Suspicious Activity Reports (SARs): A Practical Guide for Firms

A Suspicious Activity Report (SAR) is the formal way a regulated professional alerts law enforcement to known or suspected money laundering or terrorist financing. For accountants, the duty to report is one of the most serious obligations under the anti-money laundering regime — failing to report a suspicion you formed can itself be a criminal offence. The UK's National Crime Agency (NCA) received more than 870,000 SARs in its most recent annual reporting period, with accountants, solicitors and other professionals among the contributors.

When must you submit a SAR?

The trigger is knowledge or suspicion — or reasonable grounds to know or suspect — that another person is engaged in money laundering, based on information that came to you in the course of your business. The threshold of "suspicion" is more than a vague unease but less than proof: it is a possibility that is more than fanciful. Importantly, the duty applies even where no transaction is involved; suspicion formed while providing advice or preparing accounts can be enough.

The internal-then-external route

In most firms, staff who form a suspicion make an internal report to the firm's Money Laundering Reporting Officer (MLRO), who then decides whether to submit an external SAR to the NCA. The MLRO role is therefore central: they are the gatekeeper between an employee's concern and a formal report to law enforcement. Sole practitioners report directly.

DAML: asking for consent

Sometimes a firm needs to carry out an act — completing a transaction, transferring funds — that might otherwise make it complicit in money laundering under the Proceeds of Crime Act 2002 (POCA). In that situation the firm submits a Defence Against Money Laundering (DAML) request: in effect, asking the NCA for consent to proceed. If the NCA grants a defence, the firm has protection from the principal money-laundering offences for that act. There is a statutory notice and moratorium period during which the firm should not proceed while the NCA considers the request.

The tipping-off trap

Once a SAR has been or is being made, it is a separate criminal offence to "tip off" — to disclose anything likely to prejudice an investigation. This is why SAR records must be kept securely and separately from client files, and why staff must be careful in their communications with a client who is the subject of a report. Tipping off is one of the easiest offences to commit inadvertently, so clear internal protocols matter.

Quality over quantity

The NCA and supervisors increasingly emphasise the quality of SARs — clear, well-structured reports that explain the suspicion and use the correct glossary codes are far more useful than vague, defensive filings. A good SAR states concisely what is suspected, why, and what the firm knows about the parties and funds involved. Building this judgement is exactly what our AML and compliance CPD courses are designed to develop, alongside the firm's wider anti-money laundering obligations.

Frequently asked questions

Who can submit a SAR?

Within a regulated firm, external SARs are normally submitted by the MLRO after an internal report. Sole practitioners submit directly to the NCA. Reports are made through the NCA's online SAR portal.

What is the difference between a SAR and a DAML?

A SAR reports a suspicion. A DAML is a specific type of request seeking the NCA's consent (a "defence") to carry out an act that might otherwise be a money-laundering offence.

What happens if I do not report a suspicion?

Failing to disclose a suspicion that arose in the regulated sector is itself a criminal offence under POCA, carrying potential imprisonment and fines — which is why the duty is taken so seriously.

Submitting a SAR can feel daunting, but the principle is simple: if you form a genuine suspicion in the course of your work, report it through the right channel, do not tip off, and document your decision. Done properly, it protects both the public and your firm.