Taking action

 

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You have identified a high risk or suspicious transaction? What now?

A report from the National Crime Agency (NCA) stated, “Estate Agents reported 10.5% fewer anti-money laundering (AML) suspicious activity reports SARs)” in the last six-month period.

Some agents suggested the reduction in reports made could be down to “a more difficult selling market and agents not wanting to lose sales”, or “them not  having enough time”.

Following the correct procedures is just as important as identifying high risk transactions. There are a few things you need to know.

If you have identified a high-risk transaction, you must:

    • Raise an internal report, which will go to your Nominated Office
    • Seek advice from your Nominated Officer on whether to proceed with the transaction.
    • If instructed not to enter a business relationship with the client in question, carefully manage the communication, to avoid anything that could be deemed as ‘tipping off’
    • Consider all internal reports if you are the business’s Nominated officer or appointed alternate must. You must make a Suspicious Activity Report or SAR to the National Crime Agency (NCA) as soon as it is practical to do so, even if no transaction takes place, if you consider that there is knowledge, suspicion or reasonable grounds for knowledge or suspicion, that the client is engaged in money laundering, or financing terrorism.
    • As a business, consider whether you need to seek a defence against money laundering or terrorist financing offences (DAML) (formerly known as a consent SAR) from the NCA before proceeding with a suspicious transaction or entering into arrangements – your Nominated Officer can advise on this.
    • Not tell the customer that a report has been raised or reporting to the NCA. This is considered as ‘tipping off’ and is deemed a criminal offence. This includes telling a customer that the customer was delayed due to a suspicion being raised, that transaction details have been reporting to the NCA or that law enforcement are investigating them
  • An introduction to Suspicious Activity Reports

    Disclaimer: This is an introduction to SARs and may not represent all guidance you may need to consider.

    What is a SAR?

    A Suspicious Activity Report (SAR) is the name given to a report made to the National Crime Agency (NCA) identifying individuals or entities where it is either known or suspected that they may be engaging in laundering money activities, or dealing in criminal property.

    Why might you submit a SAR?

    Here are some of the things to consider in deciding whether to submit a report, when dealing with transactions:

    • You are struggling to check the identities of parties involved, this could be because the customer is reluctant to provide documentation, or there may be a complex structure of intermediaries.
    • There is something unusual about the transaction, for example it is much larger than those you would usually deal with, or the customer is using your services when using another business would be better placed due to location or specialism.
    • The customer is keen to buy/sell quickly at an unusually low/high price without good reason.
    • There is something usual about the finances involved, for example the customer’s lifestyle does not reflect what you know about their income, or perhaps full or part payment is being made in a foreign currency or cash.

    There are lots of reasons why you may consider making a SAR, for more information visit HMRC or NCA websites.

    Who should make a report?

    Any colleague that knows or suspects that someone, not necessarily the seller or buyer, is involved in money laundering must report this to their Nominated Officer as soon as possible. The Nominated Officer will decide whether to make a report and are responsible for submission.

    How much information should I include in my report?

    You will need to provide details of the individual or entity that you suspect and provide as much information as is known about the money laundering activity itself and the criminal property. You also need to confirm why you believe or know that money laundering is or has taken place.

    The criminal property could be a fee payment that has been received, or a property transaction that has completed where you believe illegal activity has funded the purchase or fee payment.

    If you have any documents, evidence, or links to adverse media these also should be provided within your report.

    I am the Nominated Officer and I have received a SAR. How do I report this to the NCA?

    You can make a report to the NCA here: https://www.ukciu.gov.uk/(vzlgaa551a2urzv0euvujn55)/saronline.aspx

    It’s important to fill in all relevant sections when completing a SAR and the NCA provides helpful and detailed guides to help you get it right. However, as a guide you should:

    Provide details of the individual or entity such as their full name, date of birth and address. If it is an entity provide details of the business, the business number, significant controllers, trading address.

    If you have received a payment that you believe to have come from money laundering, provide details of that transaction (was it cash, transfer and how much was it for)

    Explain why you know or believe money laundering activity is or has taken place and provide as much information as possible, along with any evidence you have, such as links to adverse media.

    Provide details of the criminal property (this could be a property purchase, or a financial transaction that has taken place.

    What happens if I don’t submit a report?

    You may be committing an offence if you fail to make a SAR if:

    • you have ‘knowledge’ or ‘suspicion’ of money laundering activity or criminal property

    • you do something to assist another in dealing with it

    Submitting a SAR provides a defence against committing a money laundering offence, so it is important in protecting yourself and business.

    Should I still make a report, even if the transaction does not go ahead?

    Yes. The nominated officer should make a suspicious activity report even if no transaction takes place. The report should include details of how they know about, or suspect money laundering or terrorist financing. It should also include as much relevant information about the seller and buyer, transaction or activity as the business has on its records.

    Do I need to tell the customer if I have submitted a report?

    No. It’s important that you don’t discuss your suspicions with the client, or anyone other than the Nominated Officer, as this could lead to tipping off which is a criminal offence.

    It is recommended that you consider how you will handle your relationship with the subject once you have submitted the SAR and you may wish to discuss with the Nominated Officer or professional body if you are unsure.

    Helpful Resources:

    NCA

    www.nationalcrimeagency.gov.uk/what-we-do/crime-threats
    www.nationalcrimeagency.gov.uk/who-we-are/publications

    HMRC

    Money Laundering Guidance for Estate Agencies and Letting Agencies
    www.gov.uk/government/publications/money-laundering-regulations