In May 2025, the Financial Intelligence Analysis Unit (FIAU) issued guidance document SA25-01 titled “Key Red Flags in Financial Statements and Other Non-Financial Information.” The paper aims to assist subject persons in identifying potential indicators of money laundering and terrorist financing within both financial and non-financial data.

The FIAU notes that red flags should not be viewed in isolation, as the presence of a single indicator does not necessarily imply illicit activity. Instead, anomalies should be considered collectively and in the proper context when assessing the risk of suspicious behaviour.

The guidance highlights several common warning signs within financial statements, including unusual revenue fluctuations, an atypically high proportion of cash sales, or inconsistencies between reported sales and the business’s operational model. Other red flags include inflated or falsified purchases and inventory balances, disproportionate salary and wage expenses, excessive consulting or marketing costs, and interest or rental payments that lack clear economic rationale.

The FIAU also draws attention to irregularities within the balance sheet, such as shareholder loans or related-party transactions from unknown sources, aged or unusual receivables and payables, the overvaluation of assets, or unexplained cash movements. Persistent operating losses or limited profitability over several years may also warrant further scrutiny.

Beyond financial data, the paper outlines non-financial indicators tied to corporate structure and governance. These include activities unrelated to a company’s stated objects, directors or shareholders lacking relevant industry experience, frequent changes in ownership or control, complex corporate arrangements, and audit reports carrying qualified or adverse opinions.

The FIAU reiterates that the document serves as general guidance and does not replace existing legal obligations. Subject persons are encouraged to refer to the full guidance for a comprehensive overview of the red flags identified through the FIAU’s analytical work.

To download and read the full FIAU guidance document, kindly click on the following link.