Rise in financial services suspicious activity reports

THE number of suspicious activity reports filed by financial services business increased by more than a quarter in 2020.

Adrian Hale. (29840007)
Adrian Hale. (29840007)

It was the eighth consecutive year to see an increase of suspicious reports – known as Sars and made often where the financial services business cannot be sure of the source of funds – but the most significant rise over that time.

Guernsey Financial Intelligence Service’s annual report, published today, reveals that it received a total of 3,086 Sars throughout 2020 – three-quarters of which came from the eGambling and eGaming sector. One single licensee in that sector accounted for more than 60% of the total Sars received.

Reports from the eGambling sector increased by 50% over the year while reports from other sectors fell 12%. The FIS said the figures reflected the impact of Covid-19 restrictions over the course of the year.

‘With many individuals in the UK and the Bailiwick being confined to their homes during the pandemic in 2020, it is, arguably, axiomatic that the use of internet-based entertainment such as eGambling/eGaming increased and therefore causal to an increased number of transactions considered to be of a suspicious nature. The restrictions on international travel led to a decrease in the use of currency exchanges. This, coupled with the closure of exchanges during lockdown and no face-to-face interaction, would have resulted in a decline in business across many financial sectors during 2020, which resulted in a proportionate decrease in Sars submitted to the FIS by those sectors,’ the report stated.

Adrian Hale, head of FIS, pictured, said that Covid-19 also forced the FIS to focus on rapidly-developing new work practices. ‘Despite the many challenges that lie ahead in 2021, the FIS looks forward to harnessing the capabilities of the island’s new Economic & Financial Crime Bureau, which it is now a part of, and to continuing collaborative working with other FIUs, law enforcement agencies, regulators, government departments and other stakeholders in the fight against financial crime.’

As in previous years, suspicion of money laundering was the most commonly reported crime during 2020, accounting for 76% of all Sars. The eGambling/eGaming sector submitted 85% of all money laundering reports. Fraud, false accounting or forgery was the second most reported crime, accounting for 13% of all Sars, with 56% of these reports coming from the eGambling sector and 15% each from the trust and banking sectors.

The report also highlighted the upcoming 2023 review of Guernsey by Moneyval, a committee the Council of Europe founded to support member states in their fight against money laundering and terrorist financing. Guernsey was previously reviewed in 2016 when Guernsey was rated as ‘largely compliant’ in 20 out of 49 categories and ‘compliant’ in 28 out of the 49 categories.

Top Stories

More From The Guernsey Press

UK & International News