UK's National Crime Agency Calls for Further SARs Reforms
The UK’s National Crime Agency (NCA) is calling for additional reforms to the country’s system for reporting suspicious transactions in an effort to scale back the volume of defensive filings it receives, the Financial Times reported Thursday.
Although the Home Office has launched a “transformation programme” aimed at overhauling the UK’s regime for suspicious activity reports (SARs), additional steps are needed, according to Ian Mynot, the head of the agency’s UKFIU division.
“A tendency to defensive reporting from some parts of some sectors is one of several issues we are considering in SARs reform,” Mynot told the FT. “We will also continue to provide targeted outreach and guidance across the various reporting sectors to promulgate best practice and improve the quality of reporting.”
Last year, the NCA reported an 81-percent jump in so-called “defence against money laundering” (DAML) requests, which can shield reporting institutions from criminal liability for processing related transactions if approved by the agency, the FT said. Of the nearly 62,000 DAML requests filed in 2019, the NCA approved all but 2,055, according to the report.
The NCA has separately seen a sharp rise in SARs filed by challenger banks and other fintech firms, with the companies submitting a total of 83,609 reports in 2019-more than double the number they filed in 2018, the FT said. The rise in SARs filed by the businesses, which accounted for 64-percent of the total annual increase in reports, can be largely attributed to the relatively fast growth in customer bases and the adoption of automation in onboarding and account monitoring, the NCA believes.
Over the course of the 12-month period ending in March 2020, the NCA saw a 20-percent rise in SARs submitted by all covered firms compared to the prior 12 months.
“We are dealing with huge volumes [of SARs and DAMLs] and large increases year on year,” Mynot told the FT. “The DAML cases are the ones that are the most resource intensive and often quite complicated to deal with, and those have risen to just over 62,000 this year, which is a big increase.”
The recent publication of the FinCEN Files investigative news stories, which relied in part on leaked SARs, have “raised real questions about whether the SARs regime is fit for purpose,” Susan Hawley, the executive director of the advocacy group Spotlight on Corruption, told the newspaper.
“A radical rethink of the SARs regime . . . is urgently needed,” Hawley said. “Law enforcement desperately need high quality reports, where well-grounded suspicions are spelt out properly. Otherwise those filing reports are just, in many cases, offloading risk on to under-resourced and overstretched enforcement agencies.”
“A tendency to defensive reporting from some parts of some sectors is one of several issues we are considering in SARs reform,” Mynot told the FT. “We will also continue to provide targeted outreach and guidance across the various reporting sectors to promulgate best practice and improve the quality of reporting.”
Last year, the NCA reported an 81-percent jump in so-called “defence against money laundering” (DAML) requests, which can shield reporting institutions from criminal liability for processing related transactions if approved by the agency, the FT said. Of the nearly 62,000 DAML requests filed in 2019, the NCA approved all but 2,055, according to the report.
The NCA has separately seen a sharp rise in SARs filed by challenger banks and other fintech firms, with the companies submitting a total of 83,609 reports in 2019-more than double the number they filed in 2018, the FT said. The rise in SARs filed by the businesses, which accounted for 64-percent of the total annual increase in reports, can be largely attributed to the relatively fast growth in customer bases and the adoption of automation in onboarding and account monitoring, the NCA believes.
Over the course of the 12-month period ending in March 2020, the NCA saw a 20-percent rise in SARs submitted by all covered firms compared to the prior 12 months.
“We are dealing with huge volumes [of SARs and DAMLs] and large increases year on year,” Mynot told the FT. “The DAML cases are the ones that are the most resource intensive and often quite complicated to deal with, and those have risen to just over 62,000 this year, which is a big increase.”
The recent publication of the FinCEN Files investigative news stories, which relied in part on leaked SARs, have “raised real questions about whether the SARs regime is fit for purpose,” Susan Hawley, the executive director of the advocacy group Spotlight on Corruption, told the newspaper.
“A radical rethink of the SARs regime . . . is urgently needed,” Hawley said. “Law enforcement desperately need high quality reports, where well-grounded suspicions are spelt out properly. Otherwise those filing reports are just, in many cases, offloading risk on to under-resourced and overstretched enforcement agencies.”
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