Risk Management Manual of Examination Policies - FDIC

BANK SECRECY ACT, ANTI-MONEY LAUNDERING,
AND OFFICE OF FOREIGN ASSETS CONTROL
enforcement and regulatory agencies. The information
provided in this section should be complete, accurate, and
well-organized. This section should contain additional
information on suspects, describe instruments and methods
of facilitating the transaction, and provide any follow-up
action taken by the financial institution. Data inserts in the
form of tables or graphics are discouraged as they are not
compatible with the SAR database at FinCEN. Also,
attachments to a SAR form will not be stored in the
database because they do not conform to the database
format. Consequently, a narrative in Part V that states only
“see attached” will result in no meaningful description of
the transaction, rendering the record in this field
insufficient.
The financial institution is also encouraged to detail a
listing of documentation available that supports the SAR
filing in Part V of the SAR form. This notice will provide
law enforcement the awareness necessary to ensure timely
access to vital information, if further investigation results
from the SAR filing. All documentation supporting the
SAR must be stored by the financial institution for five
years and is considered property of the U.S. Government.
FinCEN has provided ongoing guidance on how to prepare
SAR forms in its publication, “SAR Activity Reviews,”
under a section on helpful hints, tips, and suggestions on
SAR filing. These publications are available at the
FinCEN website. Financial institution management should
be encouraged to review current and past issues as an aid
in properly completing SARs.
SAR Filing Deadlines
By regulation, SAR forms are required to be filed no later
than 30 calendar days after the date of initial detection of
facts that may constitute a basis for filing a SAR. If no
suspect was identified on the date of detection of the
incident requiring the filing, a financial institution may
delay filing a SAR for an additional 30 calendar days in
order to identify a suspect. In no case shall reporting be
delayed more than 60 days after the date of initial detection
of a reportable transaction.
Customers Engaging in Ongoing Suspicious Activity
If a customer’s suspicious activity continues to occur,
FinCEN recommends the financial institution file an update
on the activity and amounts every 90 days using the SAR
form. In such instances, the financial institution should
aggregate the dollar amount of previously reported activity
and the dollar amount of the newer activity and put this
amount in the box on the SAR requesting “total dollar
amount involved in known or suspicious activity.”
Section 8.1
Similarly, for the date range of suspicious activity, the
financial institution should maintain the original “start”
date and extend the “to” date to include the 90 day period
in which the suspicious and reportable activity continued.
Failure to File SARs
If an examiner determines that a financial institution has
failed to file a SAR when there is evidence to indicate a
report should have been filed, the examiner should instruct
the financial institution to immediately file the SAR. If the
financial institution refuses, the examiner should complete
the SAR and cite violations of Part 353 of the FDIC’s
Rules and Regulations, providing limited details of
suspicious activity or the SAR in the Report of
Examination. In instances involving a senior officer or
director of the financial institution, examiners may prepare
the SAR, rather than request the financial institution to do
so in order to ensure that the SAR explains the suspicious
activity accurately and completely. Each Regional Office
is responsible for monitoring SARs filed within that region.
Examiner-prepared SARs should be forwarded to their
Regional Special Activities Case Manager to ensure timely
and proper filing. Any examiner-prepared SARs and all
supporting documents should be maintained in the field
office files for five years.
SAR Filing Methods
SARs can be filed in paper form, by magnetic tape, or
through the Patriot Act Communications System. Financial
institutions may contact law enforcement and their Federal
Banking Agency to notify them of the suspicious activity,
and these contacts should be noted on the SAR form.
Notification to Board of Directors of
SAR Filings
Section 353.3 of the FDIC’s Rules and Regulations
requires the financial institution’s board of directors, or
designated committee, be promptly notified of any SAR
filed. However, if the subject of the SAR is a senior
officer or member of the board of directors of the financial
institution, notification to the board of directors should be
handled differently in order to avoid violating Federal laws
that prohibit notifying a suspect or person involved in the
suspicious transaction that forms the basis of the SAR. In
these situations, it is recommended that appropriate senior
personnel not involved in the suspicious activity be advised
of the SAR filing and this process be documented.
In cases of financial institutions that file a large volume of
SARs, it is not necessary that the board of directors, or
Bank Secrecy Act (12-04) 8.1-46 DSC Risk Management Manual of Examination Policies
Federal Deposit Insurance Corporation