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

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kpmg Review of the regime for handling Suspicious Activity Reports Report of recommendations KPMG LLP 6.5 Automatic search and initial allocation processing at the DMC for SARs input into Elmer Recommendation 6 Automatic initial searching of core databases 6.5.1 The DMC should conduct an automatic search for SARs after they have been input into/transferred onto Elmer. This search should include Alert “nominals” (i.e. subject names), the Elmer database, the PNC and CEDRIC. This search should capture a considerable amount of information which is currently contained on local LEA databases because there are few subjects who are on local databases who have not been convicted of a recordable offence and are therefore not on the PNC. 6.5.2 The results of this search should not be manually verified by the DMC; only the number of hits against the various systems will be recorded rather than their quality or relevance to the subject. Scoring of individual SARs 6.5.3 Each SAR should then be automatically scored on the basis of the results of the search relative to the number of hits against the different source systems. ECB should determine and agree the relative weights and priority to be adopted in relation to each type of system hit, in consultation with those LEAs which are high users of SARs. This score would then allow the identification of an initial relative priority for each SAR based on the links identified with other SARs or intelligence obtained from other databases. The scoring process should be regularly reviewed in consultation with LEAs to ensure they accurately reflect the changing operational factors relating to successful and high quality SARs. Automatic initial allocations of SARs to LEAs 6.5.4 The system should initially automatically allocate SARs to an LEA within Elmer prior to LU review. This allocation would be based on a number of different contributory factors, including, as now, the postcode for the relevant subject and any previous allocations. It should also make use of the additional information arising from the searches in the allocation of previous related hits, together with any indicative allocation or suggested predicate offence provided with the SAR by the disclosing entity. It should take account of any previous search requests submitted by any LEAs. It should also make use of information from the PNC where an LEA may already have information on or an interest in the subject of the SAR. The final component to be used should be ongoing written information provided by the various individual LEAs of their requirements, areas of interest and current priorities. 6.6 Establishment, staffing and role of ECB Liaison Unit Recommendation 7 Establishment of a new ECB Liaison Unit 6.6.1 The ECB should increase its resources dedicated to improving the quality of disclosures. It should establish an LU within ECB which will both take over the functions of the jo/fh/519 56
kpmg Review of the regime for handling Suspicious Activity Reports Report of recommendations KPMG LLP existing Duty Desk and adopt a number of additional specific responsibilities relating to quality issues as detailed below. Staffing of the ECB LU 6.6.2 The LU should comprise a mixture of staff from a range of sources: • There should be a core of permanent ECB staff, who will provide an ongoing continuity and consistency of approach. They should develop and maintain “inhouse” experience of the range of types and quality of disclosures submitted to ECB. • The staff should also include seconded experienced police and other LEA FIs who would provide knowledge of the practical use that LEAs make of intelligence packages and how to develop investigations on the back of this information. They would provide an understanding of the current issues experienced at the various LEAs. ECB should recruit former FIs for set term contracts of one or two years on their retirement from an LEA. There would then also be a greater “buy-in” by the LEAs of the role and value of ECB as local FIs would feel more comfortable dealing with a number of their peers who would understand their concerns, issues and frustrations at the LEA level. • The LU should include financial services professionals covering the key financial services, markets and products (e.g. retail and corporate banking, life and general insurance, accountants, private client and corporate lawyers). They should be provided on a rolling secondment basis (possibly through the aegis of the relevant trade associations) by the full range of disclosing entities; these should include banks, insurance companies, accountancy firms, lawyers and other financial institutions, together with individuals from their various trade bodies. In addition, ECB should recruit individuals with appropriate experience for set term contracts of one or two years on their retirement from these entities. The combination of these measures should provide the detailed specialist knowledge that is currently lacking on the Duty Desk. 6.6.3 LU staff would also benefit from secondments out to LEAs to work directly on investigations and widen their understanding of the role and activities of users of SARs. This should be made part of LU staffing planning within the wider resource discussions once the new structure is clearly bedded down. Review of all SARs input by the DMC 6.6.4 The LU should continue the work of the existing Duty Desk in reviewing SARs, after they have been input onto Elmer by the DMC. The LU should have various objectives when conducting such reviews: • To identify poor quality disclosures and to reject them, while providing feedback and (if necessary) discussion with the relevant provider. It should then be the responsibility of the disclosing entity to obtain and submit further or better information on the SAR (see sections 7.4.7 to 7.4.9 below for more detail). • To identify high priority SARs and to recommend to the LEAs via Elmer that these be actioned by the LEA. Any decisions on development or action should, in part, be jo/fh/519 57
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