ECSH155000 - Making Referrals and Suspicious Activity Reports (SARs)
Source: gov.uk (2025-02-08)


What is a SAR?

Suspicious Activity Reports (SARs) alert law enforcement to potential instances of Money Laundering (ML) or Terrorist Financing (TF).

The UK Financial Intelligence Unit (UKFIU), sited within the National Crime Agency (NCA), receives, analyses, and distributes the financial intelligence gathered from SARs.

The information is then disseminated to law enforcement agencies who investigate and decide what further action to take.

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An iSAR is a suspicious activity report made within a supervised entity or regulatory body, which is reviewed by the Money Laundering Reporting Officer (MLRO) before determining whether it should be submitted to the NCA.

The threshold for forming a ‘suspicion’ is very low with the criteria set out in ‘R v Da Silva (2006) EWCA Crim 1654’ stating it should be ‘more than fanciful’ but that ‘a vague feeling of unease would not suffice’.

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An Introduction to SARs

A suspicious activity report (SAR) is a piece of intelligence that alerts law enforcement to potential instances of money laundering or terrorist financing. SARs are generated by entities operating in sectors regulated for anti-money laundering (AML) supervision, which include:
- Banks, finance, and credit business.
- Legal professionals.
- Accountants and tax advisors.
- Trust or company service providers.
- Estate and letting agencies.
- High value dealers.
- Art market participants.
- Casinos.
- Crypto-exchanges.
When a business operating in one of these sectors identifies a risk of MLTF or sanctions evasion they have a legal obligation, under Section 7 of The Proceeds of Crime Act 2002 (POCA), to report their suspicion to the National Crime Agency (NCA). These suspicions are typically reported to the NCA through the submission of SARs using the UK Financial Intelligence Unit (UKFIU) online portal. Failure to submit a SAR, if a risk has been identified, is a criminal offence.

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) require supervised businesses to have robust measures in place for identifying and reporting MLTF risks. Failure to implement these measures can result in substantial financial penalties, or in serious cases, cancellation of registration.

The UKFIU, situated within the NCA, receives, analyses, and distributes the financial intelligence gathered from SARs to relevant law enforcement agencies. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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Does HMRC need to submit SARs?

In addition to its responsibilities as a tax authority HMRC supervises several sectors (https://www.gov.uk/guidance/money-laundering-regulations-who-needs-to-register#:~:text=Business%20sectors%20supervised%20by%20HMRC,single%20transaction%20or%20linked%20transactions) for AML purposes. Under regulation 46(5) MLR 2017 if HMRC, while carrying out its supervisory activities or otherwise, forms a suspicion that an entity in the regulated sector, or one of the entity’s customers, is carrying out MLTF, it must inform the NCA as soon as is practicable.

No specific format is legislated for how these disclosures should be made but one of the most efficient and secure ways for HMRC to share information with the NCA is via the UKFIU online portal for SARs. Officers can absolve themselves of their individual legal obligations to report suspicions directly to the NCA by following HMRC’s internal SAR reporting process i.e. by submitting a ISAR report via this link (https://forms.office.com/e/eDCWvF4LpC).

What is a sufficient level of suspicion to submit a MLTF report

The level of suspicion required for submitting an MLTF report is low and your reasons for suspicion should be based on a reasonable possibility. It does not need to be a certainty; it must simply be ‘more than fanciful’. This is akin to ‘discovery’ phase in the identification of tax fraud. Suspicion is subjective and may differ from person to person, however your suspicions should be more than just vague feelings of unease or what could be considered fanciful.

You must submit an MLTF report if you know or suspect or have grounds for knowing or suspecting a person or entity in the regulated sector is or has engaged in MLTF. You should detail this in your report under reasons for suspicion. The appendix provides some indicators of suspicious activity for reference.

Your suspicion will be formed from a wide variety of sources, be that behaviours, lack of cooperation, observations, paperwork checks or data analysis and formed at different points of your contact with businesses or individual. Your suspicions should be formed from the knowledge you gain during the normal course of your primary role.

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Tipping off

It’s an offence to tell the business or person you’ve submitted an MLTF report about them. You must never disclose outside of HMRC that you have submitted an MLTF report on a firm or person.

Once an MLTF report is made, you must consider if and how HMRC should change the way it interacts with the business to avoid committing the offences of ‘tipping off’ and ‘prejudicing an investigation’.

Under section 333A of the Proceeds of Crime Act 2002 (http://www.legislation.gov.uk/ukpga/2002/29/section/333A) (POCA), it’s a criminal offence that could result in imprisonment or a fine for:
- telling a person that: a report has been made (if you know or suspect that you’re likely to prejudice an investigation by disclosing this information); or
- an investigation into money laundering is being considered or carried out (if that disclosure will prejudice the investigation).
If you know or suspect that a money laundering investigation is being or is about to be concluded, it’s a criminal offence under section 342 POCA to make a disclosure that’s likely to prejudice the investigation.

Frequently Asked Questions (FAQs)

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Can I tell a business I am considering submitting an ISAR report regarding them or one of their clients?

No, you should not disclose the fact that an MLTF report has been made, or that a money laundering investigation is taking place, where that disclosure may prejudice an investigation. This may amount to an offence of tipping off or prejudicing an investigation under the Proceeds of Crime Act.

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Will my name be contained in the ISAR report sent to the NCA?

No, the SAR will not contain the name of the person reporting internally. You should not include your name or a colleagues name in the text of the SAR. This will form part of the checks conducted by the MLRO.

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More Information about SARs

The NCA provides further guidance on SARs here (https://www.nationalcrimeagency.gov.uk/what-we-do/crime-threats/money-laundering-and-illicit-finance/suspicious-activity-reports).