A new advisory board, from the public and private sector, and statutory guidance would reduce wasted time and improve the UK’s ability to tackle money laundering and terrorist financing, the Law Commission has announced.
Money laundering, in particular, is estimated to cost every household in the UK £255 a year and allows criminals to profit from their crimes. Banks and other businesses use suspicious activity reports (SARs) to report cases of suspected money laundering and terrorism financing, to the United Kingdom Financial Intelligence Unit. However, too many low-quality SARs are submitted to the UKFIU, undermining the entire process.
The recommendations are laid out in the Law Commission’s report, Anti-Money Laundering: the SARs regime, which can be found on the Law Commission website. These include:
the creation of an advisory board
a standardised form for the submission of SARs
guidance on key concepts underpinning the regime
Collectively the recommendations are designed to improve the quality of reporting as a whole and reduce the number of reports with limited intel.
Professor David Ormerod QC, Criminal Law Commissioner at the Law Commission said: “Money laundering is a blight on the UK’s economy and damages our international reputation. We must have a regime in place 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, by reducing the burdens on the UKFIU and reporters.”
Detail
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; a record number of reports received in a year. However, our research has found a significant number of these SARs are of low quality and can contain limited, or even no, useful intelligence. Time and money is wasted by reporters generating these reports and they even hinder law enforcement’s ability to investigate and prosecute crime.
Comment
At the defence and security think-tank RUSI, Helena Wood said: “It was hoped – by public and private sectors alike – that the Law Commission’s consultation would offer some bold proposals for reform of a system that is widely agreed to be broken and not serving the original intentions of the regime. The reality has proved anti-climactic.”
For the comment in full visit the RUSI website.
