Money Laundering: call for NCIS-style body to take over

The number of suspicious activity reports (SARs) made to the authorities by solicitors has been slashed in half compared to last year, the latest figures reveal - as government-sponsored research has found that the reports are 'under-utilised' by law enforcement agencies.


The dramatic drop in the number of SARs made to the National Criminal Intelligence Service (NCIS) follows a Court of Appeal ruling in March that established that lawyers advising clients in the course of litigation are exempt from requirements under the Proceeds of Crime Act 2002 (POCA) to report suspicions of money laundering.


The latest figures, which run to July, show solicitors made 5,643 reports to NCIS this year. The number for the same period last year - before the ruling in Bowman v Fels [2005] EWCA Civ 226 - was 11,890.


A research project on the reporting regime, carried out by the Jill Dando Institute of Crime Science, has meanwhile revealed that many law enforcement agencies have admitted that SARs could be 'better and more frequently utilised'. It found that SARs were often 'purely defensive reporting', and frequently related to non-criminal activity or did not contain clear reasons for suspicion.


The research discovered that many agencies lacked the resources to exploit information contained in SARs, while cases based on SARs were difficult to sell to operational teams. It recommended that a body such as NCIS should take overall ownership of the SAR regime.


Robin Booth, chairman of the Law Society's money laundering taskforce, said: 'If the report's recommendation for a body to take ownership of the regime is implemented, we will see a real improvement in the use of SARs.'


Louise Delahunty, partner at London firm Peters & Peters, said: 'Litigators now have comfort from the Bowman v Fels judgment - but care must be taken to stay within its remit, particularly when dealing with client assets.'


Law Society President Kevin Martin said: 'The reporting requirements in the UK remain substantially greater than elsewhere in Europe. It is incumbent on the government to demonstrate that this has resulted in commensurate benefits in tackling serious crime.'