The Financial Crimes Enforcement Network requires certain financial institutions to file a Suspicious Activities Reports (“SAR”) to report suspicious transactions, as detailed in their FinCEN SAR Electronic Filing Instructions. This blog will go over some of the important aspects of filing a Suspicious Activity Report.
Who Must File?
Certain financial intuitions operating in the United States will file their SARs with FinCEN. The financial institutions required to file SARS with FinCEN are as Follows: Banks, Financial Holding Companies, Casinos and Card Clubs, Money Services Businesses, Brokers or Dealers in Securities, Mutual Funds, Insurance Companies, Futures Commission Merchants and Introducing Brokers in Commodities, and Residential Mortgage Lenders and Originators.
Filing Deadlines
A FinCEN SAR shall be filed no later than 30 calendar days after the date of the initial detection by the reporting financial institution of facts that may constitute a basis for filing a report. If no suspect is identified on the date of such initial detection, a financial institution may delay filing a Suspicious Activity Report for an additional 30 calendar days to identify a suspect, but in no case shall reporting be delayed more than 60 calendar days after the date of such initial detection.
Filing Requirements for Financial Institutions
If a Firm conducts their FinCEN review and find any matches between their customer list and the FinCEN list, they should document it in the SARs report. They will also be required to report any transaction that is conducted or attempted by, at, or through the financial institution and involves or aggregates at least $5,000 ($2,000 for money services businesses) and the financial institution knows, suspects, or has reason to suspect that the transaction or pattern of transactions of which the transaction is a part:
- Involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity (including, without limitation, the ownership, nature, source, location, or control of such funds or assets) as part of a plan to violate or evade any Federal law or regulation or to avoid any transaction reporting requirement under Federal law or regulation;
- Is designed, whether through structuring or other means, to evade any requirement of 31 CFR Chapter X or any other regulation promulgated under the Bank Secrecy Act, Public Law 91-508, as amended, codified at 12 U.S.C 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-5332;
- Has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the financial institution knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction; or
- Involves the use of the financial institution to facilitate criminal activity.
Additional Reporting
The Bank Secrecy Act requires financial institutions to file a Currency Transaction Report (“CTR”) whenever a currency transaction exceeds $10,000. If a currency transaction exceeds $10,000 and is otherwise reportable as suspicious activity, the institution must file both a CTR and a SAR.
FinCEN SAR Electronic Filing
This report should be E-filed through the Financial Crime Enforcement Network (FinCEN) BSA E-Filing System. Go to the BSA E-Filing System to register if not already registered.
Recording Information
Complete each FinCEN SAR by providing as much information as possible. Although all items should be completed fully and accurately, items marked with an asterisk (*) must be completed even when the required data are unknown.
Corrected/Amended Reports
A corrected report on a previously filed FinCEN SAR or prior SAR versions must be filed whenever errors are discovered in the data and circumstances will not justify filing a continuing report.
Continuing Reports
A continuing report should be filed on suspicious activity that continues after an initial FinCEN SAR is filed. Financial institutions with SAR requirements may file SARs for continuing activity after a 90 day review with the filing deadline being 120 days after the date of the previously related SAR filing.
Joint Report
A FinCEN SAR may be jointly filed when two or more distinct financial institutions collaborate in filing a single Suspicious Activity Report on suspicious activity involving all of the collaborating financial institutions.
Supporting Documentation
Filers can include a single Microsoft Excel compatible comma separated values (CSV) file with no more than one megabyte of data as an attachment to the FinCEN SAR. The contents of this file must be as described in Part V of FinCEN SAR Electronic Filing Instructions, do not include any other supporting documentation with the FinCEN SAR.
Addresses
For addresses in the U.S., Canada, or Mexico enter the permanent street address, city, two or three letter state/territory/province code, ZIP Code or foreign postal code, and two letter country code for the individual or entity.
Telephone Numbers
Record all telephone numbers, both foreign and domestic, as a single number string without formatting or special characters such as parentheses or hyphens.
For more information on the Suspicious Activity Report, check out our 5 W’s of the SAR Narrative blog.
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