Dealing With Suspicious Behavior And Filing Suspicious Activity Reports

Posted in Counter-Terrorist Financing on December 25, 2023
Dealing With Suspicious Behavior

Dealing with suspicious behavior and filing suspicious activity reports. When an organization detects suspicious activities that indicate financial crimes, including money laundering, it is their duty to report them to the authorities in most countries of the world. This is done in order to prevent potential criminal behavior, including predicate offenses to money laundering such as narcotrafficking, human smuggling, and illegal wildlife trafficking.

Dealing With Suspicious Behavior

Dealing With Suspicious Behavior And Filing Suspicious Activity Reports

In most countries, the reporting of suspicious activity takes place via the submission of a suspicious activity report, or SAR, which is a document sent by an organization to the appropriate authority, according to compliance regulations.

The purpose of a SAR is to report known or suspected violations of law OR suspicious activity observed by organizations to the local financial intelligence unit or FIU. There does not have to be a direct connection to a predicate offense. That is for law enforcement to determine. One may not be able to link a SAR to illegal wildlife trade but only to an unusual behavior or specific risk indicators that might suggest illegal wildlife trade.

But why do SARs need to be filed? Financial institutions are in a unique position with direct access to customers and transactions. This knowledge of customers and transactions are a crucial information source for law enforcement. The information from a SAR can initiate investigations, help with existing intelligence, and can provide a missing piece in broader investigation relating to illegal wildlife crime.

The procedure for submitting SARs varies by region, but most nations have switched to an electronic system to standardize the process and increase efficiency.

For example, in the United States, a suspicious activity report must be sent to the so-called Financial Crimes Enforcement Network using an e-filing system. Employees should fill out an online form, stating several pertinent factors such as transaction dates and the names of people involved and give a written explanation of the suspicious behavior to file a SAR. In contrary, in the United Kingdom, SARs can still be filed in paper format.

Financial Investigations

Financial investigations are an integral part of law enforcement’s attempts to uncover and convict money laundering. In many regions, the volume of investigations into wildlife trafficking crimes does not correspond to the magnitude, cross-border nature, or volume of revenues involved with these crimes. Without a comprehensive legislative framework for investigating, prosecuting, and sanctioning illicit wildlife traffickers, syndicates, and related money launderers, successful investigations cannot be conducted.

Although significant development has happened in current years for improving wildlife crime legislation, legal loopholes remain to represent a difficulty in combating cash flows connected to illegal wildlife trade. Gaps in wildlife crime laws may affect the money laundering offense’s application, the ability to seize associated funds and instruments, and the employment of specific investigative techniques. 

Financial Gain

Financial gain motivates illicit wildlife trafficking. Due to this reason, depriving criminals of the earnings of their crimes as well as the means to conduct more crimes is one of the most effective strategies to counteract illegal wildlife trade. Hunting tools and animals, arms, vehicles, and equipment are a good example. Identifying, freezing, seizing, and confiscating related assets should be a top focus for authorities investigating wildlife crime.

When working on the illegal wildlife trade, it is vital to utterly understand the illicit supply chain, its actors, the true drivers and facilitators, and the pressure points that need to be identified to intervene and stop the trafficking. Investigation authorities and law enforcement agencies should perform their duties with diligence to identify the culprits which would help in the prevention of illegal wildlife trade. Illegal wildlife trade will only be prevented when all the officials, both at the local and international level, put collective efforts into keeping a check on each stage involves in the process.

Final Thoughts

When a financial institution notices suspicious activity in an account, it files a SAR. The report is then submitted to the FinCEN, which will conduct an investigation into the incident. FinCEN is a branch of the U.S. Treasury. The financial institution has the responsibility to file a report within 30 days regarding any account activity they deem to be suspicious or out of the ordinary. If more evidence is needed, an extension of no more than 60 days may be obtained. The institution does not require proof of a crime having occurred. The client is not notified that a SAR has been filed on their behalf.