What Happens To Your Reports
What happens to Suspicious Activity Reports (SARs) once submitted to SOCA?
Upon receipt, SARs are logged on to the United Kingdom Financial Intelligence Unit (UKFIU) internal SARs database for information evaluation and cursory analysis. The UKFIU analyses SARs to extract strategic and tactical intelligence, and makes all SARs available to Law Enforcement Agencies (LEAs) for investigation (with the exception of SARs in certain sensitive categories).
LEAs prioritise and deal with all consent requests forwarded by the UKFIU. LEAs also check SAR subject details against intelligence databases for relevant additional information. Depending on the outcome of the above, SARs can lead to the instigation of new investigations or enhance existing investigations or knowledge of a subject.
How the system operates
There have been approximately 230,000 SARs in 2009 that have accrued into a database of some 1.5 million reports.
All SARs which populate the database are subject to immediate checks, including those previously entered on to the system where new information may change the nature of a previous SAR - this is a frequent occurrence.
How value is extracted from SARs
Throughout each day checks are undertaken through the database which relate to persons, companies, locations, account numbers. In short, things that are of particular interest because there is an active investigation or intelligence interest. These are extracted immediately using keyword searches. For example, anything relating to terrorism, or any point of interest at the time in question. These are then dealt with accordingly.
Accessibility by investigators and national agencies
At the same time the database is made available nationally to UK agencies. This includes access for investigators from every police force throughout England, Wales, Scotland and Northern Ireland and all of the national agencies that have prosecution powers - Her Majesty’s Revenue & Customs (HMRC), Department of Work & Pensions (DWP), the Serious Fraud Office (SFO), along with other agencies. Due to the diversity of interest, there are very few SARs that do not add value.
Approximately 80 different law enforcement agencies and government departments are able to access directly and utilise the information provided in SARs. This includes every police force in the UK. Each police force now has its own dedicated team for the receipt, assessment and dissemination (to other investigators or specialist units within its force area) of SARs - in effect, mini Financial Intelligence Units (FIUs).
This means while the SOCA and the UKFIU are busy extracting maximum value on the more strategic issues, every day there are trained and authorised users across the country who, as their core business, are examining SARs that relate to their own public duty. For example, Avon and Somerset Police primarily review all SARs in the database that relate to Avon and Somerset postcodes or persons of interest. This is the case with every agency, so there is a proliferation of activity which has been encouraged and is being encouraged further.
Feedback from law enforcement
Twice each year, SOCA asks all the organisations and teams with access to SAR material to provide feedback in the form of a bespoke questionnaire on the use made of SARs in the preceding six months. Data from the questionnaires submitted by end users for 2008 show that the value of restraint orders obtained where SARs featured in the investigation was at least £192 million. In addition, the value of confiscation orders obtained where SARs featured in an investigation was at least £110 million and the value of cash forfeitures obtained where SARs featured was at least £26 million.
Respondents are also asked to provide evidence of how the awareness and use of SARs has been promoted throughout their organisation and how value has been extracted from SARs.
The conclusion drawn from such feedback is that the use of SARs has increased to the extent that they are now integral to all law enforcement agencies’ work. Police forces are developing the potential for mainstreaming SARs into the broader policing functions of crime prevention and detection.
Do SARs make a difference?
They most certainly do. The information provided in SARs is utilised in a number of ways by law enforcement agencies. SARs provide information and intelligence to law enforcement which is predominantly used in relation to financial crime and money laundering but can also be helpful in relation to other criminal activity. SARs provide information that assists in ongoing operations by providing details of telephone numbers, addresses, alias identities, companies, investment activity, bank accounts and other assets. For example, information from SARs has assisted in kidnap cases and in locating a convicted escaped paedophile.
SARs enable the identification of organised criminal schemes. For example, mortgage and boiler room frauds, enabling detection and prevention activity including the issue of SOCA Alerts to businesses at risk from such activity. Multiple SARs on the same subject or company identify new targets for operational activity. Information leads to the recovery of the proceeds of crime by assisting in restraint orders, confiscation orders and cash seizures. SARs provide intelligence about criminal methodologies, contribute to UK understanding of crime and thus assist in control strategies to reduce the harm caused by crime.
There is also value in the use of information from SARs at a strategic level to inform policy and direct resources, particularly amongst law enforcement agencies. SARs may also help establish a geographical picture or pattern of the vulnerability of a particular sector or product and can be used in the analysis of suspicious activity before and after a specific event, for example, a terrorist incident.
The usage of SARs
A single SAR is often used several times by several different users for different purposes. For example, the information within it may inform HMRC about taxation, it may inform local police about fraud or theft, or it may inform a government department about another issue or a weakness in a financial product. SARs have multiple uses and rarely become time redundant.
The SARs database remains live, so that while some SARs may not be immediately actionable, they may subsequently (sometimes after several years) provide vital information that contributes to law enforcement activity. This clearly demonstrates how the usage of SARs has become increasingly relevant many years beyond being submitted.
Twice Yearly Feedback Questionnaire (TYFQ)
Every six months, the UKFIU sends out a questionnaire to all end users of SARs asking for statistics and feedback on their use of SARs. The findings of these Twice Yearly Feedback Questionnaires (TYFQs) are then used to produce a summary document for end users to share perspectives on the use of SARs, to share and encourage best practice amongst reporters and end users and to provide a feedback mechanism for the UKFIU on the operation of the Regime. Improving the usage of SARs by SOCA and its partners is key to enhancing the effectiveness of the SARs Regime
Data extracted from the questionnaires highlight the myriad of ways SARs are being used to reduce harm - not just in detecting money laundering and terrorist financing, but in successfully tackling all areas of criminality
Data from the most recent TYFQ End User Summary (covering the period of April to September 2010) suggested that the value of restraint orders and confiscation orders where SARs featured in investigations was, respectively, at least £103 million and £13.5 million.
It should be noted that the figures extracted from TYFQs on SARs' contribution to asset recovery work do not constitute official performance data. The information is derived from the responses to the questionnaires which end users submit on a voluntary basis. This data is included as an indicator of SAR contribution to asset recovery.
Driving up the use of SARs
Over recent years, increasing evidence has emerged of the value of the SARs database as an entity-based intelligence database. Accordingly, increasing numbers of LEAs are extending use of the SARs database beyond specialist Financial Investigation Units into more general intelligence functions.
However, there is more to do by all parties. We are committed to further increasing the level of law enforcement use of SARs, and to this end are actively working with end users to mainstream the use of SARs across their activity.
Home Office Circular 53/2005: Money Laundering: The Confidentiality and Sensitivity of Suspicious Activity Reports (SARs) and the Identity of those who make them
All SARs are confidential. The UKFIU adheres to and promotes the provisions of the Home Office circular (33.7 kB PDF) regarding the confidentiality of SARs, No. 53/2005 (Money Laundering: The Confidentiality and Sensitivity of Suspicious Activity Reports (SARs) and the Identity of Those Who Make Them).
SOCA applies the same Code of Practice for the recording and disseminating of SARs as it does for all intelligence. In addition, all financial investigators are trained to use SAR information in a sanitised form when referring to it in the course of an investigation.
If reporters have concerns about the inappropriate use of SARs by end users, or breaches of SAR confidentiality, they should call the SAR Confidentiality Breach Line on Freephone 0800 234 6657, 9am-5pm, Monday-Friday. This number is for reporting breaches of confidentiality only. All other SAR enquiries or consent issues should be directed to 020 7238 8282.
The Consent Regime
The governance around what happens to your SARs seeking consent is covered by the following public document:
Home Office Circular 029/2008 ‘Proceeds of Crime Act 2002: Obligations to Report Money Laundering - The Consent Regime’
The guidance, released on 5th December 2008, is intended to ensure sound decisions in line with the three principles of the Government’s anti money laundering strategy, which are:
- Effectiveness - making maximum impact on the criminal threat
- Proportionality - ensuring the approach is balanced as far as possible in respect of the costs and benefits, and
- Engagement - collaborative working amongst Regime participants to ensure success
The Home Office guidance recommends police and other law enforcement should reflect these principles in their internal guidance or in their consent procedures. For details, see Home Office Circular 029/2008 ‘Proceeds of Crime Act 2002: Obligations to Report Money Laundering - The Consent Regime’ (17.95 kB PDF).