Suspicious Activity Reports 101

If you're a lawyer, accountant, or real estate professional in the UK, you need to understand what Suspicious Activity Reports (SARs) are and why they're important. SARs are a legal requirement that mandate the reporting of suspicious activity related to money laundering or terrorist financing to the National Crime Agency. Failure to report suspicious activity can result in fines and even criminal prosecution. Read on to learn more about SARs and their crucial role in maintaining the integrity of the UK financial system.

What are suspicious activity reports?

Suspicious Activity Reports (SARs) are a legal requirement in the United Kingdom for certain professionals, including lawyers, accountants, and real estate firms, to report any suspicion of money laundering or terrorist financing to the National Crime Agency. 

It is important for lawyers to understand their obligations around SARs and to have processes in place to identify and report suspicious activity. Failure to report suspicious activity can result in fines and even criminal prosecution.

SARs are filed with the NCA via their portal. This portal is currently being re-vamped to be more user friendly with an anticipated beta launch between early 2023 that allows users to see previous SARs, and more. In 2021-2022, there was a total of 901,255 SARs received in the UK, an uplift of 21% from the year before.

Why are suspicious activity reports important?

These reports are a key tool in the fight against financial crime and help to identify and disrupt illegal activity. Overall, SARs play a vital role in maintaining the integrity of the UK financial system and ensuring public trust in the professions that are often doors to dirty money entering the system.

When should suspicious activity reports be filed?

SARs should be filed as soon as you become aware of suspicious activity. This is because the purpose of a SAR is to provide the National Crime Agency with information that may assist in their investigation, even if the suspicious activity is ultimately determined to be legitimate. A delay in filing a SAR can potentially allow criminal activity to continue and hinder the investigation process.

Are suspicious activity reports confidential?

SARs should be filed as soon as you become aware of suspicious activity, regardless of whether you believe a crime has been committed. This is because the purpose of a SAR is to provide the National Crime Agency with information that may assist in their investigation, even if the suspicious activity is ultimately determined to be legitimate. A delay in filing a SAR can potentially allow criminal activity to continue and hinder the investigation process.

Furthermore, when a SAR is filed, it triggers a legal obligation for you to cooperate with any subsequent investigation and to refrain from disclosing the fact that a SAR has been filed or the contents of the report.

Who files suspicious activity reports?

The person responsible for filing SARs is the MLRO. They also act as the main point of contact between your firm and the NCA.

How to write a suspicious activity report? What’s a good SAR?

A good Suspicious Activity Report (SAR) is one that provides the National Crime Agency (NCA) with as much detail as possible about the suspected money laundering or terrorist financing. 

This includes:

• information about the criminal property involved 
• any relevant details about the individuals or companies involved, such as
• their addresses, phone numbers, and IP addresses.
• the correct Glossary code 

It's important to use the appropriate Glossary codes to indicate the type of suspicious activity being reported, as this helps the NCA triage the report and prioritise the most serious cases, for instance matters relating to child sexual abuse or human trafficking. 

The NCA website has lots of guides and resources available to assist in the filing of SARs, which can be found here .

What happens after a suspicious activity report is filed?

SARs are the biggest dataset that the NCA has, and they use a team of people to read through hundreds of SARs daily. 

SARs are used both in tactical and strategic ways by police and intelligence agencies. On a tactical level, SARs are often used to understand transactions that are occurring and build a picture to begin a case. Strategically, SARs are also used to build an idea of emerging trends in criminal activity that is then used to create alerts and to take action.

All data collected from SARs are used by up to 80 law enforcement agencies who conduct their own checks as a means for investigating and preventing criminal activity. It is interrogated as a dataset thousands of times a year for keywords and names to help identify and direct an investigation. 

Particularly with the improvements being made to the SARs portal, reports will better utilise structured data which will allow better quality data into the system to be triaged, analysed and used more effectively across different departments.