Money Laundering: Review of the Reporting ... - Dematerialised ID

kpmg
Review of the regime for handling Suspicious Activity Reports
Report of recommendations
KPMG LLP
4 Key issues and challenges across the SAR regime
4.1 Summary
4.1.1 This section sets out the key issues and challenges across the regime, as identified by our
review. These are:
• The absence of a statement of the aims of the regime, combined with no single
organisation taking ownership of the regime as a whole has meant that participants
have focused on their own agendas (section 4.2).
• The number of SARs disclosed has increased significantly over the last three years
and is likely to continue to increase. The quality of SARs disclosed varies
considerably (section 4.3).
• Disclosing entities need to receive feedback on the disclosures they make for various
reasons. LEAs provide insufficient feedback to ECB, which in turn is unable to
provide the type and quality of feedback disclosing entities require (section 4.4).
• The value added to the regime by ECB processes has not been maximised, due to a
number of factors (section 4.5).
• There is a growing backlog of SARs which have not been processed. This has
implications for the usefulness of SARs to most LEAs (section 4.6).
• The differing aims, knowledge, resource levels and focus of LEA activities and the
use made of SARs has led to diverse outcomes, and some LEAs make better use of
SARs than others (section 4.7).
• There is a significant mismatch in resource allocated to the SAR regime between
providers of SARs and NCIS and the LEAs (section 4.8).
4.2 Ownership of the SAR regime
“The present regime is rapidly falling into disrepute”
“There is a considerable amount of blame of everybody else for the failures of the system,
rather than developing solutions which are best for everybody”
“The ECB really has not got a grip of [the SAR system] and totally devalues it”
Source: Interviewees and questionnaire respondents as part of KPMG’s review
4.2.1 There has been no clear public statement of the overarching aims of the SAR regime prior
to the commencement of our review and no single organisation or group was identified as
the owner of the SAR regime as a whole. Without such an owner there has been no
strategic oversight of all parts of the reporting and investigation process to ensure that the
actions and priorities of each group of the stakeholders are consistent with the operation
of the regime as a whole.
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