Recommendation 33

HM Government · verbatim extract Acknowledged

Milestones for SARs Reform delivery were published by the government in the Economic Crime Plan Statement of Progress (May 2021). 13 The reform programme is performing well, with a number of core components of the programme now complete. The SARs Reform Programme is at the heart of improving the performance of the Anti-Money Laundering (AML) system. SARs intelligence is a critical tool in our ability to identify, disrupt and recover the hundreds of millions of pounds which underpins the most serious and organised crime in the UK. Through the increased investment over the SR period, funding will be provided to ensure changes being implemented by the programme, such as maintaining the new SARs digital service and the increased staffing levels in the UKFIU and ROCUs are delivered. This will enable the SARs Reform Programme to help the AML regulated sector prevent money laundering and disrupt more criminality through SARs intelligence. The SARs Reform Programme focusses on three key areas of change, with good progress being made across each: 1. Uplifting staffing : to increase capacity within law enforcement to analyse and act on SARs intelligence. This includes 75 additional officers in the UKFIU which will almost double capacity. 45 of these officers are already in post and the milestone for recruiting the remaining 30 is the end of FY 2022/23. The programme has also provided more than 20 new financial investigators in the Regional Organised Crime Units (ROCUs) dedicated to SARs analysis. These new staff are already delivering operational results from SARs intelligence including the recovery of criminal assets (£380,000 to date this year, with a further c. £1 million frozen) and identification and arrest of previously unknown Organised Crime Group members. 2 . IT transformation : a new SARs Digital Service including data analytics, to replace legacy IT implemented more than 20 years ago. The first elements of the new SARs IT systems (Bulk Reporter submission) were delivered in early 2021, to enable organisations that submit large volumes of SARs (bulk reporters) to begin testing the new systems. To ensure consistency of service, de-risk delivery and ensure the protection of the public, the end-to-end SARs Digital Service will be delivered in stages. The new SARs Online Portal and bulk submission method will go live first from summer 2022. This will be followed by further releases, which will replace the current SARs IT used by the UKFIU, Law Enforcement Agencies, and other Government Departments. 3. Legislation and guidance : covering improved guidance and better feedback to the private sector who report SARs, and legislative exemptions to Defence Against Money Laundering (DAML) SAR reporting to reduce the volume of ineffective reports. The additional staff in the UKFIU have enabled significantly increased UKFIU feedback and engagement, with 90% of bulk SARs reporters (banks) feeding back that the engagement with NCA on SARs is better than 12 months ago. Changes introduced in 2021 through the Financial Services Bill brought Electronic Money Institutions into scope of existing reporting exemptions, resulting in c.10,000 fewer low value DAMLs this year. Further legislative change that could cut the number of DAMLs by 50%, freeing up staff to focus on high value activity, will be introduced with the second part of the Economic Crime Bill.