AML 4 MSB 10. Suspicious Activity

More acronyms. Now that you have PEP - it is time to meet your new friend SAR.

SAR stands for Suspicious Activity Report.

From the guidance:

This is the name given to a report sent to the NCA under the Proceeds of Crime Act or the Terrorism Act. The report identifies individuals who you, an employee, an agent, or their employee suspect may be involved in laundering money or financing terrorism. The term suspicion is meant to be applied in its everyday, normal sense. But if you are still not sure of the meaning of suspicious, then the courts have said that “it is a possibility that is more than fanciful.”

Simple really.

Ha!

Let’s get practical.

Anyone can report a suspicion to any part of law enforcement. In theory. However, there is a preferred method.

Anyone in the business who feels something is off should report that to the Nominated Officer. I firmly recommend that these internal reports should NOT be called SAR. (I’ll explain later). Staff should be encouraged to report whenever they feel the slightest bit suspicious. They MUST not let on to the customer, that they are suspicious.

Now - the next bit that I’m going to type is going to come across as shouty. That’s because it is really important.

IF YOU SUSPECT MONEY LAUNDERING, IT IS A CRIMINAL OFFENCE TO DO THE TRANSACTION.

Told you it sounded shouty.

This trumps everything else. I can (&do) write complicated policies about SAR, and there is a tendency amongst businesses to think that these policies are instead of the the line in capitals above. They are not.

Often, a staff member isn’t suspicious in the “normal sense”. They are unsure, and a little concerned. Or - they may become suspicious when a customer returns for another transaction. At this point, they should make an internal report as quickly as is practical. The report goes to the Nominated Officer (NO), who has two options.

  1. Put aside. The NO decides that there are no grounds for suspicion. The transaction (if pending) can proceed. No further action is required.
  2. Report the suspicion to the National Crime Agency. Preferably through the SARS Online system.

I advised against calling the internal report “suspicious” because it somewhat corrals the NO. To put aside an “unusual transaction report” is easier than to put aside a “suspicious transaction report”. Doing that, essentially means, “I believe that you are not suspicious, or shouldn’t be.” Difficult.

SAR is a complex area, and causes businesses untold misery. Want a hand? Get in touch, and we’ll point you in the right direction - for free.