NAEA ARLA ConferenceNewmarket

08th October 2014

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Content

© Copyright NCA

NCA Overview

SAR Regime

Best Practice

Case Studies

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National Crime Agency (NCA)

© Copyright NCA

Keith Bristow

Intelligence Hub

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UKFIU Structure

Alan HislopHead of UKFIU

Donna Carruth Keith White

Policy and Communications

Consent

Systems and Futures

Dialogue

SARs Data Exploitation Team

International

Terrorist Finance Team

SAR Management

International Corruption Intelligence Cell

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UK Financial Intelligence Unit

National responsibility for receiving, analysing anddisseminating financial intelligence submitted through the Suspicious Activity Reports (SARs) Regime

Delivers the day-to-day operation of the SARs database (ELMER)

Provides agreed support to the regime's end users, reporters and other stakeholders, including international partners

Money Laundering & UK Legislation

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The Problem

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105 Kilos of Heroin

….generates £2,760,000 cash

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Trends

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At least 1 in 4 organised crime groups retain a corrupt individual in the legitimate financial sector

Illicit profits are often laundered through cash-rich overt businesses, which very often operate on the high street and typically include nail bars, food and licensed premises, companies offering security services, taxi firms and car washes.

Complicit, negligent or unwitting professionals in the financial, accountancy and legal professions in the UK facilitate money laundering on behalf of organized criminals. UK organised crime groups also use specialist money launderers, some overseas, who manage laundering for multiple criminal enterprises.

Government Serious Crime Review – Oct 2013

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© Copyright NCA

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UK Legislation

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Primary Legislation

Proceeds of Crime Act 2002 (POCA)

Terrorism Act 2000 (TACT)

Secondary Legislation

Money laundering Regulations 2007

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POCA Interpretation

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S.340(9)

Any benefit derived from criminal conduct. Property includes money, all forms of property, real or personal, heritable or moveable, things in action and other intangible or incorporeal property

POCA – Criminal Property

S.340(2)

Any conduct which constitutes an offence in any part of the UK or would constitute an offence in any part of the UK if it occurred there

POCA – Criminal Conduct

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POCA – Money Laundering Offences

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s.327 Concealing, disguising, converting, or transferring criminal property

s.328 Being concerned in an arrangement in relation to criminal property

s.329 Acquisition, use or possession of criminal property

PENALTY – 14 years imprisonment

Where a suspicious transaction is pre-advised, Consent must be sought from the NCA to proceed

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POCA – Other Offences

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s.330 Failure to disclose – applies to the regulated sector. A person commits this offence if he knows or suspects or

has reasonable grounds for knowing suspecting that another is engaged in money laundering and fails to report it

PENALTY: 5 years imprisonment

s.333 Tipping off

“Knows or suspects” that a disclosure (report) has been made &

(b)Makes a disclosure which is likely to prejudice any investigation which might be conducted following the disclosure

PENALTY: 2 years imprisonment

SAR Best Practice

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SAR Best Practice

© Copyright NCA

Put in all KYC / CDD information

Address & date of birth vital if known

Make sure your reason for suspicion is clear

Reason for suspicion should be in first line of text

Glossary code should be used

Always put postcode in even if previously reported on

If you need Consent be specific (and tick the box)

Submit via SAR Online / Fax

Be available during the notice period

Consider business / reputational risk

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Consent – Essential Elements

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The information or other matter which gives the grounds for knowledge, suspicion or belief

A description of the property that is known, suspected or believed to be criminal or terrorist property

A description of the prohibited act for which consent is sought

The identity of the person or persons known or suspected to be involved in money laundering or committing or attempting to commit an offence under s15 to 18 of TACT

The whereabouts of the property that is known or suspected to be criminal or terrorist property

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POCA Interpretation

© Copyright NCA

www.nationalcrimeagency.gov.uk

SAR Usage

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Banks78.24%

Building Societies 3.36%

Estate Agents0.05%

Gambling0.34%

Legal1.51%

MSBs8.40%

Other 6.03%

Accountants2.06%

Accountants

Banks

Building Societies

Estate Agents

Gambling

Legal

MSBs

Other

SA

SARs Breakdown by Sector

2012-2013

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SAR Usage Oct 2011 – Oct 2012

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Investigations featuring a SAR:

£108.1 million subject to Restraint Orders

£49.8 million in Confiscation Orders

£8.7 million in Cash Forfeitures

Interventions arising from Consents :

£110.3 million subject to Restraint

£36.7 million returned to HMRC

Asset Denial 2011 / 12:

Assets denied by SOCA - £100.6m

Assets denied by partners (UK & Overseas) - £299.7m

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Intelligence vs. Evidence

•Strictly for intelligence purposes only

•Managed in accordance with your agreement with UKFIU & HO Circ 53/2005

•SARs information should always be on the sensitive schedule for CPIA

•Any potential disclosure MUST be discussed with UKFIU

•If evidential material required then ILOR through the UK Central Authority (Tel: 0207 035 4040)

Case Studies

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© Copyright NCA

Khalid Malik(25 Years)

Shadab Khan Solicitor(4 Years)

Tanveer CheemaMortgage Advisor

(3 Years)

Davinder SinghOCG Member

(15 Years)

Mohammed KhanOCG Member

(14 Years)

Balkees BegumWife

(10 Years)

Shanaz AfzalBegum’s Sister

(4 Years)

Paul MorganProperty Dev(5.5 Years)

Parmjit SinghCourier

(200 hrs CS)

Shafiq RehmanCourier

(200 hrs CS)

Stephan OsborneMalik’s ‘Banker’

(Deceased)

Aras Karkuti (23 years)Naveed ButtFarhad Ibrahim* (20 Years)Khalid Durani (18 Years)(Iraqi Kurds)

London ConnectionOperation Numerator

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ML Modus Operandi

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Cash Smuggling?

Property?

Professionals Involved?

Foreign Bank Accounts?

Front Company?

Other Accounts?

Rental Properties?

Unique Car Care Company

£860k flat in Dubai£900k land in Bulgaria

£1.2m across Yorkshire

?£100K

Bling Lifestyle?Malik’s Lamborghini & SL55

£29k jewellery, cars

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Estate Agents - Smurfing

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Mark Owens3 Years

Fazal Hussain7 Years

Muhammed Habib3 Years

Nasrullah Khan10 Years

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Threat Areas – Property Sector

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Targeting by OCGs – value knowledge / access

Identity fraud / false documentation to evade

KYC / CDD procedures

Complicit / bogus professionals

High cash turnover businesses / unusually

profitable

Increased OCG use of offshore accounts & Company

Service Providers

Overseas links / international cash flow

Protect Yourselves – Be Suspicious

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Contact Details

© Copyright NCA

• SAR Online & Glossary of Terms –

www.nationalcrimeagency.gov.uk

• UKFIU Support desks – 0207 238 8282

• UKFIU Dialogue Team via ukfiusars@nca.x.gsi.gov.uk

• SAR Confidentiality Breach Line – 0800 234 6657

• NCA General Enquiries Number – 0370 496 7622

• Fraud Reporting www.actionfraud.org.uk/report_fraud

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Any Questions?

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