What is an FIU?

Over the past years, specialized governmental agencies have been created as jurisdictions develop systems to deal with the problem of money laundering and other financial crimes. These entities are commonly referred to as “financial intelligence units” or “FIUs”. They offer law enforcement agencies around the world an important avenue for information exchange. An FIU, quite simply, is a central office that obtains financial report information, processes it in some way and then discloses it to an appropriate government authority in support of a national anti-money laundering effort. FIUs have attracted increasing attention with their ever more important role in anti-money laundering programs. They are able to provide a rapid exchange of information (between financial institutions and law enforcement / prosecutorial authorities, as well as between jurisdictions), while protecting the interests of the innocent individuals contained in their data.

Two major influences shape the creation of the FIUs: implementing anti-money laundering measures alongside already existing law enforcement systems (the Judicial, Law Enforcement and Hybrid models) or providing a single office for centralizing the receipt and assessment of financial information and sending the resulting disclosures to competent authorities (the Administrative and Hybrid models).

• The Judicial Model is established within the judicial branch of government wherein “disclosures” of suspicious financial activity are received by the investigative agencies of a country from its financial sector such that the judiciary powers can be brought into play e.g. seizing funds, freezing accounts, conducting interrogations, detaining people, conducting searches, etc.
• The Law Enforcement Model implements anti-money laundering measures alongside already existing law enforcement systems, supporting the efforts of multiple law enforcement or judicial authorities with concurrent or sometimes competing jurisdictional authority to investigate money laundering.
• The Administrative Model is a centralized, independent, administrative authority, which receives and processes information from the financial sector and transmits disclosures to judicial or law enforcement authorities for prosecution. It functions as a “buffer” between the financial and the law enforcement communities.
• The Hybrid Model serves as a disclosure intermediary and a link to both judicial and law enforcement authorities. It combines elements of at least two of the FIU models.