Suspicious Transaction Report STR

A firm must report promptly, on its own initiative, once it knows, suspects or has reasonable grounds to suspect that funds or activities are the proceeds of criminal activity or are related to terrorist financing. Article 69(1) of the Anti-Money Laundering Regulation (AMLR) sets that test for every obliged entity. No minimum amount applies. Attempted transactions must be reported too, as must suspicions that arise because the firm could not carry out customer due diligence.

The firm reaches its view by assessing what the client does against every relevant fact it knows (Article 69(2)). A suspicion can rest on the client or its counterparties, on the size, nature or pattern of a transaction, on links between several transactions, or on where the funds come from and go.

A report is not an accusation. The recitals to the AMLR say that a suspicious transaction is not an indication of criminal activity.

The firm's compliance officer files the report, and the financial intelligence unit (FIU) of the member state where the firm is established receives it (Article 69(6)). Article 19 of Directive (EU) 2024/1640 makes the FIU the single central national unit that receives and analyses these reports.

Some professions may have a different first recipient. Under Article 70(1) a member state may allow auditors, external accountants, tax advisors, notaries and lawyers to send the report to a self-regulatory body it has designated. That body must forward the information to the FIU promptly and unfiltered.

The transaction waits. Article 71(1) requires the firm to hold back a transaction it knows or suspects to be related to the proceeds of crime or to terrorist financing until it has reported. The steps run in this order.

1. The firm assesses the transaction and records the assessment.
2. The compliance officer sends the report to the FIU, or to the designated self-regulatory body.
3. The firm does not carry out the transaction, and follows any specific instruction from the FIU or another competent authority.
4. If no instruction to the contrary arrives within 3 working days of the report, the firm may proceed, after assessing the risks of doing so.
5. The FIU may instead suspend the transaction or withhold consent to it. For its analytical work, that period must not exceed 10 working days. A member state may set a longer one where its FIU also traces, seizes, freezes or confiscates criminal assets (Article 24(1) of Directive (EU) 2024/1640).

The order can be reversed in two cases. Where holding back is not possible, or would be likely to frustrate efforts to pursue the beneficiaries of the transaction, the firm carries it out and informs the FIU immediately afterwards (Article 71(2)).

A firm must answer an FIU request for information within 5 working days. The FIU can shorten that to less than 24 hours in justified and urgent cases, or extend it where it considers that justified (Article 69(1)).

No. Article 73(1) forbids the firm, its directors and its employees to disclose to the client or to any other third person that a report is being, will be or has been sent. The same applies to the fact that a transaction is being assessed, or that an analysis may be carried out. This is the rule often called the ban on tipping off.

The article allows a few disclosures. A firm may speak to competent authorities, and to self-regulatory bodies acting as supervisors. Obliged entities in the same group may share the information under group-wide procedures. Legal and accounting professionals who work within the same legal person or network may do the same.

Where a lawyer, notary, auditor, accountant or tax advisor tries to dissuade a client from illegal activity, that is not a prohibited disclosure (Article 73(6)).

Yes, where the report is made in good faith. Under Article 72 such a disclosure does not breach any restriction on disclosure imposed by contract or by law. It does not expose the firm, its directors or its employees to liability of any kind. That holds whether or not illegal activity actually occurred.

The firm must also make sure that the compliance officer and any employee involved in reporting are protected against retaliation, discrimination and other unfair treatment (Article 69(7)).

Article 77(1) requires a record of each assessment, with the information considered and the result, whether or not a report followed. A copy of any report is kept with it.

Yes, with one exemption. Article 70(2) exempts notaries, lawyers, other independent legal professionals, auditors, external accountants and tax advisors from the duties in Article 69(1) for information they receive while ascertaining a client's legal position, or while defending or representing the client in judicial proceedings. Advice on starting or avoiding proceedings is included. Those duties are reporting and answering requests from the FIU. Article 21(4) of Directive (EU) 2024/1640 says the same from the FIU's side: a firm is not obliged to comply with a request that concerns such information.

The exemption falls away in three cases: the professional takes part in money laundering, its predicate offences or terrorist financing; gives legal advice for those purposes; or knows that the client seeks advice for those purposes. A member state may also remove the exemption for types of transaction it considers higher risk (Article 70(3)).