2.3.1 Transaction Monitoring

Effective from 15/8/2021

Where possible, transaction monitoring systems used to monitor activity in the accounts of the RHP should also be equipped to identify breaches of the permitted services by RHP listed in Part I section 4.1. The transaction monitoring system used by LFIs should also be equipped to identify RHP that are using the LFI's accounts to conduct their business and to move funds on behalf of customers while attempting to conceal this activity from the LFI. Red flags for concealed activity appear below. If an LFI's automated transaction monitoring system is not capable of alerting on these red flags, LFIs should have in place manual monitoring, such as management information systems that are capable of doing so. Frequent deposits by multiple individuals into a single bank account, followed by international wire transfers and /or international withdrawals through ATMs.

		•	Money being transferred at regular intervals to international locations known to be clearing houses for remittances.
		•	An account being used as a temporary repository with the funds quickly transferred.
		•	Usage of third-party accounts to disguise and to avoid detection by authorities.
		•	Wire transfers frequently sent by traders to foreign countries that do not seem to have any business connection to the destination countries.
		•	Business accounts used to receive or disburse large sums of money but show virtually no reasonable business-related activities such as payment of payrolls, invoices etc.
		•	Frequent deposits of third-party checks and money orders into business or personal accounts.
		•	Frequent international wire transfers from bank accounts that appear inconsistent with stated business activities.
		•	Sudden change in pattern of financial transactions from low value international fund transfers to large value transfers.