News & what's on - Written by on Monday, June 2, 2014 5:30 - 0 Comments

More joined up approach required: Only .5% chance a corruption suspicious activity report will be acted upon

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NCA training 018Launched amid a fanfare last year some are now asking questions about the National Crime Agency and the need for a more joined up approach with other investigators.

Paradoxically, against a backdrop of the Bribery Act and increasing awareness and publicity surrounding corruption, UK referrals of corruption intelligence from the National Crime Agency to the Police and the Serious Fraud Office has fallen dramatically in the last two years, the Times reports.

What are the odds?

Figures obtained by the Times reveal that the number of intelligence packs about overseas corruption created by the National Crime Agency off the back of intelligence garnered under the UK’s draconian anti-money laundering regime fell by 67 percent to just 82 last year.

The NCA does not track the numbers of international corruption reports it receives (because it claims the data is ‘not useful’ – though its forerunner the Serious Organised Crime Agency did).

Historically SOCA recorded that corruption reports averaged c.10,000 a year.  Assuming that that number which is pretty static has not changed that means there is .5% chance that a suspicious activity report will be taken further.

A staggeringly low statistic.

This is against a backdrop where David Green QC, Director of the SFO, has pledged to rebuild the SFO’s intelligence function.  It has previously been reported the SFO has considered placing agents undercover in Annabel’s a well known high end London nightclub.

UK money laundering laws

The Proceeds of Crime Act requires companies to file Suspicious Activity Reports in the context of suspicious transactions.

There is a fine distinction between those companies subject to UK Money Laundering Regulations, for example corporate lawyers, financial services firms, accountants, foreign exchange brokers and the like – who must proactively take steps to identify any activity they suspect may be linked to money laundering (for example corruption).  In turn, if they know or suspect there is such a link they must report it to the National Crime Agency (NCA).

For others not governed by the UK Money Laundering Regulations they may still be caught by the UK Proceeds of Crime Act which requires companies to file an authorised disclosure in certain circumstances including if they anticipate entering into or becoming concerned in an arrangement which they know or suspect facilitates (by whatever means) the acquisition, retention, use or control of criminal property (for example revenues from a contract tainted by bribery) by or on behalf of another person.

The suspicion threshold is very low (more than fanciful).

If you want to proceed with a transaction that you’re suspicious of you must ask the NCA for consent before proceeding and an offence is committed if there is a failure to report.

Opinion

These latest statistics raise more questions than they answer.

It is surprising that the SFO only see up to a maximum of 82 reports flowing from more than 10,000 Suspicious Activity Reports filed with the National Crime Agency relating to international corruption and the numbers beg the question, is intelligence being squandered?

The collapse of reports created by the NCA based off of reported suspicious transactions may point to a lack of resources to adequately process and investigate reports in the last 12 months.

Over recent years the prosecutors toolkit has been filled with a variety of tools (anti money laundering laws, the Bribery Act etc.) to enable prosecutors to investigate and prosecute corporate crime.

However, against a backdrop of a desire to enhance intelligence functions, and a desire to target wrongdoing as it happens, not just historical allegations, a more joined up approach among UK law enforcement is required.

Failing which, serious questions should be asked about whether intelligence which is being gathered is simply being ignored.

 

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