UKFIU’s SARs Reporter Booklet November 2024

Your regular CDD, risk assessments and SARs are helping detect suspicious activity as early as possible, and preventing crime.

SARs are a critical intelligence resource for law enforcement – they provide information like phone numbers, addresses, company details, investment activity, bank accounts and details of other assets. They have been instrumental in identifying sex offenders, fraud victims, murder suspects, missing persons, people traffickers, fugitives and terrorist financing.

Accountancy and bookkeeping firms (including sole practitioners) play a critical role in alerting law enforcement to potential instances of money laundering and terrorist financing. Undertaking regular Customer Due Diligence (CDD) and risk assessments can help firms detect instances of suspicious activity as early as possible and the submission of SARs can help reduce and prevent financial crime.

SARs case studies

The latest SARs Reporter Booklet published by the UK Financial Intelligence Unit (UKFIU) uses case studies to provide a snapshot of how SARs intel initiates and supports law enforcement investigations.

Risk indicators and the Accountancy AML Supervisors Group Risk Outlook

Some of the key risk indicators leading to the submission of the SARs in the case studies used include:

• a number of linked accounts with higher-than-expected turnover and multiple high-value transfers
• doubt during verification checks over the true identity of a customer, triggering an investigation into the customer’s financial activity
• activity inconsistent with the suspect’s profile, including spending on high-value assets
• multiple red flag indicators of underground banking on a customer’s account, including the customer being an international student with a short association with the reporter, financial activity and cash deposits of high value not reflective of a student, and origins of cash credits being unknown
• Open-source media reports relating to the customer’s history of illicit activity and the identity of several payments to retailers linked to equipment that could be used in the production of drugs.

Firms are reminded that the risk of money laundering and terrorist financing is constantly evolving. Firms should regularly review the Accountancy AML Supervisors Group Risk Outlook (PDF), and any other risks published by their supervisory authority (such as the AML Alerts that AAT publishes in Knowledge Hub) to make sure they have identified all the areas relevant to their own business. Risks may evolve because of changes to the firm’s client base, geography and services provided.

Guidance on making an SAR

Chapter 6 of the CCAB’s Anti-Money Laundering, Counter-Terrorist and Counter-Proliferation Financing Guidance for the Accountancy Sector provides guidance on what suspicious activity must be reported, when and how a report should be made to the National Crime Agency, and matters which may require a Defence Against Money Laundering (DAML).

The quality of an SAR can affect the UKFIU’s ability to prioritise and process the report. It can also affect the relevant agency’s decision or ability to investigate. Before making an SAR, firms should familiarise themselves with the UKFIU’s Guidance on Submitting Better Quality SARs.

AAT’s AML helpline

AAT’s AML helpline offers advice for AAT-supervised firms on all aspects of complying with the Money Laundering Regulations, such as advice on how to report suspected illegal activity. To discuss any questions you might have, call us on +44 (0)20 7367 1347 or email [email protected].

AAT Comment offers news and opinion on the world of business and finance from the Association of Accounting Technicians.