UK SARs fall from key company formation agents
22 Jan 2020

The number of suspicious activity reports filed by company formation agents has fallen by more than half to only 23, despite government attempts to improve the system.

There was a 56.6 per cent decline in SARs to the National Crime Agency in the year to March 2019 from trust and company service providers, which incorporate companies. That was in spite of a 3.1 per cent increase to 478,437 in such reports to the agency from other industries, including banks, accountants and estate agents.

The Office for Professional Body Anti-Money Laundering Supervision, or Opbas, was created in January 2018 to oversee 22 professional body supervisors, which in turn supervise company formation agents. Based at the Financial Conduct Authority, the office was meant to ensure that supervisors meet anti-money laundering regulation standards, while tackling inconsistencies in supervision and addressing the low number of suspicious activity reports submitted to the NCA.

Hundreds of billions of pounds a year of dirty money is estimated to flow through Britain every year. Suspicious activity reports alert law enforcement to potential money laundering and terrorist financing.

An investigation last year by an international consortium, including The Times and Finance Uncovered, an investigative journalism body, and co-ordinated by the Organised Crime and Corruption Reporting Project, shone a spotlight on the loopholes and weaknesses in the regulations of company formation agencies and led to concerns that they are damaging Britain’s reputation for corporate governance.

Leaked documents revealed that a web of businesses, banks and tax havens used by international crime gangs and fraudsters had been created by Formations House, a London-based agency, and links to scams worth more than £300 million.

The low number of SARs may reflect that some agents offering other services are listed under different categories in the total number of reports. Nevertheless, experts said that the total suggested the system was broken.

By Alex Ralph, The Times, 21 January 2020

Read more at The Times

RiskScreen: Eliminating Financial Crime with Smart Technology

Count this content towards your CPD minutes, by signing up to our CPD Wallet