The Law Commission has published the long awaited consultation on making the AML and CFT SARs regime work better. The paper focuses on the consent provisions in POCA and the Terrorism Act and the disclosure offences in those laws.
The regime has been beset with problems including proliferation of defensive reporting, the burdens of the reporting process and the impact of suspension of transactions when a SAR has been made.
The Law Commission now proposes a package of measures including:
- the creation of statutory guidance on what to look for when considering whether there is a reportable suspicion, and a set reporting format
- the possible use of new enforcement tools
- a new power that would require additional detail and record keeping requirements for specific transactions
- a way of focussing on accounts where there are reasonable grounds to suspect that property is criminal property and thereby cutting down on low quality reports
- providing legal protection for banks who lock in only the suspected criminal funds while allowing the rest of the account to operate
- giving guidance on what is a “reasonable excuse” for not making a report and
- consulting on whether there should be a liability on organisations for failing to prevent a criminal offence where an employee fails to report a suspicion.
The consultation closes on 5 October.