When you get the “knock” - Liaising with law enforcement
From conversations with many practitioners, one question they often have about Suspicious Activity Reports (SARs) to the National Crime Agency (NCA) is: "What happens after a SAR is made to the NCA?"
There is a common belief that a police officer will appear on the reporter’s doorstep the next day asking to interrogate the money laundering reporting officer (MLRO) and examine files.
As Ken Murray CA, Head of Forensic Accounting at Police Scotland explains in the below podcast, that is highly unlikely. Ken views individual SARs as pieces of intelligence in a much bigger jigsaw. It’s not until the full picture forms that an officer is likely to contact the MLRO, and even then only if the content of the SAR suggests they could provide evidence to further the investigation.
That said, instances in which the police follow up a SAR are not unheard of. In that case, when answering questions from a NCA or other law enforcement officer, MLROs should only clarify the content of a SAR.
Any further disclosure to NCA or law enforcement or prosecuting agencies should normally only be given in response to the exercise of a power to obtain information contained in relevant legislation, or in compliance with professional guidance on the balance of confidentiality and making disclosures in the public interest. This provides protection for the MLRO and the business against any allegation of breach of confidentiality.
Under the Proceeds of Crime Act 2002 (POCA), law enforcement officers can get a variety of Court Orders as specified in Part Eight of POCA, such as production orders, search warrants, disclosure orders, customer information orders and accounting monitoring orders. If faced with one of these, it is imperative that you seek legal advice on what to do. However, there are also some basic steps that you should take yourself.
Check the small print
First of all, ask the officer for his warrant card and ensure he is who he says he is. Only speak with a designated financial intelligence officer, not an operational detective. If in doubt, you can check with the NCA.
Ask for a copy of the Order as it will detail exactly what material you are required to hand over. Check it carefully and deliver only that which is stated – no more. Best practice would be for the officer to liaise with you in advance, but sometimes this does not happen.
Try and negotiate time beyond the statutory seven days on the grounds of practicalities. If necessary, you can apply to the court for more time to comply. The officer will often be happy to receive the information in installments. Never post or email material, as this may affect continuity of evidence – if it’s important, the police will collect it.
If the material is held on computer, they have no right to take away hardware that would prevent you from running your business. If you have to give access to information on computer, this must be in a form which is visible and legible.
If material must be produced to take away, again it must be in a visible and legible format. The police have no right to take away or access other confidential information, such as other clients’ files or the firm’s client list. If computers are involved, you should definitely seek independent legal advice, as there are also data protection obligations to consider.
Finally, if the police turn up unannounced with a search warrant (or search and seizure warrant in England and Wales) then the police likely don't trust you. You should again check warrant cards and the warrant itself. It will state exactly to what the police are allowed access, and how many officers are authorised to conduct the search. In such circumstances, you should seek independent legal advice immediately.
The client comes first
Much of the above advice also applies to police enquiries outside the anti-money laundering/SAR regime, such as general fraud enquiries by local officers. You should always check the identity of the officer, and bear in mind that you have an overarching duty of confidentiality to your clients.
You must use your discretion and take your own legal advice on whether or not to provide any information, and while you should always seek to assist the police with their enquiries, it would be prudent only to do so in response to a court order. This would protect you from being sued for breach of confidence.
Finally, beware of 'back door' requests for information under Section 29(3) of the Data Protection Act 1998 which allows ‘relevant authorities’ such as the police, government departments and local authorities with regulatory powers to request access to personal data without the consent of the data subject for the purposes of:
- The prevention or detection of crime.
- The apprehension or prosecution of offenders.
- The assessment or collection of tax or duty.
Section 29 of the Act does not give an automatic right of access to information. It gives you the option to disclose if you wish – it does not give the police the right to compel you to disclose personal information. You should assess the merits of such requests and decide whether or not to apply Section 29.
The Information Commissioners Office produces guidance on this, which includes factors you must take into consideration when deciding whether or not to release information. The exemption should only be applied to the extent necessary to avoid prejudicing the crime and taxation purposes.
This means that you must do as much as you can to comply with the usual requirements of the Data Protection Act. You should only disclose the information that is necessary for the purpose stated, and should not assume that all the data that you hold is exempt. Speculative requests for personal data, especially about large numbers of people, are unlikely to meet the tests of necessity and prejudice.