In this last newsletter before whatever Christmas will mean this year and, indeed the last newsletter for 2020, let’s have a look at just two of the several live issues in relation to financial crime risk and compliance.
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There is a growing debate around suspicious activity reports (or similar by any other name). Both the topics in this newsletter relate to that.
The first question is being revived after being more or less dormant for a while. FIUs, Financial Intelligence Units, the world over are drowning in a sea of suspicious activity reports and there are, from time to time, calls for reporting entities to submit (or ″file″) only so-called ″quality reports.″
The problem has come up again because the increasing action against banks, etc., and the widespread misleading of the public by the sensationalised and, from a legal and regulatory standpoint, largely superficial reporting of the so-called FinCEN Files, has led to what is mistakenly called ″defensive reporting.″
It is not defensive reporting because all laws all over the world require reporting institutions to file reports where there is any suspicion of any activity involving any asset or benefit arising, in whole or in part, from criminal conduct.
The law says ″reasonable cause for suspicion.″
It does not say ″cause for reasonable suspicion.″