Suspicious Transaction Reporting: Overview & Statistics Seminar_Lawyers_6... · 2019-12-16 · Particulars of the subject persons / organizations / beneficial owners (including details

Shingo LAI

Chief Inspector of Police

JFIU

Suspicious Transaction Reporting:

Overview & Statistics

Joint Financial Intelligence Unit

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1. About JFIU

2. Key Legislation

3. Reporting Requirement

4. STR Mechanism

5. STR Statistics

6. STR Reporting

7. Case Studies

STR


Agenda


About JFIU

Superintendent of Police

(Head of JFIU 2)

Strategic Analysis & Research Team

Suspicious Transaction Report and

Management System (STREAMS) Team

STREAMS Support Team

Financial Intelligence

Development Team

Chief Inspector of Police (JFIU 1)

Data Analysis & Intelligence Development Teams

JFIU 2A

JFIU 2B

JFIU 3A

JFIU 1A JFIU 1B

JFIU 1C JFIU 1D

JFIU 1E JFIU 1F

JFIU 1G

Superintendent of Police

(Head of JFIU 1)





Exchange Team

Training & Outreach Team

JFIU 3B

JFIU 3C

JFIU 4A

JFIU 4C

JFIU 4B

C&ED

Mutual Evaluation Coordination and

International Policy Team


About JFIU

JFIU

FIUs

LEAs Professional Bodies

Regulatory Authorities

Financial Institutions &

DNFBPs

Policy

Bureaux


Unit

Law Enforcement

Agencies


STR Mechanism

Reporting

Entities

AML/ CFT

Prevention Detection

Reporting Entities

Financial Intelligence Unit

Law Enforcement

Agencies

CDD + KYC

Record Keeping

Internal Controls

STR Filing

Financial Institutions& DNFBPs

STR Regime

Intelligence Exchange

International Cooperation

Training & Outreach

JFIU

Financial Investigation

Asset Tracing

Restraint & Confiscation

Mutual Legal Assistance

e.g. Police, Customs, ICAC


STR Mechanism

Public-Private Partnerships

ReportingEntities


Unit

LawEnforcement

Agencies

STR Analysis FinancialInvestigation

(Useful) Information Intelligence Evidence


STR Mechanism

14,838 16,06219,690 20,287

23,282

32,907

37,188

42,555

76,590

92,115

73,889

24,027

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019(Up to Q2)

Number of STRs received in the past 10 years


STR Statistics

68,146

1,236

39

1,337

529

1,219

47 70416

22 81

747

Banks Insurance Companies

Money Lender

MSOStored Value Facilities Licensees

SFC Registered Companies

Real Estate Agents

Dealers in Precious Products

Law Firms

Accountancy Firms

Trust & Company Service Providers

Others

Sectoral Breakdown of STRs received by JFIU in 2018

STR Overview (By Reporting Sector)

No. of STRs 2014 2015 2016 2017 2018 2019Q1-Q2

Annual Total 37,188 42,555 76,590 92,115 73,889 24,027

Filed by Legal Sector

222 894 969 555 416 326

0.5 – 1.2% 1.35%

STRs from Legal Sector


Anti-Money Laundering and

Counter-Terrorist Financing Ordinance,

Cap.615 (AMLO)


STR Reporting

Suspicious Transaction

Report And Management

System (STREAMS)

Screen

Ask

Find

Evaluate

subject entities’ background & transactions

appropriate questions to clarify circumstances

relevant records for review

whether suspicion is substantiated

SAFE Approach

How to File Quality STRs?


Particulars

of the subject persons / organizations / beneficial owners

(including details of ID document or company registration)

What Suspicious?

- Property involved (e.g. company, real estate, vessel, etc.)

- Accounts & transactions (including. amount, currency, source of fund)

Why Suspicious?

- Suspected crimes / suspicious indicators / news

- Assessment and analysis?

- Explanation by clients, if any

Previous STR ref. / Police case ref., if any

STR Content


1) Triggering Factors

2) Background of Subject(s)

3) Transactions

4) KYC/CDD Result & Open Source Information

5) Conclusion & Way Forward


Recommended Structure of STR Narrative


Recommended Structure of STR Narrative

Client

Politically Exposed Person?

Non–resident / Corporate from high-risk country?

No known nexus with Hong Kong?

Complex corporate structure (obscuring ultimate beneficial ownership)?

Transaction

Payment from 3rd party / cashier order?

Unusual high/ low payment for a property?

Unexpected amount of transactions ?

Transacted with unrelated parties / jurisdiction?


Risk Indicators

Previous Records/ Further Enquiries

Background check / open source (adverse news)

Failing to disclose specific role / relationship / ownership of property

Unwilling to response to questions or answers are not convincing

Unwilling to provide supporting document

Evaluation

Information from client is incommensurate with your record in hand?

Information from client could not be verified?

The client appeared to be a stooge in the transaction?


Risk Indicators

*TF Risk


STR Feedback

Acknowledgement of receipt

Consent/ No Consent/ N/A

Quarterly STR Analyses

Meetings with Stakeholders

www.jfiu.gov.hk

Thank you


Documents

Suspicious Transaction Reporting: Overview & Statistics Seminar_Lawyers_6... · 2019-12-16 · Particulars of the subject persons / organizations / beneficial owners (including details