A Suspicious Activity Report (SAR) is a report submitted by a regulated firm to the National Crime Agency (NCA) under the Proceeds of Crime Act 2002 (POCA 2002) when it suspects that money held for or by a customer is the proceeds of crime, or that a transaction is related to money laundering or terrorist financing. The obligation to report is carried by the MLRO (as nominated officer), who receives internal suspicion reports from staff and decides whether to submit to the NCA.
Why the SAR matters
Failing to submit a SAR when one is required, or delaying submission, is a criminal offence under POCA 2002. The tipping-off prohibition means staff must not tell the subject of the report that a SAR has been or may be filed. The decision to submit a SAR must be documented; firms should maintain records of all internal suspicion reports and the MLRO’s decision.
Where a firm wishes to proceed with a transaction that may involve criminal property, it can seek a Defence Against Money Laundering (DAML) through the SAR, giving the NCA the opportunity to refuse consent before the firm acts.
Who it applies to
Relevant regulated businesses under POCA 2002 and the MLR 2017, in practice all FCA-regulated firms. The obligation to file falls on the MLRO; the obligation to escalate a suspicion falls on every relevant employee.
Related terms
MLRO, tipping off, CDD and EDD.