How to Detect and Report Suspicious Transactions Under AMLA 2001 (Full Transcript)

Speaker 1: Reporting institutions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 or AMLA are required to submit a Suspicious Transaction Report or STR whenever they have any suspicion on a customer or a transaction. In order to help you fulfil your obligation to submit an STR, there are four steps that you can take to detect suspicious transactions. First, establish the red flags that are relevant to your business. Red flags are indicators or warning signs that a customer or transaction may be suspicious. Here are some examples of red flags. When your customer refuses to provide his or her information, tries to hide his or her identity by using nominees or proxies, makes a large payment by cash for no logical reasons, structures or splits a large amount of money into small amounts. For example, a customer makes multiple small deposits or withdrawals for no logical reasons, or makes small deposits or withdrawals from multiple branches within the same day or short period for no logical reasons, previously has been convicted or is currently being investigated or prosecuted for any serious crime. When your customer has a complex company structure that makes it hard for you to identify who is the ultimate beneficial owner, conducts transactions with unrelated third parties without justifiable reasons. Knowing your customers and having an understanding of their usual transactions will help you to detect any suspicious transactions. Second, screen through customers' profiles and transactions to see if there are any red flags. If yes, ask your customer appropriate questions to know more about the nature of these transactions. You may ask questions like, why do you need to make such transactions? Or, who will actually be getting the money from these transactions? Third, review all information regarding your customer to see if it matches with how the transactions were conducted. Fourth, evaluate your customer and the transaction. If you find that the transaction is not suspicious, continue business as usual. However, if your customer and the nature of the transaction still raises suspicion, file an STR to Bank Negara Malaysia. You may still continue business as usual with the customer while carefully taking the risk profiles into consideration. We hope you are now clear with your responsibilities as a reporting institution to submit STRs. Compliance to the requirement to submit an STR is essential for you and your business. Remember that when you comply to protect, you are protecting yourself and your business from being misused by criminals. For more information, visit us at our microsite or contact us at the following channels. This message is brought to you by Bank Negara Malaysia.