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The Role of the SOCA, Now the NCA, in the SARs Regime

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Anti-Money Laundering

Part of the book series: Palgrave Studies in Risk, Crime and Society ((PSRCS))

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Abstract

The objective of this Chapter is to critically evaluate the functions of the SOCA, now the NCA, as the UK’s FIU law enforcement model and to assess this model in terms of its ability and power to handle SARs received from the reporting entities. This is essential in order to evaluate in the Final Chapter the chances of the UAE successfully adopting this model. In addition, this Chapter critically analyses the efficiency of the consent regime in relation to the SARs and the practical problems associated with the grounds for submitting SARs to the NCA.

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Notes

  1. 1.

    The CCA 2013, Sch.8 (1) para 6.

  2. 2.

    SOCA’s staff consisted of 3700 full-time employees. They worked from around 50 sites in the UK and 40 sites abroad. It was divided into three major business groups, namely (1) Strategy and Prevention, (2) Operational Delivery and (3) Capability and Service Delivery. Detailed information about these groups is available on its website at: www.soca.gov.uk (last accessed on 13th September 2013).

  3. 3.

    S.1 (3) of the SOCPA 2005, which is repealed by the CCA 2013, Sch.8 (2) para 158.

  4. 4.

    ‘One Step Ahead—A 21st Century Strategy to Defeat Organised Crime’ as produced by the Home Office in March 2004, 1, available online at: www.soca.gov.uk/about-soca/library/doc…/67-one-step-ahead (last accessed on 11th November 2014).

  5. 5.

    It was a Home Office Non-Departmental Government Body, see ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ as produced by the FATF 29 June 2007, 84.

  6. 6.

    Ben Bowling and James Ross, ‘The Serious Organised Crime Agency—should we be afraid?’ [2006 Dec] Criminal Law Review 1019, 1019.

  7. 7.

    The SOCA Board included the Chair, the Director-General, who were both appointed by the Home Secretary and ordinary members, as well as ex-officio members appointed by the Director-General in consultation with the Chair. See Clive Harfield, ‘SOCA: a paradigm shift in British policing’ (2006) 46 (4) British Journal of Criminology 743, 750.

    Further information on the Board of SOCA is available on the SOCA’s website at: www.soca.gov.uk (last accessed on 13th September 2013).

    Moreover, under s.43 (1) of the SOCPA 2005, which is repealed by sch.8 (2) para 158 of the CCA 2013, the Director General was responsible for designating officers’ powers which can be one/more of the following:

    (a) a person having the powers of a constable, England and Wales, Scotland and /or Northern Ireland;

    (b) a person having the customs powers of an officer of Revenue and Customs;

    (c) a person having the powers of an immigration officer.

  8. 8.

    S.2 (1) of the SOCPA 2005, which is repealed by the CCA 2013, Sch.8 (2) para 158.

  9. 9.

    S.2 A of the SOCPA 2005, which is repealed by the CCA 2013, Sch.8 (2) para 158.

    S.74 of the SCA 2007 abolished the Assets Recovery Agency (ARA) and Sch.8 (2) of the Act equipped SOCA and now NCA with civil recovery powers. The decision of merging ARA with the SOCA was due to the underachievement of the ARA and to enhance the effectiveness of the civil confiscation regime. See Nicholas Ryder, Financial Crime in the 21st Century: Law and Policy (Edward Elgar Publishing Limited 2011), 208.

  10. 10.

    S. 3(1) of the SOCPA 2005, which is repealed by the CCA 2013, Sch.8 (2) para 158.

  11. 11.

    Sabrina Fiona Preller, ‘Comparing AML legislation of the UK, Switzerland and Germany’ (2008) 11 (3) Journal of Money Laundering Control 234, 236.

  12. 12.

    Clive Harfield (n 1157) 743.

  13. 13.

    See www.nationalcrimeagency.gov.uk (accessed on 20th April 2015).

  14. 14.

    Home Office Report, ‘The National Crime Agency- A plan for the creation of a national crime-fighting capability’, Presented to Parliament by the Secretary of State for the Home Department by Command of Her Majesty (HM), June 2011, available on the Home Office website at: www.homeoffice.gov.uk (accessed on 25th November 2014).

  15. 15.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ as produced by the SOCA, 42, and ‘Suspicious Activity Reports Regime, Annual Report 2012’ as produced by the SOCA, 41.

  16. 16.

    The National Security Strategy defines organised crime as significant and persistent threat to UK citizens, the economy and business. See HM Government Report, ‘A Strong Britain in an Age of Uncertainty: The National Security Strategy’, Presented to Parliament by the by the Prime Minister by Command of HM, October 2010, available online at:

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/61936/national-security-strategy.pdf (accessed on 23rd October 2014).

    Organised crime costs the UK between £20 billion and £40 billion yearly and is expected to rise during the next five years, notably in light of increasing globalisation, facilitated through the internet, which assists criminals to commit crimes more easily. See ‘SOCA annual Plan 2013/14’ as produced by the SOCA on 28 March 2013, 8 & 9.

  17. 17.

    Karen Harrison and Nicholas Ryder, The Law Relating to Financial Crime in the United Kingdom (Ashgate Publishing Limited 2013), 25 & 26.

  18. 18.

    The CCA 2013 received Royal Assent on 25 April 2013.

    In addition, the National Policing Improvement Agency (NPIA) has been replaced by the NCA.

  19. 19.

    The current Board of the NCA comprises (1) Keith Bristow- Director General (Chair), (2) Phil Gormley- Deputy Director General, (3) David Armond Director- Border Policing Command, (4) Peter Davies Director- CEOP Command, (5) Gordon Meldrum Director- Organised Crime Command, (6) Gary Chatfield- Director of Operations (Temporary), (7) Tim Symington- Director of Intelligence, (8) Stephen Webb- Director Corporate Services (Interim) and (9) Trevor Pearce Director- Economic Crime Command (Interim).

    For further information about the members of the NCA, see ‘NCA Annual Plan 2013–14’, as produced by the NCA in October 2013, 10 & 11.

  20. 20.

    And through the Home Secretary to Parliament.

    In addition, s.11 of the CCA 2013 requires Her Majesty’s Inspectors of Constabulary (HMIC) to carry out inspections of the NCA and to report to the Secretary of State on the NCA’s efficiency and effectiveness.

  21. 21.

    ‘NCA Annual Plan 2013–14’ (n 1169) 10.

  22. 22.

    The term “strategic partners” means:

    ‘(a) the Scottish Ministers;

    (b) the Department of Justice in Northern Ireland;

    (c) such persons as appear to the Secretary of State to represent the views of local policing bodies;

    (d) such persons as appear to the Secretary of State to represent the

    views of the chief officers of England and Wales police forces;

    (e) the chief constable of the Police Service of Scotland;

    (f) the Chief Constable of the Police Service of Northern Ireland;

    (g) the Commissioners for Her Majesty’s Revenue and Customs;

    (h) the Director of the Serious Fraud Office.’ S.16 of the CCA 2013.

    The functions of the NCA extend to Scotland and Northern Ireland, but specific arrangements have been adopted since police and criminal justice are devolved matters in Scotland and Northern Ireland. The NCA is co-located with the police in Scotland and other partners at the Scottish Crime Campus in Gartcosh and the NCA carries out its operations in collaboration with the police in Scotland. In Northern Ireland, the NCA’s functions cover tackling serious and organised crime, customs offences, immigration crime and some asset recovery; however, NCA officers are not given the powers of a constable. The NCA works with the Police Service of Northern Ireland and other Northern Ireland enforcement partners. For the NCA’s functions in Scotland and Northern Ireland in detail, see ‘NCA Annual Plan 2013–14’ (n 1169) 11, and ‘SOCA annual Plan 2013/14’ (n 1166) 10.

  23. 23.

    S.3 of the CCA 2013.

  24. 24.

    More details about the strategic priorities can be found in the ‘NCA Annual Plan 2013–14’ (n 1169) 6.

  25. 25.

    Philip Johnston, ‘The National Crime Agency: Does Britain need an FBI?’ The Telegraph, 7 October 2013.

  26. 26.

    S.10 (1) of the CCA 2013.

  27. 27.

    S.1 (4) of the CCA 2013.

  28. 28.

    S.1 (5) of the CCA 2013.

  29. 29.

    For more details about the commands, see ‘NCA Annual Plan 2013–14’ (n 1169) 12–14.

  30. 30.

    Emma Radmore, ‘Deferred Prosecution Agreements—for more enforcement action?’ May 2013 Financial Regulation International 1. Available online at:

    http://www.dentons.com/insights/articles/2013/june/18/deferred-prosecution-agreements-for-more-enforcement-action (accessed on 25th August 2015).

  31. 31.

    The CCA 2013, Sch.8 (1) para 6.

  32. 32.

    S.104 of the SOCPA 2005.

  33. 33.

    S.332 of the POCA 2002.

  34. 34.

    S.5 (1) of the CCA 2013.

  35. 35.

    Even Part 1 of the SOCPA 2005, before it was abolished, did not explicitly mention the term “FIU.”

    It is worth noting that the EU Third Money Laundering Directive requires all member state to create a FIU as a national unite specialised in receiving, analysing and disseminating SARs. Article 21 of the Directive provides that:

    ‘1. Each Member State shall establish a FIU in order effectively to combat money laundering and terrorist financing.

    2. That FIU shall be established as a central national unit. It shall be responsible for receiving (and to the extent permitted, requesting), analysing and disseminating to the competent authorities, disclosures of information which concern potential money laundering, potential terrorist financing or are required by national legislation or regulation. It shall be provided with adequate resources in order to fulfil its tasks.

    3. Member States shall ensure that the FIU has access, directly or indirectly, on a timely basis, to the financial, administrative and law enforcement information that it requires to properly fulfil its tasks.’

    Directive 2005/06/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.

  36. 36.

    ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 78.

  37. 37.

    ‘Suspicious Activity Reports Regime, Annual Report 2013’ as produced by the NCA, 4.

    It is worth noting that although the SARs annual report 2013 is produced by the NCA, it refers to the reporting year under the management of SOCA, as the NCA replaced the SOCA in October 2013.

  38. 38.

    ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 78.

  39. 39.

    The review was commissioned in July 2005. Sir Stephen Lander, ‘Review of the suspicious activity reports regime’ as produced by the SOCA in March 2006, available on the SOCA’s website at: www.soca.gov.uk (last accessed on 13th November 2012).

  40. 40.

    Angela Leong, The Disruption of International Organised Crime : An Analysis of Legal and Non-Legal Strategies ,(Ashgate Publishing Limited 2007), 209.

  41. 41.

    For details about the 24 recommendations, see Sir Stephen Lander (n 1189).

  42. 42.

    Jayesh D’Souza, Terrorist financing, money laundering and tax evasion- Examining the performance of Financial Intelligence Unit (Taylor and Francis Group, LLC 2012), 159 & 160.

  43. 43.

    Sir Stephen Lander (n 1189), recommendations 2, 7 and 11.

  44. 44.

    ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187) 29.

  45. 45.

    This department manages the SARs regime and processes the SARs from the reporting entities. It is also responsible for creating best practice for ELMER use and its feedback. In addition, it preserves control over IT support. Jayesh D’Souza (n 1192) 161.

  46. 46.

    This department has two major functions. Firstly, it collects, collates and disseminates consent-derived intelligence. Secondly, it works as an intervention device between LEAs and reporting entities with a view to ensuring best practice and to develop the use of consent. Ibid.

  47. 47.

    This team is the link between the UK FIU and entities affected by the SARs regime, including reporting entities, regulators and LEAs. This team also provides individual feedback to the aforementioned entities about the SARs regime and vice versa. Ibid.

  48. 48.

    This department analyses SAR-derived intelligence for tactical and strategic evaluation purposes and to enhance the utilisation of SARs in accordance with the UK’s and international requirements. Ibid.

  49. 49.

    The team is responsible for analysing and disseminating SARs on certain crimes to appropriate HMRC investigation teams. These SARs deal with VAT fraud, ML, tax credit, tax evasion, cash/foreign currency intelligence, arms proliferation and excise fraud. Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 81.

  50. 50.

    The role of this department is to ensure that the UK FIU complies with the Egmont Group by providing financial intelligence to the UK LEAs and foreign FIUs upon request. Jayesh D’Souza (n 1192) 161.

    In addition, there are a number of other departments, such as the TF Team and PEPs. ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 81–87.

  51. 51.

    ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 85.

  52. 52.

    S.1 (5) of the CCA 2013 provides that:

    ‘(5) The NCA is to have the function (the “criminal intelligence function”) of gathering, storing, processing, analysing, and disseminating information that is relevant to any of the following

    (a) activities to combat organised crime or serious crime;

    (b) activities to combat any other kind of crime;

    (c) exploitation proceeds investigations (within the meaning of section 341(5) of the Proceeds of Crime Act 2002), exploitation proceeds orders (within the meaning of Part 7 of the Coroners and Justice Act 2009), and applications for such orders.’

  53. 53.

    This is similar to the internal electronic system, which is used by banks in the UAE, as illustrated in the course of interviewing Mr. Z. See Chap. 6.

  54. 54.

    Doug Hopton, Money Laundering, A Concise Guide for All Business (Second Edition, Gower Publishing Limited 2009), 119.

  55. 55.

    The SAR, in this case, comprises one/more type(s) of disclosure, as analysed in the previous chapter.

  56. 56.

    Doug Hopton (n 1204)119.

  57. 57.

    Ibid 120.

  58. 58.

    UK FIU Guidance Note, ‘Introduction to Suspicious Activity Reports (SARs)’ as produced by the NCA in October 2013, available on the NCA’s website at: www.nationalcrimeagency.gov.uk (accessed on 25th October 2014).

  59. 59.

    The address of the UK FIU and the number of its Fax are available on the NCA’s website at: www.nationalcrimeagency.gov.uk (accessed on 25th October 2014)

  60. 60.

    ‘Frequently Asked Questions’ (FAQs) as produced by the SOCA and available on its website at: www.soca.gov.uk (last accessed on 15th November 2012). The NCA Preferred Paper SAR Form can be downloaded also from the NCA’s website.

  61. 61.

    This is a secure electronic reporting system for entities which report a large volume (more than 250) of SARs a year. ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 82.

  62. 62.

    The NCA prefers this method to submit SARs. The system enables all persons, regardless of whether they work in the regulated sector or outside it, to report SARs to the NCA electronically and securely, but the person/entity has to register for the system to work. This only entails downloading and completing the registration form from the NCA website and only requires a working email account, which is used for SAR Online user identification. Robin Booth and others, Money Laundering Law and Regulation: A Practical Guide (First Published, Oxford University Press 2011), 105.

    The email account can be used by only one user. The SAR Online can be easily accessed from the NCA website. In 2012, the system was used by more than 4000 reporting entities. ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) 18.

  63. 63.

    This is a secure electronic system for submitting SARs, as reporters have encrypted emails to submit SARs. ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 82.

  64. 64.

    UK FIU Guidance Note, ‘Reporting via SAR Online’ as produced by the NCA in October 2013, available on the NCA’s website at: www.nationalcrimeagency.gov.uk (accessed on 24th October 2014).

  65. 65.

    S.331 and s.332 of the POCA 2002. See Chap. 8.

  66. 66.

    However, the POCA 2002 gives the right to the Home Office to prescribe the form and manner of the required disclosure and authorised disclosure. At present, the government has decided not to proceed with the prescribed form after the Home Office issued a consultation document in July 2007 on this issue and published, in February 2008, a summary of responses to the consultation exercise. See Robin Booth and others (n 1212) 152–153.

  67. 67.

    These models are (1) a Source Registration Document which needs to completed when the reporting entity reports its first SAR to the UK FIU, (2) Report Details (cover sheet), (3) Subject Details, (4) Additional Details, (5) Transaction Details in case the reporting entity is a financial institution, such as a bank, (6) Reason for Suspicion and Limited Intelligence Value (LIV) SAR and (7) Reason for Suspicion Continuation which allows the reporter/discloser to write, in his own words, why the transaction is unusual or why he has reasons for suspicion and it includes “tick boxes” for the suspected offences, such as drugs. In relation to model no.5, namely Transaction Details, the reporter, bank, has to fill out this module about the known/suspected customer, for example, account(s) number, sort code(s) and balance of the account. For further details about the NCA Standard Form, see FAQs (n 1210).

  68. 68.

    For example, code XXS1XX requires immediate attention from law enforcement officers when reporters do not seek consent for the purposes of s.335 of the POCA 2002, whilst code XXS99XX denotes that appropriate consent has been sought under the POCA 2002. All SAR Glossary Codes are available on the NCA’s website at: www.nationalcrimeagency.gov.uk (accessed on 24th October 2014).

  69. 69.

    Doug Hopton (n 1204) 61 & 67.

  70. 70.

    It is crucial to note that these questions are the elements of the analytical function of the UAE FIU, as Mr. A, from the AMLSCU staff, stated in Chap. 6.

  71. 71.

    Such as the date of the activity, type of product or service and the reason for suspicion. Moreover, information about the relevant parties, such as his full name, date of birth, his occupation and his account/policy number (if appropriate) and information about the relevant company, such as full legal name, registration number and address. See, UK FIU bulletin, ‘Compliance and the Consent Regime’ as produced by the UK FIU in February 2011, available on the SOCA’s website at: www.soca.gov.uk (last accessed on 15th November 2012)

  72. 72.

    Mark Simpson and Nicole Smith, ‘UK Part III: Practical implementation of Regulations and Rules’ in Mark Simpson, Nicole Smith and Arun Srivastava (eds), International Guide to Money Laundering Law and Practice (Third Edition, Bloomsbury Professional 2010), 95 at 132.

  73. 73.

    The AMLSCU received 80,592 STRs from the reporting entities and only 285 STRs were transmitted to the Public Prosecution Office.

  74. 74.

    See (n 1195).

  75. 75.

    The term of “tactical analysis” has been analysed in Chap. 4.

  76. 76.

    ELMAR is an Internal UK FIU database, which stores all SARs, which have been received from the reporting entities.

  77. 77.

    The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 79–80.

  78. 78.

    See (n 1196).

  79. 79.

    UK FIU bulletin, ‘Compliance and the Consent Regime’ (n 1221).

  80. 80.

    The term “operational analysis” has been analysed in Chap. 4.

  81. 81.

    ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 80.

  82. 82.

    FAQs (n 1210).

  83. 83.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 39.

  84. 84.

    ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) 39.

    The term of “strategic analysis” has been analysed in Chap. 4.

  85. 85.

    See (n 1198).

  86. 86.

    ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 80–81.

  87. 87.

    FAQs (n 1210).

  88. 88.

    However, SARs on sensitive subjects, such as terrorism, are not available for LEAs via ELMER. Ibid.

  89. 89.

    Furthermore, the SOCA, now the NCA, has published criteria for direct access to SARs on ELMER via Money Web and ARENA for LEAs or other relevant government bodies. The criteria apply from October 2011 onwards and are included in Annex G of ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165).

  90. 90.

    ‘Suspicious Activity Reports Regime, Annual Report 2010’ as produced by the SOCA.

  91. 91.

    Moreover, all SARs which are not related to criminal activity are also being deleted. SOCA, now the NCA, has issued this policy following a consultation with the Information Commissioner. For further information, see, ‘UK FIU Updates, New retention and deletion policy for Suspicious Activity Reports (SARs)’, available on the SOCA’s website at: www.soca.gov.uk (last accessed on 17th November 2012). Accordingly, 745,203 SARs have been removed from ELMER. ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) 21.

    Currently there are about 1.38 million SARs on ELMER. This number has been obtained from the SOCA’s website at: www.soca.gov.uk (last accessed on 17th November 2012).

  92. 92.

    SOCA, now the NCA, uses the term “end users of SARs,” which means LEAs and other relevant government bodies, which are current or potential users of SARs.

  93. 93.

    ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187) 24.

  94. 94.

    ‘Suspicious Activity Reports Regime, Annual Report 2010’ (n 1240) 47 & 48.

  95. 95.

    The UK police force means:

    ‘(a) an England and Wales police force;

    (b) the Police Service of Scotland;

    (c) the Police Service of Northern Ireland;

    (d) a special police force.’ S.16 (1) of the CCA 2013.

  96. 96.

    Special police force means:

    “(a) the British Transport Police;

    (b) the Civil Nuclear Constabulary;

    (c) the Ministry of Defence Police.” S.16 (1) of the CCA 2013.

  97. 97.

    UK LEAs means:

    ‘(a) the Commissioners for Her Majesty’s Revenue and Customs;

    (b) the Director of the Serious Fraud Office;

    (c) the Director of Border Revenue;

    (d) the Scottish Administration;

    (e) a Northern Ireland department;

    (f) any other person operating in England, Scotland, Northern Ireland or Wales charged with the duty of investigating or prosecuting offences (apart from a UK police force).’ S.16 (1) of the CCA 2013.

  98. 98.

    In addition, sch.3 (2) of the CCA 2013 deals with exchange of information.

  99. 99.

    ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 84.

  100. 100.

    Home Office Circular 53/2005: ‘Money laundering: the confidentiality and sensitivity of Suspicious Activity Report (SARs) and the identity of those who make them’, available on the NCA’s website at: www.nationalcrimeagency.gov.uk (accessed on 27th October 2014)

  101. 101.

    S.1 (5) of the CCA 2013, and even s.3 (1) of the SOCPA 2005, which is abolished now, required the SOCA to do so.

  102. 102.

    (N 1185).

  103. 103.

    See also (n 502).

  104. 104.

    Sabrina Fiona Preller (n 1161), 235.

  105. 105.

    FAQs (n 1210).

  106. 106.

    ‘Suspicious Activity Reports Regime, Annual Report 2010’ (n 1240) 16.

  107. 107.

    Ibid 44.

  108. 108.

    Between October 2010 and the end of September 2012, the reporting entities submitted 1212 STRs as a direct result of SOCA alerts. These alerts increased their awareness about particular issues. Moreover, between October 2012 and the end of September 2013, they submitted 581 SARs as a direct result of SOCA alerts. See, ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 17, ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) 18 and ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187) 15.

  109. 109.

    Jayesh D’Souza (n 1192) 154.

  110. 110.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 17.

  111. 111.

    This comprised 94 events for reporting entities, 102 for LEAs and 36 supervisor/professional body/trade association visits. The numbers thus almost doubled compared to 2012, which saw 128 events. ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187) 9.

  112. 112.

    Jayesh D’Souza (n 1192) 154.

  113. 113.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 41.

    For instance, in 2009, the Vettel Group reviewed the SARs submitted by the accountancy sector in order to produce material to assist the sector with improving the quality of their SARs. As a result, the UK FIU has published a bulletin, ‘Suspicious Activity Reports (SARs)—Top Ten Tips for the Accountancy Sector ‘in April 2011, available on the SOCA’s website at: www.soca.gov.uk (last accessed on 20th November 2012)

  114. 114.

    The end users of SARs are obliged to respond to the TYFQ pursuant to the criteria for direct access to the SARs on ELMER via MoneyWeb and ARENA (n 1239).

    criterion 3(2) provides that:

    ‘The organisation must submit comprehensive and timely Twice Yearly Feedback Questionnaires (TYFQs) and adequately detail their use of SARs.

    The organisation must provide case studies outlining how a SAR(s) was used in a particular investigation and the assets recovered, if appropriate.’

  115. 115.

    ‘Suspicious Activity Reports Regime, Annual Report 2010’ (n 1240) 22.

  116. 116.

    Ibid 22 & 48.

  117. 117.

    ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 83.

  118. 118.

    However, a court order is required in case the FIU requires additional information, but the additional information in this case does not directly relate to a specific activity/transaction contained in the SAR. Ibid.

  119. 119.

    S.33 and s.34 of the SOCPA 2005.

  120. 120.

    As of September 2013, the membership of the SARs Regime Committee was comprised of the SOCA Executive Director (the NCA Director) (Chair), the Association of Chief Police Officers, the British Bankers’ Association, the FCA, HM Revenue and Customs, HM Treasury, the Home Office, the Institute of Chartered Accountants in England and Wales, the Law society of England and Wales, the Metropolitan Police Service, the National Terrorist Financial Investigation Unit (NTFIU), the Office for Security and Counter-Terrorism and the SOCA, now the NCA. From October 2012, the SOCA replaced by the NCA. See, ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187) annex B.

  121. 121.

    All of the annual reports were publically available on the SOCA’s website at: www.soca.gov.uk and can now be found on the NCA’s website at: www.nationalcrimeagency.gov.uk (accessed on 15th December 2014)

  122. 122.

    For the role, which the SOCA plays in confiscating the proceeds of crime and recovering assets, see Nicholas Ryder, Money Laundering—An Endless Cycle? (First Published, Routledge Cavendish 2012), 95–99.

  123. 123.

    ‘Suspicious Activity Reports Regime, Annual Report 2010’ (n 1240) 4.

  124. 124.

    ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) 10.

  125. 125.

    (N 1189).

  126. 126.

    The reporting year means the period from October to September of the next year.

  127. 127.

    ‘Suspicious Activity Reports Regime, Annual Report 2010’ (n 1240) 23–28 and ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 22–28.

  128. 128.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 37.

  129. 129.

    ‘Suspicious Activity Reports Regime, Annual Report 2010’ (n 1240) 14.

  130. 130.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 5–6.

  131. 131.

    Ibid 6.

  132. 132.

    SARs in this regard are not confined to ML, but cover other crimes, such as TF, fraud and other financial crime.

  133. 133.

    It should be noted that gambling is an illegal activity in the UAE.

  134. 134.

    ‘Suspicious Activity Reports Regime, Annual Report 2010’ (n 1240) 13.

    MSBs includes money transmitters, bureaux de change and cheque cashers, ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 157.

  135. 135.

    ‘Suspicious Activity Reports Regime, Annual Report 2010’ (n 1240) 14. The report did not mention the name of the four banks.

  136. 136.

    ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187) 7.

  137. 137.

    See charts 2, 3 and 4 in Chap. 6.

  138. 138.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 14.

  139. 139.

    ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) 14.

  140. 140.

    ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187) 8.

  141. 141.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 14.

  142. 142.

    ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) 14.

  143. 143.

    ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187) 8.

  144. 144.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 14.

  145. 145.

    Nicholas Ryder (n 1272) 93.

  146. 146.

    ‘Suspicious Activity Reports Regime, Annual Report 2010’ (n 1240) 14.

  147. 147.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 14.

  148. 148.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 10, ‘Suspicious Activity Reports Regime, Annual Report 2010’ (n 1240) 11, ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) 12 and ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187) 6.

  149. 149.

    The SARs annual reports contain SARs, including consent requests, by industry sector as appendix.

  150. 150.

    ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) 12 & 13.

  151. 151.

    ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187) 7.

  152. 152.

    In 2011, the UK FIU refused 2197 (16.08 %) consents requests within 7 days and 164 (7.46 %) consents requests, which had been refused were subsequently granted during the moratorium period when it appeared that the relevant investigating agencies were unlikely to obtain restraint orders.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 20.

  153. 153.

    In 2012, the UK FIU refused 1229 (9.05 %) consents requests within 7 days, whilst 169 (13.75 %) consents requests, which had been initially refused, were subsequently granted during the moratorium period when it appeared that the relevant investigating agencies were unlikely to obtain restraint orders.

    ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) 30.

  154. 154.

    [2010] EWCA Civ 31.

  155. 155.

    Where the UK FIU refused 1387 (9.08 %) consents requests within 7 days, whilst 266 (19.02 %) consents requests, which had been initially refused, were subsequently granted during the moratorium period when it appeared that the relevant investigating agencies were unlikely to obtain restraint orders.

    ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187) 19.

  156. 156.

    This includes all electronic methods, such as SAR Online and encrypted email.

  157. 157.

    S.4 (3) and Sch.2 (2) para 7 of the CCA 2013 require the NCA at the beginning of each financial year to issue a plan setting out how it intends to exercise its functions during that year and to issue a report at the end of each financial year about the exercise of its functions during that year. All these annual reports and plans were available on the SOCA’s website at: www.soca.gov.uk and can now be found on the NCA’s website at: www.nationalcrimeagency.gov.uk (accessed on 15th December 2014)

  158. 158.

    Annexes C and D of the ‘Suspicious Activity Reports Regime, Annual Report 2010’ (n 1240), ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165), ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) and ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187).

    Moreover, the SARs annual reports contain detailed statistics, by industry sector, about SARs on TF.

  159. 159.

    As analysed in Chap. 7. This is unlike the UAE’s legislation, which adopts a limited list of predicate offences to ML, as analysed in Chap. 5.

  160. 160.

    FATF Recommendation 29 has been analysed in Chap. 4.

  161. 161.

    ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) 35.

  162. 162.

    ‘The United Kingdom Third Mutual Evaluation Report, Anti-Money Laundering and Combating the Financing of Terrorism’ (n 1155) 88.

  163. 163.

    See Chap. 8 (n 1122).

  164. 164.

    The UK FIU consults the relevant LEA before granting or refusing consent.

  165. 165.

    ‘Suspicious Activity Reports Regime, Annual Report 2011’ (n 1165) 20.

  166. 166.

    Ibid.

  167. 167.

    ‘Suspicious Activity Reports Regime, Annual Report 2012’ (n 1165) 29.

  168. 168.

    Ibid.

  169. 169.

    ‘Suspicious Activity Reports Regime, Annual Report 2013’ (n 1187) 20.

  170. 170.

    Ibid.

  171. 171.

    Arun Srivastava, ‘UK Part II: UK law and practice’ in Mark Simpson, Nicole Smith and Arun Srivastava (eds), International Guide to Money Laundering Law and Practice (Third Edition, Bloomsbury Professional 2010), 27 at 44.

  172. 172.

    [2007] EWCA Civ 406.

  173. 173.

    Ibid para 36.

  174. 174.

    Ibid para 52.

  175. 175.

    Circular 029/2008, ‘Proceeds of Crime Act 2002: obligations to report money laundering—the consent regime’, which released on 5th December 2005, available on the Home Office website at: www.homeoffice.gov.uk (accessed on 28th November 2014).

  176. 176.

    See ‘Consent Policy’ which is attached to the Circular 029/2008, ibid.

  177. 177.

    Ibid.

  178. 178.

    Where an authorised disclosure is based on a subjective basis, the first two offences of failing to report are based on either a subjective basis or objective basis and the third offence of failing to report is based on a subjective basis, as critically analysed in the previous chapter.

  179. 179.

    [2005] EWHC 664 (Ch).

  180. 180.

    Ibid.

  181. 181.

    Ibid para 7.

  182. 182.

    [2006] EWCA Crim 1654. See Chap. 7.

  183. 183.

    [2006] EWCA Civ 1039. See of Chap. 7.

  184. 184.

    (N 1304).

  185. 185.

    Under s.338 of the POCA 2002 (authorised disclosure), see Chap. 8.

  186. 186.

    Which is about £206 million.

  187. 187.

    (N 1304) para 22.

  188. 188.

    Ibid para 25.

  189. 189.

    Paul Marshall, ‘Does Shah v HSBC Private Bank Ltd. make the anti-money laundering consent regime unworkable?’ (2010) 25 (5) Journal of International Banking and Financial Law 287, 288.

  190. 190.

    Keith Stanton, ‘Money laundering: a limited remedy for clients’ (2010) 26 (1) Professional Negligence 56, 58.

  191. 191.

    S.330 and s.331 of the POCA 2002, as critically analysed in Chap. 8.

  192. 192.

    (N 1304).

  193. 193.

    Ibid.

  194. 194.

    Paul Marshall (n 1339) 287.

  195. 195.

    However, the number of total SARs with consent requests increased in 2013, but this is attributable to the increase in the number of reporting entities.

  196. 196.

    (N 1304).

  197. 197.

    S.330, s.331 and s.332 of the POCA 2002. See Chap. 8.

  198. 198.

    Rudi Fortson, ‘Money Laundering Offences under POCA 2002’ in William Blair and Richard Brent (eds), Banks and Financial crime: the International Law of Tainted Money (Oxford University Press 2008), 155 at 170.

  199. 199.

    Article 8 of sch.1 of the Human Rights Act 1998 provides that:

    ‘1- Everyone has the right to respect for his private and family life, his home and his correspondence.

    2- There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others’. The content of this Article is same as Article 8 of the 1950 ECHR.

    It seems that there is incompatibility between interference under Article 8 (2) (the minimum necessary degree to achieve the legitimate aim pursued) and suspicion as a basis for SARs and it may well be that the legitimate goal pursued, mentioned in Article 8 (2), is exceeded in this context which is counteracting ML. For additional detail on such issue, see Robert Stokes, ‘The banker’s duty of confidentiality, money laundering and the Human Rights Act’ [2007 Aug] Journal of Business Law 502. See also Clive Harfield (n 1157) 753 & 754.

  200. 200.

    For example, in the case where the customer explicitly confessed, in front of the banker, that the amount he received in his account is a result of drug trafficking.

  201. 201.

    R v Saik [2006] UKHL 18.

  202. 202.

    (N 1304).

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  1. Dubai Public Prosecution, SHARJAH, UAE

    Dr. Waleed Alhosani (Assistant Chief Prosecutor)

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Alhosani, W. (2016). The Role of the SOCA, Now the NCA, in the SARs Regime. In: Anti-Money Laundering. Palgrave Studies in Risk, Crime and Society. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-59455-6_9

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