Glossary term
Reportable Transaction
Subject: Financial Crime, Reporting and FIU
Also known as: Threshold transaction
A reportable transaction is a transaction that must be reported to the authorities because of its type, size or other defined feature, whether or not anyone suspects wrongdoing.
Explanation
Law or regulation lists the kinds of transaction that trigger a report. Typical examples are cash above a threshold and large cross-border wire transfers. Some countries also cover transfers received by non-profit organisations. Some countries add sales of high-value property or dealings of a stated type. The institution does not need to form a view on the customer; if the transaction meets the definition, it reports. This produces regular, consistent data for the financial intelligence unit, which can be mined later. It sits beside, and does not replace, the duty to report suspicion, so one transaction may need both kinds of report. Systems must capture the data and meet filing deadlines, and mistakes or missed reports can lead to penalties. Authorities use the resulting data to see normal volumes, so that departures from them stand out.
Example
In a country that requires reports on all international transfers above 50,000, a bank sends one for a customer paying a foreign supplier. The payment is routine and the customer is well known, so no suspicion arises. The report is generated automatically from the payment system and filed with the national FIU within the stated period.
Not to be confused with
- Suspicious transaction
- A suspicious transaction is reported because of doubt about its purpose or source. A reportable transaction is reported because it meets a rule.