Financial Intelligence Unit (FIU)

Apart from dealing with SARs, financial intelligence units are responsible for three main procedures:

1. Understanding the financing and methods of money laundering and terrorism financing, especially how large criminal organizations work.
2. Sharing financial data with other countries to stop crime on a global scale.
3. Reporting and creating Suspicious Transaction Reports (STRs) based on suspicious activities.

A country’s financial intelligence unit is the main body that receives and analyzes suspicious transaction reports. However, this isn’t the only process they’re responsible for. 

FIUs also:

• Collect information on money laundering and terrorist financing, sharing their insights with relevant regulatory authorities. 
• Help combat tax crimes and other types of fraud, such as corruption or bribery, especially in regions where the risk of such crimes is higher. 

When communicating internally, banks and other financial institutions refer to financial intelligence units as anti-money laundering departments or representatives. That’s because they operate as investigators of financial crimes that are uncovered when suspicious activity is reported. 

Some major financial intelligence unit examples are:

• The Financial Action Task Force (FATF). This is an international body that sets AML standards and promotes measures for combatting financial crimes. It’s best known for its 40 Recommendations, which is a set of guidelines informing companies about the key points and AML risks.
• The Financial Crimes Enforcement Network (FinCEN). It operates a bureau within the US Department of the Treasury. FinCEN collects and analyzes data related to financial crimes and shares it to support efforts in combating money laundering, terrorist financing, and other financial crimes
• The Serious Fraud Office (SFO). It’s a non-ministerial department of the UK’s government. It prosecutes and investigates complex fraud cases and other illicit activities linked to financial crime.

The Egmont Group is a network of financial intelligence units operating globally. Since 1995, it has been successfully operating and exchanging information on financial crime by providing a secure platform for FIUs to share their insights globally. Having such a platform helps support AML efforts, assisting companies in preventing fraud and identifying suspicious activities more effectively.

The Egmont Group has diverted FIUs into four main types, which are:

1. Law-Enforcement FIUs (they are law enforcement agencies that handle financial crime investigations, freeze transactions, seize assets, etc.). 
2. Administrative FIUs (they operate independently and focus on receiving and analyzing suspicious transaction reports). 
3. Judicial FIUs (they leverage judicial resources and combine investigative and prosecutorial functions to combat financial crime).
4. Hybrid FIUs (they share a mix of functions from all types of FIUs, providing insights and sharing their responsibilities towards helping combat fraud and financial crime).