On 18th July 2023, the Financial Conduct Authority (FCA) hosted an informative webinar in collaboration with the UK FIU, focusing on tackling financial crime within the payment and e-money sector. As part of their commitment to reducing and preventing financial crime, the FCA discussed recurring thematic issues and emphasised the need for better reporting of suspicious activity.
During the webinar, the FCA highlighted several key areas that payment firms need to address to combat financial crime effectively. These encompassed governance and oversight, customer risk assessment, customer due diligence, enhanced due diligence, transaction monitoring, sanctions, and fraud. The FCA also stressed the significance of diversity of thought and experience to foster an innovative mindset and relevant expertise within organisations.
The importance of reporting suspicious activity
An essential takeaway from the UKFIU was the pressing need for the payment sector to improve the reporting of suspicious activity. Despite the “Dear CEO” letter’s call to action, there is still underreporting and poor quality Suspicious Activity Reports (SARs) across the industry. The webinar provided valuable guidance on filing high-quality SARs, including the purpose and requirements of Defence Against Money Laundering (DAML) reports, which can also be found on the UK FIU website here.
The full webinar can be viewed here.
Key tips for submitting a SAR
Submitting a comprehensive SAR is crucial to combatting financial crime effectively. When submitting a SAR, always consider the following key tips:
- Clearly identify criminal property: Clearly identify the suspected benefit from criminal conduct (the ‘criminal property’), including the amount of benefit, if possible.
- State reason for suspicion: Identify the reasons for suspecting that the property is criminal property.
- Specify proposed prohibited acts: Clearly state the proposed prohibited act/s that you seek to undertake involving the criminal property.
- Include details of involved parties: Identify all other parties involved in dealing with the criminal property, including their dates of birth and addresses where appropriate.
- Provide comprehensive details: Describe fully the reasons for suspicion in relation to money laundering. Try to answer the following six basic questions: Who? What? Where? When? Why? How?
The new SAR portal
During the webinar, the UKFIU introduced the new SAR Portal, a secure and web-based system for submitting SARs. This system aims to streamline and enhance the reporting process for both reporters and law enforcement agencies. The SAR Portal offers automated acknowledgment of successful submissions, structured SARs for better processing, and the option to request Defence Against Terrorism Finance (DATF) when necessary.
The new SAR portal provides several advantages:
- Comprehensive SARs: The portal makes it easier to submit structured, meaningful, and comprehensive SARs, providing enhanced intelligence to UKFIU and law enforcement agencies.
- Faster processing: Structured submissions lead to improved processing times, benefiting both reporters and law enforcement in their efforts to disrupt criminal activity.
- Requesting DAML/DATF: The SAR portal allows users to request DATF, supporting enhanced investigation efforts.
For more information on the new SAR portal and guidance on submitting SARs, visit the following links:
How Neopay can help
The FCA webinar on financial crime in the payments sector highlighted the importance of tackling financial crime and maintaining robust compliance measures. If you need advice on risk and mitigations in respect of anti-money laundering (AML), counter-terrorist financing (CTF), or any other regulatory issue, Neopay can help. We offer comprehensive guidance and support to ensure your suspicious activity arrangements align with regulatory guidelines, adhere to the best industry practices, and meet the expectations of both the Regulator and the National Crime Agency. Our team can also assist you and your employees in identifying and reporting any suspicions effectively.
Our Virtual Compliance Service provides advice on day-to-day compliance issues as well as helping you to review and update your compliance program regularly. Our team of experts stays up-to-date with the latest regulatory developments and can provide guidance on any changes that may impact your business. Contact us to find out more.