Lawyers have not been forthcoming in reporting suspected suspicious activity related to money laundering, a director at the National Crime Agency (NCA) has said. NCA director Donald Toon told MPs yesterday that the majority of suspicious activity reports (SARs) - alerts to law enforcement agencies that activity is in some way suspicious – come from banks.
Toon said that of 464,000 alerts during 2017/18 83% came from banks, and a third from one single bank.
‘From our perspective there is more reporting than necessary from the banks and a real dearth of reporting from some of the professional services sectors,’ Toon said. He referred to situations where SARs from banks, which then lead to enforcement action, often show that professionals ‘usually lawyers and accountants’ are involved but that they are not reporting. ’It’s unusual for us to get a report from them,’ he said.
He said SARs are on the whole effective but could be much more so.
Toon was giving evidence to the Joint Select Committee on the Draft Registration of Overseas Entities Bill. The committee is scrutinising a bill proposing a new register of the beneficial owners of overseas entities that own UK property.
According to analysis published by anti-corruption group Global Witness, which also gave evidence to the committee, property worth more than £100 billion is owned by anonymous companies registered in tax havens. The analysis is based on Land Registry data.
Conservative committee member Mark Pawsey suggested that more efforts should be made to target suppliers of professional services. ‘Most overseas entities will have a UK representative in some form,’ he said.
Toon said legal professional privilege has hampered efforts to identify overseas parties. ‘What we may be investigating could be legal overseas,' he said. 'We have had issues with the sheer scale of data we investigate. Within that, there is material which has within it professionally privileged material, management of that is very difficult.’