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Guideline on Anti-Money Laundering and the Combating of Terrorist Financing18.9 Financial institutions should ensure that all contact between their departments or branches with the FIU andlaw enforcement agencies is reported to the Compliance Officer so that an informed overview of thesituation can be maintained.19. LEGAL PROTECTION AND INDEMNIFICATION19.1 Where financial institutions, their directors, officers, employees and agents disclose a suspicion or belief thatany property represents another person’s proceeds of a specified offence under POCA 43 , such disclosure isnot treated as a breach of any restriction upon the disclosure of information imposed by contract or by anyregulation or rule of conduct.19.2 When a suspicious activity report is made to the FIU in good faith, financial institutions their employees,staff, directors, owners or other representatives as authorised by law, are exempted from criminal, civil oradministrative liability as the case may be, or for breach of any restriction on disclosure of informationimposed by contract or by any legislative, regulatory or administrative provision, regardless of the result ofthe communication 44 .19.3 It is illegal for employees, directors, officers or agents of a financial institution to disclose that a suspicioustransaction report or related information on a specific transaction has been reported to the FIU. This isknown as ‘tipping off’ 45 .20. UNUSUAL, COMPLEX AND SUSPICIOUS TRANSACTIONS20.1 Where a transaction is inconsistent in amount, origin, destination, or type with a customer's known,legitimate business or personal activities, the transaction must be considered unusual. Unusualtransactions are not necessarily suspicious, but they should give rise to further enquiry and analysis. In thisregard, financial institutions should examine, to the extent possible, the background and purpose oftransactions that appear to have no apparent economic or visible lawful purpose, irrespective of where theyoriginate.20.2 Complex transactions or structures may have entirely legitimate purposes. However, financial institutionsshould pay special attention to all complex, unusual large transactions, and all unusual patterns of43 Refer POCA 47.44 Refer POCA 55.45 Refer POCA 51(1).Page 41 of 75
Guideline on Anti-Money Laundering and the Combating of Terrorist Financingtransactions, which have no apparent economic or visible lawful purpose 46 . The background and purpose ofsuch transactions should as far as possible be examined and documented by the financial institution.Findings regarding enquiries about complex, unusual large transactions, and unusual patterns oftransactions should be kept by the financial institution, and be available to help supervisory authorities andauditors for at least six years.20.3 Suspicious transactions are financial transactions that give rise to reasonable grounds to suspect that theyare related to the commission of a money laundering or terrorism offence. These transactions may becomplex, unusual or large or may represent an unusual pattern. This includes significant transactionsrelative to the relationship, transactions that exceed prescribed limits or a very high account turnover that isinconsistent with the expected pattern of transactions. In some instances, the origin of the transaction maygive rise to suspicion. A pre-requisite to identifying unusual and suspicious activity is the profiling ofcustomers and determination of consistent transaction limits.A suspicious activity will often be one that is inconsistent with a customer’s known, legitimate activities orwith the normal business for that type of account. The key is to know enough about the customer (KYC)and the customer’s normal expected activities to recognize when a transaction, or series of transactions, isunusual. Although there is a tendency to focus on new business relationships and transactions, institutionsshould be alert to the implications of the financial flows and transaction patterns of existing customers,particularly where there is a significant, unexpected and unexplained change in the behaviour of an account.20.4 Financial institutions should develop procedures to assist in the identification of unusual or suspiciousactivity in all types of business transactions, products and services offered, but particularly for transactionswith high risk customers and using high risk services (for example wire transfers, credit/debit cards and ATMtransactions, lending, trust services and private banking). For example, to facilitate the detection ofsuspicious transactions, a financial institution should:-a) require customers to indicate/reveal the source and/or purpose of funds for business transactions inexcess of threshold limits, or such lower amount (i.e. wire transfers) as the financial institutiondetermines, to ascertain the legitimacy of the funds.b) develop written policies, procedures and processes to provide guidance on the reporting chain and theprocedures to follow when identifying and researching unusual transactions and reporting suspiciousactivities;c) require its staff to document in writing their suspicion about a transaction; andd) require documentation of internal enquiries.20.5 The following factors should be considered by the financial institution when seeking to identify a suspicioustransaction:46 Refer to the POCA 55 (2)(a)(ii)Page 42 of 75
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