Administration Office

Administration Office

Recognizing unusual transactions

As a service provider – administration office – you are familiar with the practices within your line of business. Whether a transaction is considered unusual depends largely on your professional judgment. Your professional judgment is consistent with what is considered unusual within your profession. In addition to your judgment, there are situations that are unusual by nature and should therefore be reported.

If a situation arises as described in the examples below (not exhaustive), this is a reason to further examine whether the transaction could possibly be related to money laundering and / or terrorist financing. You do not have to determine with certainty that money laundering or terrorist financing is involved. You merely need to have an assumption / presumption that the transaction may be related to money laundering or terrorist financing.

If you believe that money laundering or terrorist financing may be involved, you are required to report this under the subjective indicator.

Red flags – Administration office

  • A transaction involving a client which leads to a result that is clearly higher or lower than can reasonably be expected or which leads to an unusual high result compared to similar companies in the industry in which the client operates, especially if the turnover for a significant part consists of cash sales
  • There is an inexplicable discrepancy between money and the flow of goods. A client achieves unusually high revenue and / or profits, of which it is not clear to which activities they are related
  • A transaction involving a client takes place under significantly worse conditions than can reasonably be expected without an acceptable explanation as to why a better structure has not been chosen
  • The actual picture of the annual financial statements does not match with the underlying documents. Unauthorized transactions or incorrectly recorded transactions. Administrative systems which, by design or intentionally, do not provide an adequate method to track transactions or provide adequate evidence
  • Payments for services provided that appear excessively high in relation to the services provided. Commissions and comparable incomes that appear excessively high, payments for unspecified services or loans to advisers, related parties, employees, or government personnel
  • Non-compliance with any obligation to publish or the legal obligation, if any, to obtain an auditor’s report with the annual financial statements
  • Atypical prepayments of insurance premiums
  • Insurance policies with premiums that appear to exceed the buyer’s financial resources
  • Insurance policies with values ​​that seem inconsistent with the buyer’s needs