Reporting suspicious activity

IPA members must be aware of the importance of appropriately reporting concerns around money laundering, including internal reporting and consultation within their firms (and with the IPA if necessary) and submitting Suspicious Activity Reports (SARs) to the National Crime Agency (NCA). The reporting requirements originate from Part 7 of the Proceeds of Crime Act 2002 (POCA), which states, broadly, that a person commits an offence under section 330 if:

• they know or suspect (or have reasonable grounds for knowing or suspecting) that another person is engaged in money laundering;
• they can identify that other person and/or the whereabouts of any of the laundered property (or it is reasonable to believe that information exists to be able to do so);
• the information leading to the knowledge or suspicion (or reasonable grounds for knowledge or suspicion) came to them in the course of a business in the regulated sector (which includes insolvency practice); and
• they do not make the required disclosure to a nominated officer, or to the National Crime Agency (NCA), as soon as is practicable after the information comes to them.

A nominated officer commits an offence under section 331 if:

• they know or suspect (or have reasonable grounds for knowing or suspecting) that another person is engaged in money laundering;
• they know the identity of that other person and/or the whereabouts of any of the laundered property (or it is reasonable to believe that information exists to be able to identify them);
• the information leading to the knowledge or suspicion (or reasonable grounds for knowledge or suspicion) came to them through a disclosure made under section 330 (above); and
• they do not make the required disclosure to the NCA as soon as is practicable after the information comes to them.

To help members comply with this aspect of the Money Laundering Regulations, the IPA has brought together some relevant guidance. Should an IPA Member have any questions or concerns regarding AML compliance, they are encouraged to seek advice by emailing amlhelpline@ipa.uk.com.

NCA guidance on submitting better quality SARs

We highly recommend that you read the NCA guidance on completing better quality SARs. Click here to read the guidance, which includes some useful examples of deficient SARs, and some good practice tips.

Defence Against Money Laundering requests

When receiving a SAR, the NCA can provide the relevant person making the report with a defence against money laundering (DAML) in respect of a specified future activity. The relevant power is contained in section 335 of POCA, and the legislation is explained by the NCA in practical terms here.

The IPA, along with the other Recognised Professional Bodies and R3, has agreed specific guidance with the NCA where an urgent DAML request is required. For example, it may be known (or suspected) prior to an appointment that the appointment may result in the Insolvency Practitioner taking control of tainted assets; or perhaps urgent payments are required to be made on appointment to enable trading to continue, but there is suspicion that the funds held may include the proceeds of crime. In such situations, an urgent DAML SAR should be made prior to appointment (or as soon as possible after appointment where this is not possible due, for example, to the urgent requirement to preserve assets).

Please note that an urgent DAML request in accordance with the guidance (available here) must only be made where there is genuine urgency.