- Solicitors For Business
- Banking and Finance
- Business Crime
- Business Contract Solicitors
- Commercial Litigation
- Corporate Immigration Services
- Corporate Insolvency Solicitors
- Data Protection
- Intellectual Property
- HMRC Tax Investigation Services
- Corporate & Professional Regulation
- Real Estate Commercial
- Real Estate Finance
- Sports Law
- Solicitors For You
- Armed Forces Claims
- Clinical Negligence
- Court of Protection
- Criminal Defence
- Driving Offences
- Family Law
- Intellectual Property
- Media Law
- Personal Injury
- Personal Immigration Services
- Personal Insolvency
- Professional Regulation and Discipline
- Residential Real Estate
- Wills, Trusts & Estate Planning
- Will Disputes
- About Us
- News & Events
Suspicious Activity Reports: The present and the future5th November 2019 Business Crime
A major accountancy firm has very recently hidden evidence of smuggling by an organised crime gang that was laundering British drug money, an investigation has revealed. Twenty-seven members of the money laundering gang were jailed in France in 2017.
EY failed to file a Suspicious Activity Report (“SAR”) in respect of one of the world's largest gold refineries. Under the current regime, all members of the regulated sectors, including the banking, accountancy, legal and property sectors must report suspicions about potential money laundering and terrorist financing to the National Crime Agency (NCA). To report such a suspicion, they create a SAR.
The number of SARs soared to 463,938 during 2017-18. At that time, it was initially estimated that the annual number of SARs would be round 20,000. The driving force behind the enormous number of SARs is the criminal liability attaching to Money Laundering Reporting Officers (MLROs) for a number of offences, including non-reporting. This has led to a non-risk culture within many organisations’ to report everything irrespective of whether there may be valid grounds for not doing so. This makes EY’s failure to file the SAR even more surprising.
In order to reduce the number of SARs to a manageable number, many commentators have advocated for the criminal liability of MLROs to be removed. However, the counter argument is that to remove liability would present a real risk that very serious organised crimes would go unreported.
EY’s case will reopen the debate on how the SARs regime. What is highly likely now however is that the number of SARs will spike, at least in the short term owing to the very high profile of EY’s case and its extensive reporting.