SARs: New glossary codes

Other articles (Insolvency Practitioner, June 2020):

Introduction

Businesses and individuals who work in a regulated sector have a requirement under the Proceeds of Crime Act 2002 (POCA) or Terrorism Act 2000 (TACT) to report knowledge of, or suspicions of, Money Laundering to the National Crime Agency (NCA).

Insolvency is a regulated sector and, therefore, all members of the IPA (not just licensed Insolvency Practitioners) are covered by the requirement. It is therefore important that all members of your teams are aware of who your firm’s or office’s Nominated Officer is (the person appointed to act in relation to Money Laundering matters – previously called the Money Laundering Reporting Officer) and your firm’s SARs reporting policy.

SARs are Suspicious Activity Reports and your policy should inform your teams about how they raise concerns and ensure that the Nominated Officer is able to make the appropriate report to the NCA.

What should go in a SAR?

The following details should be included (where possible on the information held):

WHO? – who is the person or organisation that is involved in the activity? Provide as much information as possible to your MLRO
WHAT? – what is the activity, service, dealing or issue that has led you to form the suspicion?
WHEN? – can you advise when the activity took place, or when a request was made which formed a suspicion and when they want the activity to occur?
WHERE? – is there a specific location that this is occurring (the name of the business or a geographical area) or is the request for a repayment to an odd location – an overseas territory for a UK based business?
HOW? – how is the activity to take place or what did take place that led you to consider the transaction(s) suspicious
WHY? – why you consider that the action/activity/transaction etc. is suspicious

Glossary codes

The NCA receive all SARs reports. For 2018-19 there were 478,437 SARs made to the NCA. To assist the NCA and wider law enforcement in identifying trends in Money Laundering activity, where there are higher risk cases to develop and where immediate action may be necessary, the NCA also use glossary codes in producing feedback on patterns in reported SARs.

Glossary codes are therefore important in a SARs submission to alert the NCA to any potential serious issues, provide a strengthened intelligence network and – for your teams – assisting the NCA in dealing with requests for Defence Against Money Laundering SARs (DAML SAR) – the ‘permission’ to proceed with a transaction or case.

A quicker response to a DAML SAR will assist you and your teams in being able to either progress case matters, or, to be advised that agreement to proceed is not provided and ensuring that you do not further deal with a tainted asset or distribute tainted funds.

Updated codes – May 2020

The NCA regularly update glossary codes for use with SARs reporting and have released a new guide on glossary codes and reporting which can be viewed via the link here.

Covid-19

The NCA have also released a note on three new glossary codes to be used where there is a suspicion of groups or individuals exploiting the Covid-19 situation. The note can be viewed by clicking here.

Tipping off

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 ideally via legal advice.

SARs: New glossary codes

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