Appendix 2 The Duty – Writing a SAR Narrative

Under Part 7 of Proceeds of Crime Act 2002 (POCA) and Part 3 of Terrorist Act 2000 (TACT), requires a SAR to be submitted to seek a defense (or Seek consent) from NCA.

v to a principal money laundering offence (sections 327-329 POCA 2002) under sections 335 and 336 of POCA;

and/or

v a terrorist financing offence (sections 15-18 Terrorism Act 2000 [‘TACT’]) under section 21ZA of TACT.

Once SAR is raised it enters what is called a ‘notice period’, it is seven working days starting from the day after the SAR is submitted.

The end of the working day is 1700 hrs.

The notice period excludes weekends and bank holidays.

Where a SAR is raised under POCA, a defence is afforded in cases no reply is provided by the NCA at the end of the seven-day notice period.

Where disclosure is made under TACT a person is treated as having a defence if no notice of refusal is received before the end of the notice period, under TACT.

Where a refusal under POCA is received it means that defence has not been granted until a granted letter is received or the end of the 31-day moratorium period. The moratorium period begins on the day of refusal and ends after 31 calendar days. During this period law enforcement may get in touch regarding any investigation, serve production orders, property freezing orders and restraint orders in relation to the matter.

Where a refusal is received under TACT there is no moratorium period, and no defence is available, unless and until the request is granted by the NCA.

Section 330 of POCA 2002 makes it a legal duty to report money laundering, A conviction for failing to disclose suspicion of criminal property or money laundering can incur a custodial sentence of up to five years and an unlimited fine.

The information that is included in a SAR assist the law enforcement agency (LEA) to get an adequate picture. The minimum information the report should include:

· the reason for suspicion

· a description of the property concerned (including value where possible)

· providing the identity of the persons involved

· the whereabouts of the criminal property and/or

· any information they have that is or is reasonable to believe may assist in identifying these.

T

he Five Ws, and one H, are questions whose answers are considered basic in information-gathering. They can assist in getting a complete story to write a SAR. According to the principle of the Five Ws, a report should start with an interrogative word:

Writing a SAR Narrative. What are the 5 Ws and 1H?

Narrative Structure can be written as:

who is doing what

who they are/were doing it with

when they are/were doing it

why they are/were doing it

where they did it

how are they doing it.

1. Introduction

WHY?

Provide a brief statement of the SAR’s purpose

-Generally, describe the activity

Background of the suspicious activity, describe concisely but fully, why the activity is considered suspicious, Location where the activity takes place

2. Body

WHO?

Subject/suspect who is conducting the suspicious activity. Describe all details such as employer, occupation, the relationship between suspects and the organization and length of the financial relationship.

- Provide relevant facts about all parties facilitating the activity.

- Identify all involved accounts and transactions in chronological order by date and amount

The narrative should be used to describe

· the suspect or suspects, including occupation, position or title within the business, and the nature of the suspect’s business.

· Any known relationships with suspects in the Narrative Section. While detailed suspect information may not always be available (e.g., in situations involving non-account holders), such information should be included to the maximum extent possible.

· Addresses for suspects

· Any identification numbers associated with the suspect(s), such as passport, alien registration, and driver’s license numbers.

(WHAT & WHEN)

- Include unusual observations such as financial activities which do not commensurate with the expected normal business flows and types of transactions, unusual multiple-party relationships, customer verbal statements, unusual and/or complex series of transactions indicative of layering; lack of business justification and documentation supporting the activity

- A specific description of the involved accounts and transactions, identifying if known, both the origination and application of funds (usually identified in chronological order by date and amount)

What?

Products or services facilitate the suspicious transactions/activities

Describe transactions/activities with financial products and services used for the suspicious activities. An illustrative list of instruments or mechanisms that may be used in suspicious activity includes, but is not limited to, wire transfers, structuring, shell companies, bonds/notes, stocks, mutual funds, insurance policies, etc. In addition, several different methods may be employed for initiating the negotiation of funds such as the Internet, phone access, mail, couriers, or others. In summarizing the flow of funds, always include the source of the funds (origination) that lead to the application for, or recipient use of, the funds (as beneficiary). In documenting the movement of funds, identify all account numbers at the financial institution affected by the suspicious activity and when possible, provide any account numbers held at other institutions and the names/locations of the other financial institutions.

3. WHEN?

Time background the suspicious activity occurred

Date for One-time activity, the duration for a pattern of activity and the time when the suspicious activity is detected. If the activity takes place over a period, indicate the date when the suspicious activity was first noticed and describe the duration of the activity. A good practice is for Filers to provide a tabular presentation of the suspicious account activities (transactions in and out). While this information is useful and should be retained, Also, to better track the flow of funds, individual dates and amounts of transactions should be included in the narrative rather than just the aggregated amount.

4. WHERE

Location background the suspicious activity takes place

-Specific details on transactions that identify the bank locations (branches) where the transactions occurred, the type of transactions, and how the transactions occurred such as night deposit, online banking and ATM

1. HOW

The way the suspicious activity occurred, any factual observations or incriminating statements. Describe how the suspicious activity was conducted. usually identified in chronological order by date and amount.

- Explain in detail the filer’s position that the activity is suspicious

- Describe the method of operation of the subject.

- Manner in which the activity is conducted, any relationship to other transactions, accounts, conductors, and subsequent results of the activity

Appendix 2 - The Duty Writing a SAR Narrative.pdf

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Introduction to SARS Guidance on submitting a Better SAR Defence Under POCA and TACT