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#614705 - 09/18/06 04:53 PM $25000 cash transaction - Automatic SAR
straw Offline
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straw
Joined: Nov 2002
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I am reviewing a contract with a vendor that provides transactional services, allowing customers to make transactions at other institutions.

The contract states that a SAR MUST be filed for any cash transaction over $25,000.

Does anyone automatically file for a cash transaction over a certain dollar amount, or do you investigate to determine if acitivity is suspicious?

(don't worry about CTR requirements; these would obviously be filed)

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#614706 - 09/18/06 04:58 PM Re: $25000 cash transaction - Automatic SAR
BrendaC Offline
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Sweet Home AL
All situations are investigated prior to filing.
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#614707 - 09/18/06 07:26 PM Re: $25000 cash transaction - Automatic SAR
MagicCity Offline

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The transaction must be suspicious to warrant a SAR.
You should have evidence of your review in file.

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#614708 - 09/19/06 05:31 PM Re: $25000 cash transaction - Automatic SAR
Titanic Offline
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Quote:

I am reviewing a contract with a vendor that provides transactional services, allowing customers to make transactions at other institutions.

The contract states that a SAR MUST be filed for any cash transaction over $25,000.

Does anyone automatically file for a cash transaction over a certain dollar amount, or do you investigate to determine if acitivity is suspicious?

(don't worry about CTR requirements; these would obviously be filed)




Who drafted the contract?
Is there a reasoning for the automatic SAR?

Is your customer a HIGH risk customer?

Any how, I would definetively, perform an indepth investigation to support all the reasoning behind the SAR...

I believe you are dealing with a double side sword....
#1---If you file, it could be a defensive approach if you are not able to clearly define what's suspicious about the transaction....
#2---If you don't file, examiners might inquire as of why you did not enforced the contract's clause for such transaction....
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#614709 - 09/19/06 09:24 PM Re: $25000 cash transaction - Automatic SAR
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,182
Toano, VA
Quote:

The contract states that a SAR MUST be filed for any cash transaction over $25,000.



This is insane. FinCEN's complaining about junk SARs and here's a financial service provider who considers the bearer of any sum of cash exceeding a self-imposed arbitrary limit to be suspicious. What crime will this vendor always suspect? (There must be a one-size fits all crime since there's no mention of an investigation.)
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#614710 - 09/20/06 11:45 AM Re: $25000 cash transaction - Automatic SAR
Elwood P. Dowd Offline
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Joined: Aug 2001
Posts: 21,939
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As Richard so subtly suggests, this is defensive filing in its purest form. In addition, although your bank would normally be able to refuse to answer questions about a SAR filing in court, the other side would certainly be able to introduce a copy of a business contract where you agreed to file a SAR under a specific circumstance when it was not required by law, thus creating a presumption that you did file the SAR.

However, what I find most amusing is that it is a contractual provision that is totally unenforceable because the other party or parties to the contract would never know if you had complied with its terms.

Either the draftsman is crazy like a fox or he is just...
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#614711 - 09/20/06 09:14 PM Re: $25000 cash transaction - Automatic SAR
campste Offline
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campste
Joined: Jun 2002
Posts: 145
LA
Agreed, I concur with Richard. The safe harbor provisions of the law protects the bank, however, what happens when the bank begins to file SAR's in "bad faith". Additionally, by virtue of the contract, it apppears that information regarding the filing of a SAR is being released to the very party its filed on. Again, this appears to be in contravention of the law.

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#614712 - 09/20/06 10:55 PM Re: $25000 cash transaction - Automatic SAR
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
Insist on a change in the contract. It is a ridiculous clause that requires you to do something contrary to regulation.
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