Red Flags (Generic) Guide

Why Red Flags ?

You need to establish red flags or triggers relevant to your business or service for effective
identification or detection of suspicious transactions

Transaction aborted after

funds received in client Received untrusted large
account and then client sums of capital funding quickly
requests to send the funds to then spent or transferred
a third party and avoids elsewhere in a short period of
personal contact. time.

Use of multiple accounts to

“Structuring” a down payment collect and then funnel funds
or escrow money transaction. to a small number of foreign
beneficiaries.

Client has multiple shareholders,

who each holding an ownership Unexplained of frequent
interest just below the beneficial payments to foreign professional
ownership threshold. intermediaries.

Unreasonable transactions Unexplained business transac-

between two or more parties tions involving family members of
that are connected. one or more of the parties.

Transactions executed from a Unjustified transactions from a

business account but appears business account, involving a
to fund personal purchases large sum of cash.
inconsistent with their profile.

Addi�onal for Lawyers Addi�onal for Accountants

Transfer of real estate between par�es in Unexplained frequent changing accountants.
unusual short period of �me.
Crea�on of fic��ous employee under payroll list.
Payment of deposits via mul�ple transac�ons
below cash threshold into client account. Unexplained transfer of money to offshore
companies via clients’ account by the firm.
Unexplained offer to pay extraordinary fees for
services that would not warrant such a premium. Unusual repe��on of transac�on between
par�es over contracted period of �me.
Funds deposited into the firm’s client account
which do not match with the client’s profile. Unexplained large and repeated transac�on by a
signatory to the account who is not a beneficial
Unreasonably purchase of real estate property. ownerhsip.
Unjus�fied deposi�ng payment into the firm’s Funds deposited into client’s account is larger
client account from various loca�ons. that client’s income.

Note: Please refer to Sec�on 14 of the An�-Money Laundering, An�-Terrorism Financing and Proceeds of Unlawful Ac�vi�es Act 2001 and Paragraph 19 of the An�-Money
Laundering, Countering Financing of Terrorism and Targeted Financial Sanc�ons for Designated Non-Financial Businesses and Professions (DNFBPs) & Non-Bank Financial
Ins�tu�ons (NBFIs) (AML/CFT and TFS for DNFBPs & NBFIs Policy Document)
Disclaimer:
This document is intended for your general informa�on only. It does not contain exhaus�ve advice or informa�on rela�on to the subject ma�er nor should it be used to
subs�tute for legal advice. In the event that the informa�on on Bank Negara Malaysia's official printed documents or any Acts differ from the informa�on contained herein,
the informa�on on such Act and official documents shall prevail and take precedence.