The Financial Crimes Enforcement Network (FinCEN), and federal banking agencies, released updated guidance clarifying expectations around suspicious activity report (SAR) filings under the Bank Secrecy Act (BSA). A series of frequently asked questions (FAQs) address common compliance challenges and reinforce a risk-based approach to SAR reporting.
Financial institutions are only required to file an SAR if the institution knows, suspects, or has reason to suspect, that the transaction or series of transactions are designed to evade the reporting requirements. The guidance also clarifies that institutions may rely on their risk-based protocols to identify and report suspicious activity and that a separate review, manual or otherwise, for continuing activity is not required unless new information emerges.
The guidance provides clear timelines should a financial institution file on continuing suspicious activity in line with previous FinCEN guidance. Set forth below is a timeline in which a financial institution files a SAR with an identified subject and determines that suspicious activity has continued:
NOTE: If a financial institution cannot identify a subject and elects to file a SAR 60 days after detection of the facts that may constitute a basis for filing a SAR, the initial filing date would result in all additional dates being extended 30 days:
Notably, the FAQs state that decisions not to file SARs are not required; but, should a financial institution decide to document such a decision, in non-complex cases a concise statement is sufficient. Although, a financial institution may consider more documentation to explain the factors that the institution considered in reaching a SAR filing determination in more complex investigation scenarios.