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Financial Transaction Monitoring in Bolivia: A Comprehensive Approach

In today’s complex financial landscape, transaction monitoring has become an essential tool for preventing money laundering and other illicit activities. While it is crucial to detect and report suspicious transactions, financial institutions must also comply with various sanction regimes and regulations.

The Broader Picture of Transaction Monitoring

Transaction monitoring is not just about detecting illegal funds; it involves a comprehensive approach that includes:

• AML risks (money laundering, terrorist financing, and human trafficking): Detecting and reporting suspicious activities related to money laundering, terrorist financing, and human trafficking.
• Fraud risk: Identifying and preventing fraudulent transactions.
• Cyber risk: Monitoring for cyber threats and protecting against data breaches.
• Sanction risk: Preventing transactions with entities violating international law principles and norms.

Obligations include:

• Obtaining knowledge of customers
• Understanding their transactional behaviors
• Recognizing suspicious activity

Information Noise and Case Studies

While access to multiple data sources is readily available, the complexity and interconnectedness of information make it challenging to identify relevant pieces of intel. Sophisticated skills are necessary for AML experts to recognize and name suspicious activities and predicate offenses.

One example of cooperation between FIs and law enforcement was a 2017 human trafficking case in the United States. Knowledge about patterns, expected behaviors, and predicate offenses allowed prosecutors to comprehend large organized crime and stop human exploitation.

Real-Time Monitoring Against Sanctions Lists

Monitoring transactions in real-time against sanctions lists is crucial to prevent transactions from being performed by entities violating international law principles and norms.

The recent changes in payments format implemented by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) introduced a new cross-border payment format ISO 20022 messages. This should help reduce false positive hits, a big step towards more efficient monitoring.

Transaction Monitoring: A Must for Bolivia

Predicate offenses, money laundering, sanctions - the list of battles to fight is quite long. Transaction monitoring is essential no matter how broad we look at this process. However, there is another component that comes in handy to effectively combat crimes - knowledge. To be aware means to be able to act.