NCA Cites Record Number of SAR Filings, Far Fewer Investigations
08 Nov 2019

UK financial institutions and other firms filed a record number of suspicious activity reports (SARs) between April 2018 and March of this year, but only a third of the reports citing potential money laundering prompted criminal investigations.

In an annual report published Tuesday, the National Crime Agency (NCA) said that the 478,437 SARs it received during the 12-month period marked a 3-percent rise in filings from the previous year. The agency separately noted a nearly 53-percent rise in Defence Against Money Laundering (DAML) requests, which potentially permit financial institutions and other firms to handle suspicious funds without violating UK rules.

Of the 34,543 DAML requests received by the NCA over the year, approximately a third of the reports were referred to law enforcement officials for further investigation, the Financial Times noted in a story published Thursday.

Banks, building societies, legal professionals and casinos all filed more SARs over the 12-month period than they had in the previous year, with companies in the gaming sector showing the biggest jump–up 93 percent–in annual filings.

By contrast, the number of SARs filed by money services businesses, estate agents, accountants and trust and company service providers all declined over the year in comparison to the previous period, with trust and company service providers filing only 23 reports, a nearly 57-percent annual decline.

“The pattern of reporting is changing,” said Ian Mynot, head of the UK Financial Intelligence Unit, in the report. “While the number of reports from lawyers and accountants remains low, we are now seeing increased reporting from challenger banks and Fintech companies.”

The overall increase in SARs continues to raise concerns that the reporting obligations are prompting covered businesses to focus more on quantity than quality, the Financial Times noted.

The UK’s SAR regime is resulting in “reports which are unnecessary or of such poor quality that they are worthless,” Nicola Finnerty, a criminal litigation partner at Kingsley Napley, told the newspaper.

“This places a huge drain on an already under-resourced enforcement agency with the potential consequences that good quality SARs and intelligence are neglected,” she said.

RiskScreen: Eliminating Financial Crime with Smart Technology

You can claim CPD minutes for this content, by signing up to our CPD Wallet