Financial Sector Assessment

Financial Intelligence Units

Financial Intelligence Units (FIU) constitute a key element in policies to counter finan­cial crime and money laundering. FIU is a national agency that receives, analyzes, and dis­
seminates to competent authorities the particular financial information and intelligence concerning suspected proceeds of crime or other disclosures required by national laws and regulation/ With some variation among jurisdictions, FIUs are statutorily empowered to receive a wide variety of financial information from diverse sources. These sources may include reports by financial institutions of suspicious or unusual transactions—as deter­mined by financial institutions—of some or even all offshore wire transactions or of large cash transactions. FIUs also typically have access to information not only from other domestic governmental sources, including those administering customs, tax, pension, and criminal laws but also from foreign FIUs. A key task of FIUs is to analyze this informa­tion (along with information publicly available) to uncover leads on possible financial crime for use in investigations or inquiries conducted by domestic (and often foreign) law enforcement and financial institution regulatory agencies.

Establishment of an FIU is one of the key standards of the FATF, a prerequisite for an effective regime that reports suspicious transactions and for the detection and prevention of money laundering and terrorist financing. Intelligence gathered and disclosed to law enforcement’s and financial institutions’ regulatory agencies can also assist in investiga­tions on or inquiries into potential predicate crimes, including financial crimes. Because FIUs provide a central gathering point for analyzing a broad range of domestic and foreign financial information, they may be particularly effective at uncovering patterns among large numbers of complex financial transactions that point to a possible financial crime. For example, reports of many FATF member countries conclude that a majority of the financial information received and analyzed by their FIUs does not point to pos­sible money laundering but, rather, to fraud against the financial institutions themselves, including wire and check fraud, credit card fraud, loan fraud, and embezzlement.

FIUs have far greater access than do individual financial institutions to relevant data. For example, FIUs can track suspicious transaction reports from all financial institutions that are required to make such reports and can seek additional information from gov­ernmental and other sources with respect to those transactions. In addition, FIUs often develop special expertise to identify patterns among transactions (e. g., offshore wire trans­fers) that suggest possible laundering or terrorist financing. Combinations of informa­tion gleaned in those ways can sometimes uncover complex schemes. If the transactions involve multiple jurisdictions, the ability to share information internationally among FIUs also becomes more important.