FIU: Put limit on cash transactions » EntornoInteligente

FIU: Put limit on cash transactions /

The re­port, which cov­ers the pe­ri­od from Oc­to­ber 1, 2019, to Sep­tem­ber 30, 2020, saw a record num­ber of sus­pect fi­nan­cial trans­ac­tions re­ports to the FIU

The change over in the $100 notes from cot­ton to poly­mer led to a huge in­crease in the amount of sus­pi­cious trans­ac­tions re­port­ed to the Fi­nan­cial In­tel­li­gence Unit of Trinidad and To­ba­go (FI­UTT) and shows the need for changes in the leg­is­la­tion to lim­it cash trans­ac­tions.

Act­ing Di­rec­tor of the Fi­nan­cial In­tel­li­gence Unit’s Nigel Stod­dard said in the FI­UTT An­nu­al Re­port that last year’s de­mon­eti­sa­tion process in­creased the need for the in­tro­duc­tion of new reg­u­la­tions con­cern­ing busi­ness trans­ac­tions in­volv­ing sig­nif­i­cant amounts of cash.

“It is ev­i­dent, that com­ing out of the de­mon­eti­sa­tion ex­er­cise, the amount of cash ex­changed or at­tempt­ed to be ex­changed, lacked trans­paren­cy in cer­tain in­stances to prop­er­ly iden­ti­fy their source of funds,” he said, “There­fore, such cash-in­ten­sive en­vi­ron­ments in­crease the risk of mon­ey laun­der­ing and fa­cil­i­tate crim­i­nal con­duct. Thus, the FI­UTT con­tin­ues to rec­om­mend that the au­thor­i­ties give se­ri­ous con­sid­er­a­tion to in­tro­duc­ing some form of cash thresh­old when con­duct­ing busi­ness trans­ac­tions.”

The fact that the de­mon­eti­sa­tion process fea­tured sig­nif­i­cant­ly in re­ports to the FIU was al­so ac­knowl­edged by Min­is­ter of Fi­nance Colm Im­bert as he ad­dressed the Par­lia­ment in March.

Dur­ing his ad­dress to the Par­lia­ment, Im­bert re­vealed the vast ma­jor­i­ty of re­ports to the FIU were con­nect­ed to tax eva­sion and mon­ey laun­der­ing.

The most com­mon sus­pect­ed crim­i­nal con­duct were tax eva­sion (539), mon­ey laun­der­ing (530), sus­pi­cious fi­nan­cial ac­tiv­i­ty (401), fraud (205) and drug traf­fick­ing (92). These five sus­pect­ed crim­i­nal con­duct ac­count­ed for 97 per cent of the to­tal num­ber of Sus­pi­cious Trans­ac­tion Re­ports/Sus­pi­cious Ac­tiv­i­ty Re­ports sub­mit­ted and 99.89 per cent of the to­tal mon­e­tary val­ue of all Sus­pi­cious Trans­ac­tion Re­ports/Sus­pi­cious Ac­tiv­i­ty Re­ports sub­mit­ted,” the Fi­nance Min­is­ter said in his state­ment to the Par­lia­ment.

Al­most a year af­ter the in­tro­duc­tion of the new poly­mer $100 notes, in­stances of sus­pi­cious trans­ac­tions re­lat­ed to the old cot­ton note con­tin­ued to be re­port­ed to the FI­UTT.

The re­port, which cov­ers the pe­ri­od from Oc­to­ber 1, 2019, to Sep­tem­ber 30, 2020, saw a record num­ber of sus­pect fi­nan­cial trans­ac­tions re­ports to the FIU.

Stod­dard said, “At the op­er­a­tional lev­el, the FI­UTT re­ceived more STRs/SARs in this re­port­ing year, in­deed the most it has re­ceived through­out its ten years’ ex­is­tence. The FI­UTT re­ceived a to­tal of 1,831 STRs/SARs which rep­re­sent­ed a sig­nif­i­cant in­crease of 80 perc cent over the 1,019 STRs/SARs re­ceived in the pre­vi­ous re­port­ing pe­ri­od.”

These 1831 re­ports amount­ed to al­most $27 bil­lion dol­lars in shod­dy trans­ac­tions.

He di­rect­ly con­nect­ed this in­crease of re­ports to the change of the blue note, as over two fifths of the re­ports record­ed dur­ing that pe­ri­od were con­nect­ed to the changeover.

The new poly­mer note was in­tro­duced on De­cem­ber 9, 2019 while the old $100 bill of­fi­cial­ly lost val­ue as of Jan­u­ary 1, 2020. The new notes were hasti­ly in­tro­duced as a na­tion­al se­cu­ri­ty mea­sure.

Cit­i­zens were then giv­en un­til March 30, 2020 to ex­change the old notes with a grace pe­ri­od giv­en to na­tion­als who could prove they were out of the coun­try and un­able to present their notes for ex­change by the dead­line.

The in­crease in STRs/SARS sub­mis­sions can be pri­mar­i­ly as­so­ci­at­ed with the de­mon­eti­sa­tion of the cot­ton-based one-hun­dred-dol­lar bill process. 750 STRs/SARs or 41 per cent were re­ceived which were re­lat­ed to the de­mon­eti­sa­tion process. It must be not­ed, the FI­UTT is cur­rent­ly still re­ceiv­ing STRs/SARs from Re­port­ing En­ti­ties re­lat­ed to the de­mon­eti­sa­tion process,” he said.

The re­port re­vealed that the num­ber of mon­ey laun­der­ing re­ports al­most dou­bled last year, as 286 in­stances of mon­ey laun­der­ing were brought be­fore the FIU the year pri­or. This rep­re­sent­ed a 185 per cent in­crease.

While there was an in­crease in re­ports, the FIU al­so record­ed an in­crease in the num­ber of sus­pi­cious trans­ac­tions stopped by re­port­ing en­ti­ties with 314 in 2020 com­pared to 86 in 2019.

Not sur­pris­ing­ly, the emer­gence of sev­er­al “sou sous” last year be­came a top­ic with­in the re­port as they were sev­er­al in­stances of fraud­u­lent ac­tiv­i­ty con­nect­ed to these arrange­ments, which be­came more and more preva­lent from mid-2020 with many at­tract­ed to the high pay­outs promised par­tic­u­lar­ly in the midst of em­ploy­ment un­cer­tain­ty prompt­ed by the pan­dem­ic.

The re­port ac­knowl­edged the in­creas­ing preva­lence of on­line scams and the ponzi/pyra­mid scheme phe­nom­e­non’ as it stat­ed, “There was al­so a not­ed in­crease in the in­ci­dence of ponzi/pyra­mid schemes be­ing op­er­at­ed un­der the guise of “non-tra­di­tion­al sou-sou” and op­er­at­ed as “in­vest­ments” schemes with the names of “Bless­ing Loom”, “Giv­ing Cir­cle” and “Bless­ing Bank” to name a few. “

Ac­cord­ing to the FIU, there were sev­er­al ro­mance scams tak­ing place, where­by in­di­vid­u­als were be­ing lured in­to pur­port­ed “re­la­tion­ships” so as to de­fraud them. This the re­port said, be­came more preva­lent as more peo­ple turned to so­cial me­dia in the pan­dem­ic.

The FIU an­nu­al re­port al­so ac­knowl­edged a 215 per cent in­crease in Sus­pi­cious Trans­ac­tion/Sus­pi­cious Ac­tiv­i­ty Re­ports (STR/SAR) sub­mis­sions by Re­port­ing En­ti­ties, ris­ing to 1516 com­pared to the 482 re­port­ed a year pri­or.

Stod­dard not­ed that there was al­so an in­crease in the mon­e­tary val­ue of these re­ports.

The mon­e­tary val­ue of STR/SAR sub­mis­sions is TT$27,013,069,082; a dra­mat­ic in­crease from TT$1,777,596,583 in the pre­vi­ous re­port­ing pe­ri­od. The com­plet­ed sus­pi­cious trans­ac­tions ac­count­ed for 1,517 STRs/SARs with a mon­e­tary val­ue of TT$884,434,198. How­ev­er, the at­tempt­ed sus­pi­cious trans­ac­tions, which was on­ly 314 STRs/SARs had a mon­e­tary val­ue of TT$26,128,634,884, a 2,710 per cent in­crease over the pre­vi­ous re­port­ing pe­ri­od,” said the FIU’s act­ing di­rec­tor.

He ex­plained, “While the num­ber of at­tempt­ed sus­pi­cious trans­ac­tions is sig­nif­i­cant­ly less than the com­plet­ed sus­pi­cious trans­ac­tions as stat­ed above, the main rea­son for the TT$26 Bil­lion in at­tempt­ed sus­pi­cious trans­ac­tions are cus­tomers ap­proach­ing the Banks with sus­pect­ed fraud­u­lent con­tracts and pend­ing in­com­ing wire trans­fers. These ap­proach­es to the Banks by the cus­tomers are usu­al­ly based on emails re­ceived from un­known per­sons promis­ing huge fi­nan­cial gains in for­eign cur­ren­cies.”

Analy­sis of the fig­ures in­deed re­vealed that the vast ma­jor­i­ty of the sus­pi­cious trans­ac­tions in­deed were con­duct­ed in banks. 1289 of those flagged were record­ed in banks with 1057 of those trans­ac­tions ac­tu­al­ly be­ing com­plet­ed.

Cen­tral Trinidad (Ch­agua­nas/Cou­va/Cunu­pia) record­ed the high­est num­ber of sus­pi­cious trans­ac­tions for the pe­ri­od with 542, fol­lowed by Trinidad’s cities, Port of Spain with 432 and San Fer­nan­do with 411. North­ern Trinidad (Grand Bazaar to Ari­ma) ac­count­ed for 265 re­ports while West Trinidad tal­lied less than 100 re­ports with 98 while To­ba­go, East Trinidad (San­gre Grande, Ma­yaro and RIo Claro) and the South West penin­su­la ac­count­ed for 42, 24, and 17 re­ports re­spec­tive­ly.

Stod­dard said de­spite the COVID-19 pan­dem­ic, the FIU had made great strides in com­bat­ing mon­ey laun­der­ing, fi­nanc­ing of ter­ror­ism and pro­lif­er­a­tion fi­nanc­ing. The FIU said this helped achieve Trinidad and To­ba­go’s re­moval from the Fi­nan­cial Ac­tion Task Force’s “grey list” of coun­tries which re­quired in­creased mon­i­tor­ing.

Stod­dard said FI­U­Con­nect, which al­lowed en­ti­ties to sub­mit re­ports around the clock, con­tributed great­ly to the im­ple­men­ta­tion of an­ti-mon­ey laun­der­ing and counter ter­ror­ism fi­nanc­ing mea­sures.

How­ev­er Stod­dard not­ed that there were few­er re­quests from law en­force­ment to in­ves­ti­gate in­stances of Mon­ey Laun­der­ing and Fi­nanc­ing of Ter­ror­ism

The FI­UTT re­ceived 184 re­quests for fi­nan­cial in­tel­li­gence on 598 sub­jects from Law En­force­ment Au­thor­i­ties (LEAs) in 2020, as com­pared to the 221 re­quests on 636 sub­jects that were re­ceived in the pre­vi­ous re­port­ing pe­ri­od. This rep­re­sents a 17 per cent de­crease in the num­ber of re­quests for in­ves­ti­ga­tions in­to Mon­ey Laun­der­ing (ML)/Fi­nanc­ing of Ter­ror­ism (FT) and oth­er crim­i­nal con­duct,” Stod­dard said.

How­ev­er when the FIU was called in by law en­force­ment, cash seizures re­lat­ing to mon­ey laun­der­ing, was the most com­mon rea­son with 61 in­stances.

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