Suspicious Transaction Reporting: A Temporary Measure to Enhance Financial Transparency
In a move to strengthen financial transparency and combat money laundering, a new law has been introduced in the country, requiring businesses in various sectors to report suspicious transactions. This law aims to enhance the country’s anti-money laundering (AML) and combating the financing of terrorism (CFT) framework.
What You Need to Know
The new law sets out a list of suspicious signs for various sectors, including:
- Banking
- Payment intermediary
- Life insurance
- Securities
- Prize-awarding game/gaming
- Casino businesses
- Real estate
It also clarifies the elements of suspicious transactions that are subject to regulatory reporting.
Time Limit for Reporting
The new law has introduced changes to the time limit for reporting, with:
- High-value transactions and electronic money transfers to be reported within one working day for e-reporting and two working days for paper reporting.
- Suspicious transactions must be reported within three working days from the transaction date or within one working day from detection.
What Firms Need to Do
To implement the new AML law, firms are advised to consider the following practical solutions:
Robust Governance
- Establish strong oversight from top management
- Implement a clear duty segregation mechanism
Effective Management Reporting Framework
- Provide timely and actionable information to senior management
- Promote a robust AML/CFT culture
Effective Implementation of AML Technology System
- Ensure data accuracy and completeness
- Sufficient resources with required skills and experience
Effective Investigation
- Ensure staff involved in handling suspicious transaction alerts are adequately skilled and experienced
- Identify and assess criminal activity
Effective Outsourcing Programme
- Establish good governance and strong oversight of any outsourced function
- Ensure compliance with local regulations
Effective Quality Assurance Program
- Implement a risk-focused QA programme that promotes the desired AML/CFT mind-set and ethical standards
Conclusion
The new law aims to enhance financial transparency and combat money laundering in the country. To implement this law effectively, firms must take practical steps to strengthen their AML/CFT framework, including robust governance, effective management reporting, technology implementation, investigation, outsourcing, and quality assurance.