SARS FAQs

Content description and disclaimer

This product draws together good practice by reporters across the UK to address queries regularly received by the NCA’s UK Financial Intelligence Unit. It is intended to help reporters provide good quality Suspicious Activity Reports (SARs) that provide maximum benefit to law enforcement.

Collaborative answers are provided to the most frequently asked questions (FAQ) about the process of submitting a SAR. The ambition of these core answers is therefore to help a large cross section of the SAR reporting community. The aim will be to regularly review the content, as it is anticipated that this product will evolve with the introduction of new legislation, regulations and crime trends.

The answers provided to the questions are intended to provide good practice GUIDANCE ONLY. The answers are not intended to, nor should they be construed as, providing any form of legal advice.

For further information and advice, please refer to UKFIU guidance such as Guidance on Submitting Better Quality SARs, available here on the NCA’s website, which should be read in conjunction with this document.

More tailored, industry-specific advice regarding submitting SARs to the NCA and more general anti-money laundering (AML) compliance should be sought from regulators, supervisors or trade bodies. Alternatively, consult independent legal opinion from a lawyer.

The following product is produced by the UKFIU as part of its ongoing commitment to engage with reporting sector colleagues and to maximise the potential of SARs- derived intelligence.

Contents

Part 1 – Definitions and process

Defining some of the frequently misunderstood terms associated with the regime.

Part 2 – Dilemmas

Presenting a variety of scenarios commonly faced by members of the reporting sector. Such situations may arise before, during or after you have submitted a disclosure.
A. Prior to disclosing
B. Following submission of the disclosure
Part 3 – Signpost for further guidance

Sector-specific further information sources.

Part 1: Definitions and process

Q.1: What is a SAR?

SARs (Suspicious Activity Reports) are submitted by reporters (these can be any organisation or individual who knows or suspects that another is engaged in money laundering). SARs alert law enforcement to activity which is in some way suspicious and may indicate money laundering or terrorist financing.

Submitting a SAR provides law enforcement with valuable information about potential criminality. It may also protect you and your organisation from laundering the proceeds of crime. By submitting a SAR to the NCA you will be complying with your legal obligations to report suspicious activity under the Proceeds of Crime Act 2002 (POCA) or Terrorism Act 2000 (TACT).

Q.2: What are ‘DAMLs’ and ‘DATFs’?

A Defence Against Money Laundering (DAML) or Defence Against Terrorist Financing (DATF) is a disclosure made to the NCA under s.338 POCA or s.21ZA TACT where a reporter has a suspicion that property they intend to deal with is in some way criminal property and that by dealing with it they risk committing one of the principal money laundering or terrorist financing offences under POCA or TACT. A reporter may submit a DAML or a DATF where they wish to request a defence to one of these offences before dealing with the criminal property in question.

A person does not commit one of those offences if, after submitting a DAML or a DATF, they have received ‘appropriate consent’ from the NCA. The NCA has the power to provide consent under s335 of POCA and s21ZA of TACT.

These requests for a defence are the primary task of the UKFIU’s DAML Team. Please refer to the UKFIU document Frequently Asked Questions – Defence Against Money Laundering (DAML) available on the NCA’s website www.nationalcrimeagency.gov.uk for further information.

A reporter’s decision to request a defence to a primary money laundering or terrorist financing offence should not be confused with separate obligations to report suspicious activity under s.330/331/332 POCA or s.19 and 21A TACT.

Q.3: What are the principal money laundering and terrorist financing offences?

The principal money laundering offences are:

• Concealing, disguising, converting, transferring or removing criminal property from England and Wales, or from Scotland, or from Northern Ireland.
• Arranging or facilitating the acquisition, retention, use or control of criminal property by or on behalf of another person.
• Acquiring, using or possessing criminal property.

The elements of each are defined in sections 327 to 329 of POCA.

The principal terrorist financing offences are:

• Fund-raising for the purposes of terrorism.
• Use and possession of money or other property for the purposes of terrorism.
• Making money or other property available for the purposes of terrorism.
• Insurers making payments in connection with terrorist demands.
• Facilitating the retention or control of terrorist property, by or on behalf of another person.

These are defined in sections 15 to 18 of TACT.

Q.4: What is meant by the term ‘criminal property’?

This is any property which derives from a criminal act if the alleged offender knows or suspects that it constitutes or represents such a benefit.

It is also important to understand the legal concept of fungibility, where a relatively small amount of criminal property can taint the whole of the asset or assets. For example, if illicit funds are paid into a bank account that contains legitimate funds, then the act of pooling the money in the account may result in the totality of the funds in the account constituting criminal property for the purpose of money laundering offences. If necessary, consideration ought to be given to seeking legal or regulatory advice on such matters.

Q.5: What is meant by the term ‘terrorist property’?

Under TACT, terrorist property is money or other property which is likely to be used for the purposes of terrorism (including any resources of a proscribed organisation). The definition also includes the proceeds of the commission of acts of terrorism, and the proceeds of acts carried out for the purposes of terrorism.

Q.6: When should I submit a SAR?

As soon as you ‘know’ or ‘suspect’ that a person is engaged in money laundering or terrorist financing you should submit a SAR as soon as is practicable. You must decide whether to submit the SAR under either POCA or TACT, depending on the nature of your knowledge or suspicion and on a case by case basis.

Q.7: What constitutes ‘suspicion’? What is the threshold for suspicion, and when do I hit that threshold to submit a SAR?

The NCA is unable to provide any advice as to when a reporter should submit a
SAR, beyond what POCA, TACT and the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 dictate.

Suspicion is not defined in legislation; however, some reporters reflect upon the Court of Appeal case R v Da Silva [2006] EWCA Crim 1654 in which the judge defined suspicion as:
“… a possibility, which is more than fanciful, that the relevant facts exist”, noting that
“… a vague feeling of unease would not suffice …”.
It is always a matter for the reporter to decide at what point the ‘threshold’ is crossed and a disclosure to the NCA should be made. It is not for the NCA to comment upon what circumstances should or should not be deemed suspicious – red flags for suspicious activity should have been discussed during your firm’s AML training. More tailored advice over industry specific guidance is available from your sector’s trade body and/or regulator.

Q.8: What happens if I don’t submit a SAR?

Persons working in the regulated sector are required under POCA and TACT to submit a SAR in respect of information that comes to them in the course of their business if they know, or suspect or have reasonable grounds for knowing or suspecting, that a person is engaged in, or attempting, money laundering or terrorist financing.

Failure to do so could result in both the employee and the employer being prosecuted for criminal offences and/or facing action from the regulator. The offences of failing to disclose come under sections 330-331 of POCA and sections 19 and 21A of TACT, and the penalties for conviction on indictment are up to five years’ imprisonment or a fine, or both.

The risks of not submitting a SAR when required may therefore be legal, regulatory, ethical, operational, reputational and commercial, and could lead to significant repercussions for you and your business.

Even if you are not in the regulated sector, you may have an obligation to submit a SAR. Please refer to Q.15 under Dilemmas below.

Q.9: How do I submit a SAR?

The easiest way to submit a SAR is with the secure SAR Online system. SAR Online is free, negates the need for paper-based reporting, provides an acknowledgement and reference number (reports submitted manually do not receive an acknowledgement) and reports can be made 24/7 (please see the SAR Online User Guidance document, available here or on the NCA website’s Suspicious Activity Reports page, under the Document Library). Online reports will also be processed more quickly, particularly if a DAML or DATF is sought. Alternatively, you can download the forms for manual reporting from the NCA’s website, available here.

Q.10: Who do I send SARs to?

We advise you to only send SARs to the UKFIU.

All SARs should be submitted to the NCA. The UKFIU has the responsibility of receiving SARs on behalf of the NCA.

If you are engaged with law enforcement in advance of submitting a SAR you should note this in your report. It is good practice to identify the police team and police force with relevant reference numbers which will help coordinate subsequent activity – but please avoid naming specific individual law enforcement officers in the SAR.

Q.11: Can I submit a SAR anonymously?

Yes. However, please remember that the confidentiality of SARs is the cornerstone of the reporting regime. Once a SAR is received by the NCA it is held on a secure database with access strictly limited to appropriate law enforcement and government agency staff. THE INFORMATION IS HELD IN THE STRICTEST CONFIDENCE. Please refer to Home Office Circular 022/2015 on the confidentiality and sensitivity of SARs for further details and guidance.

Should you wish to submit a SAR anonymously you can do so by post, addressing it to UKFIU, PO Box 8000, London, SE11 5EN.

Q.12: What does a good SAR look like? Be clear and concise

The explicit rationale and context behind your reason for suspicion should be clearly communicated in simple English.

• Structure your report in a logical format including all relevant information.
• Briefly summarise your suspicion.
• Provide a chronological sequence of events.
• Keep the content clear, concise and simple.
• Avoid acronyms and jargon – they may not be understood by the recipient and are open to misinterpretation.
• If describing a service provided or technical aspect of your work, please provide a brief synopsis in your SAR to aid the reader.
• Do not write the SAR in capital letters – this makes it difficult to read.
• If including a large amount of information/text, break it up into more manageable – and readable – paragraphs.
• Very long SARs which are text heavy are difficult to digest.
• Use punctuation.
• Separate bank account/transaction information and use the standard sort code account and format as 012345 12345678

Reason for suspicion

The suspicion element is the rationale behind why a SAR was submitted and therefore should be explicit. Some reporters find it useful to outline which red flags have emerged through their due diligence checks. When describing why you are suspicious you should try to answer:

Who is involved?
How are they involved?
What is the criminal/terrorist property?
What is the value of the criminal/terrorist property (estimated if necessary)? Where is the criminal/terrorist property? (e.g. a casino in London, a property in Hampshire, etc.)?
When did the circumstances arise?
When are the circumstances planned to happen?
How did the circumstances arise?
Why you are suspicious or have knowledge

Please avoid including reams of transactional data, but instead focus on any specific transactions that have led to your suspicion, including the reason why you consider it to be suspicious. Only include those transactions that directly relate to the suspicious activity described, and explain why you think the transaction supports your reason for suspicion.

Completing all SAR information fields

Alongside completing the ‘reason for suspicion’ you should complete as fully as possible all the information gathered from your due diligence in the other SAR fields.

Completing fields of information in a SAR not only assists in ensuring that any development of the information contained in the SAR is accurate from the offset, but also ensures that any further subject matching that may occur is accurate.

Missing or inaccurate information:

• limits analysis opportunities
• has a negative impact on identifying the subjects correctly
• reduces the overall effectiveness of the SAR.

The amount of information you have may depend on your relationship with the subject of the SAR. It is appreciated that you may not always have the full details concerning all of the entities involved, especially where you are reporting on subjects that are not your usual clients/customers/suppliers. If you do not know the information please populate the field with ‘UNKNOWN’. Please do not use an * (asterisk), ? (question mark), . (dot) or leave blank; using such characters hinders UKFIU/law enforcement agency (LEA) analysis, as it is unclear whether the reporter has entered them in error.

Subject of a previous SAR

If the reported subject (e.g. client/customer) has been the subject of a previous SAR submitted by your organisation, please:

• include up to three previous SAR reference numbers provided to you by the UKFIU. This will be sufficient – we can then work back as necessary until we find the first one.
• do not include any internal reference numbers which you may use yourselves.

The absence of any previously submitted SAR reference numbers risks the connection between SARs being missed.

SAR glossary codes/NCA Alerts

SAR glossary codes are used to identify specific categories of suspicious activity. The inclusion of the appropriate glossary code can be useful in ensuring the distribution of the SAR to a law enforcement or government agency which may be best placed to utilise or act on the information provided. The use of SAR glossary codes is considered good practice and allows the UKFIU and wider law enforcement to:

• conduct analysis to identify money laundering trends
• identify high risk cases for development
• take immediate action where necessary.
• When submitting a SAR the relevant glossary code/alert reference should be included in the ‘reason for suspicion’ text space.
• It is acceptable to have a SAR with several codes; if in doubt as to whether a particular code applies, always work on the basis that it is better to include one than not.
• It is possible that a glossary code does not match the set of circumstances faced by the reporter, so in some cases it is acceptable that no codes are populated into the ‘reason for suspicion’ text space

Please click here to refer to the SAR Glossary Codes and Reporting Routes April 2020 guidance document, available on the NCA website.

Court orders and law enforcement enquiries

In some instances, you may be served with or receive notice of a court order (such as a production order) or law enforcement enquiry made in respect of a particular individual/entity. This may act as a catalyst for you to review the activity which you have conducted in relation to that individual/entity.

If, following such a review, you feel there is an obligation to submit a SAR or request a DAML, then the SAR should reflect your suspicions in the context of your engagement with the subject and not just refer to the fact that you have received a court order or law enforcement enquir

Q.13: What is the process once a SAR is submitted?

The UKFIU receives more than 470,000 SARs a year. SARs are stored on a secure central database which currently holds over two million reports. The UKFIU analyses the SARs to extract strategic and tactical intelligence, identify the most sensitive SARs and send them to the appropriate organisations/LEA for investigation. Certain categories of SAR are fast-tracked where appropriate, where there is a greater threat involved, for example to an individual who is vulnerable or at risk.

With the exception of SARs in certain sensitive categories, SARs are made available to UK law enforcement bodies for up to six years, so they have constant, recurring intelligence value. SARs are often the last piece of the jigsaw in law enforcement investigations; just one SAR can contain information relevant to many end users.

The UKFIU’s teams typically operate with very high caseloads and unfortunately cannot provide progress updates; requests for such updates should therefore be avoided since they cause unnecessary and additional work, adversely impacting on the UKFIU’s efficiency.

Similarly, we cannot provide feedback to reporters on every SAR received. This is because of both the volume received and the wide range of ways the reports are used across the law enforcement system, but every single piece of reported information is considered to be of value and retained.

SARs are also regularly checked against a number of police and law enforcement databases, and matches (or ‘hits’) are investigated further. In some cases, there will be information that can be forwarded to progress or assist with existing investigations, but sometimes there is enough information to trigger new investigations.

Part 2: Dilemmas

This part will focus on the dilemmas commonly faced by members of the reporting sector:
A)prior to disclosing
B) following submission of the disclosure.
A. Prior to disclosing

Q.14: I work in the regulated sector but I’m not a Nominated Officer. Can/should I submit a SAR – or how do I otherwise raise my suspicions?

If you are working in either the regulated or non-regulated sector you must report any suspicious transaction or activity you become aware of to your nominated officer, who is the focal point within your organisation and responsible for receiving disclosures from staff. It is the nominated officer’s responsibility to decide whether the disclosure should be passed on to the NCA by making a SAR.

Q.15: Do I have to submit a SAR if I am not in the regulated sector, or some of the work I do is not?

Even if you are not in the regulated sector, or some of the work you do is not, you may have an obligation to submit a SAR if your organisation has a Nominated Officer.

Nominated officers outside the regulated sector have a legal obligation to submit a SAR to the NCA if they know or suspect, or have reasonable grounds to know or suspect, that another is engaged in money laundering; and the information came to them by way of their trade, profession, business or employment.

You may commit an offence if you:

• have ‘knowledge’ or ‘suspicion’ of money laundering activity or criminal property
• do something to assist another in dealing with it
• fail to make a SAR.

If you’re unsure if your firm or work is in the regulated sector consult your regulator, professional body or trade association, or seek independent legal advice.

Q.16: Should I submit a SAR to report a crime or potential vulnerable people?

The NCA is not a crime reporting agency.
The SARs regime is not a route to report crime or matters relating to immediate risk to others; it is for reporting knowledge or suspicions of money laundering, or belief or suspicions relating to terrorist financing.

As such, in addition to a SAR, you may have to report the matter via other routes to ensure the right information gets to the right organisation.

Where you do report a crime alongside a SAR it is good practice to include the crime reference and the organisation details in the SAR. The UKFIU document Suspicious Activity Report (SAR) Glossary Codes and Reporting Routes, available here on the NCA website, provides details of organisations to report to.

Q.17: What should I do if I believe the criminal activity is taking place outside of the UK?

Under POCA, the activity is reportable if it is an offence in the UK and an offence in the country in which you believe it is taking place. Activity may not need to be reported to the NCA if it is not an offence in the country where it is taking place but it is an offence in the UK. In these circumstances reporters may wish to consider the Proceeds of Crime Act 2002 (Money Laundering: Exceptions to Overseas Conduct Defence) Order 2006.

Under TACT, the activity is reportable if it is an offence in the UK, irrespective of whether it is or is not an offence in the country in which you believe it is taking place.

The NCA will assess the information and decide whether to consult with partner LEAs (either in the UK or abroad) to assess whether action can be taken.

Q.18: Will the information contained in the SAR I submit be held securely?

All users of SARs adhere to specific guidelines to protect the confidentiality of SARs. Once a SAR is received by the NCA it is held on a secure database. This database has strictly limited access to appropriate law enforcement and government agency staff. THE INFORMATION IS HELD IN THE STRICTEST CONFIDENCE. Please refer to Home Office Circular 022/2015 on the confidentiality and sensitivity of SARs for further details and guidance.

If, in the unlikely event you are made aware that confidentiality may have been breached, you should contact the NCA immediately. This should be done on freephone 0800 234 6657.

Q.19: Can I ask my client or customer further questions to satisfy any initial concerns and determine whether I should submit a SAR?

When talking with your client or customer, you may be mindful of ‘tipping off’. These provisions can be found in sections 333A of POCA and 21D of TACT, which make it a criminal offence to tell a person that a disclosure has been made where telling them that you have submitted a SAR could prejudice any investigation that might be conducted as a result of the SAR. These offences can only be committed:

• after a disclosure has been made to the NCA,
• if you know or suspect that by disclosing this information, you are likely to prejudice any investigation that might be conducted relating to that SAR, and
• the information upon which the disclosure is based came to you in the course of business in the regulated sector.

You can make further enquiries of your client or customer to properly assess whether you are suspicious and whether you need to submit a SAR. This is entirely acceptable and you may wish to consider if you have an obligation to do so under the Money Laundering Regulations. As a SAR has not been submitted yet, concerns about committing a ‘tipping off’ offence may not arise.

There are also offences of prejudicing an investigation under s.342 POCA and s.39 TACT. These offences may be committed if a person knows, or has reasonable grounds to suspect, that an investigation is, or is about to be, conducted and they do anything which is likely to prejudice that investigation. Depending on the circumstances, you may consider it unlikely that an offence of prejudicing an investigation may occur if you make enquiries with a client or customer to satisfy any initial concerns that you may have.

B. Following submission of the disclosure

Q.20: If new or additional information comes to light after I submit a SAR, what should I do?

You should submit a new SAR, in which you can provide the new or additional information that has come to light. Please:

• include up to three previous SAR reference numbers provided to you by the UKFIU. This will be sufficient – we can then work back as necessary until we find the first one.
• do not include any internal reference numbers which you may use yourselves

The absence of any previously submitted SAR reference numbers risks the connection between SARs being missed.

Q.21: Can I discuss the submission of my SAR with anyone, or inform a client or customer that I have made a report?

You should not discuss the fact of making a SAR with your client or customer or any other third party, if this risks prejudicing any investigation that might be carried out. Once a SAR has been submitted all reporters should be mindful of the offences under s333A and s342 of POCA and s21D and s39 of TACT relating to ‘tipping off’ and ‘prejudicing an investigation’. There are few exceptions to this rule (see s333B to s333D(2) of POCA and s21D to s21G of TACT). Further advice on these exceptions should be sought from supervisors, trade bodies, regulators or via legal advice.

Q.22: I’m under pressure from the subject. What should I tell them to avoid ‘tipping off’?

The NCA does not provide or approve standard wording for you to use in such circumstances or give general advice on specific methods to answer client queries or awkward questions, as these will vary by reporting sector. For this reason this discussion is again best had with trade bodies, regulators or lawyers.

If a subject is behaving in a threatening or intimidating manner then consideration should be given to contacting local police on 999 or 101 as deemed appropriate.

Q.23: Should I stop providing services to my client/customer once I submit a SAR?

It is recommended that you give careful consideration to how you will handle your relationship with the subject once you have submitted a SAR. This applies particularly if the subject is a client or customer of your business. Whether or not to maintain a client relationship will be a decision for reporters to make based upon their legal obligations and/or risk appetite. You may wish to discuss with your supervisor or professional body if you are unsure.

Q.24: Can I talk to police or other law enforcement regarding my disclosure?

The NCA may refer your SAR to police or other law enforcement bodies as part of the process. Such LEAs may contact you for further information or to discuss the circumstances of your disclosure in more detail.

If you are contacted by the police or another LEA we recommend that you verify that they are who they say they are, for instance by ringing them back via their force/agency switchboard. SAR intelligence can only be shared with certain accredited individuals within law enforcement (financial investigators or financial intelligence officers) and so the individuals contacting you should hold one of these accreditations. You should not assume that all law enforcement officers should be privy to SAR information.

Q.25: How can I update my contact details?

If there are any changes to the MLRO/SAR Online main contact details, you will need to re-register for a new SAR Online account. Please ensure that your contact
details are accurate and up-to-date, and inform the SAR Online technical support team of any changes as soon as possible by emailing UKFIUSARs@nca.gov.uk.

 

Part 3 – Signpost for guidance

The UK Financial Intelligence Unit (UKFIU)

Information about the UKFIU, the SARs regime and guidance notes can be found on the Suspicious Activity Reports page of the NCA’s website at https://www.nationalcrimeagency.gov.uk/what-we-do/crime-threats/money- laundering-and-terrorist-financing/suspicious-activity-reports.

A link to SAR Online is also available in the top right-hand corner of each page of the NCA website.

Useful reference documents

• SARs Annual Report 2019
• SARs Reporter Booklet December 2019
• Defence Against Money Laundering (DAML) FAQ – May 2018
• SAR Glossary Codes and Reporting Routes April 2020
• Guidance on Submitting Better Quality SARs
• Introduction to Suspicious Activity Reports (SARs)
• Submitting a SAR within the Regulated Sector
• SARs Online User Guidance
• Home Office Circular 22/2015: Confidentiality and Sensitivity of SARs
• Home Office Circular 029/2008 – The Consent Regime

Useful contacts

Defence Against Money Laundering (DAML)
All contact with the DAML Team is via email: DAML@nca.gov.uk

SAR Online technical support/general UKFIU queries
Telephone 0207 238 8282. This is a voicemail service only; please leave a message including the date, time, your contact details and the nature of your enquiry and a member of the team will get back to you.
ukfiusars@nca.gov.uk

Terrorist Finance Team
All queries related to disclosures concerning terrorist financing can be sent to: UKFIUTFT@nca.gov.uk

Queries regarding any disclosure of SARs (including as part of a Data Subject Access Request)
UKFIU.OperationalRiskManagementTeam@nca.gov.uk
Her Majesty’s Revenue & Customs (money service businesses, estate agents, high value dealers etc.)

Website guidance:
https://www.gov.uk/guidance/money-laundering-regulations-report-suspicious- activities

Email: MLRCIT@hmrc.gsi.gov.uk

Financial Conduct Authority

Website guidance:
https://www.fca.org.uk/firms/financial-crime/money-laundering-terrorist-financing

Joint Money Laundering Steering Group

Website: http://www.jmlsg.org.uk/

Legal sector

The Law Society website:
http://www.lawsociety.org.uk/support-services/risk-compliance/anti-money- laundering/

Legal sector AML guidance:
http://www.lawsociety.org.uk/policy-campaigns/articles/draft-anti-money- laundering-guidance/

AML helpline (free and confidential): 020 7320 9544

Email: AML@lawsociety.org.uk

Solicitors Regulation Authority website: http://www.sra.org.uk/aml

Ethics and guidance: 0370 606 2577

Law Society of Scotland Professional Practice Team

Telephone: 0131 226 8896

Email: profprac@lawscot.org.uk

Website: https://www.lawscot.org.uk/members/business-support/financial- compliance/anti-money-laundering/
Accountancy sector

Institute of Chartered Accountants in England and Wales (ICAEW)

Website guidance:
https://www.icaew.com/en/technical/legal-and-regulatory/money-laundering/anti- money-laundering-supervision

For ICAEW members only – Email: moneylaundering@icaew.com

Gambling sector

Gambling Commission website AML guidance page:

http://www.gamblingcommission.gov.uk/search/search- results.aspx?searchKeywords=AML&categories=&page=0#main

Email: intelligencereports@gamblingcommission.gov.uk

Confidential reporting line 0121 230 6655
(Please ask to speak to a Financial Intelligence Officer at the Gambling
Commission)