Financial Crime World

Reporting Suspicious Transactions: A Guide for Financial Institutions

In the fight against financial crime, it is crucial for financial institutions in The Bahamas to report suspicious transactions to the Financial Intelligence Unit (FIU). This guide provides guidelines on how to identify and report such transactions.

The Financial Transactions Reporting Regulations

The Financial Transactions Reporting Regulations, 2000, require financial institutions to:

  • Establish and maintain identification, record-keeping, and internal reporting procedures
  • Appoint a Money Laundering Reporting Officer (MLRO)
  • Provide training for relevant employees

The Financial Intelligence Unit Act

The Financial Intelligence Unit Act, 2000, established the FIU as an agency responsible for:

  • Obtaining, receiving, analyzing, and disseminating information related to offenses under the Proceeds of Crime Act, 2000, and the Anti-Terrorism Act, 2004

The Role of the Money Laundering Reporting Officer

The MLRO is responsible for determining whether a suspicious transaction report (STR) should be filed with the FIU. The MLRO must:

  • Consider all relevant information available within the business concerning the person or client to whom the initial report relates
  • Decide if the initial report gives rise to knowledge or suspicion of money laundering or terrorist financing
  • Disclose this information to the FIU if necessary

Procedures for Reporting Suspicions

The need for simple reporting lines is essential. Reporting lines should be as short as possible, with minimal people between the person with the suspicion and the MLRO. The hallmarks of an effective internal reporting system are:

  • Speed: Reports should be filed promptly
  • Confidentiality: All reports should be kept confidential
  • Easy accessibility to the MLRO: The MLRO should be easily accessible for reporting purposes
  • Maintenance of full and accurate records: All records should be maintained accurately

Documenting Procedures

All procedures should be documented in appropriate manuals. Job descriptions should clearly state:

  • Accountabilities and responsibilities of those who are designated to handle suspicious activity reports
  • The accountability for all reports rests with the MLRO, who is required to sign off on all reports sent to FIU and regularly review cases where a decision has not been made

The Role of Managers and Supervisors

Managers and supervisors play a crucial role in the reporting process. They should be aware that they may not have a reasonable excuse for failing to report promptly if an ineffective reporting chain delays an internal report.

By following these guidelines, financial institutions can ensure that they are compliant with regulations and effectively identify and report suspicious transactions to the FIU.