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Suspicious Activity Report
After many months of meetings, letters, drafts, discussion, more meetings, more drafts,-we finally have a Suspicious Activity Report (SAR) to take the place of the old Criminal Referral Form.
Federal Reserve and FinCEN have delivered all they promised. The SAR is shorter, simpler, easier to fill out (they estimate 40 minutes), and the instructions are clear and concise.
Best of all, it requires no accompanying documentation, which will elicit a sigh of relief not only from our security officers, but also from our attorneys. And, you need only file one completed SAR-that one with FinCEN. (Though financial institutions are encouraged to provide copies of suspicious activity reports to state and local authorities, where appropriate.)
However, the form is not quite "perfect".
The instructions are not yet complete and need some elaboration and clarification, in the opinion of some security officers and attorneys. Which is why the final use of the SAR is being delayed. Comments and suggestions on the instructions are still being solicited and evaluated by all the regulatory agencies, including Fed and FinCEN. (See box on back page of this issue.) The ultimate goal is for all agencies' instructions to be exactly the same. It is expected the final instructions will be out, and the form ready for use, by the middle of December.
The proposed instructions are what we expected. We are to file suspected insider abuse involving any amount; transactions aggregating $5,000 or more where a suspect can be identified (including any alias identifiers); transactions aggregating $25,000 or more regardless of potential suspects; and money laundering, suspicious financial transactions, or violations of the Bank Secrecy Act. It is this last filing requirement that security officers and bank attorneys want explained and made specific.
Although there is, at the top of the page of instructions, a quote from the law assuring "safe harbor" for reporting the required suspected criminal violations, there is also a concern about the "safe harbor" guarantee to financial institutions reporting violations or patterns of suspected criminal violations that fall below the required parameters of $5,000 or $25,000.
Computer software will later be available to enable financial institutions to prepare the new SAR and file it on various forms of magnetic media, such as disc or tape. In-house computer systems will also be accommodated, using specs available from Treasury.
Note: Subscribers will find the draft of the SAR and instructions enclosed with this newsletter.
Copyright © 1995 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 6, No. 1, 9/95
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