A place for your gold or a mini $ laundromat?
5 ways to identify suspicious activity with safe deposit boxes
Swiss banks are synonymous with anonymity. But the threats of money laundering and terrorist financing are enough to force some banking changes — particularly when it comes to safe deposit boxes.
Recently, India and Switzerland have been working closely together to identify Indians who have potentially been stashing illicit money in Swiss safe deposit boxes. Switzerland has already disclosed account information at the request of the Indian government, an action that would not have taken place 20 years ago. But the Swiss government also issued assurances that its safe deposit box regulations are sufficient to deal with increased money laundering risks at this time.
Just how popular are safe deposit boxes today? Industry analysts claim that they are relics of the past, popular in bygone times when documents couldn’t be registered electronically and people held investments in jewels and gold bars. Yet the public still seems captivated by them, probably due to Hollywood’s visuals in James Bond films and news accounts of lost treasures being found in them, such as the recent retrieval of a missing Van Gogh painting,
As long as safe deposit boxes retain the perception of popularity, banks will offer the service — and remain at risk for their use in money laundering activities. The Federal Financial Institutions Examination Council (FFIEC), an interagency organization dedicated to promoting standards for financial institutions, recently identified the following red flags for safe deposit box usage:
1. Frequency of visits. If a customer suddenly begins to visit a safe deposit box more frequently, it’s a red flag.
2. Location. If a customer opens a safe deposit box and is not a nearby resident, it’s a red flag.
3. Timing of visit. If a customer completes a large cash transaction and then visits a safe deposit box, it might be a red flag.
4. Number of boxes. Does a customer have more than one safe deposit box? Why? Definitely a red flag, depending on the answer.
5. Change in safe deposit box traffic patterns. How many people enter the safe deposit box area on a normal basis? How many of them carry bags or other containers? If the traffic pattern changes, it’s a red flag.
Technology, particularly advances in the collection and usage of big data, can help reduce the risk of safe deposit boxes and their deployment in money laundering activities. Ask me how in the comment section!
