Reporting of suspicious transactions

Every reputable offshore bank has not only to properly identify its customers, but also to follow their financial transactions. If transactions exceed particular limits or become unusual or unusually related to higher-risk businesses, for example, casinos, trading of precisious metals and stones, they are to be reported.

Major part of these requirements is described in paragraphs 13-16 of FATF 40 Recommendations.

These requirements are adapted to local situation in each offshore jurisdiction, but every offshore banking jurisdiction has detailed laws and instructions that describe the way the bank should monitor financial transactions, the cases some additional information should be required from the customer as well as the threshold for rising red flags and reporting about suspicios transaction to the appropriate authorithy. There is an established special authorithy where offshore bank should report about suspicious financial transactions in each offshore jurisdiction.

Reporting does not always mean that the customer has made some illegal activity, however, the task of the special authority to make sure that a suspicious transaction is related to money laundering and to do it with the help of the bank.

As regards reporting criteria, this is where the bigger difference between offshore jurisdictions emerges. No jurisdiction will tolerate financial transaction linked with drug trafficking, terrorism or human trafficking, nevertheless, some jurisdictions take tax-related law violations more tolerantly than the others.