NSF by niusheng11


									     Credit Union
 National Supervisors

  Revenue Commissioners

Suspicious Transactions Reports

       7th November 2010

         Gerry Conway
 Money Laundering Act 2010

Section 6: Definition of “criminal conduct
Section 7: The Offence of Money Laundering
Section 47: “Disclosure of Information not to be
treated as a breach of any restriction imposed by
any other law”
Section 49: “Designated person should not “tip
off” the subject of a report”
Section 54: “Obligation to monitor transactions
and activities of customers”
Section 55: “Keeping of Records – 5 Year Rule”
  Money Laundering Act 2010

Section 42: “Reporting Suspicious Transactions”
     - Garda Siochana AND
     - Revenue Commissioners

Report to include:
    - Information regarding suspicion
    - Identity of person
    - Whereabouts of property (share account)
    - Any other relevant information
  Revenue Approach to STRs
Accept STR only reflects a suspicion of
criminality/tax evasion
STRs used by Revenue for intelligence
Gardai deal with criminality & money
Revenue deal with tax/duty/evasion, fraud,
CAB involved in appropriate cases
Confidentiality - filing of STR not disclosed
Documents retained securely
                STR Use
Identifying cases to be considered for
possible prosecution
Identifying persons outside the tax net (black
Identifying cases for further tax and customs
enquiries, audits and investigations
Ensuring compliance with Revenue
Debt Management
Sectoral Profiling
          Revenue Powers

Section 906A TCA 1997
Information to be furnished by Financial
Institution (Revenue Commissioner approval)

Section 908A TCA 1997
As 906A but in prosecution cases (District Court)

Attachment Orders

Enforcement Orders
          Risk Analysis of STRs
2009                  2010

Risk A+    37 (9%)    Risk A+    45 (7%)

Risk A     49 (12%)   Risk A    110 (17%)

Risk B    138 (32%)   Risk B    196 (30%)

Risk C    193 (45%)   Risk C    299 (46%)

Risk D     10 (2%)    Risk D      0 (0%)
    Risk Assessment Tools

Transaction Amount
Turnover Amount
Employer/Self Employed/Director
    - control of business funds
Local knowledge of member
Number of suspicious transactions
Most important – Information
          Wider Interests

Dept. of Social Welfare
Criminal Assets Bureau
Financial Regulator
New Regulators – Non financial
Airport + Port – Intelligence and

Over 80,000 STRs received since May 2003
30 facilitating criminal prosecutions (Tax)
25 facilitating criminal investigations
450 referred to CAB and Special
2,000 being used in Audit and Compliance
400 cases settled with €52m tax uplift
Settlements ranging from €3.5m to €523
Top Revenue Settlements from STRs

       Case 1     €3,500,000
       Case 2     €2,300,000
       Case 3     €2,000,000
       Case 4     €2,000,000
       Case 5     €2,000,000
       Case 6     €1,000,000
       Case 7     € 945,355
       Case 8     € 900,000
       Case 9     € 879,130
       Case 10    € 803,520
Number of STRs Received from Credit
        Year                 Number

       2003                       0
       2004                     267
       2005                     709
       2006                     568
       2007                     454
       2008                     435
       2009                     427
       2010                     650 (to date)
Number of Credit Unions Reporting in 2010: 86
         Credit Union STRs
Always use the standard ML1 form
If hand written, writing should be clear and
Give full details of the individual including ID
used to open account
If a „child account‟ is being used by an adult
give details on the adult as well
Give as much detail as possible, including
amounts, dates, turnover for a period
If the lodgement is a cheque/draft give details
Very few Reports received on high investors
Restricted Access to STR information

Only experienced auditors investigate

Source of information never revealed

Duty of confidentiality standard practice in

Identified as Corporate Business Risk -
   Suspicious Activity Examples
3rd Party cheques (3rd Party Suspicion)
Sterling transactions
Lodging business funds to personal accounts
Irregular/missing lodgements
Early repayment of loans
Accounts in family/childrens‟ names
Accounts in false or varied names
Large cash lodgements
€500 notes – more detail of suspicion
Social Welfare Payments
Suspicious Activity Examples
  - Identity Problems
  - Knowledge of Customer
  - Statements made at counter
  - Cash transactions in property deals
    where known (including withdrawals)
  - Short period accounts
  - Unusual requests
  - Off-shore interests
       Under Reporting
Huge amount of reporting evident
Concern that in some instances STRs not
Published Cases: LR case
Settlement over €9m, 3 months in prison
STRs only came in post event
Early receipt of STRs would have short
circuited enquiries considerably
Monitoring: Auditors Reports and Press
Notice to Financial Regulator in some
    Supervisors Role ?
Section 58 Credit Union Act 1997. “A credit union
shall have a Supervisory Committee which shall
consist of three or five members and shall have the
general duty of overseeing the performance by the
directors of their functions”.
Role in ensuring that the Credit Union is complying
with policies and procedures regarding Money
Laundering and Terrorist Financing
Be vigilant when looking at member‟s accounts and
report any suspicions to the MLRO
Note there is an obligation to report to Revenue as
well as An Garda Siochána
Have you received your AML training?
         Case Example 1
STR confirmed individual lodging and
withdrawing large amounts of cash
Individual had not come to the attention of
Revenue before
Individual organised charitable events in
Ireland for American Foundation
In Audit did not disclose Credit Union Account
but did admit to having a Villa in Spain
Revenue advised that they would instigate
tax criminal proceedings against individual
   Case Example 1 contd.

Under caution admitted to having a Credit
Union Account and Villa in Spain
Books and Records and Computer seized
Prosecutor established via computer records
that individual had 3 properties in Spain and
had coerced American Foundation to lie for
Case being prepared for DPP
Payment on account received €450,000
         Case Example 2
Credit Union Report
Child Account opened (10 y.o.)
€66,000 lodged over 5 years
CU noticed funds withdrawn by a Ms. Smith
STR detail linked Ms. Smith with a Mr. Jones,
an electrician
Focus of attention switched to Mr. Jones
During audit, account disclosed
Mr Jones used child account to lodge
business funds
Settlement €141,500
         Case Example 3
Person operating Fast Food Outlet
Recently sold business
Capital Gains Tax due in relation to sale
Returning to homeland without paying tax
STR received in case
Person still had funds in investment products
in Ireland
Attachment Order issued to protect Tax,
Interest and Penalty due to Revenue of
        Case Example 4
STR received for a director of a company
Share account held in fictitious name
Investigation initiated
Initial denial of account followed by
Settlement calculated €418,728
6 months later a further STR received from an
insurance company stating that director is
making claim to funds held in another
fictitious account
Case reopened and a further €380,000 paid
to Revenue
         STRO Contact Details

Dermot O‟Connor     01 8277636
Gerry Conway        01 8277542
Mary Curtis         01 8277424

Revenue Commissioners,
Suspicious Transactions Reports Office,
3rd Floor Block D,
Navan Road,
Dublin 15.

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