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A man peeking through blinds with binoculars | AccountingWEB | Accountants defy decline in suspicious activity reports
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Accountants defy decline in suspicious activity reports

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The total number of suspicious activity reports dropped by 5% in 2022/23 due to a reduction in activity from high street banks, but accountants and tax advisers are bucking this trend.

8th Apr 2024
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The National Crime Agency’s annual suspicious activity reports (SAR) statistical report has revealed that the total number of SARs received has fallen from 901,255 in 2021/22 to 859,905. 

Accountants defy SARs downturn

Although the total number is down, accountants and tax advisers’ contribution to the total was 3.24% higher than the previous year. 

Accountants and tax advisers accounted for 0.7% of the 859,905 SARs submitted to the NCA, translating into 6,053 submitted by this industry sector. 

This number is higher than the previous year when accountants and tax advisers submitted 5,863 SARs, accounting for 0.32% of the overall figure. However, the figure from 2021/22 was significantly higher than 2020/21’s efforts, increasing by 25.47%. 

Banks dominance

The volume of SARs from accountants and tax advisers pales in comparison to banks. As the largest industry sector for submitting SARs, banks contributed 561,610 of the reports, accounting for 65.31% of the total number. 

Despite sitting at the top of the SARs league table, the figure was still almost 12% down on the previous year. But banks remain primary SAR contributors, despite decreased reporting. 

The next-biggest industry sector for submitting SARs was those classed as “financial institution – other”, which filed 144,815, followed by building societies at 56,268.   

Out of the 12 industry sectors listed, accountants and tax advisers were the eighth-biggest contributor, only two reports behind the gaming and leisure sector in seventh place. 

Accountants and tax advisers are also ahead of independent legal professionals who submitted only 2,526 SARs and estate agents who contributed 950. 

Continuing the trend, the amount of funds denied from defence against money laundering (DAML) requests were also down, dropping from £305.7m in 2021 to £272.7m in 2022/23.  

Critical role of SARs

Richard Burger, partner in the investigations group at WilmerHale, said: “In the collective fight to combat UK financial crime, SARs still remain a valuable tool. The drop in filed SARs is not indicative of a downturn in suspected cases of money laundering but more quality over quantity reporting.”

He added: “The report shows the close link between financial sanctions compliance and anti-money laundering controls.”

In the foreward to the NCA report Vince O’Brien, the deputy director of the UK Financial Intelligence Unit (UKFIU) at the NCA, said: “SARs continue to play a critical role in alerting law enforcement to potential instances of money laundering and terrorist financing.

“SARs are a vital source of intelligence, not only for tackling economic crime but to help investigate a wide range of criminal activity including identifying fraud victims, sex offenders, murder suspects, missing persons, people traffickers and fugitives.”

He added: “We are now better positioned to innovate and adapt our working practices, especially as more new IT capability comes online in the next year. Through SARs reform, engagement with reporters has increased significantly, and a large number of training sessions with specific reporters has helped improve the overall quality of SARs received into the FIU.”

Expert guidance

SARs continue to be a contentious topic in the comment section of AccountingWEB articles and across the Any Answers forum, with readers often complaining that they have no evidence that the SARs reports submitted have even been read. 

A complaint raised on an episode of Any Answers Live in 2022 was that the NCA’s SARs reporting template seemed to be designed to capture information from banks and are not relevant to accountants and tax advisers. The volume of SARs reported from banks demonstrates why this may be the case. 

Considering the amount of SARs submitted by banks, the advice given by Any Answers’ resident AML expert David Winch on writing better SARs is even more relevant. 

“Your SAR is going to be read initially by someone who knows nothing about your firm, nothing about the person about whom you are reporting, nothing about what you are hoping or expecting the authorities might do after receiving your SAR and – let’s be frank – probably understands very little about accounts, tax or company law,” wrote Winch.

“It’s likely for this reason that acronyms and jargon should be avoided as the recipient might not understand and they’re open to misinterpretation.”

Replies (7)

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By FactChecker
08th Apr 2024 22:00

I have nothing against SARs per se (in a similar manner to the old Peter Cook and Dudley Moore sketch at https://www.youtube.com/watch?v=lbnkY1tBvMU), but let's be realistic here.

Despite all the statistics being thrown around, only two are of direct relevance to this audience:
* The heading "Accountants defy SARs downturn" actually relates to just 190 more year-on-year;
* The total of 6,053 submitted by Accountants and Tax advisers in 2022-23 means that the *vast* majority of those advisers submitted zero SARs.

I've no idea as to the total 'population' (either of these accountants and tax advisers, or indeed of all their clients), but it seems clear that submitting a SAR is as rare as the proverbial rocking-horses post prandial output.

Thanks (6)
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By Roland195
09th Apr 2024 10:20

If 6 times as many reports were received from entities not even subject to AML Regulations, then it suggests the emphasis put upon this by our profession is ridiculously overblown.

Clearly the system is designed for banks and shoehorning us into it doesn't seem to be producing any reasonable result for the money spent.

Thanks (1)
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By Paul Crowley
09th Apr 2024 11:15

I suspect that reports by accountants are just mostly small fry because most of us only have small fry clients.
I have had no BBLs to report, they all kept within the rules of turnover, not being insolvent and only applying for one. My first posting of a question on here was about the refusal of a BBL application, in the early days when banks were being a bit precious.
The real problem is no lower limits, so they get loads of trivial stuff.
I suspect at the other end priority will always be quantum, and that will be banks and funny money buying property, but possibly the big four that deal with big figure clients.
I suspect that they do not have the resources to deal with.

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By OrmeGoat
09th Apr 2024 11:20

How many of the 6053 were acted upon by whichever branch of the Stasi they were referred to by the NCA?

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Replying to OrmeGoat:
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By Roland195
09th Apr 2024 11:31

Very likely none as in with the thousand reports allocated to one person detailing transactions from financial institutions there is one from Bloom & Co CA regarding a client who appears to have been less than enthusiastic about correcting the lack of a scale charge.

Thanks (1)
Replying to Roland195:
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By FactChecker
09th Apr 2024 17:44

Are you suggesting that my partner, Max Bialystock, is a stickler for correctness?

Thanks (2)
Replying to FactChecker:
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By Roland195
10th Apr 2024 09:29

He does tend to get hysterical about these matters

Thanks (1)