Back to reporting basics

It may be partly my own fault.  For years – although I have stopped this now – when junior staff used to ask about how they could tell whether a money laundering suspicion was “right” or not, I would try to explain and then say, “If in doubt, pass it to the MLRO and they will make sure that only genuine money laundering suspicions are disclosed to the FIU”.  So perhaps I gave them a let-out clause, saying that the MLRO will do the thinking for you.  And now, when I ask MLROs how things are going, one of the most common complaints I hear is that their staff are making SARs that are nothing to do with money laundering.

Sometimes I can be a bit blinkered, I know.  My little ears prick up when I hear the words “money laundering” on the news, while I yawn widely and start running a bath when they talk about fraud or cybercrime or golf (especially that last one).  But even I have to admit that there are other crimes, apart from money laundering, that are of concern to the financial sector.  And indeed it is tip-top and marvellous if staff can be trained and encouraged to be on the look-out for, say, identity fraud or investment scams.  But they should not then report their concerns in the form of a SAR.  A SAR is for reporting suspected money laundering – nothing else.  If an investment scam has succeeded and it seems that the proceeds of that scam are on the move, well and good, that’s suspected money laundering.  But if a fraud has merely been attempted – and we’ve all received those emails offering irresistible opportunities to lose money – then there are no proceeds as yet, and therefore no money laundering.

So, SARs for beginners:

  • suspected money laundering – yes
  • attempted fraud, offers of bribes, or Rory McIlroy’s latest scores – no.
This entry was posted in AML, Due diligence, Money laundering and tagged , , , , , , . Bookmark the permalink.

2 Responses to Back to reporting basics

  1. Roy McCarthy says:

    If there’s any doubt in the matter I’d sooner see a report on my desk rather than have an employee struggle with it and not report. In practice of course it would most likely be dealt with by informal discussion before deciding whether or not to report.

  2. Absolutely right, Roy – an important part of the role of the MLRO is to ensure that staff feel comfortable about reporting. And I very much support the idea of informal discussions pre-reporting (provided, of course, the MLRO is simply discussing and not deciding…).
    Best wishes from Susan

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