On 29 December 2018 the National Crime Agency (NCA) published the 2018 Suspicious
Activity Reports (SARs) Annual Report. Statistics show that:
The UK Financial Intelligence Unit (UKFIU) processed a record number of SARs
(463,938) between April 2017 and March 2018, nearly 10 per cent more than the
22,619 of those were requests for a defence against money laundering (DAML),
which resulted in a total of almost £52m being denied to criminals.
In addition, $500m was denied to criminals as a result of a DAML refusal relating to
funds transferred to fraudsters from overseas.
There were only 40 arrests across 28 different cases.
3,615 vulnerable person SARs (up 37.61% from the previous year) were
disseminated to law enforcement agencies (LEAs). The SARs regime allows for the
identification of members of the public who are vulnerable or likely to become
vulnerable to financial crime;
1,419 PEP SARs were disseminated to LEAs, up 64.62% from the previous year.
The report clearly evidences how SARs are vital to tackling the many and varied forms of
criminality impacting the UK. The SARs regime allows for the identification of members of
the public who are vulnerable or likely to become vulnerable to financial crime, and the
associated money movement. A data matching tool that enables the cross referencing of
HMRC and third party data with SARs data continued to generate HMRC cases for criminal
and civil investigations.
The banking sector is the strongest contributor, with circa 80 per cent of the total SARs
volume, whilst concerns were raised that lawyers and accountants are not filing enough
SARs, despite some of them predictably dealing with clients whose source of wealth could
be questionable. Annex 1 to the report shows that the legal sector contributed only 0.57 per
cent of the total SARs submitted, and the accountants with only 1.1 per cent. Just 35 SARs
were raised in the education sector despite the reasonable concern that private schools
might deal with dubious funds when it comes to the payment of tuition fees.
The report also highlights how the UKFIU provided support to law enforcement and
intelligence services in the aftermath of the 2017 Manchester and London terrorist attacks,
with the information provided in SARs contributing greatly to the intelligence picture.
In April 2016, the government made a commitment in its Action Plan for Anti-Money
Laundering and Counter-Terrorist Financing to reform the SARs regime, however this
commitment remains unfulfilled so far. In March 2018, the UKFIU was visited by Financial
Action Task Force (FATF) assessors as part of the UK’s mutual evaluation and the outcome of
this peer review was better than expected. It is said in the report that through the year, the
UKFIU has improved its internal processes to make the current regime more effective and
better able to achieve operational outcomes.
The Home Office is leading a SARs Reform Programme, which aims to improve the SARs
regime, including underpinning it with modern IT. The Programme has funded the police
and NCA to deliver pilot training courses for law enforcement and develop new e-learning
materials, to support and encourage LEAs to further use and exploit SARs in their
investigations across all crime types. The aim is for the public and private sectors to deliver
an integrated and transformational world-leading approach that reduces harm, protects the
integrity of the UK economy, supports legitimate growth and prosperity, and ensures that
there are no safe spaces for the proceeds of crime or terrorism financing.
It is anticipated that the volume and complexity of SARs will continue to rise, and in
anticipation of these increases the NCA has confirmed an additional 46 operational posts for
the UKFIU over the next three years.