Giving the FIU High Priority

The report however identified constraints that the FIU has been facing, particularly the need for more resources and training for the analytical section arising from new tasks such as detailed strategic analysis linked to terrorism financing and from the increasing number of Suspicious Transaction Reports/ Suspicious Activity Reports (STRs/ SARs) being received. In addition, regarding the supervisory role, the report concluded that the scope of entities to be supervised exceeded the capacity of the FIU, which did not appear to have sufficient resources to properly carry out the regulatory and monitoring functions.

Legal constraints on the FIU’s supervisory powers were also identified as it is required to obtain consent from the owner of a business before an AML/CFT inspection can take place.

For this reporting period, the FIU received 739 suspicious transaction reports, which include both competed and attempted transactions, an increase of 21% over the last period. Submissions from the Banking sector increased from 185 to 284, almost 54%.

Submissions from Money Value Transfer Services and Private Members Clubs increased by 76% and 78% respectively compared to last year. For 2016, the FIU completed analysis on 533 STRs/ SARs and from this, generated 209 Intelligence Reports – 178 related to Money Laundering and 31 related to Financing Terrorism.

The total monetary value of the 739 STRs/SARs submitted to the FIU in 2016 was over TT$805 million, representing a 127% increase over 2015. For the period 2011-2016, the total monetary value of suspicious transactions reported was approximately TT$4.5 billion.

There has also been a steady increase in the number of attempted transactions reported over the period 2013-2016, accounting for almost 43% of the total value of STRs/SARs submitted. In its report, the FIU noted that cash continues to be widely used in suspicious activities – of the 739 STRs/SARs received in 2016 almost 50% involved cash transactions with a value of over TT$114 million.

Interestingly, analysis of the STRs/SARs submitted by profession showed that transactions conducted by business owners and company directors continued to account for the majority of suspicious transactions reported – 145 or almost 20%. Additionally, there was also an increase in the number of STRs/SARs involving law enforcement and security personnel as well as an increase in the number of Politically Exposed Persons reported for suspicious transactions.

For 2016, money laundering represented 23% of the suspected criminal activity, followed by fraud, accounting for 19% and drug trafficking at 16%. The FIU also identified an increase of human trafficking reports – this was the suspected offence in 15 STRs/ SARs.

There were two emerging trends identified in the FIU’s Report – wire transfers to jurisdictions suspected of involvement in human trafficking activities and the use of fraudulent certificates of insurance and false documentation to support claims arising from motor vehicle accidents.

A continuing trend is the use of bank accounts for lottery or employment fraud.

In this reporting year, the FIU took – for the first time - enforcement action against an entity for breaches of its obligations under the Financial Obligations Regulations (FOR).

In addition, the FIU took enforcement action against 114 entities who failed to comply with their obligation to register with the FIU and against 107 entities for failure to implement AML/ CFT legal obligations. In this year, seven persons were charged with money laundering, bringing the total to 16 persons so charged under the Proceeds of Crime Act since 2012.

The 4th Round Mutual Evaluation recognised that challenges which negatively impact the work of the FIU are the lack of resources, the need for training, and has further identified language as a barrier since the FIU now exchanges information more frequently outside of the jurisdiction.

The work of the FIU is clearly important and emphasis must be placed on ensuring that the FIU is properly staffed and trained in order to meet its mandate. Focus should be on the Analysis Division to cope with the steady increase in the number and complexity of STRs/SARs received, and the new FATF requirement for Intelligence at the strategic level to assist in law enforcement decision-making.

Additional staffing may also be considered for the Compliance Division as the entities to be supervised increased to 2288 in 2016.

It is apparent that legislative reform may also be necessary in order to ensure that the FIU remains able to keep up with the creative ways the criminal elements find to disguise the movement of illicit funds. The recommendations made by FATF should be a high priority if we ever want to control of these criminal activities and see more STRs/SARs translated to more convictions.