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What is a Suspicious Activity Report (SAR)?

When financial institutions detect suspicious transactions, it is their duty to report it to the authorities. This is done to prevent potential criminal behaviour such as money laundering and he financing of terrorism. In most countries, this is done by submitting a <a href="/glossarycollection/suspicious-activity-report" style="color:#48277C;" target="_blank" title="Suspicious Activity Report"><u>SAR</u></a> to the appropriate authority according to local compliance regulations. In the UK, this is the National Crime Agency Financial Investigations Unit (NCA FIU).<br/><br/>

Financial institutions must understand when and how to report suspicious activity and ensure their AML program is set up to facilitate this process.<br/><br/>

All staff in a regulated entity have a responsibility to report any transactions which they suspect involve funds derived from illegal activities. They must understand how to report any suspicions to their <a href="/glossarycollection/money-laundering-reporting-officer" style="color:#48277C;" target="_blank" title="Money Laundering Reporting Officer"><u>MLRO</u></a> who is ultimately responsible for sending the SAR on to the appropriate authority.<br/><br/>

In the UK, the penalty for knowingly failing to report such activity can be a fine or imprisonment for up to 5 years.

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