When a regulated entity conducts business across multiple jurisdictions and encounters suspicions of money laundering within its overseas operations, a critical compliance question arises: Should the suspicion be reported solely in the jurisdiction where it was identified, or is there an obligation to report it in every jurisdiction where the entity operates? Given that the UK Financial Conduct Authority (FCA) does not explicitly address this scenario in its regulations, there is a lack of clear guidance on the appropriate reporting obligations in such cross-border cases; hence, I seek your view.
That’s a great question, and one that often comes up with cross-border operations.
From a global best practices perspective, the expectation is to file a suspicious activity report (SAR) in the jurisdiction where the suspicion arises or where the activity occurred.
Each country has its own legal requirements for reporting, so the obligation is typically localised. There’s no requirement to file in every country where the business operates — unless the suspicious activity has a direct link to those jurisdictions.
That said, firms with international operations should have strong group-wide information-sharing mechanisms. These ensure that if a suspicion arises in one country, the broader group is aware and can assess whether a local SAR is also required elsewhere based on their own thresholds and legal requirements.
For UK-based firms, it’s also important to assess whether the activity, even if overseas, could amount to an offence under UK law. If so, a UK SAR may still be appropriate.
In summary: file where it’s legally required, coordinate internally, and ensure nothing falls through the cracks. That’s the balanced approach most global compliance teams follow.
For more insights on UK AML/CFT regulations, check: