Safety first

Accountants are required by law to report suspicions of money laundering to
the Serious and Organised Crime Agency (SOCA). Not only this but the
professional bodies (including ACCA) have made the reporting of suspicions an
ethical requirement as well as a legal one.

From a public interest point of view we have little argument with the
rationale behind the reporting of suspicious activities.

Under the money laundering reporting regime, all information reported to SOCA
should be treated as confidential and the source of that information kept
anonymous. By the same token it is a legal and ethical requirement that
accountants should not divulge to clients that they have submitted a report
about them. Hence, all parties in the reporting framework must avoid ‘tipping
suspects off’.

The recent Lander review of the UK’s suspicious activity reports regime
(SARs) acknowledged that failure to respect reporters’ confidentiality was a
cause for concern. This chimes with feedback ACCA has received from its members.

We must hope that the official recognition of this problem leads to strong
action to plug the leaks. The issue is not simply one of professional
embarrassment, the deeper issue is about the integrity of the whole reporting
system. Unless accountants have confidence in the ability of the system to
preserve their confidentiality, they may think twice before deciding to comply
with their responsibility to submit reports.

A common complaint about the UK’s all-crimes reporting regime is that it
generates a lot of trivial and innocuous information. But some information
reported in SARs may well be of material interest in the fight against ‘serious’
crime. It would be ironic, in these circumstances, if fears about weaknesses in
official security controls had the effect of causing reporters to report only
the more trivial information and withhold more serious information, which might
trigger repercussions for reporters and their families.

The Home Office is currently talking about expanding the potential of SARs by
making them widely available to law enforcement agencies. But before action is
taken to distribute SARs more widely, the problem of the open back door needs to
be resolved. It would be unfair to expose accountants to risk until their
legitimate concerns about security are addressed.

Chas Roy-Chowdhury is head of tax at ACCA

Related reading