If you suspect you have spotted money laundering, it is an offence to ignore it.

If during the course of your business within the regulated sector a relevant employee knows or suspects that money laundering or terrorist financing has/is taking place they must submit a Suspicious Activity Report (SAR) to the UK Financial Intelligence Unit (UKFIU) which sits within the National Crime Agency (NCA). This will alert law enforcement agencies to potential instances of money laundering or terrorist financing.

Failing to submit a SAR in such circumstances is a criminal offence. Submitting a SAR not only ensures you conform to the legislative requirements but also protects your practice, staff, reputation, and profession as well as identifying possible offenders and assisting in the tracing of assets obtained through the money laundering process. The information you provide may just be the missing piece of the jigsaw.

The process of submitting a SAR is completely confidential and those members who submit a SAR will have their identity protected. Details of such confidentiality are contained within the Home Office documentation Home Office Circular 022/2015

Relevant SARs Legislation

The requirement to submit a SAR is contained within the following legislation:

Forming Money Laundering Suspicion

When should you submit a SAR and what is suspicion?

There are four conditions that are required to be satisfied:

1. That you know or suspect or have reasonable grounds for knowing or suspecting, that another person is engaged in money laundering.

2. That the information, or other matter, on which your knowledge or suspicion is based or which gives reasonable grounds for such knowledge or suspicion, came to you in the course of a business in the regulated sector (ie. in your as a bookkeeper)

3. That you can identify the person mentioned or the whereabouts of any of the laundered property, or that you believe, or it is reasonable to expect you to believe, that the information or other matter mentioned will or may assist in identifying that other person or the whereabouts of any of the laundered property.

4. That you make the required disclosure to the nominated officer - the Money Laundering Reporting Officer (MLRO), as soon as is practicable after the information or other matter mentioned comes to you.

Suspicion is very subjective and what is suspicious to one may not be suspicious to another and as such cannot be transferred.

The threshold for suspicion is low and in the stated case R v Da Silva, comment was made that you have a reportable suspicion if you think there is 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”. The case can be found here R v Da Silva [2006] EWCA Crim 1654.

Also, in order for you to form suspicion, criminal property needs to be involved. Criminal property is any property that has resulted from criminal conduct either in the UK or overseas as per stated case Anwoir and others [2008] EWCA Crim 1354.

If you are not the MLRO of the practice, you should make the disclosure to your MLRO on the Money Laundering Internal Report (MLR 4) and forward to the MLRO who will notify the NCA on your behalf. This form should be used when reporting a suspicion of money laundering internally to the MLRO. As a sole practitioner, you should also use this form if you notice something unusual which, after making enquiries, you decide is not suspicious and does not need to be reported. It is your evidence that you considered the situation.

If you are the MLRO of the practice, on receipt of the MLR4 you should consider the information provided to you and form your own views if you are suspicious. The concerns of an employee are not sufficient evidence of suspicion as stated in case (Shah v HSBC [2012] EWHC 1283 (QB)).

Appendix C of the CCAB Anti-money laundering guidance for the accountancy sector provides further considerations when deciding to make a SAR.

Once the information has been reviewed, use the MLRO Control Report Sheet (MLR5) to record your observations and subsequent actions and, even if a SAR is not submitted, record the reasons why. Think about 5WH, Who, What, Where, When, Why and How.

The MLRO Report Log (MLR6) should then be completed to log all reporting of suspected money laundering.

It is an offence under the legislation (Tipping Off) to disclose the submission of a SAR and as such it is best practice to keep all documentation in relation to SARs separate from your client files to avoid accidental disclosure.

If you have decided to submit a SAR the next decision to make is what to do with your client. You may decide to continue to act for the client and if that is the case it is important in the first instance to complete Enhanced Due Diligence as the client would be considered to be high risk. You must also closely monitor the client activity and submit further SARS should the need arise. However, you may decide that you no longer wish to continue to act for the client and if so, consider how to disengage without alerting the client. This is something that if required you can liaise with ICB to discuss.

Tipping off

Tipping off is an offence under the Proceeds of Crime Act 2002. It may be committed once a SAR has been made and is then disclosed in a manner likely to prejudice a subsequent investigation; or where an investigation of money laundering is underway or contemplated and a disclosure is again likely to prejudice that investigation.

Discussions within your practice, and with ICB as your supervisory body, would not constitute tipping off.

Submitting a SAR

So you have decided having reviewed all of the information that you are going to submit a SAR to the NCA. This is completed online via the NCA Online Portal. Once submitted you will receive a reference number for your records. The NCA have produced guidance on submitting SARs online.

The UKFIU can provide a person submitting a SAR with a defence against money laundering or terrorist financing offences, should a client request that the member carries out a future act which otherwise may result in the member committing an offence under the legislation.

If you find yourself in a position whereby you wish to seek a defence against money laundering, the NCA have produced a document of FAQs which can be accessed here Defence Against Money Laundering (DAML) FAQs.

The NCA use glossary codes which identify the offence being reported offence. At present when submitting a SAR on the NCA Portal the glossary code at present needs to be included in the reason for suspicion text space. This will be amended in the future when a drop-down list will be implemented. The glossary codes can be found here latest updated glossary codes (March 2022).

Registering with the National Crime Agency

ICB advises members to consider registering with the NCA straight away. This will enable you to complete all registration details and obtain your registration number to be used when making a submission in the future. The site contains straightforward instructions on how to register and how to complete a SAR if ever you should need to do so.

Resources 

Other 

  • Accountancy Sector SAR Guidance 


UKFIU Contacts 

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 

Enquires in relation to disclosures concerning terrorist financing. 

Email: UKFIUTFT@nca.gov.uk 

Feedback or suggestions for the UKFIU magazine 

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