Financial Intelligence Units (FIUs) serve as national centres for the receipt and analysis of suspicious transaction reports and relevant money laundering information, associated predicate offences, and terrorist financing. FIUs are also responsible for disseminating analysis results.
An FIU should obtain additional information from reporting entities and have timely access to required financial, administrative, and law enforcement information to undertake its functions properly. A few major considerations shape an FIU’s creation: anti-money laundering and counter-terrorism financing laws, existing law enforcement, and the need for an authority that will receive, assess, and share financial information.
The FATF Interpretive Note to Recommendation 29 determines that if a country’s FIU adheres to the Egmont Group’s Statement of Purpose and Principles for Information Exchange, the FIU should apply for Egmont Group membership. The Egmont Group documents provide important guidance concerning the role and functions of FIUs and the mechanisms for exchanging information.
There are four FIU models: judicial, law enforcement, administrative, and hybrid.
- The Judicial Model is when an FIU is established within the judicial branch of government. In this model “disclosures” of suspicious financial activity are received by a country’s investigative agencies from its financial sector so the judiciary powers can react (e.g., seizing funds, freezing accounts, conducting interrogations, detaining people, conducting searches, etc.).
- The Law Enforcement Model implements anti-money laundering measures alongside existing law enforcement systems, supporting the efforts of multiple law enforcement or judicial authorities with concurrent, or sometimes competing, jurisdictional authority to investigate money laundering.
- The Administrative Model is a centralized, independent, administrative authority, that receives and processes financial sector information and transmits disclosures to judicial or law enforcement authorities for prosecution. It functions as a “buffer” between the financial and law enforcement communities.
- The Hybrid Model serves as a disclosure intermediary and a link to both judicial and law enforcement authorities. It combines elements of at least two FIU models.