Reporting suspicious activities

Suspicious Activity Reports (SARs) must be submitted to the National Crime Agency (NCA). Reports alert law enforcement to potential instances of money laundering or terrorist financing.

Ultimately, submitting a SAR protects you, your firm, the profession and the UK from the risk of laundering the proceeds of crime. 

What is a suspicious activity report?

A suspicious activity report (SAR) is a disclosure made to the UK Financial Intelligence Unit (UKIU) (part of the NCA) about known or suspected:

It is important to note that SARs are treated confidential in order to protect the identity of those who make them. Further information on confidentiality of SARs is included in the Home Office Circular 022/2015

When to make a SAR

A suspicious activity report (SAR) is required when, during the course of their business in a regulated sector, a relevant employee (e.g. a member in practice) has knowledge or suspicion of money laundering or terrorist financing. It is a criminal offence to fail to report.   

The MLRO has a duty to consider all such reports. If the MLRO also suspects money laundering or terrorist financing then they must make an onward disclosure (otherwise known as a suspicious activity report) to the National Crime Agency (NCA). The MLRO must make the report to the National Crime Agency as 'soon as is reasonably practicable' after the information to their attention. (POCA 2002)

There is no obligation to report to the NCA where none of the following are known or suspected:

  • the identity of the person who is engaged in money laundering
  • the whereabouts of any of the laundered property
  • that any of the information that is available would assist in identifying that person, or the whereabouts of the laundered property.

Further guidance on each of these elements (and the privileged circumstances reporting exemption) is contained within section 6 of the CCAB Anti-money laundering guidance for the accountancy sector.

Once a SAR is made, it is important to consider whether or not it is appropriate to continue to act. If you decide to disengage for the client, this should be document, ideally by a disengagement letter.

Forming a suspicion

You’ll need to decide whether you’ve formed a suspicion before you’re obliged to make a SAR.

The threshold for suspicion is low. The leading test comes from R v Da Silva [2006] EWCA Crim 1654.

You have a reportable suspicion if you think there’s a possibility, which is more than fanciful, that the relevant facts exist. In Da Silva, it was noted that "a vague feeling of unease would not suffice".

Factors to consider when deciding to make a report are included in Appendix C of the CCAB Anti-money laundering guidance for the accountancy sector. Please note that:

  • as MLRO, you should form your own views as to whether you are suspicious by asking questions and reviewing information. Concerns by employees are not sufficient evidence of suspicion (Shah v HSBC [2012] EWHC 1283 (QB)). 
  • In order to form a suspicion, there must be criminal property, that is, property that results from criminal conduct in the UK or overseas Anwoir and others [2008] EWCA Crim 1354.
  • Suspicion is not automatically transferred if, for example, a police officer advises you that your client is under investigation for a criminal offence. You must make your own assessment of suspicion in light of client information.

It may be helpful to refer to the Red Flag Indicators guidance and Metropolitan Police Criminal Indicators for accountants guidance as part of your deliberations.

Once you've formed your suspicion, it's good practice to document the basis for your reasons. Equally, it is important to document why there is no suspicion and you have decided not to submit a SAR. 

How to submit a SAR

Submit your SAR online via the NCA website. You’ll receive a confirmation email and your report will be processed in about five to seven working days. You can also submit other types of SAR by post or fax – using the NCA’s preferred forms.

The NCA specifically recommends that you submit your SAR electronically if you’re requesting a defence against money laundering (DAML).

Tips for making a good quality Suspicious Activity Report (SAR)

Given the number of SARs and DAMLs being submitted every year, it is imperative that that SARs and DAML requests are good quality. According to the UK Financial Intelligence Unit Suspicious Activity Reports Annual Report 2020, UK Financial Intelligence Unit (UKFIU) received  and processed 573,085 Suspicious Activity Reports (SARs) (an increased on the previous period and 62,408 requests for a Defence Against Money Laundering (DAML) submissions. 

When submitting a SAR you need to think about what, who, why, when, how, where and keep it as short and punchy as possible. Where information is known, every effort should be made to complete all relevant fields accurately. To help guide you through the SAR process, you might want to refer to the Accountancy Sector SAR template.  

In addition, NCA’s Financial Intelligence Unit (FIU) has come up with some practical tips on how to submit a better quality SAR.

Submit at SAR online

Wherever possible use SAR Online. This system has the advantage of secure transmission and instant acknowledgment with a reference number. For NCA, it greatly reduces processing time meaning quicker dissemination to law enforcement and less time tied up in administrative tasks. The NCA have produced guidance on submitting SARs online.

Be clear and concise

The report should be clear, concise, logical, including all relevant and supporting documentation. In order to make it easier to read and understand, avoid using acronyms and jargon and writing in bold or capital letters. If a large amount of text is being submitted, break it up with paragraphs and use punctuation.

Providing the right information

  • Subject type. Use the options to classify each subject as suspect, victim or unknown, this helps put each subject's role into context and also makes clear where subjects are not suspected of criminal activity.
  • Subject details - individuals. Where possible provide any middle names, date of birth (especially helpful), addresses (including postcodes where known), email addresses, web page addresses and any other known identifiers such as National Insurance number, passport number, car registration or phone numbers.
  • Subject details - entities. Wherever possible include the registration number, (tax reference and VAT number is also useful), country of incorporation, addresses (including postcodes where known), email and web addresses, phone numbers and wherever possible the full legal name and designation, e.g. Limited, SA, GmbH etc.
  • Financial transactions. When the suspicion relates to a financial transaction, include details of the beneficiary/remitter of funds, bank account details, transaction date and transaction type e.g. credit card, cash and explain the reason why any of the transactions are suspicious.
  • Services provided. Provide details of the types of services being provided at the time the suspicion arose e.g. audit, assurance, company formation, tax etc. and include date of activity, how the activity will take place and where known, full identity of the parties involved as well as indicators suggesting complicit criminal behaviour or negligent behaviour of the professional(s) involved.
  • Reason for suspicion. Keep your explanation clear, concise and in plain English and focus on what you have seen and why it is unusual or suspicious. Where you feel able to, refer to which predicate offences (i.e. the underlying criminal conduct giving rise to the money laundering) you think may have been committed.

If you know the Act and section number detailing the offence, put it in as it helps explain why you are reporting. Do not include reporting officers' details in a SAR. If you do not know details of certain information, please enter the word 'UNKOWN' rather than leaving a blank filed or populating the information with a *, ? or ….

Use glossary codes

The NCA has for some time encouraged use of its glossary codes to help identify the nature of the reported offence. NCA’s latest updated glossary codes (May 2021) is effective immediately.

Use of the codes and their descriptions significantly enhances the capabilities of law enforcements agencies to utilise SARs. The list of codes is segmented into some straightforward categories such as economic crimes (includes tax offences), high end money laundering, vulnerable persons and so on.

Unfortunately, the current SARs online reporting system does not contain any drop-down menus for the glossary codes. Reporters are therefore advised to include the appropriate code in the narrative of their report, for example, the 'reason for suspicion/knowledge' text space.

Other reporting considerations

In addition to making a report to the NCA, you may have to make a report to other authorities to make sure that the right information gets to the right place.

The SAR regime is not a route to report crime or matters relating to immediate risk to others. For example, if laundering relates to fraud, then a report must also be made to Action Fraud. Further information on reporting crime is available at the NCA website.

Obtaining a request against money laundering or terrorist financing 

The UKFIU can provide a reporter with a defence against the principal money laundering or terrorist financing offences, for a specified future activity or activities (POCA S335 and s21Za of TACT).

Should you want to seek a defence, please refer to the UKFIU guidance Requesting a defence from the NCA under POCA and TACT  and Defence Against Money Laundering (DAML) FAQs which provide further information on the process.

When making a SAR online, please tick the box 'consent' and clearly specific the activity for which a defence is required.

Urgent queries regarding DAML requests can be emailed to DAML@nca.gov.uk 

Tipping off

Tipping off is an offence under the Proceeds of Crime Act 2002. It is committed when:

  • a SAR has been made, and is then disclosed in a manner likely to prejudice any subsequent investigation; or
  • where an investigation of money laundering is underway or contemplated and a disclosure is likely to prejudice that investigation.

Internal discussions within the firm do not constitute tipping off.

Resources

NCA

UKFIU key contacts

Queries regarding SAR online/general enquiries

Telephone: 0207 238 8282 - Option 2 or 3
Email: ukfiusars@nca.gov.uk

Defence against money laundering (DAML)

Email: DAML@nca.gov.uk

Queries related to disclosures concerning terrorist financing

Email: UKFIUTFT@nca.gov.uk

Feedback on guidance or ideas for the UKFIU magazine

Email: ukfiufeedback@nca.gov.uk

CCAB

IFA

HMRC

Report fraud to HMRC