Warning signs of being targeted

Your business can be at risk of being exposed to money laundering (ML) and terrorist financing (TF).
You should pay attention to cash transactions made in a single and in a several operations as they may be linked. It is important to note that whilst some transactions may appear to be connected from the outset, in other cases, this may only become apparent at a later stage.

Examples of scenarios which may be linked to ML or TF

Unusual sales or purchase activities may include:

• cash payments for unusually large or frequent purchases
• delivery methods or payment arrangements that are not consistent with normal practice
• a new customer with little or no trading history and no trade references
• a customer travelling to Jersey just to purchase goods, when the goods are readily available near their home location
• a customer or representative making multiple smaller cash deposits into the business’ bank account 
• unusual enquiries regarding the business’ refund policy, like a customer asking if a refund can be made by cheque, wire transfer or paid to a third party.

Transactions may be linked in the following scenarios:

• they are executed by the same individual or group of individuals (including third parties connected with those persons)
• they involve the same business
• they occur across a specified period of time, for example a high value item worth £12,500 or more is initially secured with a cash deposit, then the total value is paid in cash instalments over time
• they do not have a commercial rationale (for example they appear to be deliberately structured to avoid the £12,500 threshold).

Note that this list is not exhaustive.

Recognising suspicious behaviour and unusual transactions

Recognising stolen cash

Stolen cash is frequently laundered through retail outlets. Sterling, and many euro banknotes, become stained with dye when cash boxes are stolen and opened during bank or cash-in-transit robberies. Criminals frequently attempt to clean the notes, but this damages the foil and other security features.

High value cash transaction

Money launderers want to move funds quickly to avoid detection. This is easily done in large one-off transactions. The purchase of high value goods, with good portability, paid for in cash, represents an attractive target for money launderers.

Equally, an asset may be purchased to support a certain lifestyle like a high performance car or a yacht. Alternatively, an asset may be purchased as a form of long-term investment (for example jewellery, an antique, a work of art etc.).

Behaviours to look out for associated with suspicious transactions

This includes:

• reluctance to make personal contact
• reluctance to provide the required identification information or evidence of identity
• the size of purchase is out of line with the appearance / age of the customer
• customers who initially indicate that they will be paying for goods over £12,500 by credit card / cheque and then at the last minute present cash as the means of payment
• there appears to be no genuine reasons for paying large sums of money in cash
• cash is unusual for that type of customer
• customers purchasing goods which are available nearer home at a similar price
• purchases by businesses where the level of cash activity is higher than the underlying business would justify
• the customer is paying in small denomination used notes

Goods that are returned for refund

Returning high value goods paid for in cash and obtaining a refund by way of a cheque or electronic payment enables the laundering of the “dirty money” by exchanging it for a legitimate retailer’s payment. Suspicions may be raised in the following circumstances:

• the customer enquires about the supervised person’s refund policy before purchasing
• the customer seeks a refund for spurious reasons
• the customer seeks the repayment in the form of a cheque or electronic payment when the purchase or a deposit was made in cash

Buying second-hand goods

Retailers who buy high value second-hand items for trading should be vigilant to avoid handling stolen property. A money launderer who has exchanged criminal cash for a high value asset and then trades it in has a cheque that can be paid into their bank account. Jewellers, art and antique dealers should inform their network and police if they think stolen goods are being offered around for sale.

Report the crime

If you suspect the crime or have fallen victim, submit a Suspicious Activity Report (SAR) online.
For reporting suspicions of crime refer to Section 8 of the Handbook for guidance.