Whether you are making your first suspicious activity report (SAR) or you 100th, providing the correct information will ensure that it is processed quickly and can be used most effectively.
Here are a few good practice tips to help enhance your SARs.
Online / Preferred form
As all solicitors know, it is so much easier to deal with information when it is clearly set out and in a format which is compatible with your own systems.
The Serious Organised Crime Agency (SOCA) (now known as the National Crime Agency (NCA)) is no different. They have issued a preferred form which helps ensure all of the information they need is included and that it is in a format which they can quickly enter into their system.
While the form is designed with financial institutions in mind (as they are responsible for more than 80% of the SARs reported annually), law firms can still fill in the parts which are relevant to them.
In addition, the NCA has created an online portal which will allow you to submit the SARs directly on-line and into their database.
The benefits of using the portal include
- there is no delay for someone to enter the information before any consent request can be considered
- you can save a copy for your records, and
- you receive an email confirming receipt.
You do have to register for the system, but you can do this before you need to make a SAR.
If you prefer to make your report on paper, you can still fax the form through to the NCA on 020 7238 8286.
Make use of the CDD you acquired
Firms spend a lot of time collecting client due diligence information (CDD), so it is important that when the time comes to make a SAR, you make full use of this resource. There are a number of reasons for this.
Firstly, full details help the NCA more quickly identify whether your client is a person of interest to them or not.
Secondly, even if some of the details you have been given are fraudulent, some of the contact details will be real in order to allow you to communicate with the client. This may help law enforcement link in different parts of criminal gangs and provide information about different alias being used.
So make sure you include the following information where you have it:
- full names,
- addresses including post codes,
- dates of birth,
- phone numbers,
- passport or drivers licence numbers
- company registration numbers.
Why are you suspicious?
The narrative section of the report is the part where you give a concise explanation of your to law enforcement agencies. The easier you make it for them to understand, the quicker they will be able to act on it.
You should provide a brief outline which covers:
- the name of the person you are reporting and their relation to you for example your client, the other side or a third party funder
- what is the transaction you are undertaking or how did you receive the information causing the suspicion?
- details of your suspicion.
When stating why you are suspicious of money laundering you should either:
- outline what criminal activity you think the person has been engaged in to produce criminal property or
- outline the warning signs which cannot be explained and make you think there must be criminal property involved.
So this section may look something like:
- I suspect that the client has accepted bribes / evaded tax / claimed benefits they were not entitled to ….
- The client has instructed me to recover a debt from a debtor who lives a long way from both the client and our firm. The debtor is very happy to pay the debt without us taking any action and would like to put the money through our client account. The debt relates to a type of business (eg oil importation) in which our firm has no experience. We have not received a satisfactory explanation for this from our client. We therefore suspect this is scam litigation and they are attempting to use us to launder money.
The vexing issue of consent
You only need consent if you know or suspect that you will be involved in money laundering. If you are simply reporting about someone else's money laundering, you do not need consent.
If you need consent, make sure you tick the consent box.
In the narrative section clearly state what you would like consent to do.
If you need to take those steps before either the notice period (7 working days starting the day after you put the report in) or the moratorium period (31 days after the NCA refuse consent), include information about those deadlines.
This will assist the NCA and law enforcement agencies to prioritise matters and to consider whether a refusal of consent would actually make it more difficult to trace the assets or would put people at risk.
What not to do
The NCA's consideration of your SAR may be delayed and you may potentially find yourself on the wrong side of a regulatory or civil claim if you:
- send or attach boxes of files
- ask for consent to take on a client for whom you cannot fully complete CDD
- ask the NCA to verify your client's identity for you
- use complicated legalese or Latin terms
- report everything just in case.
Getting more help
Remember that you are not alone in having to put in SARs, there are around 170,000 firms regulated for AML compliance who need to consider failure to disclose SARs and many more who need to consider making consent SARs when they suspect they may be involved in money laundering.
Here are three useful places you can get more assistance: