Anti-money laundering
Chapter 8 – making a disclosure
8.1General comments
The disclosure regime for money laundering and terrorist financing is run by the Serious Organised Crime Agency (SOCA). SOCA was created on 3 April 2006 by the Serious Organised Crime and Police Act 2005. It is a law enforcement body devoted to dealing with organised crime within the UK and networking with other law enforcement agencies to combat global organised crime.
For full details on SOCA and their activities view their website at: www.soca.gov.uk
8.2Application
All persons within the regulated sector and nominated officers have obligations under POCA to make disclosures to SOCA of suspicions of money laundering.
All persons are required to make disclosures to SOCA of suspected terrorist financing.
8.3Suspicious activity reports
-
8.3.1What is a SAR?
A suspicious activity report (SAR) is the name given to the making of a disclosure to SOCA under either POCA or the Terrorism Act.
-
8.3.2Who discloses?
Where a firm has a nominated officer, either they or their deputy will make the SAR to SOCA.
-
8.3.3When?
You must make a SAR as soon as you hold a suspicion or know of terrorist financing or money laundering (subject to privilege considerations). Swiftly made SARs avoid delays in fulfilling your client's instructions.
You do not need to wait to ascertain whether or not a person is actually your client before making the disclosure. A SAR can be made about any person whom you suspect is involved in money laundering or terrorist financing.
-
8.3.4Types of disclosures
Reports can either take the form of a SAR or a limited intelligence value report (LIVR). SARs will generally be the normal method of reporting, particularly where consent is required; however, LIVRs may be appropriate where you know that a law enforcement agency already has an interest in a matter. SOCA has provided detailed information (PDF) on when LIVRs should be used. If in doubt, complete a SAR form.
-
8.3.5How to disclose
-
Forms
SOCA has issued a preferred form to be completed when making a SAR, which is likely to become mandatory in the near future. Criminal penalties will apply for its non-use. We encourage you to start using the preferred form now.
-
SARs online
The quickest way to submit a SAR is online. This securely encrypted system provided by SOCA allows you to:
- register your firm and relevant contact persons
- keep electronic copies of all SARs submitted by your firm
- submit a SAR at any time of day
- receive e-mail confirmations of each SAR submitted
-
Post or fax
SARs can still be submitted in hard copy, although they should be typed and on the preferred form. You will not receive acknowledgement of any SARs sent this way. Where you require consent you should send by fax not by post.
Hard copy SARs should be sent to:
Fax: 020 7238 8256
Post: UK FIU
PO Box 8000
London SE11 5EN
8.3.6Information to include
SOCA has provided information on completing the preferred SARs form.
To speed up consideration of your SAR, it is recommended that you use SOCA's glossary of codes for each reason for suspicion section of the report.
Your regulator number is your firm's ID number. Find this at www.solicitors-online.com or by calling the Solicitors Regulation Authority on 0870 606 2555.
8.3.7Getting consent from SOCA to proceed
You will often be asking SOCA for consent to undertake acts which would be prohibited as a principal money laundering offence.
While SOCA has produced information on obtaining consent, here are a number of key points to remember:
- You only receive consent to the extent to which you asked for it. So it is vital you clearly outline all the steps in the transaction still needing to be undertaken that could be a prohibited act. For example: We seek consent to finalise an agreement for sale of property X and to then transfer property X into the name of (purchaser) and following payment of disbursements, pay the proceeds of the sale of the property to (seller).
- The initial notice period is seven working days after the SAR is made, and if consent is refused, the moratorium period is a further 31 calendar days from the date of refusal. If you need consent sooner, you should clearly state the reasons for the urgency in the initial report and perhaps contact SOCA to discuss the situation. SOCA can sometimes give consent in a matter of hours.
- Within the notice and moratorium period you must not do a prohibited act. However this will not prevent you taking other actions on the file, such as writing letters, conducting searches etc.
- SOCA will contact you by telephone to advise that consent has been provided and will then send a follow up letter.
8.3.8Talking to a SOCA representative
The Financial Intelligence Helpdesk can be contacted on 020 7238 8282. You can contact SOCA on this number for:
- help in submitting a SAR or with the SARs online system
- help on consent issues
- assessing the risk of tipping off so you know whether disclosing information about a particular SAR would prejudice an investigation
8.3.9Confidentiality of SARs
SOCA is required to treat your SARs confidentially. Where information from a SAR is disclosed for the purposes of law enforcement, care is taken to ensure that the identity of the reporter and their firm is not disclosed to other persons.
If you have specific concerns regarding your safety if you make a SAR, you should raise this with SOCA either in the report or through the helpdesk.
If you fear the confidentiality of a SAR you made has been breached call the SARs confidentiality breach line on 0800 234 6657. In addition, you can e-mail the Law Society at antimoneylaundering@lawsociety.org.uk, so that we can continue to monitor this issue for discussion with SOCA.
-
8.4Feedback on SARs
SOCA provides some feedback on the value of SARs they have received, although such feedback will always be anonymised to protect the confidentiality of those who submitted it. Feedback is provided:
- on their website
- in their annual reports
- during SOCA legal sector seminars, details of which are advertised in the Law Society's AML newsletter – Gatekeeper