Financial Intelligence Unit, Monthly Report - March 2021
11 May 2021
The Financial Intelligence Unit produces monthly reports called “The Suspicious Activity Report”. The most recent focuses on suspicious activity reporting and what makes a good suspicious activity report (SAR).
Some key points for reporting entities are:
- Suspicious activity reporting is based on an objective test applied to reasonable grounds for suspicion. “Where an objective observer would conclude that reasonable grounds for suspicion were known to the reporting entity, it is no defence that the reporting entity did not actually consider the transaction to be suspicious.” Department of Internal Affairs v Ping An Finance
- The FIU expects reporting entities to conduct enquires to gather information to establish reasonable grounds for suspicion. This may be required to comply with enhanced customer due diligence requirements.
- Reasonable grounds for suspicion means “an activity and/or transaction that is inherently likely to be relevant to the investigation or prosecution of any person for a money laundering offence (or any other offence as specified - NZ Legislation website)”.
- Once reasonable grounds for suspicion exist, the legal obligation is triggered to submit a SAR to the FIU (as soon as practicable, but no later than three working days) using goAML.
- If your business is not registered for goAML please visit the FIU website. The FIU may also be contacted at FIU.Compliance@police.govt.nz.
FIU recommended approach to identify suspicious activity – SAFE
Screen
- Screen for suspicious activity indicators
- The recognition of one or more potential indicators of suspicious activity is the first step
- See indicators from page 18 of the Suspicious Activity Reporting Guideline
Ask
- Asking the customer appropriate questions (including as part of enhanced customer due diligence)
Find
- Find information already held about the customer and review to determine whether an activity is unusual or to be legitimately expected for that customer
- This could be considered part of ongoing customer due diligence and account monitoring
Evaluate
- Evaluate all the information – is the activity or transaction objectively suspicious?
- Are there reasonable grounds to suspect that the activity or transaction is relevant to the investigation or prosecution of money laundering (or any other offence as specified)?
What does a good SAR look like?
Must contain:
- a statement of the reasonable grounds on which the reporting entity holds a suspicion;
- an indication of any supporting documents that may help the FIU to analyse the SAR;
- information the reporting entity lawfully holds on the timing, parties and accounts for transactions or services that are sought or provided;
- customer or other party details – names, addresses, business names and addresses – and other supporting identity information as available.
They must also explain why the transaction or activity (or proposed transaction or activity) is suspicious.
The FIU also asks reporting entities to identify in SARs, the five essential elements – who, what, when, where, why and how (the method of operation).
Read the full report here. (Police website)
