Suspicious Activity Report (SAR) intel is proving invaluable in law enforcement investigations

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. For example, as a result of multiple reporters submitting SARs against one business due to concerns over the high-value payments being frequently received in multiple accounts held by the business, law enforcement was able to obtain multiple Account Freezing Orders and forfeitures on all funds in the accounts, totalling over £100,000.

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:

• high-value cash deposits in newly opened accounts
• lack of source of funds
• customer failing to engage with customer due diligence measures
• multiple accounts for one business frequently receiving and withdrawing high-value payments
• high-value transfers of unknown origin frequently being transferred out of the account soon after
• transactions not in keeping with the business profiles of the customer, whether due to size or frequency
• payments from firms unrelated to the business
• multiple linked business accounts in receipt of large credits that were rapidly dispersed to third parties in the UK and to overseas businesses.

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, 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 –particularly as risks may evolve because of changes to the firm’s client base, geography and services provided.

Guidance on making an SAR

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.