SIP 2 investigations into Covid support scheme abuse and SARs reporting
IPA Insolvency Practitioner newsletter, January 2024
Members may recall articles in the February 2023 newsletter and April 2023 AML newsletter on reporting the misuse of Bounce Back Loans (BBLs) and other Covid support schemes as part of an IP’s SIP 2 investigations.
SIP 2 investigations will remain an area of focus for the IPA as part of monitoring visits, and IPs must ensure that a proper investigation into the application for and use of Covid support scheme funds received – in particular BBL funds – is carried out as part of relevant SIP 2 enquiries. It is recognised that there may be a delay in obtaining all relevant bank statements (which will now likely require up to 4 years of statements to review) and members should ensure that clear file notes and comments are made and kept as part of the SIP 2 file to document ‘…initial assessments, investigations and conclusions…’ as required under p18 of SIP 2, and any further investigations are followed up and completed with further reports made on any findings as relevant.
Members should also consider reporting misuse and fraudulent applications for Covid support measures to their Money Laundering Reporting Officer (MLRO) to allow the MLRO to consider reporting the misuse to the National Crime Agency under as a Suspicious Activity Report (SAR). Members are reminded that reports to your MLRO – and an MLRO’s report to the NCA – is required when a suspicion is formed, and you do not have to wait for the conclusion of any SIP 2 investigations to make a report to your MLRO/the NCA. The reporting of suspicions to the NCA via SARs in relation to Covid Support abuses will be a focus for the IPA as part of our AML compliance reviews and AML inspection visits. You should make sure that you have a clear SARs policy which is understood by your teams, and the IPA recommends the use of a SARs form to report suspicions to your MLRO and which allows your MLRO to capture their considerations on reporting to the NCA.