Financial Crime World

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Reporting Suspicious Transactions Key in Ecuador

Ecuador’s financial institutions are stepping up efforts to combat money laundering and terrorist financing by reporting suspicious transactions to the authorities.

In a bid to prevent illicit activities, the Financial Crimes Enforcement Network (FinCEN) requires certain businesses to report any transaction or pattern of transactions that exceed $2,000 or more. This includes money services businesses such as those that provide money transfers, currency dealing, or exchange.

How to Report Suspicious Activity

Businesses must record relevant information on a Suspicious Activity Report by MSB (SAR-MSB) form and submit it to the FinCEN. A copy of the report and any supporting documentation must be kept for five years from the date of filing.

Money laundering is when criminals try to hide or disguise the source of their illegal money, making it difficult for law enforcement to track down the funds. By following federal recordkeeping and reporting requirements, businesses can help prevent criminals from profiting from their crimes.

Structuring: A Red Flag

Designing a transaction to evade triggering a reporting requirement is called structuring. This is a federal crime that must be reported by filing a SAR. Examples of structuring include breaking a large transaction into two or more smaller transactions, or using multiple people to conduct separate transactions.

Red Flags for Suspicious Activity

Businesses should be aware of several possible factors that may indicate suspicious activity, including:

  • Unusually large transactions
  • Frequent similar transactions
  • Unusual types of transactions
  • Use of fake IDs or similar IDs
  • Transactions that fall just below reporting thresholds

If a business observes any of these red flags, they must file a SAR if the transaction involves $2,000 or more.

What is Suspicious Activity?

Suspicious activity includes any conducted or attempted transaction or pattern of transactions that meets certain conditions, such as:

  • Involving money from criminal activity
  • Designed to evade Bank Secrecy Act requirements
  • Appearing to serve no business purpose and lacking a reasonable explanation
  • Involving use of the business to facilitate criminal activity

Examples of possible suspicious activity include using fake IDs or multiple IDs on different occasions, or two or more customers using similar IDs.

Important Reminders

Businesses have 30 calendar days to file a SAR after becoming aware of any suspicious transaction or pattern of transactions. When reporting suspicious activity, the law protects businesses from civil liability. Businesses are not being asked to accuse customers of criminal activity, but rather to report activities that may be suspicious and involve $2,000 or more. If a situation seems to require immediate attention, contact the appropriate law enforcement authority right away and then file a SAR. It is also illegal to tell any person involved in the transaction that a SAR has been filed.