In everyday practice, we are increasingly observing situations where citizens and businesses face freezing of funds/transactions by financial institutions, even though their financial actions are entirely legitimate.
These cases are related to the way transactions are assessed by the financial monitoring system, which today operates on strict legal principles aimed at preventing money laundering and terrorist financing, and where the suspension of a transaction is only the first step of concrete consequences.
The Law on the Prevention of Money Laundering and Combating the Financing of Terrorism and the relevant regulations of the Central Bank (CBK) impose clear obligations on financial institutions to identify, analyze, and report transactions that deviate from the client’s expected financial behavior.
However, an unexpected payment, an unclear or overly generalized transaction description, a cash deposit that does not match the client’s history, or a transfer from a relative abroad, even without any legal violation, can lead to additional verifications by the bank. This is because the system does not assess only the amount, but also the context.
This means that often it is not necessary for an illegal act to exist for a transaction to be classified as suspicious. It is sufficient that the financial action lacks clear economic logic, falls outside the client’s profile, or raises suspicion that the real purpose does not match the declared purpose.
So, to clarify: the AML Law does not target law-abiding citizens. But the way it functions, especially through reporting entities, creates situations where citizens and businesses can easily be misunderstood.
What triggers suspicion?
Financial institutions, according to the relevant CBK regulation, are guided by several basic questions to understand whether a transaction may pose a risk:
- Is the size of the transaction consistent with the client’s history?
- Does it have a clear and rational economic purpose?
- Has the circulation pattern changed compared to the past?
- In international transactions, is there a clear reason why funds are being moved to or from that entity and country?
If the answers are not coherent, financial institutions are obliged to record the activity and, when the suspicion is reasonable, to report to the Financial Intelligence Unit (FIU) within 24 hours.
If a client consistently conducts cash transactions below €10,000 the financial institution may consider it an attempt to avoid reporting. Likewise, when a person makes several separate cash transactions which together reach €10,000 or more within a certain period of time, this behavior may be assessed as suspicious and trigger reporting.
This does not automatically make the transaction illegal, but it places the person under a procedural radar, which implies verification, requests for documentation, temporary suspension of transactions, and possible reporting.
It is worth noting that financial institutions today rely on automated mechanisms that analyze not only transaction amounts, but also descriptions, transaction patterns, fund origins, and, as emphasized above, deviations from the client’s financial profile.
The words used in the transaction description often trigger automated alerts, because the system is built to seek every possible risk signal. Even completely ordinary terms can gain weight in the wrong circumstances, especially when combined with large amounts or with a type of circulation that suddenly changes from the client’s previous behavior.
It should be emphasized that reporting does not constitute an accusatory act; it is a preventive measure, and may be accompanied by:
- requests for additional documentation;
- delay or suspension of the transaction;
- continuous monitoring of the account;
- criminal complaint in cases where elements of money laundering exist.
From our practice at Vokshi & Lata, we have had cases where a client of ours was invited by the Police to provide explanations for transfers that were entirely normal in the functioning of the business, but which, due to their volume, activated an investigation. The company had several POS terminals from different banks, and all payments for goods purchases, salaries, and other expenses were made from a single bank account. Therefore, funds originating from POS payments were periodically transferred to the main bank account. This alone was sufficient for the client to be invited for an interview by the Police, after which the investigation was closed once the flow of funds was clarified.
How can these situations be avoided?
Naturally, addressing this issue is much more complex than a short answer.
However, in general terms, we can say that the client is in a much more favorable position if they: document the source of funds, use appropriate descriptions in transfers, prepare contracts that create logical and legal links for the funds, maintain coherence between historical activity and new circulation, and seek professional advice in advance when planning a major transaction.
At Vokshi & Lata, we have advised clients on structuring complex transactions in compliance with AML regulations, preventing misunderstandings and unnecessary investigations.
Conclusion:
In an economy where financial monitoring is active, intelligent, and legally mandatory, every transaction must have a clear reason, supporting evidence, and a logical path of justification.
Transparency and planning are key elements that help citizens and businesses protect their financial integrity and avoid unnecessary procedural implications. In this context, legal care is not only protection, but also a prerequisite for sustainable financial operation.
Author: Gent Nuza
