1. FIU - STR Red Flags

2. Assessing STRs Established processes
Factors influencing the assessment
of STRs -
Established processes
Jurisdictional business activities
Operational priorities of law enforcement etc
Countries of risk
Feedback on the investigative results of STRs
Information on the subjects from open and confidential sources
Known typologies and indicators

3. Establishing suspicion
More suspicious
additional information compounds the complexity, strangeness, lack of legitimate rationale, etc.
Less suspicious
additional information provides insight into legitimate rationale.

4. Proportionality – The ‘Suspicion Test’
0% %
No Suspicion Suspicion Belief Absolute Knowledge
The Proportionality test or Line of Suspicion test can be used to show that as we gather more information, our thoughts can also move from having no suspicion, to suspecting something has happened, to believing it has happened and finally having absolute knowledge something has happened. The further along the line we travel, the more justification is found for the kind of intrusive actions Financial Investigation can create such as gaining access to a suspects Bank account.

5. Utilizing indicators in analytical reports
FIU's uses indicators of ML/TF to meet its disclosure thresholds
FIU's includes these indicators in case disclosures because they transfer expert knowledge from practitioners (report writer) to consumers (report reader).
Indicators also allow an FIU to accentuate a particular set of transactions or highlight a method of operation by the crime group.

6. What makes a good STR?
Many transactions that are considered suspicious aren’t necessarily the most useful to investigators.
For example…
“Mr. XXXXX entered Thai Bank and deposited .5 million USD to his personal bank account. The money was presented in pre packaged bill bundles.”

7. What makes a good STR? Good STRs identify the following:
Indicators of money laundering.
Patterns of financial transactions.
Subject identifying information (KYC info.).
If the matter has already been referred to police.
Counter-party information.

8. What makes a good STR? Good STRs identify the following:
A suspected predicate offence.
Review of the subject’s bank account activity.
Beneficial ownership of businesses.
Nominees potentially acting for subject.
Familial or business relationships.

9. Indicators Indicators are observable events
that point to the possibility of specific activities occurring.
The more indicators of an activity the greater the likelihood or probability of it occurring.

10. Indicators Examples include -
Cash deposits made in different bank branches
within a short time frame
Suspect appearance notes (old, covered in powder)
Lack of economic explanation
Transfers to accounts on which there are no previous transactions
Transfers followed by cash withdrawals
More concern about speed than costs
Transactions irregular to those normally performed by subject

11. Most Common Indicators
Atypical business account behaviour
Unusual explanation for business/account behaviour/activity
Media coverage of account holder’s activities
Possible client relationship to previous crime
Suspicious activity of client associates
Concealment of beneficial owner of funds
Rapid offshore transfer after funds deposited
Atypical or uneconomical fund transfer to/or from foreign jurisdiction
Insufficient explanation for source of funds
Customers sending and receiving wire transfers to/from financial haven countries

12. TF Cases
Sending or receiving funds by international transfers from and/or to locations of specific concern
Atypical business/account behaviour
Charity/Relief organization linked to transactions
Large scale cash transactions
Media coverage of account holder’s activities
Ongoing investigation
Large and/or Rapid Movement of Funds

13. TF Cases Multiple transactions below threshold
Possible link to criminal activity
Rapid creation and withdrawal of funds from account
Use of same branch or similar branches on multiple instances when a single transaction would be more efficient.
Use of false/stolen identities
Wire transfers to and from multiple relief and/or charitable organizations, domestic and foreign
Related companies (e.g. same owners, managers, addresses, phone numbers)
Multiple entities reporting suspicions

14. Establishing suspicion
Conduct a FI database search to identify any suspicious profiles such as -
Structuring
Smurfing
Large value transactions with no rationale
Unusual transaction behaviour
Unusual transaction pattern

15. Additional information
Is related to known typologies
Has clear links to criminal activity
Includes typologies that are well known and considered to be high risk
Includes well known subjects involved in high risk transactions
Involves a geographic location which is regarded as high risk
Contains information that states whether the transaction has, or has not been executed

16. What is the FIU's role to improve STR quality?
FIU's collaborates with supervisors to provide guidance on public websites to what sort of activity we are looking for in STRs.
FIU's supports supervisors outreach to reporting entities and coaches them on better detecting/reporting techniques.
FIU's with the Supervisors publicly applauds the efforts of reporting entities in cases where they have helped.
In the event of non-compliance with FIU's support supervisors issuing of fines against reporting entities.

17. What happens if STR quality is poor - Rating Priority
Low Priority If a report is considered to be of low priority, no further action is required. Medium Priority If a report is considered to be of medium priority then a decision will made as to either flag the report for ongoing scrutiny, or conduct a more thorough analysis. High Priority If a report is considered to be of high priority, it will require full analysis

18. Thank you