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What is a Suspicious Transaction?

What is a Suspicious Transaction? | Singapore Compliance

Definition-A suspicious transaction implies a transaction mainly made in cash to an individual acting in good faith, giving rise to a reasonable ground of suspicion that it may include the proceeds of crime.

The reporting firms need to complete the Suspicious Transaction Report (STR) Form and submit it to the relevant authorities.

Mediums through which a Suspicious Transaction can be reported

  • Electronically to the Financial Intelligence System.
  • Fax
  • Email
  • Call through a hotline

Characteristics of a Suspicious Transaction

  • Seems not usual.
  • Lacks distinct economic purpose.
  • The transaction looks illegal.
  • Fails to correspond with the customer’s profile or business activities.
  • Involves proceeds from unlawful activity.
  • This indicates that the customer is associated with money laundering or terrorism financing activities.

Potentially Suspicious Activities warranting further Investigations

  • If the client involves in unusual activity in cash purchases of traveler’s cheques, money orders, or cashier’s cheques.
  • A client opens a vast number of different accounts than expected for the kind of business they are supposedly conducting and frequently transfers money among those accounts.
  • A client’s corporate account has deposits or withdrawals mainly in cash other than cheques or different types of transfers.
  • If a client deposits a massive volume of cashier’s cheques, money orders, and wire transfers into an account when the account holder’s business nature does not appear to verify such an activity, further investigations would be necessary.
  • If a client regularly makes huge dollar transactions, including deposits, withdrawals, or acquisitions of monetary instruments, without explaining to utilize them in the business, the
  • If a business account history indicates little periodic activity or the account seems to be used mainly as a temporary source of funds that are transferred abroad, that will be deemed high risk.
  • When clients in many firms regularly make large cash deposits and uphold high balances but do not utilize and enjoy other banking services would alert the institution to the need to carry out an extra investigation.
  • Regarding layering in money laundering, this may result from a global transfer in an unusual currency. If the currency transaction patterns of a dealing face a sudden and unpredictable change from everyday activities, it would be anticipated that it would be identified by the institution and reviews performed.
  • If a venture fails to generate foreign currency unexpectedly starts to make several currency transactions, a sanitation firm that makes various deposits of cash, then that should be identified and reviewed.
  • At times convicts will attempt to recognize a weakness in a controlled setting which they can utilize to conceal their activities. Consequently, financial transactions involving monetary tools that are either incomplete or contain payees, remitters, if known, will be of specific concern.
  • In general, transactions that do not seem to have a commercial foundation will be an issue of concern. For instance, rare transfer of funds amid related accounts or accounts that include the same principal or connected principals need investigation.

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