Reporting suspicious activities
According to the SARs Annual Report 2009, UK Financial Intelligence Unit (UKFIU) receives more than 460,000 Suspicious Activity Reports (SARs) a year.
SARs can be used to stop crime and arrest offenders, identify changes in the types and extent of organise crime, criminal methods and targets. They are used multiple times by different authorities. For example, the information contained in a SAR may inform HM Revenue & Customs about taxation, local police about fraud or theft and a government department about an issue or weakness in a financial product.
Ultimately, submitting a SAR protects you, your firm, the profession and the UK from the risk of laundering the proceeds of crime.
A person working in public practice has a legal obligation to report to the Money Laundering Reporting Officer (MLRO) when they have knowledge, suspicion or reasonable grounds to know or suspect money laundering or terrorist financing. It is a criminal offence if they fail to do so.
Some warning signs or red flags which might indicate money launderings are summarised below:
The MRLO 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.
Please see the sector guidance for more information on suspicious activity reporting and your obligations.
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 in the following NCA guidance:
- Guidance on submitting better quality SARs
- Guidance on reporting routes relating to vulnerable persons
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.
Tips for making a good quality Suspicious Activity Report (SAR)
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 clear, concise, logical, including all relevant and supporting documentation. In order to make it easier to read and understand, avoid using acronymns 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 transation, 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 2020) is effective immediately. The changes in the glossary code as summarised in this NCA briefing.
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.
Further NCA guidance is available on their website. In particular, the following guidance may be of help when submitting SARs:
- SARs in Action May 2020
- Submitting A SAR
- SAR Guidance notes
- Guidance on submitting better quality SARs
- Glossary codes
- SARs Online User Guidance
- SARs Annual Report 2019
- SARs in Action 2019
- July 2019 SARs Reporter Booklet
Further information on the Flag It Up campaign is available on their web page.
For general UKFIU queries and SAR online technical support only email UKFIUSARs@nca.gov.uk
Obtaining a request against money laundering or terrorist financing
The UKFIU receives over 22,000 consent requests a year.
The UK FIU 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 defenced 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 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.
Members may also wish to refer to the following resources: