Financial intelligence units

"The Financial Intelligence Units are made up of analysts whose objective is the investigation, analysis and communication to the relevant authority 'SEPBLAC' of those operations in which there are indications of money laundering and/or terrorist financing. In this article we will talk about how these units work in banking institutions".

Before going into detail, we need to know what these Financial Intelligence Units (hereinafter FIUs) consist of and where they come from.

The creation of these units is mandatory, according to Law 10/2010 on the Prevention of Money Laundering and Terrorist Financing, for all those obliged entities whose annual turnover exceeds 50 million euros. 

This measure is more specifically included in Chapter IV of Law 10/2010 "Internal Control Measures" under the name of "Technical Unit". For more information on this chapter, please refer to Sec2Crime's article "Internal Control Measures".

There is a key aspect that is included in the law when mentioning the "Technical Units", and that is that they must be formed by experts in the field and with exclusive dedication. 

In other words, the analysts who form part of these units must have extensive knowledge of money laundering and terrorist financing and must be exclusively dedicated to work related to the analysis of this phenomenon.

This measure has brought about a really important change in the sector, as it has led to the necessary specialisation of analysts in this area, so that today these units have more and better trained professionals.

In this article we are going to focus on the work of FIUs in banking institutions.

FIUs in banking institutions are located in the "Non-financial risks" branch, and are normally included within the Compliance area. Depending on the decision and strategy of each entity, the work carried out by the units may be outsourced to a greater or lesser extent, although there is a tendency not to outsource due to the commitment of the work carried out, both because of the importance of this activity and the sensitivity of the information with which it works.

The answer is clear as we have seen above, specialised analysts. The basic training of these analysts is varied, being mainly people with degrees in economics, business administration and law, although the criminology sector is increasingly being taken into account, on the basis of its training in economic crime and the quality requirements of SEPBLAC.

These quality requirements in the analyses carried out make it necessary to have knowledge closer to the field of security, criminal behaviour, criminal organisations and structured analysis (directly related to intelligence analysis), and not just purely economic or legal knowledge.

Analysts receive information about suspected cases of money laundering or money financing through different channels:

The main one is the IT controls that every bank has in place. These controls try to parameterise behaviour considered suspicious so that, when they are triggered, alarms are generated and analysed. The design of these controls, a task in which the FIU participates, is of vital importance for the entity, as they could generate excessive and unnecessary work or suspicious activities may go undetected.

Only the FIU knows what these controls are and how they work.

Other ways of obtaining information on suspicious behaviour are communications from employees, usually from offices, and communications or requests from the authorities, both SEPBLAC and the SSECF.

Once the information is received, the analyst should proceed with the investigation, based on his or her knowledge of the matter and the information available. If necessary, the client under investigation may be asked for any information deemed necessary, for example, tax documentation, but never directly, as a person under investigation, according to Law 10/2010, cannot at any time know that they are being investigated.

Sometimes the analyses carried out are of great complexity, they may involve plots with dozens of people involved, international and national transactions, risk jurisdictions, companies, etc.

This makes following the money trail and understanding customer/client behaviour very complicated, even with all the information available to banks.

Once the analysis has been carried out, a conclusion must be reached. The analyst must conclude whether there is evidence of money laundering, terrorist financing or any type of financial crime. If so, the analysis, after being thoroughly reviewed and submitted to the internal control bodies, is sent to the competent authority, in the case of Spain, the SEPBLAC. 

If no suspicions are found, the case will be closed and may be reopened in the future, as these cases are regularly audited.

FIUs are today, and increasingly so, essential bodies in the fight against money laundering and terrorist financing, made up of experts in the field, in constant collaboration with other entities and with the SSFCCF, and which are currently in a process of evolution and development.

We are likely to see a new market niche opening up for those trained in economic crime, security and intelligence analysis, as the profile of the AML/CFT analyst requires a mix of knowledge, between economics, law, security and structured analysis.

Pablo Cascio Cañas, AML/CFT analyst at ING and collaborator in the Economic Crime area of Sec2Crime