Handbook of Anti-Money Laundering.

CHAPTER 21INVESTIGATING SUSPICIONS

21.1 THE INVESTIGATION PROCESS

As discussed in the two previous chapters, the first stage of the process of identifying suspicions is the initial identification of a transaction. Following approved company policies, the staff member will then need to make a report to an appropriate officer of the firm. Once this initial report has been made to the appropriate officer, the next stage is for an initial investigation to be undertaken by the firm itself. The objective of this stage of the investigation process is to see whether there are actually sufficient suspicions to require this transaction or relationship to be reported to the relevant external reporting body as a suspicious activity report (SAR).

There are, therefore, a number of different parties that will become involved at different stages of the process. Initially, it is the responsibility of the firm's own staff and its appointed officer to determine whether there are reasonable grounds for having knowledge or suspicion of inappropriate activity. This means the firm needs to have clearly defined what constitutes an actual suspicion, as well as the procedures that need to be followed internally to ensure that all required local reporting obligations are also met.

Once internal processes have been completed, firms must then submit the required external reports, generally known as suspicious activity reports (SARs), to the relevant reporting agency. Generally, the requirement is that, ...