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7.6 Procedures for the Reporting of Suspicious Transactions

Effective from 13/7/2023

(AML-CFT Law Article 9; AML-CFT Decision Articles 17.1(a), 21.2)

As the designated Competent Authority for receiving and analysing STRs from all FIs, it is within the purview of the FIU to determine the procedures for the reporting of suspicious transactions. As stated in the AML-CFT Decision, FIs shall report STRs “via the electronic system of the FIU or by any other means approved by the FIU”, which is the FIU’s GoAML system.

Without prejudice to the above, it should be noted that the AML-CFT Decision provides for the reporting of STRs to be effected by the designated compliance officer of the FI. Specifically, the Cabinet Decision states that the duty of a compliance officer is to:

“Review, scrutinise and study records, receive data concerning Suspicious Transactions, and take decisions to either notify the FIU or maintain the Transaction with the reasons for maintaining while maintaining complete confidentiality.”

In this regard, as part of their overall risk-based AML/CFT framework and commensurate with the nature and size of their businesses, FIs should establish appropriate policies, procedures and controls pertaining to the internal reporting by their managers and employees of potentially suspicious transactions, including the provision of the necessary records and data, to the designated AML/CFT compliance officer for further analysis and reporting decisions, as well as to the reporting of STRs by the compliance officer to the FIU. The relevant policies, procedures and controls should take into consideration such factors as:

•Policies and procedures for the internal investigation of potentially suspicious transactions prior to the reporting of STRs;
 
•Conditions, timing, and methods for filing internal potentially suspicious transactions;
 
•Content requirements and format of internal potentially suspicious transactions;
 
•Appropriate controls for ensuring confidentiality and the protection of data from unauthorized access (also see Section 7.8, Confidentiality and Prohibition against “Tipping Off”);
 
•Procedures related to the provision of additional information, follow-up actions pertaining to the transactions, and the handling of Business Relationships after the filing of STRs;
 
•Policies and procedures for the analysis and decision-making of suspicious transactions by the compliance officer in regard to reporting to the FIU;
 
•Other conditions deemed appropriate by the AML/CFT compliance officer.
 

Such policies, procedures and controls should be documented, approved by senior management, and communicated to the appropriate levels of the organisation, in keeping with the nature and size of the FI’s business.