SAR's - Tipping off?

SAR's - Tipping off?

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Hi there

Can the threat of the potential to make a SAR be used as a deterrent to a client.

For example if a client was proposing to do something dodgy which I specifically told them they couldn't do could I then bolster my standpoint by telling them that I'd be duty bound to file a report if they continued against my advice ?

Replies (12)

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By Paul D Utherone
10th Nov 2015 09:06

I believe a threat like that

would effectively be tipping off.

Do you really want to keep a client like that? Just say that you will be unable to continue to act if they go ahead.

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By Tim Vane
10th Nov 2015 09:21

I disagree with Paul. I am fairly sure that you can NOT be guilty of a tipping off offence if the disclosure is made for the purpose of dissuading the client from engaging in criminal conduct.

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By Tim Vane
10th Nov 2015 09:25

Although I am in complete agreement with Paul's sentiment about not wanting to keep a client like that!

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By Mr_awol
10th Nov 2015 09:36

Im pretty sure when we originally did our training when the Money Laundering Regulations were introduced that they covered this and said it WOULD be tipping off.  Unfortunately my notes on that course are filed somewhere alongside my notes for the A day training, and I'm therefore unlikely to be able to check.

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Replying to Paul Crowley:
By Paul D Utherone
10th Nov 2015 10:35

This is what I had in the dark recesses of my mind

Mr_awol wrote:

Im pretty sure when we originally did our training when the Money Laundering Regulations were introduced that they covered this and said it WOULD be tipping off.  Unfortunately my notes on that course are filed somewhere alongside my notes for the A day training, and I'm therefore unlikely to be able to check.

Happy to be proved wrong
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Stepurhan
By stepurhan
10th Nov 2015 09:36

What offence?

Tipping off is alerting someone that a report has been made, not that a report will be made. A report is only due once a ML offence has been committed. Since this is just something the client is proposing to do at present. Therefore there cannot be a tipping off situation at present.

It could be argued that, if they went ahead, they have been "tipped off" that you will be making a report. However, they will have no way of knowing if you actually have or not, so it is hard to see how you could be found at fault.

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By Tim Vane
10th Nov 2015 09:41

s333D POCA 2001 as amended by the POCA amendment regulations of 2007:

A professional legal adviser or a relevant professional adviser does not commit an offence under section 333A if the disclosure—

(a)is to the adviser’s client, and
(b)is made for the purpose of dissuading the client from engaging in conduct amounting to an offence.

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By Ruddles
10th Nov 2015 09:48

Interesting logic

If you have advised the client that should he proceed with a specific course of action you would be required to file a report, I'd be rather nervous.

If on the other hand you've advised him generally that you have an obligation to file reports in certain circumstances that is arguably a safer position.

I wouldn't chance it in this case. So long as you've advised him against it, your conscience should be clear - the consequences of not heeding your advice are then entirely his responsibility.

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By cheekychappy
10th Nov 2015 09:51

Telling the client that you will have to report them will make them think you, the government and HMRC are all in cahoots.

Just tell them that you won’t be able to act if they want to proceed in doing something dodgy.

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David Winch
By David Winch
10th Nov 2015 12:11

Tipping off (or not)

The law relating to 'tipping off' in the Proceeds of Crime Act 2002 as originally enacted was pretty simple & all-encompassing (and 'over the top').  So much so that the original legislation (s333) was repealed & replaced in 2007 with more nuanced legislation in new sections 333A - 333E.

Essentially since 2007 a 'tipping off' offence may occur where you inform someone that (i) a Suspicious Activity Report has been made (whether internally to the firm's MLRO or externally to the NCA), or (ii) an investigation (into allegations that a money laundering offence has been committed) is being contemplated or is being carried out. 

But even then there are certain exceptions that permit disclosure.

So as far as the law is concerned, what the OP is proposing to do would not amount to a tipping off offence.

Whether what he is proposing to do would be the best way to handle a difficult situation is quite another matter.

David

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By Ned Ludd
10th Nov 2015 15:55

thanks guys

thank you everyone.

got myself in a bit of a mess overthinking this during a sleepless night.

 

seeing things a lot more clearly now thanks to your input.

 

 

 

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By Mr_awol
10th Nov 2015 17:02

So it was but now it isnt

Thanks to David for a comprehensive answer.

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