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 confiscation units. In doing so, consideration should be given to including representatives from more than one LEA specialism following the model established within the Scottish Money Laundering Unit (“SMLU”) as part of the Scottish Drug Enforcement Agency (“SDEA”), which includes Police, HMC&E, IR and NCIS FIs, Intelligence Officers (“IOs”) and financial analysts. This allows a cross-fertilisation of skills and experience to increase operational efficiencies and maximise the benefit of receipt of financial information through SARs. Early indications are that the SMLU’s system for handling SARs, which has been in operation for the last six months, has led to better allocation of SARs to the appropriate LEAs and a more timely, flexible and integrated use of intelligence and resource. 8.3 ARA Centre of Excellence to develop guidance and training on use of SARs Recommendation 16 Identification of benefits from SARs and best practice 8.3.1 The ARA Centre of Excellence should ensure that the benefits from the identification and provision of high quality SARs are promulgated in the first instance to FIs. The Centre of Excellence should issue national guidelines relating to SARs which should form the basis of training FIs. These should set out: • The benefits that can be derived from the focused and rigorous use of SARs within different classes of investigation, both in relation to money laundering offences and to other predicate offences where information in SARs can provide leads and evidence to support other investigations. • The best practice methods for use of the range of different financial information contained within SARs. This should be based on the specific experience of law enforcement, ARA, and NCIS, including learning points and proven techniques from successful prosecutions and disruptions and those issues and problems arising from unsuccessful investigations. This should include the various stages of an investigation such as the grading of intelligence, effective case management, the most effective methods to audit results and the need to provide feedback on both specific cases and more generic methodologies and typologies. Use of best practice in training all law enforcement investigating officers 8.3.2 Once best practice information and methodologies have been identified through the Centre of Excellence, this should also be used as part of the training modules which ACPO, ARA, NCIS and other LEA training bodies provides for all entrants to law enforcement and not solely to FIs. This would emphasise and demonstrate to all investigating officers the benefits of using SARs as part of the wider intelligence held within ECB and that they can and should form an integral part of the processes of investigating, tracking down and recovering the proceeds of crime. jo/fh/519 72
kpmg Review of the regime for handling Suspicious Activity Reports Report of recommendations KPMG LLP 8.4 LEA access to and use of Elmer terminals Recommendation 17 Access to Elmer terminals 8.4.1 All FIUs should have an Elmer terminal, and all accredited FIs should have access rights to use the terminal. The largest LEAs should have the option to take a number of other terminals, subject to agreeing access protocols if they have multiple access to Elmer. Whilst it would be inappropriate for the LEAs to have free access to all the types of data available on Elmer, FIUs should be allowed access to manage the SARs allocated to them and held in their own queue and to conduct specific searches of all SARs on the Elmer database. Meeting the requirements of the Data Protection Act 8.4.2 The Data Protection Act 1998 (“DPA”) permits NCIS to disclose SARs to other agencies if, inter alia, the disclosure is for “the prevention or detection of crime”. Initial legal advice provided to NCIS ECB states that “…for the investigating agency to have the benefit of an Elmer terminal they give you an indemnity and they would also have contractually to undertake to maintain the confidentiality of the information thereby gleaned”. 15 8.4.3 Access protocols should therefore be agreed between ECB and the LEAs which will build this DPA and confidentiality criteria into the legal relationship between the different parties. Other safeguards to the data held on Elmer and accessible by LEAs should include: • The reasons for all search requests should be recorded by the LEA on Elmer, based on a number of options all linked to “the prevention or detection of crime”. • ECB should then monitor compliance with the protocols and the reasons given for the use made of Elmer data. 8.4.4 Implementation of the range of KPMG recommendations will, over time, ensure that there is a reduction in low quality SARs and those with inadequate reason for suspicion on Elmer, thereby strengthening further the position under the DPA. 8.4.5 ECB will be responsible for ensuring that it has taken appropriate legal advice on its legal position prior to agreeing the relevant protocols. ECB should also enter negotiations with industry representatives to ensure that these arrangements and use of data are appropriate and, where necessary, renegotiate the relevant agreements. Managing the SAR queue - LEA decisions on which SARs should be developed 8.4.6 Individual FIs within FIUs should review the queue of SARs in Elmer and decide which ones should be developed into intelligence packages and which should be actioned immediately (e.g. VAT Carousel fraud) but not developed. The LEA will be able to 15 Letter from Winckworth Sherwood to NCIS 25 November 2002. jo/fh/519 73
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