I filed a SAR almost 90 days ago and the suspicious activity since then has continued but is less than $5000 during this timeframe. If aggregated with the previous report, it's over $5000. So, is a follow-up SAR required?

My answer would be that the continuation SAR is not required, but you may have a field examiner who can't find anything else to write about...

Call FinCEN's Helpline and ask. They normally will not tell you whether to file or not to file based on specific activity, but that is not the question you are asking here.

P.S. If someone makes me watch them for 90 days and we're not looking at $5,000 or more I would either tell them to stop it or send them to another bank. Monitoring is expensive.

I would say a follow-up is required. The total money involved is reported and is over $5000.

Is the activity in question something the customer can be counseled on without revealing they are being reported as suspicious?

i*sam, yes, I think that's what we need to do, especially since his balance doesn't support the time it takes to monitor.

Ken, your answer brings up another question: Aren't we required to monitor for 90 days after filing to ensure the activity doesn't continue? After filing we put them on a high risk list and monitor within 90 days and refile for continuing activity. If we don't have to do that, and can just wait for it to show up on another report (rather than manually monitor), it would save a lot of time.

Thanks for your help.

chatty - As far as I know there's little to no guidance on this specific aspect of SAR filing determination, but – in my opinion – FinCEN would probably prefer that you file. If there is a pattern of activity that you identified as suspicious still occurring, it is your obligation to report every transaction in that pattern.

With that being said, you probably could get away with not filing, but the 15-20 minutes it would take to prepare & submit a SAR and - if the activity ceases – 15-20 minutes it would take to conduct a 90-day review vs. the potential of having to deal with questioning by an examiner, is well worth the time investment. In addition, there may be something about the specifics of the transaction(s) that are of benefit to law enforcement.

Chatty,

See http://www.osbckansas.org/DOB/DOBQuarterlyInterest/summer06/summer06.pdf

Go to page 6. Obviously, there are differences of opinion on this subject, but I agree with hovis. You either have to file or explain why you did not file. Both would take about an equal amount of time. Just keep in mind that if you continue to file, there comes a point where you are faced with the decision of whether to keep the account or not since the risk elevates each time you file a SAR.

I went ahead and called the Helpline... The example I left was that the bank found suspicious activity in excess of $5,000 and they could identify a suspect, so they filed a SAR. Ninety days later they reviewed the customer’s activity and the suspicious activity had continued, but did not cross the $5,000 threshold during that 90 day period.

The person who responded said that the regulation would not require the filing of an additional SAR; each required SAR filing is on its own merits. Obviously the bank could file another SAR on a "voluntary" basis.

The rest of this is from me, not FinCEN.

There is no specific regulatory requirement to monitor customers on whom you have filed a SAR. You do it because you are smart and you know there is guidance that says if the activity continues you are required to continue reporting it.

So, you could either classify them as high risk and monitor them continuously for the next 90 days or simply treat them like the rest of your customers, but go back and give them the once over before the 90 day period ends. Preferences may abound, but the choice is yours.

If the dollar figure involved in the 90 day period does not mandate a SAR filing I would not file one (I reserve the right to change that if the activity in this situation is described). I would treat it like any other "dud" where I considered filing a SAR and decided not to; i.e. I would write a memo saying no SAR was filed because the dollar threshold was not met. I would also contact the customer and they would either stop the activity or close the account.

"The person who responded said that the regulation would not require the filing of an additional SAR; each required SAR filing is on its own merits. Obviously the bank could file another SAR on a "voluntary" basis."

That is one of the joys of dealing with BSA. FinCEN has its ideas and the regulators have their ideas. Different people within FinCEN have their own ideas. Then individual examiners within each agency have their own ideas. Our examiners hang their hat on Issue 8 of the SAR Review and they are sticking with it. We just file our SARs and do an automatic follow-up in 90 days. If the same activity continues, regardless of the amount, we file an update. If it stops, we stop. So far, we are still open for business.

As we have discussed, they are not final because they are right, they are right because they are final. In this instance, I do agree with them.

This discussion probably happens in the committee rooms and hallways of FinCEN too, which may be why their is no clear written answer. Let me give an example why I think you should file a supplemental SAR regardless of the dollar amount involved.

Say you filed on a customer sending $3,000-$5,000 wires to the NWFP in Pakistan, every few days, funded by cash deposits under the threshold. To manage the first SAR - the analyst handling it at some point set a "cutoff" on their review scope because the activity was frequent and showed no signs of stopping. During the subsequent 90-Day review, the activity had ceased unexpectedly, except for one additional $4,999 wire to the NWFP in Pakistan. Otherwise, there was no activity in the account. Would it be wise to refrain from SAR filing in this instance?

It would not be much of a challenge to come up with a vast array of circumstances where filing a voluntary SAR is simply common sense. The issue raised here was whether a continuation SAR was required when the filing threshold was not met.

I agree with Ken on this one. Someone is depositing cash that is unusual for thier occupation (ex. unemployed depositing $3,000 - $5,000 in cash every week) - a SAR is filed.

You monitor for 90 days ... but during that time frame only $3,000 is deposited.

In this instance I would state "structuring activity did not continue blah blah".

If it picked up again, I would state "activity from x - x was suspicious. from x - x only $3,000 was deposited and a SAR not filed. activity picked up again from x - x"


er something like that ^

I understand that SAR filing in such a case is "voluntary", but how many aspects of a program are merely *suggested* - until the examiner arrives? Why not err on the side of caution and just file? If it's under $5,000 it'll probably take as long as the conversation with the regulator or auditor explaining why you didn't need to file.

I respectfully disagree It won't be a long conversation if you simply document your decision & stand by it.

Too many examiners make up rules based on what they see other banks doing. If all the banks "jump" just because an examiner says so & don't take the time to question ... I don't want to be expected to jump too ... I don't have time to follow rules that don't exist.

It is not required to file a SAR if the threshold is under $5,000 - simple as that. However in certain cases you may decide to file - but you are not required to. Document document document

I called the Helpline too and the person I spoke with said we should refile because of the aggregate total.

To me, the time it takes to complete a SAR form isn't a problem. But the ones we file on are put on a high risk list for six months and have to be monitored quarterly, and I don't want to miss the 90 day refiling deadline if the activity has recurred. So I don't want to file unnecessarily. And totals below $5000 seem very insignificant when you have bigger fish to fry.

I like your recommendation, Ken, and thanks to everyone for the good information.

[quote=chatty]I called the Helpline too and the person I spoke with said we should refile because of the aggregate total. /[quote]


This is what we had been told as well.

FinCEN has since attempted to homogenize its responses on this issue...it would be worthwhile to call them again.

It is not wrong to file a continuation SAR when the dollar threshold is not met in the 90 day follow up period. (It is actually prudent in some circumstances.) It is just not required by regulation.