FinCEN developed a new electronic BSA Suspicious Activity Report (BSAR) that replaced FinCEN SAR-DI form TD F 90-22.47. Filers are reminded that they are generally required to keep copies of their filings for five years. L.102550, 106Stat. . A filer can electronically save the filing to his/her computer hard drive, a network drive, or other appropriate storage device. As a result, the FinCEN SAR starts the numbering of line items on the initial submission page as with all the other reports, and continues the numbering in the order of Parts I, II, III, IV, and V, with some minor exceptions. A currency transaction report (CTR) is used in the banking industry to monitor and report cases of potential money laundering. Therefore, a financial institution may leave non-critical fields without an asterisk blank when information is not readily available. It's likely that the vast majority of testing focuses on the initial SAR filing; whether it was filed in a timely way, and whether it fulfilled the overall . The filer should complete the FinCEN SAR in its entirety, including the corrected/amended information and noting those corrections at the beginning of the narrative, save (and print, if desired) a copy of the filing, and submit the filing. (2) A national bank need not file a SAR for lost, missing, counterfeit, or stolen securities if it files a report pursuant to the reporting requirements of 17 CFR 240.17f-1. Once your filing is accepted into the BSA E-Filing System, a Confirmation Page pop-up will appear with the following information: An email will also be sent to the email address associated with your BSA E-Filing account indicating your submission has been Accepted for submission into the BSA E-Filing System. If an institution is unable to identify a suspect associated with the transaction, it can delay filing for an additional 30 days. The financial services firm identifies or has reasons to suspect violation of a federal criminal law, and has substantial reason to believe that one of its employees, agents, executives, directors, contractor, officers, or affiliate has committed or aided in the commission of the federal violation. c. Damage, disable or otherwise affect critical systems of the institution. 9. 4. Analyze data to detect, prevent, and mitigate fraud. SARs allow law enforcement to detect patterns and trends in organized and personal financial crimes. 15. Optimize operations, connect with external partners, create reports and keep inventory accurate. 3762, 4060). To encourage complete candor and cooperation, there are disclosure and evidentiary privileges that protect SAR filers. Additionally, the institution filing the SAR must not disclose the existence of the filing to those mentioned in the report. Under no circumstances can an institution delay filing a SAR for more than 60 days. How do we complete Item 56/68 on the new FinCEN SAR which asks for the financial institution or branchs role in transaction, and provides options for Selling location, Paying Location, or Both? Item 29 records the total amount involved in the suspicious activity for the time period of the SAR. For purposes of this reporting requirement, unauthorized electronic intrusion does not mean attempted intrusions of websites or other non-critical information systems of the institution that provide no access to institution or customer financial or other critical information. If the amount or all amounts involved in the suspicious activity are unknown, box 29a Amount unknown is checked and the Item 29 amount field is left blank. 13. In the myriad of Suspicious Activity Report (SAR) requirements, there are perennial findings that reflect the failure to file, delays in filing, and deliberate efforts not to file . An agent is an independent financial institution (such as a supermarket that sells money orders or an independent insurance agent) that has a contractual relationship with the reporting financial institution to conduct financial transactions. Please note that it is important to have the information within the filing regarding the branch or other location at which the activity occurred as complete and accurate as possible. h[iq+Q However, it is not limited only to employees. What are the guidelines for retaining SAR documentation? Investopedia does not include all offers available in the marketplace. Background. 23. It should be noted that the reason "no loss to the financial institution or the consumer" is not a valid reason for not filing. Financial Crimes Enforcement Network. The report can start with any employee of a financial service. Next, the dates of the incident, as well as codes for the suspicious activity require documentation. If the previous DCN/BSA ID is not known, filers should enter all zeros (14 in total) for the previous DCN/BSA ID. The financial services firm identifies or has reasons to suspect violation of a federal criminal law, for which there is an actual or possible loss to the bank (before reimbursement or recovery) that in aggregate totals $5,000 or more, and for which the bank no substantial basis for identifying one or more possible suspects. Is that definition still valid? By clicking on the Save button a standard dialog box will appear to allow you to choose the location for your saved report. Click Submit After clicking Submit, the submission process will begin. This information was published in aNoticeon October 31, 2011. The SAR is filed by the financial institution that observes suspicious activity in an account. (SAR), 12. Account takeover activity differs from other forms of computer intrusion, as the customer, rather than the financial institution maintaining the account, is the primary target. In an account takeover, at least one of the targets is a customer holding an account at the financial institution and the ultimate goal is to remove, steal, procure or otherwise affect funds of the targeted customer. SARs include detailed information about transactions that are or appear to be suspicious. In the event of a suspicious transaction or activity, financial institutions are required to conduct suspicious activity reporting by filing a SAR. In the event of any of the below activities / scenario, a financial institution is required to perform suspicious activity reporting: The below types of criminal activities also warrant performing suspicious activity reporting: Suspicious Activity Reporting is a Subjective Affair, The decision making process for filing a Suspicious Activity Report is inherently subjective in nature. Who is conducting the suspicious activity? It is recommended that you first close out of your browser and then re-open it before attempting to log into the BSA E-Filing System again. Each SAR must be filed within 30 days of the date of the initial determination for the necessity of filing the report. This process will often include review by financial investigators, management and/or attorneys prior to filing. What Is a Suspicious Activity Report (SAR)? A financial institution is required to file a suspicious activity report no later than 30 calendar days after the date of initial detection of facts that may constitute a basis for filing a suspicious activity report. Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, file reports if the daily . 4. Complete Counterfeiting Report Form (PDF), Complete Suspicious Activities Report (SAR), Complete Counterfeit Currency Report (PDF), Third-Party Relationships: Risk Management Guidance, Central Application Tracking System (CATS), Office of Thrift Supervision Archive Search, Financial Crimes Enforcement Network (FinCEN), Bank Secrecy Act/Anti-Money Laundering: Interagency Statement on Model Risk Management for Bank Systems Supporting BSA/AML Compliance and Request for Information, Bank Secrecy Act/Anti-Money Laundering: Joint Statement on Bank Secrecy Act Due Diligence Requirements for Customers Who May Be Considered Politically Exposed Persons, Agencies Clarify Requirements for Providing Financial Services to Hemp-Related Businesses. That is a lot of information for FinCEN to filter and disseminate. The goal of SAR filings is to help the government identify individuals, groups and organizations involved in fraud like terrorist financing, money laundering, and other crimes. 1. Thorough documentation provides a record of the SAR decision-making process and is indicative of a strong BSA program. The financial services firm identifies or has reasons to suspect violation of a federal criminal law, for which there is an actual or possible loss to the bank (before reimbursement or recovery) that in aggregate totals $5,000 or more, and for which the bank no substantial basis for identifying one or more possible suspects. The supervisory user must grant access for the general users to be able to view the new FinCEN reports. You must electronically save your filing before it can be submitted into the BSA E-Filing System. AdvisoryHQ (All Rights Reserved), Below are the key Suspicious Activity Reporting (SAR) filing requirements as stipulated by the Financial Crimes Enforcement Network (. FinCEN Files Embed In a new window Absolute URL: Copy the code below to embed this on your website. For example, if an employee notices an anonymous wire transfer of money out of the country or large amounts of money deposited into an account that had never seen such activity before, they would communicate their findings to supervisors who decide whether to file a report. If the account takeover involved a wire transfer, then in addition to selecting box 35a (Account takeover), box 31j for "Wire fraud" should be checked. Whether it is a financial matter, or one related to national security, a suspicious activity report ultimately circulates to local, state, and federal agencies through the use of fusion centers. c. A depository institution and a money services business (MSB) decide to file a joint SAR together, agreeing that the depository institution would file the SAR. If the branch location at which the activity occurred does not have an RSSD number, however, leave that Item blank. FinCEN emphasized that financial institutions will continue to be expected to provide only that information for which they have direct knowledge. When a SAR is filed, five sections of information are required. At no time, however, should the filing of an SAR be delayed longer than 60 days. The status will change to Acknowledged in the Track Status view. Examples may include Compliance Office, Security Office, BSA Office, or Risk Management Office. The office may or may not be located at the location identified in the same Part IV. What Is a Smurf and How Does Smurfing Work? 3. The Bank Secrecy Act of 1970 (BSA), also known as the Currency and Foreign Transactions Reporting Act, is a U.S. law requiring financial institutions in the United States to assist U.S. government agencies in detecting and preventing money laundering. The OCC and FinCEN amended their SAR regulations to make clear that the safe harbor also applies to a disclosure by a bank made jointly with another financial institution for purposes of filing a joint SAR (see 12 CFR 21.11(l) and 31 CFR 1020.320(e)), respectively. Originally called a "criminal referral form" the SAR became the standard form to report suspicious activity in 1996. Financial institutions should immediately report any imminent threat to local-area law enforcement officials. If suspicious activity does NOT meet the SAR reporting thresholds (e.g. What are the steps for properly submitting a single (discrete) FinCEN SAR filing through the BSA E-Filing System. How do I correct/amend a prior SAR filing via the BSA E-Filing System if I do not have the prior DCN/BSA ID? In this scenario, Part IV would be completed with the information of the home office of the depository institution, and then a Part III would be completed for the depository institution location where the activity occurred. In addition, a secure message containing the official BSA ID assigned to your report will be sent to your Secure Mailbox., FAQs associated with Part I of the FinCEN SAR. Remove, steal, procure, or otherwise affect funds of the institution or the institutions customers. The Bank Secrecy Act specifies that each firm must maintain records of its SARs for a period of five years from the date of filing. The institution can then complete the specific information on the subject(s) and nature of the suspicious activity using the data elements that have been enabled as most appropriate to its type of financial institution. Build your case strategy with confidence. Please ensure all of the following steps are followed when completing a single FinCEN SAR: 1. Select the general user whose access roles require updating. Do not include amounts from prior FinCEN SARs in Item 29. What instruments or mechanisms are being used? For non-critical Items, FinCEN expects financial institutions will provide the most complete filing information available within each report consistent with existing regulatory expectations. FinCen requires the SAR forms filed by financial institutions to identify the five essential elements of the suspicious activity being reported: In addition, the method of operation (or, how is the activity being carried out?) Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Get Featured on AdvisoryHQ. If potential money laundering or violations of the BSA are detected, a report is required. Supervisory users of the BSA E-Filing System are able to view all available FinCEN reports when they log into the BSA E-Filing System. While most SARs come from the financial sector, law enforcement, public safety workers, city or state officials, business owners, and even the general public can submit a suspicious activity report. To add additional branches to the FinCEN SAR, click on the + icon to bring up additional sections in which to include the information related to those branches. 171 0 obj <> endobj 196 0 obj <>/Filter/FlateDecode/ID[<6514B63125FB412584FCC0DC3C297542><1E3B134D2DD8447FA1AEAB51EC70CD98>]/Index[171 58]/Info 170 0 R/Length 115/Prev 287448/Root 172 0 R/Size 229/Type/XRef/W[1 3 1]>>stream These centers make the information available to whatever other agencies may be affected by the flagged activity. Discrete filers can select from the available drop-down list embedded within the SAR. As an example, if the activity being reported on the FinCEN SAR involved only the structuring of cash deposits, then a financial institution would not complete Items 56 or 68, as the institution was neither a paying nor selling location in the activity being reported. Filers attempting to submit a corrected/amended SAR via the BSA E-Filing System should check Correct/amend prior report and enter the previous Document Control Number (DCN)/BSA Identifier (ID) in the appropriate field. The new BSA ID will begin with the number 31.. Under the Bank Secrecy Act (BSA), financial institutions are required to assist U.S. government agencies in detecting and preventing money laundering, and: An amendment to the BSA incorporates provisions of the USA Patriot Act, which requires every bank to adopt a customer identification program as part of its BSA compliance program. The filing institution listed in Part IV Filing Institution Contact Information must identify in Part V Suspicious Activity Information Narrative which of the Part III Financial Institution Where Activity Occurred institutions are the joint filers. Select the roles (FinCEN SAR Filer, FinCEN SAR Batch Filer, FinCEN CTR Filer, FinCEN CTR Batch Filer, FinCEN DOEP Filer, FinCEN DOEP Batch Filer, etc.) Financial institutions may also file SARs on continuing activity earlier than the 120-day deadline if the institution believes the activity warrants earlier review by law enforcement.. First, an individual or organization is precluded from discovering the existence or contents of a SAR that includes the individual or organization's name. Once the report is saved, the Submit button will become available. Financial Institutions. Financial institutions should select box 35a (Account takeover) to report that type of suspicious activity. The requirement to file suspicious activity reports (as well as the accompanying implied gag order) was added by Section 1517(b) of the Annunzio-Wylie Anti-Money Laundering Act (part of the Housing and Community Development Act of 1992, Pub. Posted on March 19, 2021. Please note that a branch is a location (such as an office or ATM) owned by the financial institution but located separately from the financial institutions headquarters. Countries Where Bitcoin Is Legal and Illegal, Capital One Fined Millions for Ineffective Money-Laundering Protections, FinCEN Warns of Potential Evasion of Russian Sanctions, Coinbase to Pay $50 Million Fine to New York Regulators.