Laxmi Capital News
Suspicious transaction reporting by financial institutions falls

Thenumber of suspicious transaction reporting (STR) by financial and otherreporting institutions has declined significantly in the last fiscal year --FY2016/17. 

Accordingto the data of Financial Information Unit (FIU) at the Nepal Rastra Bank (NRB),the number of STRs that the unit received in the last Fiscal Year 2016/17 fellto 1,053 from 1,589 in the previous Fiscal Year 2015/16. 

Thenumber of STRs in FY2015/16 was higher than the number of STRs that the FIU hadreceived in previous fiscal years.

STRsare detailed information about transactions that are or appear to besuspicious, helping the FIU to identify individuals, groups and organizationsinvolved in fraud, terrorist financing, money laundering and othercrimes. 

All BFIs,  money-changers and remitters, cooperatives, insurancecompanies, and securities  business persons and  designatednon-financial business and professions like dealers  of  precious stones  and  metals,  casinos,  independent accountants  and  legal professional,  notary public,trust and company service providers,  designated government agencies suchas the Office of the Company Registrar, Land Revenue Offices and Department ofCustoms, among others, are legally obliged to report suspicious transactions tothe FIU.

FIUrequires reporting of all actual or attempted transactions, if the reportingentity has reasonable grounds  to  suspect that the  money/asset is  generated  from  or  related  to  moneylaundering, terrorist financing, or other  offences  and illegalactivities. It may also include the transactions that are large, complex,unusual, legally or economically impossible, or discordant.

Accordingto the report of the FIU, the top reporting sector for FY2016/17 remainedbanking sector. The criminality  most commonly  reported  in STRs  during  FY2016/17  was tax  evasion, followed by misuse of payment  products.

FIUhas attributed the decline in the number of STRs to the fact that the reportingentities have learned to scrutinize and submit only genuinely suspiciousactivities. 

“Thenumbers of STRs appear to decrease this year. This is mainly due to thesubmission of quality STRs from the reporting entities,” added thereport. 

Outof the total STRs, the FIU has said that it forwarded 391 cases to the investigatingagencies. According to the report, it disseminated 174 cases related to taxevasion to the Department of Revenue Investigation, 124 to Nepal Police andCentral Investigation Bureau, 39 cases to Department of Money LaunderingInvestigation, and 37 cases to other regulator and supervisor. Similarly, ninecases have been disseminated to the Commission for the Investigation of Abuseof Authority (CIAA) and eight cases to Inland Revenue Department

Accordingto the FIU, an STR converted into intelligence by adding value is disseminatedto respective investigating agencies as per their mandate and nature of thecase.

Source:MyRepublica 28th Feb 2018

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