Flag it up! SARs – taking action against suspected money laundering
As accountants most of us are aware of the threat that money laundering poses to our industry, as well as to the economy. But in some cases, it’s probably fair to say that we don’t often think about the direct or indirect social harm it can cause, facilitating more serious crimes such as human trafficking, illegal drugs and arms trade. As intermediaries, we have a crucial role to play in disrupting this threat.
That’s why it’s important for us to always be on the lookout for the red flags of money laundering, whether it’s clients behaving out of character, unusual amounts or sources of funds, or discrepancies in transactions. But beyond that, we also need to understand the importance of reporting, should we encounter what could be considered to be suspicious activity.
In addition to professional and ethical codes of practice, you have a legal obligation to report suspicion according to the Proceeds of Crime Act 2002, and failure to comply can result in professional and criminal sanctions.
If you have got to the stage of completing a SAR, it is important to ensure that the quality is up to scratch. Low quality SARs lack the details needed to form a wider intelligence picture, and can cause delays both for you and law enforcement. It is important to get them right first time, every time.
It’s helpful to remember that the usefulness of a SAR is two-fold: independently, and as part of a jigsaw puzzle of intelligence formed by combining the new submission with information from the millions of existing SARs stored on ELMER, the UK Financial Intelligence Unit’s internal SARs database.
You can find a few simple tips to improve the quality of SARs below:
- Follow the process - completing all the fields of information in a SAR not only assists in ensuring that any research or development of SARs is accurate from the offset, but also ensures that further subject matching is accurate. Missing or inaccurate information limits analysis opportunities, has a negative impact on identifying the subjects correctly, and reduces the overall effectiveness of the SAR.
- Reason for suspicion - the suspicion element is the rationale behind why a SAR was submitted, and therefore should be explicit. Cover off the who, what, when, where, why and how of your suspicion in order to achieve the greatest possible clarity.
- Be clear and concise - the explicit rationale behind the reason for suspicion and the context of why the SAR is being submitted should be clearly communicated in simple English. Make sure to briefly summarise your suspicion, provide a chronological sequence of events, and keep the content clear, concise and simple
View the full NCA report on ensuring better SARs reporting.