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
First published on 05/01/2006