Office of the Auditor General of CanadaOAG reports published in the past are available through Publications.gc.ca.

2003 April Report of the Auditor General of Canada Exhibit 3.3—Examples of common indicators of suspicious transactions

2003 April Report of the Auditor General of Canada

April 2003 Report—Chapter 3

Exhibit 3.3—Examples of common indicators of suspicious transactions

Category

Description

Cash transactions

  • Client starts conducting frequent cash transactions in large amounts when this has not been a normal activity for the client in the past.
  • Client consistently makes cash transactions that are significantly below the reporting threshold amount in an apparent attempt to avoid triggering the requirements to identify and report these transactions.
  • Client makes cash transactions of consistently rounded-off large amounts (for example, $8,500 or $9,900).
  • Stated occupation of the client is not in keeping with the level or type of activity (for example, a student or an unemployed individual makes daily maximum cash withdrawals at multiple locations over a wide geographic area).

Economic purpose

  • Transaction involves non-profit or charitable organization for which there appears to be no logical economic purpose, or where there appears to be no link between the stated activity of the organization and the other parties in the transaction.
  • Transaction appears to be out-of-the-ordinary for industry practice or does not appear to be economically viable for the client (for example, taking a mortgage or a loan at a high rate of interest).

General

  • Client appears to have accounts with several financial institutions in one area for no apparent reason.
  • Client's home or business telephone number has been disconnected or there is no such number when an attempt is made to contact client shortly after opening account.
  • Client insists that a transaction be done quickly.

Identity documents

  • Client wants to establish identity using something other than his or her personal identification documents.
  • All identification presented is foreign or cannot be checked for some reason.
  • All identification documents presented appear new or have recent issue dates.

Knowledge of reporting or record-keeping requirements

  • Client attempts to convince employee not to complete any documents required to report the transaction.
  • Client has unusual knowledge of the law about reporting suspicious transactions.

Transactions involving accounts

  • Account with a large number of small cash deposits and a small number of large cash withdrawals.
  • Client frequently uses many deposit locations outside of the home branch location.
  • Dormant account containing a minimal sum is reactivated. Then the account suddenly receives a deposit or series of deposits. This is followed by frequent cash withdrawals until the transferred sum has been removed.
  • Multiple personal and business accounts are used to collect and then funnel funds to a small number of foreign beneficiaries. This is particularly suspicious when they are in locations of concern, such as countries known or suspected to assist in money-laundering activities.

Transactions involving areas outside Canada

  • Credit card issued by a foreign bank that does not operate in Canada is used by a client that does not live or work in the country where the card was issued.
  • Deposits followed within a short time by wire transfer of funds to or through certain locations. These countries are of concern because they are known or suspected to assist in money-laundering activities.

Transactions related to offshore business activity

  • Frequent requests for travellers' cheques, foreign currency drafts, or other negotiable instruments.
  • Transactions involving an offshore "shell" bank whose name may be very similar to the name of a major legitimate institution.
  • Unexplained electronic funds transfers by client on an in-and-out basis.

 

Source: Financial Transactions and Reports Analysis Centre of Canada Guideline 2: Suspicious Transactions May 9, 2002