The decision to file a Suspicious Transaction Report (STR) is often paralyzed by the fear of losing a high-net-worth client or the legal repercussions of "Tipping Off". However, defensive filing is your primary shield against personal liability.
The "Reasonable Grounds" Benchmark
You do not need proof of a crime. You only need "Reasonable Grounds to Suspect." If a client refuses to provide Source of Funds (SoF) or structures a payment to avoid thresholds (e.g., 4 payments of AED 40,000), this is a mandatory reportable event.
The Art of Non-Confrontation
You should never tell the client, "I am filing a report." Instead, frame your requests for extra documentation as "standard compliance procedure" or "updating our audit files." If they refuse and walk away? You must still file the STR (Attempted Transaction).
Tipping Off is a Crime
Informing a client (or any third party) that an STR is being filed is a federal crime punishable by imprisonment. The circle of knowledge within your firm must be restricted to the MLRO and the relevant senior management only.
Author: Zeej Strategic Consulting Research Team