It is prohibited in most jurisdictions and can be a criminal offence, because it can allow suspects to move funds or destroy evidence. Staff therefore need training on what they may say to a customer when a transaction is delayed or an account is restricted.
Example
A branch employee tells a customer 'we have reported your transfers to the authorities'. This is tipping off.
Where it appears in the exams
This topic is relevant for CAMS, CFCS.
Related terms
- Suspicious activity report (SAR / STR): A suspicious activity report, also called a suspicious transaction report, is a confidential report that a regulated firm files with the national financial intelligence unit when it suspects money laundering, terrorist financing or another crime.
- Financial intelligence unit (FIU): A financial intelligence unit is the national agency that receives, analyses and shares suspicious activity reports and other financial information to fight money laundering and terrorist financing.
Source: FATF Recommendation 21; UK Proceeds of Crime Act 2002 s.333A. Independent explanation for study purposes, not legal advice.