UK: Law Commission Publishes Recommendations On The UK's Suspicious Activity Reporting Regime


On 18 June 2019, the Law Commission of England and Wales (the “Commission”) published the long-awaited report on its review into the anti-money laundering (“AML”) regime in the UK and, in particular, the operation of the suspicious activity reporting ("SARs") regime (the “Report”).

The primary purpose of the review was to improve the prevention, detection and prosecution of money laundering and terrorism financing in the UK. More specifically, the review aimed 'to address systemic problems in the suspicious activity reporting process, in particular the “consent regime"',1  which allows individuals and businesses to submit a report requesting a defence against money laundering offences.

The Current SARs Regime

The review was prompted, in part, by the increasing criticism of the current SARs regime, which is widely viewed as being inefficient, resulting in too many low quality SARs. For example, between April 2017 and March 2018, the UK National Crime Agency (“NCA”), the government agency responsible for analysing SARs, received and processed 463,938 SARs, many of which it said were of a poor quality. These low quality SARs often contain limited or no useful intelligence, leading to a waste of time and resources for both the person making the report and the NCA.

The Commission noted that the reasons behind the deficiencies in the current SARs regime include: (1) a broad definition of “criminal property” in section 340 of the Proceeds of Crime Act 2002 (“POCA”), which requires that the proceeds of any criminal conduct, committed at any time and of any value, be reported (the so-called “all-crimes” “for all time” approach); (2) the threat of individual criminal liability for those working in the regulated sector for a failure to submit a SAR, which encourages defensive reporting likely to produce a high volume of low quality SARs; and (3) a lack of clarity in the definitions of key terms, which results in the law being misunderstood or inconsistently applied by those with reporting obligations.

Recommendations for Reform

The Commission makes 19 recommendations to improve the effectiveness and efficiency of the current SARs regime. Among these, the Commission has recommended the following:

  1. The consent regime  — the consent regime be retained, as it continues to serve a useful purpose in providing valuable intelligence to the NCA.
  2. Statutory guidance — POCA be amended to impose a statutory obligation on the Secretary of State to publish guidance on the suspicion threshold, appropriate consent and the “reasonable excuse” defence to not submitting a SAR when required.
  3. Advisory Board — an Advisory Board be established to assist in drafting the abovementioned guidance, as well as to measure the effectiveness of the SARs regime and advise the Secretary of State on ways to improve it.
  4. "All-crimes" approach — the “all-crimes” approach to money laundering be retained. However, the Report notes that the implementation of statutory guidance around what may amount to a “reasonable excuse” defence could lead to a greater focus on reporting only serious crimes by, in essence, allowing the NCA to '"switch off” the flow of certain types of SAR if they were proving to be of little value.'2
  5. SAR submissions — the Secretary of State to introduce a prescribed form for a SAR and that reporters be permitted to submit one SAR for multiple transactions on the same account/company/individual.
  6. Ring-fencing — an exemption to the existing AML framework be introduced to allow criminal property to be ring-fenced by credit and financial institutions in order to prevent entire bank accounts being frozen when proceeds of crime are mixed with clean funds (and which is to be supplemented by guidance). 

The Commission also considered a number of further reforms, opting not to make specific recommendations. For example, the Commission considered whether further reporting and record keeping requirements should be introduced, such as to require reporting if certain specific criteria are met or when a transaction is occurring in a specific location. Whilst certain law enforcement agencies, such as the NCA, favoured the introduction of these additional obligations, the Commission considered that, in the absence of clear evidence as to the utility of such provisions, it would be unreasonable to make recommendations that would be likely to burden the regulated sector with additional costs.

The Commission also considered three possible further reforms: (1) corporate criminal liability; (2) extraterritorial jurisdiction of the money laundering offences; and (3) the legal conduct overseas exception (commonly known as the “Spanish bullfighter” exception). The Commission has made no recommendations on the introduction of corporate criminal liability under POCA “at this time”,3 but has recommended that the Government seeks to clarify the law of extraterritorial jurisdiction. It has also recommended that the Government consider the scope of the legal conduct overseas exception, and the need for related guidance around transactions involving the cannabis industry.

Finally, whilst not making any recommendation, the Commission considered the way in which information about suspected money laundering is shared between private institutions and law enforcement agencies, and how this sharing could be improved. This includes considering whether it might be appropriate to permit information sharing before a suspicion crystallises, and, if so, how that might be achieved.

What does this mean?

The Commission recognises that the current reporting system is not working as effectively as it should for reporters or law enforcement.

The recommendations in the Report reflect a practical approach to tackling some of the major issues with the SARs regime without requiring any major changes to the statutory framework in Part 7 of POCA or the substantive offences themselves.

Implementation of some of the key recommendations will involve input from a new Advisory Board made up of relevant experts from the public and private sectors, and much of the success of these proposals will turn on the effectiveness of this Board. In the crucial area of the proposed statutory guidance, the devil will be in the drafting.


1. Law Commission report titled ‘Anti-money laundering: the SARs regime’, page 18. 

2. Ibid., page 85.

3. Ibid., page 190.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions