Money Laundering: The Confidentiality and Sensitivity of Suspicious Activity Reports (SARs) and the Identity of those who make them

Home Office circular 53 / 2005

Money Laundering: The Confidentiality and Sensitivity of Suspicious Activity Reports (SARs) and the Identity of those who make them

  • Broad subject: Terrorism and Organised Crime
  • Issue date: Thu Dec 15 00:00:00 GMT 2005
  • From:
    Crime Reduction and Community Safety Group (CRCSG), Specialist Crime Directorate Specialist Crime 2
  • Linked circulars:
    No Linked Circulars
  • Sub category: Money laundering
  • Implementation date: Mon Dec 19 00:00:00 GMT 2005
  • For more info contact:
    Robert Lawman 020 7035 1563
  • Addressed to:
    Association of Chief Police Officers in Scotland, HM Inspector of Constabulary ,The Justices' Clerks' Society ,The Law Society,Association of Chief Police Officers )England Wales and Northern Ireland), Chief Officers of Police (England and Wales and Northern Ireland and Scotland), Director General,National Crime Squad ,Director General,NCIS ,Association of Police Authorities, Police federation (England and Wales),Police Superintendents Association, Independent Police Complaint Commissioner, Crown Prosecution Service, Association of Police Lawyers, Commissioners of HM Revenue and Customs, Director of the Assets Recovery Agency

THIS CIRCULAR contains guidance on the use and handling of SARs by police forces, other law enforcement agencies, and the National Criminal Intelligence Service. It has been drawn up in consultation with the Association of Chief Police Officers (ACPO), the National Criminal Intelligence Service (NCIS), the Attorney General’s Office, the Crown Prosecution Service, Office for Criminal Justice Reform, the Assets Recovery Agency and others. It seeks to respond to concerns from the financial services industry and other sectors and professions about the need to protect the identity of members of staff who make SARs, and the firms they represent.

Background

2. The Proceeds of Crime Act 2002 (POCA) created a single set of money laundering offences applicable throughout the UK to the proceeds of all crimes. There are separate offences of failure to disclose money laundering. These are set out in more detail in Annex B. A disclosure of money laundering or that another person is engaged in money laundering is commonly known as a Suspicious Activity Report (SAR). SARs can also be made under the Terrorism Act 2000.

3. A person making a SAR that another person is engaged in money laundering puts himself at risk of reprisals from the suspected person. There is therefore a great need to protect the identity of those making SARs in these circumstances. The aim of the guidance is to minimise the number of occasions where the identity of a person, or a firm, making a SAR is revealed in prosecution evidence or disclosed to the defence as unused material under the Criminal Procedure and Investigations Act 1996. Law enforcement and prosecutors should make every reasonable effort to avoid using SARs or SARs derived material, whilst complying with the law and reserving the right in exceptional circumstances to proceed with a case even where such disclosure is necessary. For example, obtaining production orders from disclosing institutions under POCA or the Police and Criminal Evidence Act should be the preferred option so that the evidential chain could begin with the production order rather than the SAR.

4. SARs disclosed by the ‘regulated sector’ and/or as “required disclosures” under sections 330, 331 and 332 of POCA must be sent to NCIS.

5. Where a SAR is an “authorised disclosure” within the meaning of section 338 or is a “protected disclosure” within the meaning of section 337 then such a SAR may be disclosed to a constable or a customs officer as well as to NCIS. For the purposes of Part 7 of POCA references to a “constable” include references to NCIS.

6. Anyone making an “authorised” or “protected” disclosure is encouraged to make such disclosures in the first instance to NCIS which is the UK’s national FIU. Where SARs are forwarded directly to a constable or customs officer the disclosing person/institution is advised to copy such a disclosure to NCIS as soon as is reasonably practicable.

Classification of SARs

7. SARs received by NCIS will be classified as “Restricted” and must be treated in confidence by law enforcement agencies. Failure to observe this general duty could lead ultimately to disciplinary sanctions.

Law Enforcement activity at Business Premises

8. Financial institutions are particularly concerned about the implications for staff of law enforcement activity in banks, money service businesses and other premises as a result of intelligence or information derived from SARs. While this is an operational matter for law enforcement, it would be helpful if arrests or cash seizures in such premises could be avoided unless there were compelling reasons to do so.

Use of SARs in Civil Proceedings

9. Police and other law enforcement agencies should be aware that SARs may be used in civil proceedings. Further information on this is at paragraphs 19-20 of the guidance.

10. The guidance is attached at Annex A to this Circular.

Attachments

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