3??0??-day Knowledge-Sharing Series-FATF 4??0??Recommendations??-Day 2??5?? Recommendation2??9?? : Financial Intelligence Units

Countries should establish a financial intelligence unit (FIU) that serves as a national centre for the receipt and analysis of: (a) suspicious transaction reports; and (b) other information relevant to money laundering, associated predicate offences and terrorist financing, and for the dissemination of the results of that analysis. The FIU should be able to obtain additional information from reporting entities and should have access on a timely basis to the financial administrative and law enforcement information that it requires to undertake its functions properly.

The FIU serves as the central agency for the receipt of disclosures filed by reporting entities. At a minimum, this information should include suspicious transaction reports, as required by Recommendation 20 and 23 and it should include other information as required by national legislation (such as cash transaction reports, wire transfers reports and other threshold-based declarations/disclosures).

FIU analysis should add value to the information received and held by the FIU. While all the information should be considered, the analysis may focus either on each single disclosure received or on appropriate selected information, depending on the type and volume of the disclosures received, and on the expected use after dissemination. FIUs should be encouraged to use analytical software to process information more efficiently and assist in establishing relevant links. However, such tools cannot fully replace the human judgement element of analysis. FIUs should conduct the following types of analysis:

Operational analysis uses available and obtainable information to identify specific targets (e.g. persons, assets, criminal networks and associations), to follow the trail of particular activities or transactions, and to determine links between those targets and possible proceeds of crime, money laundering, predicate offences or terrorist financing.

Strategic analysis uses available and obtainable information, including data that may be provided by other competent authorities, to identify money laundering and terrorist financing related trends and patterns. This information is then also used by the FIU or other state entities in order to determine money laundering and terrorist financing related threats and vulnerabilities. Strategic analysis may also help establish policies and goals for the FIU, or more broadly for other entities within the AML/CFT regime.

The FIU should be able to disseminate, spontaneously and upon request, information and the results of its analysis to relevant competent authorities. Dedicated, secure and protected channels should be used for the dissemination.

The FIU should be able to disseminate information and the results of its analysis to competent authorities when there are grounds to suspect money laundering, predicate offences or terrorist financing. Based on the FIU’s analysis, the dissemination of information should be selective and allow the recipient authorities to focus on relevant cases/information.

Etc.

Countries should ensure that the FIU has regard to the Egmont Group Statement of Purpose and its Principles for Information Exchange Between Financial Intelligence Units for Money Laundering and Terrorism Financing Cases (these documents set out important guidance concerning the role and functions of FIUs, and the mechanisms for exchanging information between FIUs). The FIU should apply for membership in the Egmont Group.

The?Nigeria Financial Intelligence Unit?(NFIU) was established in 2004 as the Nigeria’s FIU and is tasked with the responsibility of gathering, analyzing and disseminating financial intelligence to support the fight against money laundering, terrorist/proliferation financing and other financial crimes in the country.

The establishment of the NFIU is based on global standards that promote effective implementation of legal, regulatory, and operational measures to combat money laundering, terrorist and proliferation financing as outlined in the Financial Action Task Force (FATF) 40 Recommendations.

It is a member of the?Egmont Group, an international network of financial intelligence units and it regularly exchanges information and intelligence with other members of the group.

Insights/Practical Tips to effectively apply this recommendation?? ? Keys: ??Expectations??Actions??Tips??Examples

??Establish and Maintain a Functional FIU

??Countries create an Independent FIU and ensure the FIU operates independently from law enforcement and other agencies and allocate adequate financial and human resources to the FIU for effective functioning.

??Countries implement legal frameworks guaranteeing the FIU’s independence from external influence and secure consistent funding to support the FIU’s operations and technological needs.

??FIs engage with the FIU as required and provide timely and accurate while familiarizing themselves with the FIU’s procedures and requirements to facilitate smooth interactions.

??FIU A operates as an independent FIU with dedicated resources for financial intelligence and Bank A regularly submits detailed reports to the FIU and follows its guidelines for reporting suspicious activities.

??Ensure the FIU is Competent and Effective

??Relevant authorities provide ongoing training to FIU staff on AML/CFT/CPF regulations and emerging threats and utilize state-of-the-art technology for data analysis and intelligence gathering.

??Countries allocate resources for continuous professional development of FIU personnel and invest in advanced software and tools to enhance the FIU’s analytical capabilities.

??FIs keep abreast of the latest AML/CFT/CPF developments to ensure effective cooperation with the FIU and leverage the use of technology to streamline the reporting process and improve data accuracy.

??FIU B uses sophisticated technology and ongoing training programs to enhance its effectiveness and Bank B integrates its systems with the FIU’s technology to improve data sharing and reporting efficiency.

??Facilitate Effective Information Sharing

??FIUs establish secure and efficient channels for sharing financial intelligence with domestic and international counterparts and encourage collaboration between the FIU and other relevant agencies such as law enforcement and regulatory bodies.

??Countries create legal and operational frameworks that facilitate timely information exchange and promote cross-border intelligence sharing.

??FIs follow procedures for information sharing as outlined by the FIU and other regulatory bodies.

??FIs work with other FIs/OFIs and the FIU to address complex cases and share insights.

??FIU C actively participates in global intelligence-sharing networks and Bank C shares relevant data with FIU and other international FIUs to support global AML/CFT/CPF efforts.

??Ensure Confidentiality and Protection of Information

??Relevant authorities to establish documented procedure to protect sensitive information handled by the FIU and ensure that all data is securely managed and protected from unauthorized access or breaches.

??Relevant authorities implement and enforce laws to safeguard the confidentiality of information handled by the FIU and conduct regular security audits to prevent data breaches and ensure robust protection.

??FIs adhere to confidentiality agreements and protocols when dealing with the FIU and notify relevant authorities immediately if there are any breaches of confidentiality.

??Country D has strict data protection laws that govern the confidentiality of financial intelligence managed by its FIU.

??Ensure Adequate Legal Authority and Mandate

??Relevant authorities ensure that the FIU has clear legal authority to access information, analyze data, and disseminate financial intelligence as needed and clearly define the FIU’s mandate in law to include roles such as receiving, analyzing and disseminating suspicious transaction/activity reports.

??FIs familiarize themselves with the FIU’s legal authority and mandate to ensure compliance with its requirements.

?? Country E has well-defined legal powers and a mandate under the Money Laundering Act, Proceeds of Crime Act and Terrorist Financing Act and Bank E ensures its reporting processes align with the legal requirements of filing STRs within 24 Hours.

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??Promote Public Awareness and Understanding

??Relevant authorities to implement public awareness campaigns to educate stakeholders about the role of the FIU and its significance in combating financial crime and offer clear guidance and resources to FIs and the public on how to interact with the FIU.

??FIUs involve various stakeholders, including FIs and the public in awareness initiatives about the FIU’s functions and reporting channels

??FIUs regularly update educational materials and resources to reflect current practices and changes in the regulatory environment.

??FIs engage in and support public awareness initiatives related to the FIU’s role and provide training for staff on how to interact with the FIU and understand its functions.

??FIU F runs awareness campaigns and provides detailed guidelines to help the public and businesses understand its role and Bank F participates in FIU’s public education initiatives and uses the provided resources to train its employees.

R. 2??9?? ?underscores the critical role of Financial Intelligence Units in combating money laundering, terrorist/proliferation financing and other financial crimes. By emphasizing the need for FIUs to be operationally independent, adequately resourced and effectively engaged in international cooperation, FATF aims to fortify the global financial system's integrity.

For countries to meet these standards, it's essential to continuously strengthen FIUs' capacities, ensure seamless information exchange and support their important role in the financial crime prevention ecosystem.

?#FATFRecommendations #30DaysKSS #Day2??5?? #Recommendation29

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