🔹 Definition
The Non-Tipping-Off Rule is a legal and regulatory obligation that prohibits a person or institution from informing a customer or third party that a Suspicious Transaction Report (STR) or Suspicious Activity Report (SAR) has been filed, or that they are under investigation or scrutiny. This rule is designed to prevent suspects from altering behavior, concealing evidence, or fleeing jurisdiction before law enforcement can take appropriate action.
The rule is a critical safeguard in AML/CFT regimes, enforced in most jurisdictions, including under Singapore’s Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) and the Terrorism (Suppression of Financing) Act (TSOFA).
🔹 Frequently Asked Questions (FAQs)
Q1: What constitutes “tipping off”?
- Telling a customer that an STR/SAR has been filed
- Suggesting they are under internal or regulatory investigation
- Informing them that their transactions are being closely monitored
- Disclosing queries or requests from authorities regarding their accounts or behavior
- Even indirect hints or changes in service behavior may be considered tipping off
Q2: Why is the non-tipping-off rule important?
- Prevents the subject from destroying records or evidence
- Stops them from moving or withdrawing funds
- Avoids interference with ongoing investigations
- Maintains the effectiveness and credibility of the AML/CFT regime
Q3: What are the penalties for violating this rule?
- In Singapore, tipping off is an offence under the CDSA and TSOFA, punishable by:
- Fines of up to S$30,000, and/or
- Imprisonment of up to 3 years
- Globally, similar penalties exist under the Bank Secrecy Act (U.S.), UK Proceeds of Crime Act, and EU AML Directives
- Violations can lead to disciplinary actions, license suspension, or reputational damage
Q4: Who must comply with the non-tipping-off rule?
- Banking and financial institutions
- Corporate service providers (CSPs) and Registered Filing Agents (RFAs)
- Law firms, accountants, auditors, and other DNFBPs
- Crypto exchanges, fintechs, and digital asset service providers
- Any employee involved in compliance, transaction review, or reporting
Q5: How should institutions manage communications with suspected individuals?
- Continue normal service routines without revealing internal concerns
- Avoid commenting on reasons for delays, restrictions, or escalations
- If necessary, refer to standard procedures or compliance reviews without naming STRs
- Train staff to recognize tipping-off risks and use pre-approved response language
