SSNF Red Flags: Warning Signs for Professionals and Businesses in Panama

The red flags the Superintendency of Non-Financial Entities presents to lawyers, accountants, car dealers, pawnshops, cash-in-transit companies and dealers in precious metals and stones, and what to do when one appears.

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A red flag is not proof of money laundering: it is a reason to look closer. The non-financial obligated entity (SONF) analyses it, documents what it found in the customer's file and, if the suspicion holds, files a suspicious operation report (ROS) with the UAF.

Red Flags for Lawyers and Accountants

The SSNF groups them in four areas.

Customers

Refusal to explain the purpose of the legal structure.
Asking to avoid documentation or due diligence records.
Use of third parties to carry out transactions.
Unexplained changes in the business model or financial conduct.
Presence in negative news or an adverse reputational record.

Products and services

Requests for companies, foundations or trusts with no clear justification.
Attempts to hide the beneficial owner.
Frequent changes of directors or shareholders.
Sale or transfer of newly incorporated companies.
Requests for nominee services with no legitimate business purpose.

Transaction monitoring

Inconsistency between occupation, income and financial profile.
Requests for payments to third parties with no legal or business basis.
Use of front men to receive or transfer funds.
Operations that differ from the known line of business.

Geographic risk

Operations related to high-risk countries.
Transfers from or to sanctioned jurisdictions or those subject to control lists.
Business relationships with companies located in risk jurisdictions.

Red Flags for the Mixed Sector

Car dealers, pawnshops, cash-in-transit companies and dealers in precious metals and stones.

Car sales

Purchase of high-value vehicles with no economic backing.
Use of third parties to make payments or hold the title.
Frequent buying and selling of vehicles over short periods.

Pawnshops

Recurring pawning of high-value goods with no intention of recovering them.
Multiple pawn operations over short periods.
Inconsistent or incomplete customer information.

Cash-in-transit

Transport of large amounts of cash with no business justification.
Frequent changes in the type of valuables transported.
Requests for transport outside usual hours.
Newly incorporated customers with no operating history.

Precious metals and stones

Transactions at prices outside the market.
Requests for anonymity or to hide the beneficial owner.
Refusal to use the traditional financial system.
Purchases linked to travel or activities in high-risk jurisdictions.

What to Do When a Red Flag Appears

Analyse it against what you know of the customer: their activity, their income, the purpose of the relationship and their risk level.
Document the analysis and its conclusion in the customer's file, with the date and who made it, including when the conclusion is that there is nothing to report.
Apply enhanced due diligence when the risk calls for it: source of funds, beneficial owner, senior management approval.
If the suspicion holds, file the ROS with the UAF promptly.
Do not tell the customer. The FATF standard requires the law to prohibit revealing that a suspicious operation report is being filed, and extends that duty to lawyers, accountants and the other DNFBPs.

Red Flags That Leave a Trace, in COX

List and PEP screening with a certificate, adverse media for the negative news, the beneficial owner and the ownership chain in the file, a risk matrix that weighs the country and the activity, and the ROS prepared with its review and approval trail. Every analysis stays in the file with its date and author.

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Frequently Asked Questions

No. It means analysing the operation and documenting what you found. The ROS is filed with the UAF when, after that analysis, there is suspicion or reasonable grounds to suspect that the funds come from a crime or are linked to terrorist financing.

No. Revealing that a suspicious operation report is being filed is what the FATF calls tipping-off, and its standard asks countries to prohibit it by law. In exchange, whoever reports in good faith is protected from liability for breaching a confidentiality restriction.

The usual references are the lists the FATF publishes after each plenary, the sanctions programmes of the United Nations and the countries your own risk assessment rates as high. COX keeps the FATF lists edition by edition and screens the customer against sanctions lists.

No. These are the ones the SSNF highlights for professionals and the mixed sector. Your own risk assessment and your prevention manual should add those of your business.

This guide is for informational purposes only and does not constitute legal advice. It summarises the red flags presented by the SSNF without replacing its rules: confirm the obligations that apply to you with the SSNF or with a Panamanian adviser.

Detect It, Document It, Report It

Each red flag analysed and recorded in the customer's file, ready for the SSNF.

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