The Fine Points Of SAR Completion, Part 3

by Sam Ott, BOL Guru

PART V Suspicious Activity information Explanation/Description
The narrative section of the SAR should provide a detailed description of the known or suspected violation of law or suspicious activity. The completeness and accuracy of the information provided in this section is critical to the investigation and apprehension of the criminal(s) involved in any suspicious activity. The narrative should identify the essential elements of information or the who, what, where, when, and why of the suspicious activity. The narrative should be a chronological and complete account of the possible violation of law and be as detailed as possible. If Identity Theft or Pretext Calling is the underlying cause of the known or suspected criminal activity, include in your explanation the grounds for suspecting identity theft or pretext calling in addition to the other violations being reported.

The Five Ws

• Who conducted the activity?
  • While detailed suspect information may not always be available, information should be included to the maximum extent possible;
  • Beyond the basic suspect identifiers also include known information regarding the suspect's occupation or business;
  • Identify all known relationships among known suspects.
• What instruments or mechanism were or are being used in the transaction(s)?
  • Examples: wire transfers, letters of credit and other trade instruments, correspondent accounts, casinos, structuring, shell companies, bonds/notes/ stocks, travelers checks, bank drafts, money orders, etc.
  • When monetary instruments are involved in the transaction, you must include a description of the monetary instruments. Describe them by denomination, issuer, and place of origin
• Where did the suspicious activity take place?
  • Identify all bank accounts involved;
  • List all bank branches involved;
  • List any foreign jurisdictions involved in or with the suspicious activity or transaction.
• When did the suspicious activity take place?
  • Where the pattern of activity has been occurring over a period of time, state when suspicious activity was first noticed and its duration.
• Why does the filer or the bank think the activity is suspicious?
  • Note the type of financial institution you are, then describe as fully as possible why the suspected activity is unusual for your customer;
  • Examples of common patterns of suspicious activity:
    • Lack of evidence of legitimate business activity;
    • Unusually large number of wire transactions;
    • Unusually complex series of transactions;
    • Transactions conducted in bursts of activities over a short period of time;
    • Beneficiaries maintaining accounts at foreign banks that have been subjects of previous SAR reporting due to suspicious wire transfer activity;
    • Little activity in the account for an extended period of time, following by a large deposit
    • Quick withdrawal of unusual deposit.

WHEN YOU ARE READY TO FILE

• Do not insert objects, tables, or pre-formatted spreadsheets in the narrative. They do not convert when being input into the SAR data base.
  
  
• Do not attach supporting documents to a SAR. Include a reference to the documents in the narrative and maintain the documents on file for a minimum of five years
  
  
• Mail the SAR filed in a paper format to:
  FinCEN
  Detroit Computing Center
  P.O. Box 33980
  Detroit, MI 48232-0980
  
  
• Mail a SAR filed by magnetic media/diskette format to:
  IRS Detroit Computing Center
  Attn: Tape Library
  985 Michigan Ave.
  Detroit, MI 48232
  
  

REPEATED SAR FILINGS ON THE SAME ACTIVITY

• If the suspicious activity has been previously reported and activity has not changed, but is continuing, the general rule of thumb is that institutions should report continuing activity;
• A new SAR should be filed on continuing activity at least every 90 days;
• The new SARs should be filed even if a law enforcement agency has declined to investigate or if the institution has knowledge that an investigation has begun;
• Information that one law enforcement agency has declined to investigate may be of interest to other agencies, as well as the supervisory agencies.

FILING A CORRECTED OR AMENDED SAR
If you discover an error has been made:

• First, check the box 1 at the top of page one above PART I;
• A new or amended SAR must be completed in its entirety. Do not just fill in the new information and say "See original filing";
• The changes should be fully described in PART V of the new filing;
• Don't forget to change the date or range of dates in PART III, section 33;
• The total dollar amount must reflect the total aggregate amount for the reporting period listed in section 33. The dollar values should be calculated on the basis of the suspicious transactions, not on the loss to the filing institution;
• References to previously filed SARs with dates and dollar amounts may be made in the narrative section of PART V.

DISCLOSURE OF SARs AND UNDERLYING SUSPICIOUS ACTIVITY

• Federal law prohibits the direct or indirect notification to any person involved in the suspicious activity reported on a SAR that a SAR has been filed (31 U.S. C. 5318(g)(2)). That means that information relating to SARs should be shared within your institution only on a need-to-know basis in order to reduce the possibility that the subject of the SAR will learn of the filing;
• If a SAR involves an individual in your institution, such as the president or a member of the board of directors, any institution policy that would require the individual to be notified of the filing of the SAR must not be followed. For example, if the SAR filing relates to a director and you normally give detailed reports of all SAR filings to the board, you would need to give the report to all board members other than the subject director;
• Deviations to established policies and procedures so as to avoid notification of a SAR filing to a subject of the SAR should be documented and appropriate uninvolved senior personnel should be advised;
• If your institution receives a subpoena or court order covering a SAR filing, immediately contact your primary Federal regulator, as well as FinCEN;
• An institution should never disobey the order of a court to make disclosure, but it should appeal an adverse order and seek a stay when possible.

Read Part 1.
Read Part 2.

The original version appeared in the September 2002 edition of the Oklahoma Bankers Association Compliance Informer.

First published on BankersOnline.com 1/27/03