A new advisory board and statutory guidance is needed to help UK tackle money laundering and terrorist financing.
That is the main recommendation of a report Anti-Money Laundering: the SARs regime published by the Law Commission.
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In particular, money laundering is estimated to cost every household in the UK £255 a year.
Banks use suspicious activity reports (SARs) to report cases of suspected money laundering and terrorist financing. Reports are submitted to the United Kingdom Financial Intelligence Unit (UKFIU).
Law Commission recommendations include:
- the creation of an advisory board;
- a standardised form for the submission of SARs, and
- guidance on key concepts underpinning the regime.
Collectively the recommendations are designed to improve the quality of reporting as a whole. In addition, the Law Commission says it will reduce the number of reports with limited intel.
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By GlobalDataUK money laundering and terrorist financing: current issues
The number of SARs submitted has doubled over the last ten years and continues to rise. This has culminated in over 470,000 reports in 2018-19. This is a record number of reports received in a single year.
The Law Commission says that a significant number of these SARs are of low quality. Moreover, they can contain limited, or even no, useful intelligence.
Time and money is wasted by reporters generating these reports. As a result, it hinders law enforcement’s ability to investigate and prosecute crime.
Professor David Ormerod QC, Criminal Law Commissioner, Law Commission says: “Money laundering is a blight on the UK’s economy. It damages our international reputation. We must have a regime that allows law enforcement agencies to investigate and disrupt money laundering at an early stage.
“But the reporting scheme isn’t working as well as it should. Enforcement agencies are struggling with a significant number of low-quality reports and criminals could be slipping through the net.
“We think our recommendations would help tackle money laundering more effectively in a more proportionate manner, And it would reduce the burdens on the UKFIU and reporters.”
Ian Mynot, Head of the UK Financial Intelligence Unit adds: “The National Crime Agency welcomes the Law Commission report. This is a comprehensive report. We will now work with the Home Office, the regulated sectors and law enforcement agencies to consider its recommendations.”
