To suspect or not to suspect: Analysing the pressure on banks to be ‘Policemen’

Abstract

This article aims to analyse the practical challenges faced by banks while filing ‘Suspicious Activity Reports’ required under the Proceeds of Crime Act 2002. The difficulty is analysed both against the lacunae in the law as well as challenges in its implementation. The recent judgment of Shah v. HSBC has made a considerable attempt to highlight and address these challenges. However, the author believes that although the judgment has clarified the consent regime (which surfaces after a disclosure of suspicion has been made), the concept of ‘suspicion’ in itself is still vague and amorphous, proving to be a negative effect on banks to effectively identify the proceeds of crime. As a result, the fundamental issues regarding over-reporting of suspicion by banks to escape legal consequences still remain.