CHAPTER 20UNUSUAL TRANSACTIONS

20.1 THE IDENTIFICATION OF UNUSUAL TRANSACTIONS

Regulations make it clear that staff will be held accountable if they fail to recognise an unusual transaction or arrangement where they have reasonable grounds to know or suspect money-laundering activity. This means that there will always need to be clarity and training for staff to enable them both to understand their obligations and also to make sure that they conduct the procedures expected of them in an appropriate way.

Each firm will need to provide clear guidance to all of its employees to enable them to detect those unusual transactions which they are required to identify, or which pose a reputational risk to the firm. Again, it is important to recognise that the identification of an unusual transaction will not, in itself, necessarily mean that money laundering or terrorist financing has actually been detected. There may, indeed, be an innocent explanation for the activity. The identification of an unusual transaction should, however, alert the employee to the need to conduct some form of additional procedure, potentially leading to the identification and reporting of an actual suspicion.

The investigation procedures to be adopted are discussed in the next chapter, but these can only follow from alert monitoring, whether conducted by using software solutions or through attentive employee engagement. In this chapter we focus on the role of the employee in identification of suspicions.

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