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 JMLSG KPI KPMG LEA LU ML MLAC MLIT Joint Money Laundering Steering Group Key Performance Indicator KPMG LLP, its Partners and employees Law Enforcement Agency (and other entities that receive SARs such as the Inland Revenue and Department for Work and Pensions) ECB Liaison Unit Money Laundering Money Laundering Advisory Committee Money Laundering Investigation Team MLRs The Money Laundering Regulations 1993 MLRO MSB N2 NCIS NCS NTFIU OECD PEP PMP PNC Money Laundering Reporting Officer Money Service Bureau The implementation of the Financial Services and Markets Act 2000 (midnight on 30 November 2001) National Criminal Intelligence Service National Crime Squad National Terrorist Financial Investigation Unit Organisation for Economic Co-operation and Development Personal Equity Plan Project Management Panel Police National Computer PCA The Proceeds of Crime Act 1995 PoCA The Proceeds of Crime Act 2002 PTA Prevention of Terrorism (Temporary Provisions) Act 1989 RAF SAR SB SDEA SMLU SLA SPOC STR TFT Recovered Assets Fund Suspicious Activity Report Special Branch Scottish Drug Enforcement Agency Scottish Money Laundering Unit Service Level Agreement Single Point of Contact Suspicious Transaction Report Terrorist Finance Team jo/fh/519 6
kpmg Review of the regime for handling Suspicious Activity Reports Report of recommendations KPMG LLP 1 Introduction 1.1 Importance of the SAR regime 1.1.1 A wide variety of financial services companies and other entities provide Suspicious Activity Reports (“SARs”) to the Economic Crime Branch (“ECB”) at the National Criminal Intelligence Service (“NCIS”). ECB develops the criminal intelligence in these SARs and disseminates the results to a range of Law Enforcement Agencies (“LEAs”). SARs are fundamental building blocks in the identification of the flows of illegal and illicit money within the UK economy, including money used for the financing of terrorism and terrorist groups. As such, they provide crucial assistance in the identification, disruption and prosecution of crime in the UK. 1.1.2 This system has been in place for a number of years. During this time there has been significant change in the legislation, an increase in the number and range of entities which disclose to ECB, and a large increase in the number of SARs disclosed to ECB. Given the importance of the flow of information on suspicious activities and the effect of recent changes on the regime (including the Proceeds of Crime Act 2002 (“PoCA”) it is timely to review the effectiveness of the SAR regime. 1.1.3 All those to whom we have spoken believe that a strong and effective SAR regime would provide crucial support in prosecuting criminals and depriving them of the proceeds of their crimes. Those contributing to our review have been open with criticism, suggestions and recommendations for change. 1.1.4 KPMG has discussed the SAR regime with a variety of individuals from providers of SARs, ECB, LEAs and Government. We have tracked a number of SARs. We have identified a number of issues which hinder the effectiveness of the SAR regime. This report describes this work and provides cost effective recommendations where improvements to the regime can be made. 1.2 Structure of the report 1.2.1 This report is in nine sections: Section 1 provides an introduction and background to the production of the report. Section 2 provides a summary of our report and recommendations. Section 3 briefly describes the history of the SAR regime through the changing legislative framework affecting the disclosure of suspicions to the authorities by financial services companies and other relevant entities. It also identifies the aims of the regime. Section 4 sets out the range of issues and challenges inherent within the current arrangements for the reporting, processing and investigation of SARs. Sections 5 to 9 contain KPMG’s recommendations, split between ensuring that the work and changes identified in our report are appropriately overseen and monitored (section 5), those that concentrate upon the work of ECB (section 6), those for improving the quality of the SARs that are provided to ECB (section 7) and those to help ensure that the jo/fh/519 7
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Money Laundering: Review of the Reporting ... - Dematerialised ID

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