Business: Report suspicion of money laundering to the Financial Intelligence Centre

The business community is obliged to identify and report unusual and suspicious transactions and activities (STR) potentially linked to money laundering or terrorist financing to the Financial Intelligence Centre (FIC). 

This is line with section 29 of the Financial Intelligence Act and applies to anyone who carries on, oversees, manages or is employed by a business.

The FIC relies on this information to help identify crime and to combat money laundering and terrorist financing, and is used to develop financial intelligence, which is shared with law enforcement, prosecutorial and other competent authorities for their investigations and applications for asset forfeiture.

When to file a suspicious and unusual transaction or activity report 

An STR must be filed when the business knows or suspects it has received or is about to receive the proceeds of crime or which is related to terrorist activity. This includes when the business knows or suspects an activity or transaction:

• May be relevant to the investigation of evasion or attempted evasion of a duty to pay tax;
• Relates to the offence of financing of terrorist and related activities;
• Is in contravention of the prohibition of providing finance to a sanctioned person under section 26B of the FIC Act;
• Is structured with the intent to avoid being reported in terms of the FIC Act;
• Is linked to the proceeds of unlawful activity;
• Facilitates the transfer of proceeds of unlawful activities; and
• Has no apparent business or lawful purpose.

The person filing the STR does not have to prove that the funds involved in the transaction are linked to a crime. The report can be based on a suspicion. There is also no monetary limit or threshold that is applicable in filing an STR. Where there is suspicion or knowledge, the transaction or activity must be reported irrespective of the amount involved.   

The following factors may raise suspicions about a transaction:

• The payment of commissions or fees that appear excessive in relation to those usually payable;
• Transactions do not appear to be in keeping with normal or usual industry practices; and
• Transactions seem to be unusually large or inconsistent with the client’s financial standing, and where a client provides insufficient, vague or suspect information concerning a transaction.

When a transaction has not taken place but the client’s behaviour leads you to suspect that your entity may be abused for money laundering and/or terrorist financing, this must be reported in a suspicious or unusual activity report (SAR). 

Time frame and manner of reporting

All STRs must be submitted within and no later than 15 days after a business becomes aware and/or suspicion is raised regarding an activity or transaction. The report must be filed via the FIC’s electronic registration and reporting system, goAML, on the FIC website. Before any entity can submit a report to the FIC, they must first register on the FIC website.

Implications of filing a report

Filing a section 29 report does not prevent your business from continuing with the transaction, and it may therefore continue. By submitting the STR, the business is simply alerting the FIC that it suspects an individual or entity may be abusing their business for purposes of money laundering.

The FIC Act protects the identities of those involved in making a report to the FIC. A person involved in making a report cannot be forced to give evidence in criminal proceedings concerning such a report. However, this can be done voluntarily. A person involved in making a report may not inform anyone, including the client or any other person associated with a reported transaction, of the contents of a suspicious transaction or activity report, or that a report has been made.

For more information on how to file reports visit the FIC website, which also has various public compliance communications, guidance notes, reporting and registration user guides.  

For more information contact the FIC’s compliance contact centre on +2712 641 6000 and select option 1 or log an online compliance query or visit the FIC website and submit an online compliance query.

This article was paid for by the Financial Intelligence Centre.