Definition:
Suspicious Transaction Reporting (STR) is the process of identifying and reporting financial transactions that may be linked to money laundering, fraud, or terrorist financing to regulatory authorities.

Contextual Explanation:
In Canada, financial institutions and MSBs must file STRs with FINTRAC if they detect transactions that seem inconsistent with a customer’s profile or raise suspicion due to their nature, size, or frequency.

Why It Matters:
STRs are essential for detecting and preventing financial crimes. Non-compliance with reporting obligations can lead to fines, legal consequences, and reputational harm.

Example:
A PSP notices a customer suddenly sending large wire transfers to a high-risk jurisdiction without a clear business reason. The institution must report this transaction to FINTRAC as an STR.