Preventing Money Laundering in Banking Institutions

Guidelines for Identifying and Reporting Suspicious Transactions

Key Points

• Comprehensive Training: Banking institutions should provide comprehensive training to staff on all aspects of anti-money laundering (AML) legislation, internal policies, and procedures.
• Money Laundering Reporting Officer (MLRO): A dedicated MLRO should be appointed to oversee the reporting process, validation, investigation, and feedback arrangements.
• Protection of Reporting Persons and Staff: Banking institutions, directors, officers, and employees are protected from criminal and civil liability for breach of any restriction on disclosure of information imposed by contract or legislation if they report their suspicions in good faith to the Financial Intelligence Unit (FIU).
• Tipping Off: Disclosing to customers that a suspicious transaction report is being made to the FIU is prohibited.
• Review and Feedback: Banking institutions should compile and record comments on these guidelines and forward them to the FIU for action.

Identifying Suspicious Transactions

Banking institutions play a critical role in preventing money laundering activities by identifying and reporting suspicious transactions. The following are examples of suspicious transactions that may indicate money laundering:

• Unusually Large Cash Deposits or Withdrawals: Unexplained large cash deposits or withdrawals may be indicative of money laundering.
• Substantial Increases in Cash Transactions: Frequent increases in cash transactions without justification may suggest money laundering activities.
• Cash-intensive Businesses: Customers who operate cash-intensive businesses, such as bars and restaurants, may engage in money laundering activities by frequently exchanging cash for other forms of payment.
• Frequent Exchange of Cash into Other Currencies: Frequent exchange of cash into other currencies without exchange control approval may indicate money laundering.
• Customers Transferring Large Sums to or from Overseas Locations: Customers who transfer large sums to or from overseas locations with instructions for cash payment may be engaging in money laundering activities.

Reporting Suspicious Transactions

Banking institutions should report suspicious transactions to the Financial Intelligence Unit (FIU) and maintain records of these reports. The FIU will investigate the reported transactions and take appropriate action to prevent further money laundering activities.