Option 2: Monitoring of transactions

Information and intelligence necessary for financial investigations could also be obtained through monitoring or production orders. “Monitoring order” means an order issued by the competent authority and directed at a financial institution, requiring disclosure to an authorized person of information concerning transactions carried out through an account held with the institution by a person named in the order. Such an order may require the financial institution to make the disclosure immediately after a transaction has been made or on suspicion that a transaction is about to be made. The order may direct the financial institution to refrain from completing or effecting the transaction for a specified period.

In GUAM states, monitoring orders may be issued by law enforcement and FIUs (except for Azerbaijan). Law enforcement has the general power to monitor any account for suspicious activity related to money laundering, terrorism financing, all predicate offenses for money laundering, and any other criminal offense by the provisions of the criminal procedure legislation. On the other hand, FIUs also have the power to monitor bank accounts for suspicious activities, usually for all types of offenses; the legal framework for this authority is laid down either by specialized antimoney-laundering legislation or the law on operative and detective activities.

The factors that can trigger monitoring orders are: a request from a foreign authority (including FIUs), an internal analysis, and STR received from a reporting entity or a request from the prosecutor’s office. “Production order” means a judicial order addressed to a specified person to produce for the inspection of an authorized person any document that identifies or locates any property subject to forfeiture or confiscation or that determines the value of the property or benefit derived by a defendant from criminal conduct.

In short, the purpose of such orders is to compel the person or entity named to turn over information or copy thereof within a specified time. In terms of virtual currencies, such orders will be significantly different in application to cases of centralized and decentralized virtual currencies:

• Administrating authorities of centralized currencies can receive and process such orders directly and can be compelled to turn over such information;
• Since there is no centralized authority in decentralized cryptocurrencies, exchangers may be addressed by monitoring or producing orders that may indicate specific customers and/or accounts that need to be monitored and reported.