In this blog, Komkrich Silathong provides a summary of his research on money laundering for his PhD.
The United Kingdom’s Financial Intelligence Unit (FIU) is situated within National Crime Agency (NCA), a centralised national authority for receiving, analysing and evaluating suspicious activity reports (SARs). This includes information relating to money laundering, associated predicate offences and financing of terrorism that were submitted by reporting entities, which are then disseminated to anti-money laundering (AML) competent authorities.
SARs are used to detect and disrupt money laundering and other predicate offences. The fourth European Union Anti-Money Laundering Directive (EU Directive) and the Financial Action Task Force (FATF), the 2012 Recommendations as well as the new FATF evaluation methodology require a re-examination of the model and the effectiveness of the UK SAR Regime though the operation of the NCA under its Economic Crime Command for increasing the enhancement for the Home Office efficiently.
SARs can assist to detect and prevent money laundering, however, it can cause problems to all involved. For example, all reporting entities face unnecessary financial burden of SARs reporting and compliance costs. They may submit the poor reporting quality because of a vast number of SARs, which cause the delayed feedback from the concerned authorities (more than 8 working days). What are the long term solutions of these issues? The NCA’s analysis and evaluation of the SARs identifies the money laundering of typologies, techniques and trends, which can assist the entities to prevent them being fine and improve their reputation from money laundering regime. The NCA revised the SAR glossary codes, guidance booklet details for enhancement the quality of SAR. In September and October 2015, the Home Office and the NCA set the principal for consultation with relevant stakeholders in order to enhance SARs Regime that could promote the protection of money laundering.
The SARs regime plays a significant role in preventing and detecting money laundering. However, the delayed feedback and the unnecessary financial burden have continued to pose problems for the regulated sector. Therefore, government and the NCA need to carefully respond by managing and reducing unnecessary bureaucracy under the Part 7 of the POCA 2002 and Part 3 of the Terrorism Act 2000. In October 2016, the government published its Anti-Money Laundering Action Plan, which is vital to enhance the SARs.