Saturday, October 31, 2020

Criminals prevented from accessing £131m laundered money – UKFIU

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In its annual review of suspicious activity reports (SARs) handled by the UK Financial Intelligence Unit (UKFIU), the NCA said it had received and processed a record number of SARs (478,437) over the year, with a 52.72% increase in DAML requests, which totalled 34,543.

The £131.7m denied to criminals as a result of DAML requests marked a 154% increase on the previous year’s £ £51.9m.

The NCA reported that the pattern of reporting is changing. While the number of reports from lawyers and accountants remains low, the NCA has seen increased reporting from challenger banks and fintech companies.

It says over 2019/20 it plans to work to develop its understanding of these sectors and undertake targeted outreach.

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HMRC has also increased the use of SARs in civil and criminal investigations to identify potential cases and support ongoing probes.

In the last year, the tax authority has recovered £8m as a result of DAML SARs, with £6m related to tax freezing orders, restraints and winding up petitions.

The agency said a data matching tool enabled the cross referencing of HMRC and third party data with SARs data, and the yield from civil enquires amounted to £40m.

The data was also fed into civil investigations profiled for HMRC’s risk-led taskforces, generating intelligence to support a yield of £30.7m.  A further £9.4m was generated from enhancing HMRC cases already under civil investigation by providing intelligence in SARs.

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Accountants and tax advisers were responsible for just 1.06% of SARs during the year.

Stronger powers

The introduction of account freezing orders (AFOs) and the extension to the moratorium period enacted by the Criminal Finances Act 2007 were the main reasons for the significant increase in funds identified during this reporting period.

Of the total, £123m was accounted for by restraints and AFOs, while £829,752 represented cash seizures and £8m was funds recovered by HMRC.

The Home Office is leading a SARs’ reform programme, announced in July 2019, but there are concerns that too much time and effort is being spent on too many low value SARs, with businesses displaying a tendency to over-report to ensure compliance.

Ian Mynot, head of the UKFIU, said: ‘The UKFIU does not control the increases in SAR volume and with these volumes come increased risks that require effective mitigation.

‘The IT is in need of replacement and over the course of the year a six-phase plan for doing so was initiated.

‘The SARs reform programme, including SARs IT transformation, will be crucial in achieving a workflow that is manageable on a sustainable basis.’

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