The UK’s National Crime Agency (NCA) recently published their Suspicious Activity Report (SAR) Annual Report for 2022 which included statistics for the years 2020 to 2021 and 2021 to 2022. The report showed that are cord was set with a 21% increase in SARs (901,255) which were received during the last financial year.

This translates into a staggering £305.7 million that were removed from criminal enterprises due to the Defence Against Money Laundering (DAML) requests that were received. The NCA receives SARs from regulated financial institutions such as banks, and other legal financial services which flag suspicious transactions that are used to launder money or to hide criminal activities.

SARs that are gathered serve an important role in the fight against money laundering and are received, processes and assesses by the UK Financial Intelligence Unit (UKFIU) on behalf of the NCA by a dedicated team.

According to the Annual Report, the NCA created a new Combating Kleptocracy Cell (CKC) during 2022 which focussed specifically on high-end money laundering and criminal sanctions evasion. The reported SARs provided crucial insight regarding money laundering linked to sanctioned individuals and associated entities following the invasion of Ukraine by Russia.

The NCA also indicated that with the SARs Reform Project,the UKFIU has undergone a major transformation with a more targeted approach and additional staff that were allocated to the project. This included an expanded head count of 150 additional staff members with a set target to increase staff to 201 by the end of the next financial year, resulting in increased analysis and engagement within the SARs regime.

“SARs are vital to the fight against money laundering, illicit finance and wider criminality”, stated Vince O’Brien, Head of the UKFIU. Headded that “Major improvements to the UKFIU through the SARs Reform Project,including the establishment of dedicated analytical teams to support specifi coperational requirements, such as those of the Combating Kleptocracy Cell, and further enhancement rolling out over the next 24 months, will ensure we maximise the intelligence value derived from SARs, driving greater impact on economic and other crime, and helping to keep the U.K. public and businesses safe.”

Expert intervention

The NCA’s 2022 SAR Annual Report highlights to need for firms to review and refine their existing anti-money laundering (AML)screening and monitoring technologies.

From a consulting perspective, Lysis has the expertise and processes to review firms’ existing measures against sanctions and advise if improvements are needed. Secondly, Lysis is geared to manage firms’business operations by providing trained analysts that can screen and flag suspicious transactions on their behalf.

Firms constantly run the risk of processing transactions from sanctioned individuals and entities. When this happens, the financial institution will not only receive a substantial fine, but the reputational damage linked to this will be even more severe; both for the firm and the executive team in charge.

Any sanctioned process is likely to deliver a high number of false positive identities which will create a large spike in the workload of compliance staff. The NCA’s 2022 SAR Annual Report also signals that there could be an increased focus from regulators on the quality of firms’ customer and payment screening and due diligence with very little room for leniency.

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The full report can be accessed via the following link:

https://nationalcrimeagency.gov.uk/who-we-are/publications/632-2022-sars-annual-report-1/file

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