No SAR on OFAC Hits: FinCEN Director Keeps Promise to Bankers
When Bill Fox took over FinCEN (Financial Crimes Enforcement Network) in 2003, he promised to review a controversial policy that had been the cause of considerable consternation to bankers. That policy was the mandate that a Suspicious Activity Report (SAR) was required to be filed for every match of an OFAC listed entity or person. That resulted in financial institutions being required to make two separate filings with the Department of the Treasury - one with OFAC pursuant to its Reporting, Procedures and Penalties Regulations, and one with FinCEN pursuant to its suspicious activity reporting rules. Mr. Fox promised bankers he would change that policy.
As of December, 2004, the revised guidance eliminated duplicate filings with two bureaus within the Treasury Department - FinCEN and OFAC. If a financial institution blocks a transaction and files a blocking report with OFAC, a separate SAR filing is not necessarily required. In most cases, the OFAC report will be sufficient. OFAC will share the information with FinCEN, which will include it in the suspicious activity reporting database where it will be made available to law enforcement.
FinCEN's Interpretive Guidance is careful to emphasize that this interpretation does not affect a financial institution's obligation to identify and report suspicious activity beyond the fact of the OFAC match. If there is additional information not captured by the OFAC report, or if the facts and circumstances surrounding the transaction are "independently suspicious," then the SAR must also be filed.
The revised guidance was effective immediately upon publication in December. It can be found at www.fincen.gov
Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 14, No. 11, 1/05
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