUSPICIOUS TRANSACTIONS
The Financial Intelligence (Transactions Reporting) Regulations, 2001 requires financial institutions to establish clear responsibilities and accountabilities to ensure that policies, procedures, and controls, which deter criminals from using their facilities for money laundering are implemented and maintained.
Registrants offering prescribed financial services operating within or from The Bahamas are required to:
- Introduce procedures for the prompt internal investigation of suspicions and subsequent reporting of same to the FIU;
- Provide the MLRO with the necessary access to systems and records to fulfil this requirement; and
- Establish close cooperation and liaison with the FIU.
There is a statutory obligation on all staff of the financial institution to report suspicions of money laundering, terrorist financing and proliferation financing to the MLRO in accordance with internal procedures. However, in line with accepted practice, registrants may choose to require that such unusual or suspicious transactions be drawn simultaneously to the attention of supervisory management to ensure that there are no known facts that will negate the suspicion.
Financial Institutions have a clear obligation to ensure:
- that each relevant employee knows to which person he should report suspicions; and,
- that there is a clear reporting chain under which those suspicions will be passed without delay to the MLRO.
Once an employee has reported his/her suspicion to the MLRO, he/she would have fully satisfied his/her statutory obligation.