Missing NCIS reports

Missing NCIS reports

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I have recently received a letter from NCIS listing all the reports they have received up to December 2004. When I checked the list (yet more non chargeable time) more than 50% of the reports actually sent in have gone missing.

Granted all the stuff I send in is fairly trivial but these statistics, if repeated across the country, means that if you ever came across a real terrorist/money launderer then they still have a greater than 50% chance of being ignored even if you report them.

Has anybody else out there experienced this? - if they have then we should let the powers that be know and rattle some cages.

John Gilbertson

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David Winch
By David Winch
09th Oct 2005 16:41

Check with NCIS before sending further copies

John

I suggest you telephone NCIS to check the position before sending further copies of reports you have previously submitted.

My understanding of the standard letter is that NCIS would like you to tell them which reports of yours are not listed but does NOT want you to send copies of the omitted reports.

This is certainly the gist of the ICAEW statement which I quoted in full in my posting on 9 August (click on this link to see that posting).

David

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David Winch
By David Winch
08th Oct 2005 13:27

'Lost' reports to NCIS

Getting back to the original point, as you will see from my posting on 9 August NCIS do not believe any reports have been lost. I quoted then:-

"The consolidated list does not include any SARs which were individually acknowledged, including those which were disclosed electronically where the acknowledgement was generated automatically.

NCIS are confident that all SARs are recorded correctly on the database and any discrepancies are solely down to a problem with the creation of the consolidated list."

David

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David Winch
By David Winch
08th Oct 2005 13:37

Accountants at risk

Graeme

There is a significant concern, particularly amongst lawyers, that reports made in confidence to NCIS concerning suspicions of serious crime may be disclosed to the suspect in the course of consequent criminal prosecutions - thereby putting the reporter at risk.

There is however an opt-out where the person who ought to report has a reasonable excuse for not doing so. I have had occasion to advise that a report NOT be made of suspected serious criminal conduct because the making of a report could put the accountant and his staff at risk of violent reprisals. Real serious crime does happen and accountants do sometimes find themselves having to deal with it.

The problem is not that a potential new client will approach you saying "I am a drug dealer and would like you to prepare my business accounts and tax returns". The problem is that you may already be acting for someone with a small business and you may find that the income of that legitimate business exceeds your expectations or that the client has bank accounts, cash or assets of which you have had no knowledge - and the explanation is (or may be) that the client is also engaged in crime.

In many cases of drug dealers and other criminals which I deal with profits of crime have allegedly been intermingled with legitimate business income. Often the records of the legitimate business are poor and the business is of a type where there is no obvious relationship between expenditures and incomes (such as a hire or rental business, a night club with a door charge, a fruit machine amusements business, etc.). So the introduction of additional cash (and it usually is cash) may not be easy to spot. However if you don't spot it there is no-one else who is in a position to examine the business records and have the skills and experience to recognise what may be going on.

David

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David Winch
By David Winch
08th Oct 2005 13:48

Future money laundering legislation

It should come as no surprise that future money laundering legislation, due to come into force by the end of 2007, is expected to result in additional costs - particularly for accountants and estate agents.

The EU Third Money Laundering Directive will probably require amendment to both the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2003.

(The EU Second Money Laundering Directive was the basis from which the 2003 Money Laundering Regulations were developed - although the UK government decided to adopt an approach which went significantly beyond that required by the Directive and which, in particular, required reports in relation to all crimes involving money laundering whereas the Directive referred to serious crime.)

The changes will include a more specific requirement regarding identification procedures in the Regulations (rather than leaving this to be dealt with in guidance issued by the professional bodies), additional procedures in higher risk cases, and more wide-ranging arrangements for supervision and monitoring. In the case of estate agents this may involve the setting up of a new regulatory body.

The government estimates "the total cost of the Third Directive is between £5 and £46m per year depending on the extent to which firms already comply with guidance and already take a the risk based approach. The range of costs also takes into account the different models or monitoring/supervision that can be deployed when implementing the Directive. We do not have a cost of the second money laundering Directive but we estimated the cost of updating the Money Laundering Regulations to be around £100m per year at 2003 prices."

David

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By john.gilbob.freeserve.co.
09th Oct 2005 16:15

Lost Reports
David

You say that NCIS state that they are happy they have not lost any reports.

If this is the case then why have I been asked to send them further copies of the missing reports???

My original post was highlighting a problem that NCIS are losing reports that we (ie the accountancy profession) send to them. Isn't it about time that AccountingWeb or yourself (or both) start banging the drum so that some pressure is put on what appears to be yet another shambolic government organisation to at least mend its ways.

I may not like the legislation but at least I am complying with it. What really anoys me is that I am having so resubmit some reports, in some cases 18 months after the original report was sent in. Perhaps I should send them a bill....

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By john.gilbob.freeserve.co.
10th Oct 2005 08:49

Lost NCIS reports
David

The request for me to send in the missing reports came from NCIS themselves.

Sounds like this department issues one statement to the outside world and then behaves completely differently (rather like the Inland Revenue).

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David Winch
By David Winch
07th Oct 2005 14:15

Information from NCIS and other government sources

John

There is no mystery here.

NCIS and other government sources do release statistical information about numbers of reports received, including an indication of which sectors they are received from.

The majority of reports are received from banks and similar organisations (about 100,000 per year).

Lawyers were providing about 10,000 reports per year but this flow has reduced significantly since the decision in Bowman v Fels that a lawyer does not need to file a report based on information received in the course of litigation and that legal professional privilege over-rides the disclosure requirements of PoCA in certain circumstances.

Accountants produce fewer than 10,000 reports per year.

Other government sources indicate that there are estimated to be in the UK about 22,000 firms of accountants which are members of the CCAB bodies and about a further 43,000 accountancy / tax advice / book-keepers firms which are not. (In each case by 'firm' I am meaning to include sole practitioners.)

So if 65,000 firms produce less than 10,000 reports then most firms produce no reports. The 'average' firm produced something like 0.15 reports on that basis.

John, it is implicit in your question that your firm produced at least 3 reports, since the letter you received must have listed at least one and omitted more than one because you say "more than 50% of the reports actually sent in have gone missing".

All I am pointing out is that 3 is more than 0.15, the average for an accountancy firm.

Elementary, my dear Watson!

I do also have experience of a number of smaller firms which have submitted 1 or 2 reports, in connection with my work with accountants in this field, and I do know of firms which have been submitting reports where they need not have done (for example in cases of taxpayer's negligence where dishonesty is not suspected).

David

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By John Savage
07th Oct 2005 16:22

Reports to NCIS
David, I was surprised to read your statement "The 'average' (accountancy) firm produced something like 0.15 reports (during 2004)"

This statistic demonstrates just how this nonsense has been ignored by many in the accountancy profession. Indeed, perhaps one day some bright spark in Government (and I'm not holding my breath) will look up and realise that they have not won 'hearts and minds' concerning this thing. (Of course, were we Iraqis having just been invaded, then perhaps Blair and his cronies would try to make much greater effort to win our 'hearts and minds'!!!)

Many accountants and others within the profession who I speak to, who are not members of A/Web, give me the impression that they know little or nothing about the full ramifications of this idiocy!! It is now high time that the clowns who dreamed up this thing now start to fall in line with other countries, and change the legislation to properly reflect the terms 'serious crime' and also introduce a de-minimus level for reporting, in line with EC directives. Perhaps they will start to get some meaningful reports and not waste everyones' time.

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David Winch
By David Winch
06th Oct 2005 21:49

NCIS acknowledgement letters

John

You may find it useful to read my article Money laundering for accountants on this site and the postings dated 6 - 9 August attached to the article.

It does seem that your firm submitted more NCIS reports that most firms of accountants did in 2004. Indeed most accountants' firms submitted no reports at all in that year!

This either means that most firms are failing to report when they should, or you receive an unusual amount of information suggesting dishonesty, or you are submitting reports where you need not be. Perhaps all three of these propositions are true!

If you are an MLRO you can get confidential one-to-one email support, information and NewsAlerts from my website www.mlrosupport.co.uk.

David
[email protected]

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By john.gilbob.freeserve.co.
07th Oct 2005 15:11

NCIS Statistics
David

Thanks for indicating where you got your figures from.

I guess the fact that accountants submit less than 1 report a year on average is indicative of why none of them care whether NCIS loses their submissions or not!! If it was of concern to them then I guess they would have joined in this debate.

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By john.gilbob.freeserve.co.
07th Oct 2005 12:06

Confidentiality
Graeme

No, I don't know David and I purposely did not say how many reports I have sent in.

So David, are NCIS releasing this information to you or are you making an educated guess??

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By john.gilbob.freeserve.co.
07th Oct 2005 09:03

I note your comments David, but.......
Irrespective of whether the reports were right or wrong in the first place the important point I wanted to get across is that NCIS have no record of receiving more than half of them - and that is scandalous.

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