Reporting entities have to report suspicious activity as well as suspicious transactions to the New Zealand Financial Intelligence Unit (FIU). Typically, every year the FIU will receive between 7,000 and 10,000 reports of suspicious activity. Reports received by the FIU are analysed for activities and patterns that may indicate criminal offending and merit further investigation. The FIU’s 2018 risk assessment report says that between April and December of 2017 six money laundering charges were lodged each month.
If you provide services or carry out transactions covered by the AML/CFT (anti-money laundering and countering financing of terrorism) regime, you have to monitor customers’ accounts for suspicious transactions. Suspicious transactions are ones that are inconsistent with a client’s usual activities or what you’d expect for that type of client. For instance, you might notice transactions that are particularly large or complex for a particular customer, or unusual sequences of transactions or patterns of activity, or a series of transactions that are smaller than usual. A transaction may have many factors that, considered individually, do not raise a suspicion, but, considered collectively, suggest criminal activity. If you notice a suspicious transaction, you have to report it to the FIU in the form of a suspicious transaction report (STR) if you have reasonable grounds to suspect it’s relevant to a criminal offence.
Do you know what a suspicious activity report is?
Do you know how to create one?
Do you know how to submit it?
Who reports Suspicious activity also has to be reported even if it isn’t directly related to a transaction, eg a suspicion may be raised during on-boarding or ongoing due diligence. A suspicious activity report (SAR) indicates that suspected criminal activity may be occurring through a service or a transaction. Regular account monitoring is a key factor in detecting suspicious activity. You must report suspicious activity to the FIU as soon as practicable, but no later than 3 working days after the suspicion arises.
Usually, a business’s compliance officer is responsible for submitting a SAR. However, reports can be made by supervisors, managers or auditors. The person who has raised the suspicion does not have to be the reporting party.
Large physical cash transactions of NZ$10,000 and over and international wire transfers of NZ$1,000 must be reported to the FIU by businesses covered by the AML/CFT regime. Prescribed transaction reports (PTRs) must be submitted to the FIU (individually or in batches) within 10 working days of the transaction. No reason for suspicion is required.
Guidance about prescribed transactions is provided by the FIU. Click here to read.
Businesses should take time to get acquainted with goAML, the FIU’s reporting tool. Developed by the UN, goAML Web is the prescribed method by which reporting entities must submit STRs, SARs and PTRs to the FIU.
Next in The Dirty Money Series: Supervision and consultation