Are your staff able to spot suspicious transactions when it comes to money laundering?
Suspicious transactions in money laundering
A suspicious transaction is any transaction or business dealing which raisis in the mind of a person involved any concerns or indicators that there may be something illegal or something related to money launering or terrorist financing involved the the transaction or dealing.
Examples of the money laundering suspicious activity
A few examples of suspicious transactions include the following:
- Abnormally large transactions
- Cash payments or deposits where this has not been the norm
- Customer is reluctant to provide personal information or provides insufficient, hard to trace, or fictitious information
- Any transaction whose nature, size, or frequency appears unusual or out of the norm for that customer or account
- Accounts opened in offshore or high risk locations where, for example, drugs or drug trafficking may be prevalent
- Transfer of investments to apparently unrelated third parties
- Evidence of customer being a PEP
- Use of multiple currencies in a transaction
There are many ways that someone will try to launder money, meaning that spotting the crime before it’s too late can sometimes be challenging. Here is some guidance on how to spot suspicious transactions and best practice on how to deal with such suspicions.
There are many ways that someone will try to launder money, meaning that spotting the crime before it’s too late can sometimes be challenging. Here is some guidance on how to spot suspicious transactions and best practice on how to deal with such suspicions.
7 ways to identify suspicious transactions
The guidance below is taken from our interactive e-learning course, Anti-Money Laundering: Know Your Risk. You can demo the course for free here.
E-commerce
Definition: payment for a service or product online through a credit card and other electronic payment systems.
The risk: e-commerce payments create ample opportunity for money laundering and terrorist financing. Selling counterfeit goods online or no goods at all or making payments and transfers where the credit card or the user does not need to be verified are often a blind spot in AML prevention measures.
Tip: have strong identity verification measures and transaction monitoring in place. Using technology to uncover suspicious activity can help reduce the money laundering risk of online payments.
