BSA: Understanding Its Suspicious Activity Reporting (SAR) Requirement
What is Suspicious Activity Report (SAR)? BSA requires every US national bank to file a Suspicious Activity Report (SAR) when they detect certain known or suspected violations of federal law or suspicious transactions related to a money laundering activity or a violation of the BSA.
Purpose of SAR: • Identify new methodologies of money-laundering • Offer data for law enforcement investigation • Deter and Constraint money-laundering
Distinction between CTR and SAR • CTR is required whenever the transaction or series of transactions exceeds the minimum threshold requirement in a 24 hour period. • SAR is required to be filed when there are elements of uselessness, suspicion or indicators of potential illegal activity. Minimum threshold requirement is not applicable to SAR situation.
How to Identify Suspicious Activity? • Banks can use a number of methods to track and identify unusual activity – this may include: – Employee identification – Law enforcement enquiries and requests – Transaction and surveillance monitoring system output – Any combination of the above
When is SAR Filling Required? A SAR filing is required for any potential crimes: – involving insider abuse regardless of the dollar amount; – where there is an identifiable suspect and the transaction involves $5,000 or more; and – where there is no identifiable suspect and the transaction involves $25,000 or more
When to File SARs: – A SAR should be filed no later than 30 calendar days from the date of the initial detection of facts that may constitute a basis for filing a SAR. – In cases where no suspect can be identified, the time period for filing a SAR is extended to 60 days.
SAR Narratives SAR Narratives Should: • Be concise and clear • Be chronological and complete • Provide a detailed description of the known or suspected criminal violation or suspicious activity • Identify the essential elements of the information Outline of Effective SAR Narrative: • Introduction • Body • Conclusion
Want to learn more about anti-money laundering process, BSA requirements and best practices? ComplianceOnline webinars and seminars are a great training resource. Check out the following links: • How to Write an Effective SAR Narratives • Best Practices for Writing Effective SAR. • Managing an Effective AML Compliance Program • Are You Doing Your BSA/AML Risk Assessment Properly? • How to Report under AML/BSA? • BSA/AML Compliance Checklist • How to Create Effective AML/BSA Compliance Program? • How to Develop Risk Models for AML Monitoring Program?