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Suspicious Transaction
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Trends and Quality
Improvement
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Chief Inspector
Bernard LAW
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Joint Financial
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Joint Financial
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Important Notice
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Joint Financial
Intelligence Unit
Agenda
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do
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• Importance of Reporting Institutions
h
t
f
o
t
h
• Typologies
g
i
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p
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• Statistic of Suspicious Transaction
c
e
h
t
Reports
s
n
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e Transaction Reporting
• Quality Suspicious
c
r
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• Conclusion lice
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Joint Financial
Intelligence Unit
Importance of Reporting Institution
FIUs
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e AML/CFT
Reporting
Institutions
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do
t
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e
role
LEAs
Joint Financial
Intelligence Unit
Different Players and Roles
Reporting
Institutions
• Customer identification
• Record keeping
• Internal systems and
controls
FIUs
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co p
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• Dissemination
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e
• Information
exchange
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• Handling STR
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• Feedback
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• Suspicious transactions lic
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• Outreach program
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LEAs
• ML investigation
• Asset tracing
• Asset recovery
• Information exchange
• MLA
Joint Financial
Intelligence Unit
Information Flow
FIU’s
Other
Intelligence
agencies
Reporting
Entities
e
h
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Police/
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authorities
STR
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context
Intelligence
products
context
Transformation
process
context
Transformation
process
INFORMATION
Evidence
in case
Joint Financial
Intelligence Unit
e
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Typologies
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Joint Financial
Intelligence Unit
Typologies


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m
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A series of ML or TF arrangementsiswhich
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conducted in similar mannerht or using the
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In general term,
the study of methods,
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launderer
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Joint Financial
Intelligence Unit
Typologies
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To help the reporting institutions
in
s
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f
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understanding the trend and
identifying
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the vulnerable areasthused
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Launderer andorTerrorist
Financier
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Joint Financial
Intelligence Unit
Typologies
Corporate Vehicle
• easy to set up
• beneficial ownership
• shell company
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Use of TCSP
• non-resident holding several companies
• registered / corresponding address
• secretarial services
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Bank Account
• opened company accounts with different banks
• 3rd party as authorized signatories
Joint Financial
Intelligence Unit
Typologies
Trade-based Transaction
• over & under invoicing
• counter balance
• multiple business
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Money Transfer
• e-Banking
• via Money Services Operator
• multiple transfers between accounts
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Ko Other issues
• unlicensed Money Services Operator
• front man
• theft of identity
Joint Financial
Intelligence Unit
Typologies
Indicators
•
•
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•
•
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Multiple inward remittances from different fsenders
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Destination of transfer
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Paymentoof
“consultancy fees” or “loan”
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Accounts
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Joint Financial
Intelligence Unit
STR received in the past 10 years
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90
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25000
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16
Aug
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
• Represents no. of STR made by Banks
Estimated no. of STR received in 2012
Joint Financial
Intelligence Unit
13
Quality Reporting
Suspicion
identified?
Sufficient
information?
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CDD and KYC
process?
Evaluation?
Joint Financial
Intelligence Unit
Quality Reporting
Sufficient Information
i
• Client / BO information
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p
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- company details
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- ID information
ns
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e
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• Transaction information
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- fund flowol
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information
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Joint Financial
Intelligence Unit
Quality Reporting
Suspicion identified is
th
m
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e
f
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t
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Background
of customer/BO
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Quote
source of suspicion
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•
•
•e Transaction patterns
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ice • Avoid incoherent information
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Joint Financial
Intelligence Unit
Quality Reporting
KYC and CDD Process
o
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s
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ft
m
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do
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e
i information
• Update Personal and Company
r
y
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• Enquire customers forhesuspicious
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transactions
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c
• On-going transaction
monitoring
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lic
Joint Financial
Intelligence Unit
Quality Reporting
Precise and Concise
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gh
s
i
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do
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i year <= 24,000
r
• Estimated STRs received this
y
p
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c
• Quality reporting is essential
e
h
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• Precise and concise
without redundant and
w
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e
c
duplicated information
r
o
n
o
H
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o
P
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F
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lic
Joint Financial
Intelligence Unit
Quality Reporting
Evaluation
o
t
gh
s
i
h
ft
m
u
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do
t
n
e
i if risk can
• Not every STR is to be reported
r
y
p
o
c
be mitigated
e
h
t
s
• Detailed the conclusion
reached on the
n
w
o
e
necessity of STR
reporting
c
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• Report STR
il ceonce suspicion arose
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H
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gK
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Joint Financial
Intelligence Unit
Conclusion
t
n
e
m
u
c
“Compliance is not a ‘check-the-box’
o
d
s
i
exercise,
but
rather of threquires
t
h
ig
financial institutions topyrexercise
their
o
c
judgement, as s informed
by our
he
t
n
w
o
guidance andceassistance.
”
r
o
F
e
c
i
l
o Bill Fox, ex-FinCEN Director
P
g
n
o
K
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n
Ho
Joint Financial
Intelligence Unit
e
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t
s
n
w
o
e
i
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co p
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gh
s
i
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ft
m
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do
t
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e
c
r
Thank
You
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eF
H
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Ko
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l
Po
Joint Financial
Intelligence Unit