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Suspicious Transaction Report (STR)

Every banking company, financial institution and intermediary shall furnish to FIU information of all suspicious transactions whether or not made in cash.

Suspicions transaction means a transaction including an attempted transaction, whether or not made in cash which, to a person acting in good faith –
(a) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence specified in the Schedule to the Act, regardless of the value involved; or
(b) appears to be made in circumstances of unusual or unjustified complexity; or
(c)  appears to have no economic rationale or bonafide purpose; or
(d)  gives  rise  to  a  reasonable  ground  of  suspicion  that  it may involve financing of the activities relating to terrorism;

Broad categories of reason for suspicion and examples of suspicious transactions for a banking company are indicated as under:

Identity of client
–        False identification documents
–        Identification documents which could not be verified within reasonable time
–        Accounts opened with names very close to other established business entities
Background of client
–        Suspicious background  or links with known criminals
Multiple accounts
–        Large number of accounts having a common account holder, introducer or authorized signatory with no rationale
–        Unexplained transfers between multiple accounts with no rationale
Activity in accounts
–        Unusual activity compared with past transactions
–        Sudden activity in dormant accounts
–        Activity inconsistent with what would be expected from declared business
Nature of transactions
–        Unusual or unjustified complexity
–        No economic rationale or bonafide purpose
–        Frequent purchases of drafts or other negotiable instruments with cash
–        Nature of transactions inconsistent with what would be expected from declared business

 

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