What is Money Laundering?

Money Laundering is the process by which monies generated by criminal activities are converted through legitimate channels into assets that cannot be easily traced back to their illegal origins. “Dirty” money is introduced into the commercial financial system (Placement), then placed in a banking system and mixed with legitimate sums through a series of transactions meant to disguise the origin of the funds (Layering) and then the illegitimate funds are returned to the legitimate economy (Integration).

What is Terrorist Financing?

Terrorist Financing is financial support, in any form, of terrorists or those who encourage, plan or engage in terrorism. Terrorist groups get funding mainly from two sources: Organizations, countries and individuals providing financial support and legitimate activities which include charities and non-profit organizations, import and exports, sale of publications, valid employment, subscriptions and memberships, precious metals and stones

What are Financial Institutions and Relevant Businesses?

These include:

  • Banks
  • Offshore Banks
  • Building societies
  • Insurance companies
  • Credit unions
  • Money transmission services
  • Investment business
  • Trusts and other fiduciary services
  • Foreign exchange
  • Car dealerships
  • Jewelers
  • Real Estate Agents
  • Casinos
  • Internet Gambling
  • Lottery Agents
  • Barristers-at-Law and Solicitors
  • Accountants
  • Charities

Privacy and Protection of Information

What does the FIU do with SARs?

As outlined in the Guidance Notes, the FIU promptly acknowledges receipt of the report then forwards it to trained Financial Investigators who alone will have access to it. The Financial Investigators may seek further information from the reporting institution and elsewhere. Discreet inquiries are made by the FIU to confirm the basis of the suspicion but the customer is never approached. The FIU will keep the reporting institution informed of the interim and final result of the investigation.

How does the FIU protect the personal information of private citizens?

The FIU ensures that the information it is mandated to receive and hold is protected from unauthorized use and disclosure; employees are liable for the offence of “tipping off” under the POCA if information obtained as a result of their employment is disclosed. The FIU Act also sets out severe penalties for unauthorized use and disclosure of information. Additionally, information related to SARs is not disclosed outside the FIU without prior approval of Director.

Reporting to the FIU and other obligations

How do entities make reports to the FIU?

If the Reporting Officer of the entity decides that a disclosure should be made, a report is made in the prescribed form. Each institution receives SAR forms which they fill out and return by hand.

Am I liable if I make a report?

When made in good faith, the financial institutions or persons engaged in relevant business activities and their employees, staff, directors, owners or other representatives as authorized by law, are exempt from criminal, civil or administrative liability.

HOWEVER failure to report a suspicious transaction is an offence.

Do I have to report a suspicious financial transaction that was not completed?

The POCA states that every financial institution or person engaged in relevant business activity must pay special attention to all complex, unusual or large transactions, whether completed or not, and to all unusual patterns of transactions, and to insignificant but periodic patterns of transactions, which have no apparent economic or lawful purpose.

How often are reporting entities required to update client information?

With regard to continued verification of accounts, once you have verified the identity of the applicant no further verification of identity is needed once the applicant maintains a business relationship on a regular basis. You must monitor the business relationship to ensure that it is consistent with the stated account purposes and business. Where there has been no recent contact with the person within a period of 5 years, you should confirm the identity of the account holder.

How long must I keep records?

The entity must keep evidence of the person’s identity for a minimum of 7 years after the day on which the account was closed or after the day on which the transaction recorded takes place, and records or copies thereof of the details relating to the business that may assist in a ML investigation. However, if the FIU has notified a regulated institution in writing that particular records are or may be relevant to an investigation that is being carried out, the records are to be retained pending the outcome of the investigation.