The Home Office has published its response to the 2019 Law Commission report and recommendations on the SARs regime. The report had made 19 recommendations, of which the Home Office accepts 13. The uncontended recommendations include:
- that the consent regime stays – the Government agrees, and notes the updates recent legislation has made to provide further thresholds and the constantly updated reporting guidance;
- that the “all crimes” approach to reporting is maintained – the Government accepts it is best that the burden of assessment and triage should be on law enforcement agencies best qualified to make the necessary judgements;
- not to amend POCA to include a definition of “suspicion”
- that the Government should issue guidance on the operation of the “mixed assets” provision (now within the ECCTA)
Among the recommendations partially accepted are:
- to introduce a prescribed form for SARs – this is already happening as part of the SARs reform programme
- that one SAR should be capable of reporting multiple transactions for the same account or company
- that banks should not need to seek consent to repay funds to fraud victims (the Government says it is clear that this is so from SOCA guidance) and that reporters would benefit from statutory guidance
- that no predicate money laundering offence should be committed by employees of firms in the regulated sector who take action to preserve criminal property where part only of assets fall under suspicion – the Government notes the guidance the ECCTA has provided on handling of mixed assets
Among the recommendations the Government has rejected are:
- that POCA should require the Secretary of State to publish guidance for the regulated sector on matters such as the suspicion threshold and “reasonable excuse”. The Government feels it is proper for regulators to give sector-specific guidance and points out that it can issue clarifications and does approve sector guidance
- that the Secretary of State publish guidance on “suspicion”
- that there should be statutory guidance on the meaning of “appropriate consent”
- that an Advisory Board should consider whether the reporting threshold should be increased – consultees had mixed views on this, and the Government feels the ECCTA will reduce the volume of low quality SARs
- that there should not be a minimum reporting threshold (since the Law Commission report, the threshold has in fact been raised to £1,000)
- to amend POCA to allow a Crown Court judge to permit funds to be released for reasonable living expenses when hearing an application to extend the moratorium