Identifying Suspicious Transactions

A suspicious transaction may involve several factors that may seem individually insignificant, but together may raise suspicion that the transaction is related to the commission of a money laundering or terrorist offence. As a reporting person or entity, or an employee of a reporting person or entity, you should evaluate transactions in terms of what seems appropriate and is within normal practices in your particular line of business.

An assessment of suspicion should be based on a reasonable evaluation of relevant factors, including the knowledge of the customer’s business, financial history, background and behaviour. Remember that behaviour is suspicious, not people. Also, it could be the consideration of many factors, not just one factor, which will lead you to a conclusion that there are reasonable grounds to suspect that a transaction is related to the commission of a money laundering or terrorist offence. All circumstances surrounding a transaction should be reviewed. Please see Schedule A for examples of various indicators of suspicious transactions. As a reporting person or entity, you are not allowed to inform anyone, including the client, about the contents of a suspicious transaction report or even that you have made such a report. This applies whether or not such an investigation has begun. In addition, no criminal or civil proceedings may be brought against you for making a report in good faith concerning a suspicious transaction. There are penalties if you fail to meet the suspicious transaction reporting obligations.

Failure to report a suspicious transaction could lead to up to five years imprisonment, a fine of $2,000,000 or both. However, penalties for failing to report do not apply to employees who report suspicious transactions to their superior.