A suspicious activity report is the disclosure a regulated business makes to the National Crime Agency when it knows or suspects money laundering. Accountants are in the regulated sector, so the obligation is not optional. The part that causes most difficulty is the defence against money laundering request — the 7 working day notice period, the 31 day moratorium, and what a granted defence does and does not permit.
The legal basis
SARs are made under the Proceeds of Crime Act 2002 or the Terrorism Act 2000. The principal money laundering offences are POCA sections 327 to 329 — concealing, arranging and acquiring criminal property. Terrorist financing offences sit at TACT sections 15 to 18.
Section 330 POCA creates the failure to disclose offence for people in the regulated sector who know or suspect, or have reasonable grounds to know or suspect, that another person is engaged in money laundering. Disclosure must be made to a nominated officer or to a person authorised by the NCA's Director General, as soon as is practicable.
Note the threshold. It is not "believe" and it is not "have evidence of". Suspicion is a low bar, and the offence also catches the person who ought to have formed a suspicion on reasonable grounds.
Two different reports
The distinction that matters operationally is between a report you make because you must, and a request for protection before you act.
A required disclosure reports a suspicion about something that has happened. A DAML — defence against money laundering — is requested where you suspect that a future activity you intend to carry out involves criminal property, and proceeding would risk committing an offence. The terrorist financing equivalent is a DATF.
Be precise about what a granted defence gives you. The NCA is explicit: it is not approval, permission or clearance to undertake the activity. It is solely a defence to a money laundering offence under POCA or a terrorist financing offence under TACT. It does not provide a defence to tipping off, to prejudicing an investigation, or to a breach of the Money Laundering Regulations 2017.
Volumes give a sense of the scale: the UK Financial Intelligence Unit received over 57,000 DAML requests in 2023/24, alongside more than 400 DATF requests.
The moratorium clock
The timing is statutory and it is worth knowing exactly:
- The notice period is 7 working days, starting with the first working day after the disclosure is made. Working days exclude Saturdays, Sundays, Christmas Day, Good Friday and relevant bank holidays;
- If no refusal is received by the end of that period, the law treats you as having appropriate consent, and you may proceed;
- If consent is refused, a 31 day moratorium begins on the day you receive the refusal — 31 calendar days, not working days;
- The moratorium can be extended by the court under section 336A, on application by a senior officer made before the period would otherwise end. Each extension runs no more than 31 days, extensions can be granted more than once, but the court may not extend the period by more than 186 days in total beyond the initial 31.
The court applies four tests: the investigation is ongoing but incomplete, it is being conducted diligently, further time is needed, and an extension is reasonable in the circumstances.
One practical trap: where you receive notice that an application to extend has been made, the moratorium continues past the original expiry even if the court does not hear the application until afterwards. Do not treat the original end date as a deadline that automatically releases you.
Tipping off
Section 333A creates two offences for people in the regulated sector who obtained the information in the course of that business. The first is disclosing that a SAR has been made where that is likely to prejudice any investigation. The second is disclosing that a money laundering investigation is being contemplated or carried out, where that is likely to prejudice it.
Penalties on summary conviction are up to three months' imprisonment, a fine up to level 5 on the standard scale, or both; on indictment, up to two years, a fine, or both. There are permitted disclosure exceptions in sections 333B to 333D — within a group, between professionals in the same profession on the same client, and so on — and they are narrower than people assume.
The practical difficulty is the client conversation. A client whose transaction has stalled will ask why. The answer cannot explain the real reason, and it also cannot be a lie that itself prejudices the investigation. This is the point at which a firm should take advice rather than improvise.
The nominated officer
Regulation 21 of the Money Laundering Regulations 2017 requires a relevant person, where appropriate to the size and nature of the business, to appoint an individual from the board as the officer responsible for compliance, and a nominated officer who considers internal disclosures and decides whether they give rise to knowledge or suspicion, or reasonable grounds for knowledge or suspicion, of money laundering or terrorist financing.
Regulation 21 does not apply where the relevant person is an individual with no employees or associates. Nominated officers and MLROs carry their own obligations under POCA and TACT to ensure a prohibited act is not undertaken without appropriate or prior consent — the responsibility does not stop at passing the report on.
Submitting, and the penalties for not
SARs are submitted through the SAR Portal, which the NCA describes as the most secure and efficient route. DAML and DATF requests are made in section 7 of the portal, and the reporter must select the correct legislation — POCA or TACT. Only the UKFIU is authorised to receive these disclosures.
Failure to disclose under POCA sections 330 to 331, or TACT sections 19 and 21A, carries up to six months' imprisonment or a fine on summary conviction, and up to five years' imprisonment, a fine, or both on indictment.
The quality of a SAR matters as much as its existence. A report that states a suspicion without the facts behind it, or omits the glossary codes and the reason for the request, is harder for the UKFIU to act on and slower to clear — which is the reporter's problem as much as anyone's.
Acumon supports firms on anti-money laundering compliance through AML audit and anti-fraud work, with forensic accounting where an investigation follows — see also our guides to voluntary disclosure and fraud investigations. If your firm has never tested how long a DAML takes in practice, that is a gap worth closing before a completion deadline depends on it.