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Anti-Money Laundering

  • Suspicious Activity Reporting

    The BSA (31 USC § 5318(g)) authorized Treasury to issue regulations requiring financial institutions to file Suspicious Activity Reports (SARs). On May 5, 2003, FinCEN issued regulation 31 CFR § 1026.320 requiring FCMs and IBs to file SARs.

    FinCEN issued guidance on June 13, 2007, that clarified the requirement that financial institutions, including FCMs and IBs, must provide SAR supporting documentation in response to requests by FinCEN and appropriate law enforcement or supervisory agencies and that legal process is not required for disclosure of supporting documentation. The guidance also detailed what constitutes SAR "supporting documentation" under the SAR regulations.

    FinCEN issued amendments to the SAR regulation (published on December 3, 2010) which:

      (1) Clarified the scope of the statutory prohibition against the disclosure by a financial institution of a SAR;

      (2) Addressed the statutory prohibition against the disclosure by the government of a SAR;

      (3) Clarified that the exclusive standard applicable to the disclosure of a SAR by the government is to fulfill official duties consistent with the purposes of the BSA; and

      (4) Modified the safe harbor provision to include changes made by Patriot Act.

    On November 23, 2010, FinCEN simultaneously issued both an advisory and guidance. In conjunction with SAR regulations relating to confidentiality, FinCEN issued an advisory to remind its BSA stakeholders of the importance of SAR confidentiality, and guidance that allowed for the sharing of a SAR with a domestic affiliate provided that the affiliate is itself subject to a SAR regulation issued by FinCEN or the Banking Agencies. The guidance confirmed and complemented prior guidance FinCEN issued on January 20, 2006, that permitted banking institutions on the one hand, and FCMs, IBs and BDs to share SARs with head offices or parent entities, regardless of where the head office or parent is located.

    On February 23, 2012, FinCEN mandated e-filing. E-filing, which began April 1, 2013, replaced paper or legacy filing for most BSA forms, including SARs. E-filing provides for the electronic submission of most BSA forms through a FinCEN secure network. Financial institutions, including FCMs and IBs, are required to use e-filing for submitting the new FinCEN SAR. The FinCEN SAR replaced the paper form SAR-SF that FCMs and IBs previously completed in filing SARs.

    FinCEN has issued frequently asked questions to assist financial institutions in completing the FinCEN SAR, which, as of April 1, 2013, is the only acceptable format for submitting SARs to FinCEN.

    On September 18, 2012, FinCEN held an Informational Webinar on the new FinCEN SAR.

    On October 25, 2016, FinCEN issued an advisory as well as frequently asked questions on cyber-events and cyber-enabled crime to assist financial institutions in reporting cyber-events and cyber-enabled crime through SARs.