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What is an FIU?
What is a Financial Intelligence Unit and what do they do? FIUs are jurisdictional intelligence units who collate SARs/STRs across a region, have analysis departments to make sense of the information and coordinate with law enforcement agencies to instigate executive action.
Financial Intelligence Unit
A jurisdictional intelligence organisation that coordinates SAR/STR information and produces intelligence from the raw information. In large countries they have regional offices dispersed across the country.
Communication between FIU’s:
- Participate in the Egmont Group
- Often based on an MOU
- Dedicated to obtaining intelligence that may lead to evidence (Use MLATS for evidence)
- Free exchange of information based on reciprocity
- Exchange of information should be informal and rapid
- Communication between FIUs should be direct without intermediaries
FIU Requests
An Overview:
- Most requests for financial intelligence via the FIU network are made in writing.
- The requesting FIU sends a request to another FIU, either by letter or by filling out a request form.
- Requests are transmitted either on paper or electronically.
- Some FIUs send requests to each other via secure networks, such as the Egmont Secure Web or, for European Union FIUs, FIU-NET.
- In urgent cases, FIUs will request information orally. If the receiving FIU accepts such a request, it will normally ask the requesting FIU to follow up with a request in writing.
- Information exchange internationally is a vital component in the fight against money laundering. It, however, relies on swift response. In some cases jurisdictions can be slow to respond and fail in their responsibilities internationally. FATF ‘inspect’ this in evaluations.
FATF recommendations for FIUs
Recommendation 29
- Countries should establish a FIU that serves as a national centre for the receipt and analysis of:
- STRs
- Information relevant to money laundering, associated predicate offences, and terrorist financing, and for the dissemination of the results of that analysis
Recommendation 30 & 31
- Responsible for conducting money laundering and terrorist financing investigations within national AML/CFT framework
- In major proceeds-generating offenses, develop a parallel financial investigation
- Trace, freeze and seize property from the proceeds of crime
- Access all necessary documents and information for the investigation
- Utilise suitable investigation techniques such as undercover operations, communication interception, accessing computer systems, etc.
FATF cooperation between countries includes recommendations that involve FIUs
Recommendations that pertain to international money laundering investigations:
• Recommendation 36: Implementation of Conventions
• Recommendation 40: Other forms of cooperation
FATF Recommendation 36
International Instruments
- Countries should take immediate steps to become party to and implement fully:
- The Vienna Convention, 1988;
- The Palermo Convention, 2000;
- The United Nations Convention against Corruption, 2003; and
- The Terrorist Financing Convention, 1999.
FATF Recommendation 40
- Other forms of cooperation:
- Countries should ensure that their competent authorities can rapidly, constructively and effectively provide the widest range of international cooperation in relation to money laundering, associated predicate offences and terrorist financing.
- Countries should do so both spontaneously and upon request, and there should be a lawful basis for providing cooperation.
- Countries should authorise their competent authorities to use the most efficient means to cooperate.
- Should a competent authority need bilateral or multilateral agreements or arrangements, such as a Memorandum of Understanding (MOU), these should be negotiated and signed in a timely way with the widest range of foreign counterparts.
- Competent authorities should use clear channels or mechanisms for the effective transmission and execution of requests for information or other types of assistance.
- Competent authorities should have clear and efficient processes for the prioritization and timely execution of requests, and for safeguarding the information received.
FIUs play a critical part in ensuring the financial system is protected from crime. The more effective units produce intelligence products that can inform the wider AML public sector authorities and guide strategic thinking. They provide information in a timely manner and do not prevaricate over detail when speed is of the essence in ensuring seizure of assets. FATF monitor the performance of FIUs and during evaluation can downgrade whole jurisdictions on the basis of a lack of cooperation and sharing of intelligence.
The distinction between what an FIU does and what an MLAT achieves is the admissibility of the requested data. FIUs provide intelligence and intelligence product. MLATs request evidential and legal support to prosecutions or investigations into prosecutions.
