MLR3C8550 - Compliance visit tests: monitoring suspicious activity reports: Introduction

When evaluating SARs Officers should consider the following:

  • Establish if the business has a NO to consider any reports of suspicious activity and submit SARs to SOCA where appropriate. A sole proprietor with no employees and a company director with no employees are responsible for submitting their own SARs. A sole proprietor with no employees and a company director with no employees, do not need a NO.
  • Has the NO passed the “Fit and Proper” test if they are working in an MSB or TCSP?
  • Does the NO have a good understanding of the requirements of the MLR 2007, the POCA 2002 and the TA 2000?
  • Does the NO know how to submit a SAR and have an awareness of the SAR online facility?
  • Are employees trained to recognise suspicious activity and report it to the NO? It is good practice to ask individual employees about their understanding of the process.
  • Is there a suitable procedure in place for employees to report suspicious activity to the NO? Again, it is good practice to ask individual employees about their understanding of the process.
  • Does the NO take all known information about the customer into account when considering if a situation gives rise to reasonable grounds for suspicion of money laundering or terrorist financing.
  • Are SARs being submitted to SOCA where there are grounds for suspicion? Officers will need to consider the reports made to the NO which are not then included in a SAR.
  • Does the number of SARs seem reasonable considering the risk assessment of customers’ products and transactions that are being carried out?
  • Does the business deal correctly with any situations requiring consent
  • Does the business include all the relevant information? It is important to remember that the content of SARs is confidential. HMRC’s role is to ensure that all the relevant details have been included in the SAR based on what the NO was told by the member of staff who made the report and the additional information obtained by the NO.

Under no circumstances should any details of what is in the SAR be recorded by the Compliance Officer or communicated to anyone else.

However in certain circumstances it may be necessary to make a report when a SAR was not made but it was appropriate to do so.

The following is a summary of what makes a good SAR and should help Officers evaluate the quality of the SARs submitted by businesses:

There are six key features to be sure to include on all SARs (where the information is available):

  • Who is the person? - Name, Date of Birth
  • What is being reporting? - is the NO reporting a transaction that has already happened, or seeking consent to allow a transaction to proceed?
  • When did the suspicious activity take place? - What period of time does the suspicion cover?
  • Where do the parties to the transaction live? - Address details (including postcode)
  • Why is there suspicion?
  • How is the suspicious activity taking place?