Staying Ahead in AML Compliance: Understanding When to File STRs | AML UAE

Introduction

This tutorial provides a comprehensive guide on when to file Suspicious Transaction Reports (STRs) under UAE Anti-Money Laundering (AML) regulations. Understanding the indicators that necessitate filing an STR is crucial for financial institutions, Virtual Asset Service Providers (VASPs), and Designated Non-Financial Businesses and Professions (DNFBPs) to safeguard against money laundering activities.

Step 1: Recognize the Difference Between STR and SAR

• STR (Suspicious Transaction Report) is filed when a transaction is executed, either fully or partially.
• SAR (Suspicious Activity Report) is for attempted transactions that did not complete.
• Familiarize yourself with these definitions to ensure proper reporting.

Step 2: File STRs Promptly

• STRs must be filed electronically through the goAML portal without delay after identifying suspicious activity.
• Ensure you have all necessary documentation and evidence ready for the filing process.

Step 3: Identify Potential Indicators of Suspicious Transactions

Evaluate transactions based on the following criteria:

1. Inquiry Against the Customer

   • If there’s an ongoing inquiry against a customer for financial crime, review transactions with that customer and consider filing an STR if warranted.

2. Multiple Third Parties Involved

   • Be cautious of transactions involving multiple third parties without clear business rationale, as this may indicate layering of illicit funds.

3. High Volume Transactions

   • Watch for unusually high transaction volumes in a short timeframe that do not align with the customer’s profile.

4. Mismatched Transaction Value

   • Investigate transaction values that are inconsistent with the customer’s economic profile and source of wealth.

5. Last-Minute Changes in Transaction Parameters

   • If a customer requests unexpected changes to transaction details, verify their legitimacy to assess potential malafide intentions.

6. Virtual Asset Payments

   • Treat transactions involving virtual assets with caution, particularly if the customer does not adequately identify their virtual wallet.

7. Cash-Intensive Businesses

   • Exercise extra caution when dealing with businesses that heavily rely on cash transactions. File an STR immediately if suspicions arise.

8. Inconsistencies in Business Purpose

   • If the purpose of the transaction does not align with the customer’s business activities, investigate further and file an STR if necessary.

Conclusion

Filing STRs is a critical component of AML compliance. By understanding the indicators that suggest suspicious activity and knowing when to file an STR, you can help protect your organization from financial crime. Stay vigilant and ensure regular training for your team on these protocols. For more information, visit www.amluae.com or reach out at info@amluae.com.