The Appropriate Person or Body to whom Suspicions should be Reported, the Appropriate Time for such Reports to be Made and the Appropriate Procedure to be Followed Flashcards
(12 cards)
To whom should a firm employee first report a suspicion of money laundering?
A. The firm’s Money Laundering Reporting Officer (MLRO)
B. The National Crime Agency (NCA)
C. Their direct client contact
D. The Law Society
A. The firm’s Money Laundering Reporting Officer (MLRO)
Explanation: Staff must initially disclose suspicions internally to the designated MLRO for review
What is the appropriate time to file an SAR after forming a suspicion?
A. Within 30 days
B. At the end of the calendar year
C. As soon as there are reasonable grounds to suspect
D. After confirming the client’s explanation
C. As soon as there are reasonable grounds to suspect
Explanation: Reports must be made promptly upon suspicion—waiting for confirmation is not permitted
Once the MLRO decides to report, where must the Suspicious Activity Report (SAR) be submitted?
A. Solicitors Disciplinary Tribunal
B. National Crime Agency (NCA)
C. Legal Services Board
D. Local police station
B. National Crime Agency (NCA)
Explanation: SARs are filed via the NCA’s secure online portal once the MLRO has reasonable grounds
What protection does “safe harbour” provide once an SAR is submitted?
A. Exemption from record-keeping requirements
B. Immunity from professional indemnity claims
C. Right to ignore further client instructions
D. Exemption from tipping-off offences
D. Exemption from tipping-off offences
Explanation: Once a SAR is filed, the “safe harbour” lets you pause or continue work without breaching client confidentiality
A paralegal notices a client structuring several £9,900 cash deposits. What should they do first?
A. Report the suspicion in writing to the MLRO
B. Conduct further independent investigation
C. Inform the client’s bank directly
D. Wait to see if more deposits occur
A. Report the suspicion in writing to the MLRO
Explanation: Unusual deposit patterns must be documented and disclosed internally to the MLRO immediately
The MLRO reviews an internal report but unreasonably refuses to file an SAR. The employee should:
A. Accept the decision and take no further action
B. Submit the SAR directly to the NCA
C. Report the MLRO to the Law Society
D. Notify the client of the MLRO’s refusal
B. Submit the SAR directly to the NCA
Explanation: If the MLRO declines without justification, staff may escalate and file the SAR themselves
After filing a SAR, is the firm permitted to inform the client that the report has been made?
A. Yes, to maintain transparency
B. Only with NCA consent
C. No, it would constitute tipping-off
D. Yes, if the client requests confirmation
C. No, it would constitute tipping-off
Explanation: Disclosing SAR submission to the client breaches the tipping-off prohibition
How long must a firm retain SARs and CDD records after filing?
A. One year
B. Three years
C. Five years
D. Ten years
C. Five years
Explanation: SARs and supporting CDD documentation must be kept for at least five years from the end of the relevant transaction or relationship
What is the very first step in the SAR procedure after identifying suspicious behaviour?
A. File the SAR with the NCA
B. Document all relevant facts and reasons for suspicion
C. Notify the client to explain the transaction
D. Freeze the client’s assets
B. Document all relevant facts and reasons for suspicion
Explanation: Before any reporting, document dates, parties, transactions and why they appear suspicious
A client demands immediate release of their funds after you have filed an SAR. You should:
A. Release funds immediately to avoid breach of trust
B. Await NCA guidance before proceeding
C. Inform the client that a SAR was filed
D. Offer to refund their fees
B. Await NCA guidance before proceeding
Explanation: After an SAR, you must wait for NCA consent (or a “no consent” outcome) before moving on the transaction
Which of these is not a “tipping-off” offence?
A. Warning a client that authorities are investigating
B. Sharing SAR details with a third party
C. Filing the SAR on the NCA portal
D. Disclosing to staff that a SAR has been made
C. Filing the SAR on the NCA portal
Explanation: Only disclosure to the suspect or third parties constitutes tipping-off; submission to the NCA is permitted
Under MLR 2017, who is responsible for making the final decision on whether to file an SAR?
A. Any junior staff member
B. The Money Laundering Reporting Officer (MLRO)
C. The firm’s external auditor
D. The Law Society Ethics Committee
B. The Money Laundering Reporting Officer (MLRO)
Explanation: The MLRO assesses internal disclosures and decides whether to submit a SAR to the NCA .
