Suspicious Transactions Procedures
The national agency for receiving suspicious transaction reports (STRs) in The Bahamas is the Financial Intelligence Unit (FIU). The FIU has power to compel the production of information (except information subject to legal professional privilege), which it considers relevant to fulfil its functions. It is an offence to fail or refuse to provide the information requested by the FIU. Such offence is punishable on summary conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 2 years or to both such fine and imprisonment.
The FIU is empowered by the Financial Intelligence Unit Act, 2000 and its Regulations to issue Guidelines, from time to time to assist financial institutions with observance and implementation of STR procedures. Copies of these Guidelines are available here: FIU Guidelines
Financial Institutions are advised that it is mandatory by law to appoint a Money Laundering Reporting officer (MLRO) as a point of contact with the FIU, to handle reports of suspicious transactions that may involve money laundering, terrorist financing or proliferation financing. The MLRO must be registered with the FIU. It is also mandatory by law to appoint a Compliance Officer (CO). However, the firm may choose to combine the roles of the CO with the MLRO depending upon the size and nature of prescribed financial services provided by the Financial Institution.
RECOGNITION OF SUSPICIOUS TRANSACTIONS
A suspicious transaction will often be one which is inconsistent with a customer’s known, legitimate business or personal activities or with the normal business for that type of facility. Therefore, the first key to recognition is knowing enough about the customer’s business to recognise that a transaction or series of transactions is unusual. Efforts to recognise suspicious circumstances should commence with the request to open a facility or execute the initial transaction.
Pursuant to section 25 of the Financial Transactions Reporting Act, 2018 where any person conducts or seeks to conduct any transaction by, through or with a financial institution (whether or not the transaction or proposed transaction involves cash), and the financial institution knows, suspects or has reasonable grounds to suspect that the transaction or the proposed transaction involves proceeds of criminal conduct as defined in the POCA, 2018, or any offence under the POCA, 2018, the financial institution MLRO shall, as soon as practicable after forming that suspicion, report that transaction or proposed transaction to the FIU.
INTERNAL REPORTING OF SUSPICIOUS TRANSACTIONS
The Financial Intelligence (Transactions Reporting) Regulations, 2001 requires financial institutions to establish clear responsibilities and accountabilities to ensure that policies, procedures, and controls, which deter criminals from using their facilities for money laundering are implemented and maintained.
Registrants offering prescribed financial services operating within or from The Bahamas are required to:
- Introduce procedures for the prompt internal investigation of suspicions and subsequent reporting of same to the FIU;
- Provide the MLRO with the necessary access to systems and records to fulfil this requirement; and
- Establish close cooperation and liaison with the FIU.
There is a statutory obligation on all staff of the financial institution to report suspicions of money laundering, terrorist financing and proliferation financing to the MLRO in accordance with internal procedures. However, in line with accepted practice, registrants may choose to require that such unusual or suspicious transactions be drawn simultaneously to the attention of supervisory management to ensure that there are no known facts that will negate the suspicion.
Financial Institutions have a clear obligation to ensure:
- that each relevant employee knows to which person he should report suspicions; and,
- that there is a clear reporting chain under which those suspicions will be passed without delay to the MLRO.
Once an employee has reported his/her suspicion to the MLRO, he/she would have fully satisfied his/her statutory obligation.
PROCEDURE FOR REPORTING SUSPICIOUS TRANSACTIONS TO THE FIU
The Financial Transactions Reporting Act, 2018 (FTRA, 2018), outlines the procedures for reporting suspicious transactions and grants protection to those persons who report these transactions.
Section 25 of the FTRA, 2018 mandates a financial institution to report a transaction which the financial institution knows, suspects, or has reasonable grounds to suspect, that the transaction or proposed transaction involves money laundering, terrorist financing, proliferation financing, or any associated predicate offence, to the FIU.
On 1 June 2019, the FIU migrated from the manual filing of Suspicious Transaction Reports (STRs) to an electronic filing platform. This platform allows registered Money Laundering Reporting Officers (MLROs) or Designated Reporting Officers (DROs) to complete, file, and submit all STRs along with relevant supporting documentation to the FIU safely and securely from their offices.
The platform also allows institutions to submit supplemental information to an STR that has already been filed, and to submit their quarterly Terrorist Property Reports (TPR), as required by Section 70 of the Anti-Terrorism Act, 2018. Before logging into the platform, all financial institutions and their MLRO or DRO must register with the FIU by accessing the following website: – https://fiuconnect.fiubahamas.bs/casekonnect/index.php?module=users/login
Documentation, namely, an approval letter from the financial institution, an approval letter from the regulator, a curriculum vitae, and a copy of a government issued identification must also support the MLRO or DRO registration. Upon approval from the FIU, an email with a user profile and a temporary password will be received and the submission of STRs or other reports can commence.
Although the prescribed form for reporting a suspicious transaction to the FIU is via the platform, in accordance with section 25 subparagraphs (2) and (3) of the FTRA, 2018 STRs may be forwarded to the FIU by way of facsimile transactions, electronic mail, other similar means of communication, and in the case of urgent extenuating circumstances, orally. The preferred method of submission however is electronically.
Sufficient information should be disclosed, which indicates the nature of and reason for the suspicion. Where a Registrant has additional relevant evidence that could be made available, the nature of this evidence must be indicated.
Suspicious Transaction Reports (STRs) Electronic filing platform.
If you are registered on the FIUs eFiling portal, and you wish to file an STR click the Log In button below
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