‘Increased criminality’ drove 6% suspect reporting growth


Tribune Business Editor


THE FINANCIAL Intelligence Unit (FIU) says the 5.7 percent increase in suspicious transaction (STR) and other reports received in 2021 was driven by “increased criminality” experienced during the COVID-19 pandemic.

The unit, which is responsible for analysing questionable financial dealings to determine whether a criminal offence is involved, said it received a new record high of 707 STRs last year representing a 6.63 percent year-over-year increase compared to 2020.

Its annual report, tabled in the House of Assembly yesterday, said the increase in its workload mirrored that faced by the Royal Bahamas Police Force and other law enforcement agencies worldwide. “The Financial Crimes Investigation Branch of the Royal Bahamas Police Force reported that in 2020 the unit investigated 519 financial crime-related matters,” the document said.

“These consisted of offences of fraud, stealing by reason of employment, stealing by reason of service, forged documents, failing to declare and proceeds of crime matters. For the year 2021, the Financial Crimes Investigation Branch received and investigated 571 matters, an increase of 10.02 percent. The Central Bank of The Bahamas reported in December 2021 that there was a four-fold increase in the number of frauds attempted during 2020.”

Suggesting that these trends drove the increase on STRs, inter-agency reports and foreign agency requests that it received in 2021 to 885, compared to 837 the year before, the FIU said increased awareness by all agencies involved in combating money laundering and terror financing would also have helped fuel the rise.

“There was also a substantial increase in submissions from one financial institution in reporting cases related to a trend peculiar to them, and this undoubtedly affected the numbers,” the FIU annual report said. “This risk was identified and mitigated after management of the FIU had meaningful dialogue with the regulator and the financial institution concerned.” The institution in question was not named.

STRs filed with the FIU breached the 700 mark for the first time in 2021 following a “steady increase” over the previous five years. This number compared to 663 in 2020, and was more than double or greater than a 100 percent increase when matched against the 306 filed in 2016.

“Of the 707 STRs filed, 86 percent were filed by banks, with 2 percent from casinos and 4 percent from trust companies, insurance companies and non-bank entities,” the FIU annual report said. “In 2021, the figures showed that the COVID-19 pandemic did not have a noticeable impact on the number of STRs that were filed by banks.

“Notwithstanding the increase in submissions by a particular institution, there was still a marked increase in submissions by others. STRs received from banks in 2021 represented a 5.6 percent increase over STRs received from banks in 2020.

“There was a slight decline in casino submissions from 18 in 2020 to 16 in 2021. Statistics also show a decrease in STRs from trust companies from 25 in 2020 to 11 in 2021, and an increase in submissions from insurance companies from one in 2020 to 11 in 2021.”

The FIU annual report added that there was a 166.7 percent jump in STRs submitted on the basis that cash transactions were involved, with the number increasing from 141 in 2020 to 376 last year. Yet there was also a 71.7 percent decrease in the number of STRs made because account activity was inconsistent with Know Your Customer requirements. These fell from 254 in 2020 to just 72 last year.

Fraud was the suspected criminal offence underlying most STRs. Such reports rose by 25.6 percent in 2021, growing from 325 to 411. “Criminality documented as corruption increased by 75 percent,” the FIU annual report added. “Tax matters, drugs, insider trading, bribery and regulatory matters were the next major criminality suspected identified.

“While most of the subjects of STRs were Bahamian nationals, the data shows that subjects were also from 32 other countries. There were 61 subjects for whom their country of citizenship was not provided.” Haitian nationals were second behind Bahamians as the subject of 25 STRs, while Americans accounted for 14 and Brazilians ten.


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