Former director of the Financial Intelligence Unit (FIU) David West has raised red flags about the $354,471,532 million in suspicious transactions reported by the FIU in its 2015 report, which was tabled in the Senate on Tuesday.
West described the $334 million as “alarmingly small” compared to the $698 million of suspicious transactions recorded by the FIU in 2014.
Between 2014 and 2015 there was a decline of $344 million in suspicious transactions.
The report is dated October 2014 to September 2015.
“I would have expected the figure (suspicious transactions) to increase. It should have exceeded $698 million. It is alarming that it has gone down...that means that something is not too right in the SARs (Suspicious Activity Report) that have been submitted to the FIU. People are not disclosing the proper value of the Suspicious Transaction Report (STR)...they are under-reporting,” West said, in giving an analysis of the report.
SARs and STRs are reported to the FIU by reporting entities and voluntarily by the public.
In light of this new development, the FIU in response to questions by the Sunday Guardian on Friday recommended that the Government “give serious consideration to instituting cash transaction limits on all goods and services including revenue collection at government offices” since “cash is the mainstay of criminal transactions.”
The FIU is a specialised intelligence gathering unit. It receives reports of suspicious transactions and activities from financial institutions and certain business sectors. It analyses this information with other information from various sources and produces an intelligence report, which is sent to law enforcement agencies to investigate.
Money laundering the suspected offence in majority of STRs/SARs received
The report disclosed that money laundering was again the suspected offence in the majority of STRs/SARs received.
The FIU explained that any cash-intensive environment has the ability to foster a lack of transparency in transactions and facilitate criminal activities.
“Criminals are always probing the safeguards in place to exploit vulnerabilities to launder or finance terrorism,” the FIU stated.
While expressing concerns about the decrease, the FIU stated that “one has to bear in mind these are suspicious transactions (and) not transactions of confirmed wrongdoing. If there is an actual decrease and not under-reporting of such transactions that will be good news for the country. Our main concern is the low dollar value of STRs/SARs reported.” the FIU stated.
The report showed that there were 152 completed money laundering STRs/SARs banks submissions valued $191,813,131.
It also showed there were 20 attempted money laundering transactions valued at $76,704,684.
In 2014, the FIU received 617 STRs/SARs with a monetary value of $698 million, while last year 609 STRs/SARs with a monetary value of $354 million were recorded.
“The analysis (2015 report) shows 523 of the STRs/SARs submitted had monetary values under $100,000, 40 STRs/SARs had values of under $1 million and only 46 STRs/SARs had monetary values above $1 million. From 2010 to 2014 we have seen an increase in both the number of STRs/SARs and the monetary value of those STRs/SARs,” the FIU stated.
For 2015, the STRs/SARs decreased by eight, but the total monetary value decreased by $344 million or 49 per cent.
Of the 609 STRs/SARs submitted, 566 were completed transactions with a monetary value of $272,802,553 and 43 were
attempted transactions with a monetary value of $81,668,979.
At least 55 per cent of the 609 STRs/SARs submitted involved cash transactions.
For the period 2010 to 2015, the FIU has received 2,552 STRs/SARs from all reporting entities.
In giving a breakdown of the 609 STRs/SARs reports that were submitted, the report revealed:
• 216- tax evasion
• 81-fraud matters
• 67-money laundering
• 78-drug trafficking
• 16-financing of terrorism
• 134-suspicious activity.
Majority of reports came from San Juan/Barataria/PoS
The majority of the STRs/SARs were reported from San Juan, Barataria and Port-of-Spain followed by San Fernando.
Categorizing the STRs/SARs by occupation/profession, it showed that 126 people who worked as bankers, teachers, senior company officials and consultants were reported for suspicious transactions.
The next largest were business traders who accounted for 82 people, followed by 63 skilled workers, while there were five people in politics or as they referred to it, politically exposed people.
Over the period, 2011 to 2015, the total monetary value of transactions reported as suspicious was approximately $3.7 billion.
Susan Francois, in her statement as director of the FIU’s report, also expressed worry over the “possible under-reporting of the actual dollar amount of the suspected transaction or activity.”
She explained that the FIU had initiated steps to verify the actual monetary value involved in the suspicious transaction or activity recorded in the STRs/SARs, and if required would give instructions on the corrective action to be taken.
“In this reporting period, the FIU prioritised compliance monitoring and enforcement. More resources were deployed to increase the number of compliance examinations, to test supervised entities’ implementation of their AML (Anti Money Laundering/ Counter Financing of Terrorism (CFT) obligations. Directives were issued to several entities for failure to rectify AML/CFT deficiencies identified at the compliance examination,” Francois said.
Francois stated that analysis also revealed that the number of reports of financial transactions suspected of being linked to terrorism had tripled over the past year.
During this reporting period, the number of terrorism-related STRs/SARs jumped from five in 2014 to 16 in 2015.
The FIU in response to one question by the Sunday Guardian admitted that there was need to strengthen their analytical resources, due to an increase in complex money laundering and financing of terrorism cases, while they pleaded with Government to re-examine the FIU’s legal structure.
In the FIU’s six years in operation, eight people were charged for money laundering and fraud by the Financial Investigations Branch of the T&T Police Service under the Proceeds of Crime Act and the Anti-Terrorism Act.
These matters are still before the magistrates courts.
The fact that no one has been prosecuted in T&T, West said, could “weigh heavily on us” and have a negative effect on the country.
“That is one of the key areas that the Financial Action Task Force looks for.”
West said what the FIU needed was an accountant in the FIB (Financial Investigation Branch) and “foreign experts to properly train police officers.”
He said while members of the T&T Police Service have been attending courses to investigate white collar crime, financing of terrorism and corruption, they needed to work alongside skilled and trained individuals.
He said nobody in T&T has the “wherewithal” to unearth fraudulent activities.
West believes that the FIU’s model was wrong.
“The FIU has an administrative type model when they should have a hybrid type model.”
On Friday, Attorney General Faris Al-Rawi did not respond to a text message by the Sunday Guardian.