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Suspicious activity reports (SARs) regime: reforming institutional culture

XiaoTong Loh (Centre for Commercial Law Studies, Queen Mary University of London, London, UK)

Journal of Money Laundering Control

ISSN: 1368-5201

Article publication date: 12 November 2020

Issue publication date: 31 July 2021

647

Abstract

Purpose

Against a backdrop of money laundering scandals in the banking industry, this study aims to assess anti-money laundering (AML) reporting obligations of bankers in the UK. By evaluating the effectiveness of the current suspicious activity report (SAR) regime, this study seeks to use the senior management functions of the Senior Managers and Certification Regime (SMCR) to achieve the goals of AML law within the banking sector.

Design/methodology/approach

This study firstly evaluates the efficiencies of the available risk-based sanctions aimed at making the banks the gatekeeper for money laundering. It points out the three-fold deficiencies of the SAR regime in the UK. Lastly, it discusses and examines the merits of multiple proposals for reformation.

Findings

It is argued that the risk-based sanctions have failed to achieve their goals to deter banks from abusing their products and services to facilitate money laundering activities. In revealing the three-fold deficiencies of the SAR regime – theoretical flaws, practical inapplicability and institutional culture – this study argues for both the retainment of the current regime and the repositioning of regulation focus on the reformation of institutional culture, particularly within large or multinational corporates, in terms of their commitment to fulfilling AML obligations.

Originality/value

This essay has concluded that the regime has correct tools under the Proceeds of Crime Act 2002, the Money Laundering Regulations 2017 and the SMCR to address problems associated with AML reporting obligations imposed on the banking sector.

Keywords

Citation

Loh, X. (2021), "Suspicious activity reports (SARs) regime: reforming institutional culture", Journal of Money Laundering Control, Vol. 24 No. 3, pp. 514-524. https://doi.org/10.1108/JMLC-07-2020-0078

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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