Importance of FIUs in Anti-Money Laundering & Combating Financing Illicit Activities

The FIUs are considered as an essential pillar to the efforts exerted to combat money laundering and financing of illicit activities. These units collect all information related to suspicious transactions, and analyzing and checking them, and thus provide the local security and juristic authorities as well as the local legal authorities relevant to anti-money laundering with such information. It also provides such information for international organizations according to specific international regulations in this regard. There is no unified organizing form for such units which are considered as governmental entities. They may be an independent entity affiliated to higher governmental authority such as; prime minister or a certain minister. It could be an affiliate entity to the QCB as an independent unit or joined to any of its departments.

The role of the FIU is not only collecting information on anti-money laundering and financing illegal activities, but also providing data about other financial crimes as fraud, forgery, tax evasion etc.

This unit is also responsible for the following:

- Provide the supervisory authorities with information on the performance and solvency of the financial and banking sector.

- Instruct the concerned entities and institutions to report on suspicious transactions and guide them in preparing such reports.

- Conduct researches on financial crimes, make recommendations to authorities to issue the regulations and instructions appropriate to combat such crimes.

- Cooperate with foreign counterpart units in cross-border transactions and exchange of information.

In addition to the disseminated and available information and data, FIU gets the information required through different sources, first and most important of which is the obligatory reports, prepared periodically by financial institutions and banks on suspicious transactions. Such reports are not only prepared by the financial institutions and banks, but also by other entities such as; companies, customs departments, securities brokers, and real estate and jewellery traders. The second source is the investigations and researches conducted by the units themselves to acquire information. The third source is information exchanging with supervisory authorities and organizations such as; banking supervision committee, securities market, and supervisory authorities on insurance companies.

It includes information that could be acquired from foreign legislatures. In this regard, external information exchanged between supervisory authorities and the counterpart foreign information units is vital for unit’s successful work. Information can be exchanged upon a request from the FIU in case an external counterpart has significant information related to a particular issue. However, this process can be done in return for delivery of significant information by FIU to the counterpart.

Reports issued by financial institutions and banks as well as other related entities, include two types of transactions; first, general transactions that include any money deposits, securities circulations exceeding limits, or in or out money transfers exceeding limits. Second type is the transactions suspected by the reporting institutions for particular reasons, though not exceeding limits.

Arrangements and adequate regulations in FIU are crucial to maintain the confidentiality of the acquired or exchanged information.