Excerpt from the SAR Activity Review When Does the 30-Day Time Period in which to
File a Suspicious Activity Report Begin?
Guidance on when a SAR must be filed was first set forth in the October 2000
SAR Activity Review: Tips, Trends & Issues. We are issuing updated guidance
on this topic to clarify ambiguity in the interpretation of the original guidance.
Our suspicious activity reporting rules require that a SAR 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.38 If no suspect can be identified, the time
period for filing a SAR is extended to 60 days. Upon identification of unusual
activity, additional research is typically conducted, and institutions may need
to review transaction or account activity for a customer to determine whether
to file a SAR. The need to review a customer’s account activity, including
transactions, does not necessarily indicate the need to file a SAR, even if a
reasonable review of the activity or transaction might take an extended period
of time. The time period to file a SAR starts when the institution, in the course
of its review or as a result of other factors, reaches the conclusion in which it
knows, or has reason to suspect, that the activity or transactions under review
meets one or more of the definitions of suspicious activity.
The phrase “initial detection” should not be interpreted as meaning the
moment a transaction is highlighted for review. There are a variety of
legitimate transactions that could raise a red flag simply because they
are inconsistent with an accountholder’s normal account activity. A real
estate investment (purchase or sale), the receipt of an inheritance, or a
gift, for example, may cause an account to have a significant credit or debit
that would be inconsistent with typical account activity. The institution’s
automated account monitoring system or initial discovery of information,
such as system-generated reports, may flag the transaction; however, this
should not be considered initial detection of potential suspicious activity.
The 30-day (or 60-day) period does not begin until an appropriate review is
conducted and a determination is made that the transaction under review is
“suspicious” within the meaning of the SAR regulations.
A review must be initiated promptly upon identification of unusual activity
that warrants investigation. The timeframe required for completing review
of the identified activity, however, may vary given the situation. According
to the FFIEC’s 2005 Bank Secrecy Act/Anti-Money Laundering Examination
Manual, “an expeditious review of the transaction or the account is
recommended and can be of significant assistance to law enforcement. In any
event, the review should be completed in a reasonable period of time.” What
constitutes a “reasonable period of time” will vary according to the facts and
circumstances of the particular matter being reviewed and the effectiveness
of the SAR monitoring, reporting, and decision-making process of each
institution. The key factor is that an institution has established adequate
procedures for reviewing and assessing facts and circumstances identified as
potentially suspicious, and that those procedures are documented and followed.
For violations requiring immediate attention, in addition to filing a SAR,
financial institutions should immediately notify law enforcement via
telephone, and as necessary, their functional regulator. For suspicious
activity related to terrorist activity, institutions may also call FinCEN’s
toll-free hotline at 1-866-556-3974 (7 days a week, 24 hours a day) to
further facilitate the immediate transmittal of relevant information to the
appropriate authorities.
Excerpted from SAR Activity Review Issue 10, page 44
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