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Sharing SAR information within the institution

Our Compliance Division has taken the position of not letting us know if a SAR has been filed on a matter that we refer to them for a potential SAR filing. Is there some sort of regulatory requirement prohibiting the confirmation of a SAR filing?

On March 2, 2012, FinCEN published a reminder of how important it is to keep SAR filings confidential (FIN-2012-A002). That publication states in part, “FinCEN reminds financial institutions to be vigilant in maintaining the confidentiality of SARs. This includes ensuring all employees, agents, and individuals appropriately entrusted with information in a SAR are informed of the individual obligation to maintain SAR confidentiality. This obligation applies not only to the SAR itself, but also to information that would reveal the existence (or non-existence) of the SAR. Likewise, such persons should be informed of the consequences for failing to maintain such confidentiality, which could include civil and criminal penalties as explained herein.

A financial institution may consider including such information as part of its ongoing training of all employees. Furthermore, financial institutions may want to remind their counsel of the strict requirements of SAR confidentiality. Additional risk-based measures to enhance the confidentiality of SARs could include, among other appropriate security measures, limiting access on a "need-to-know" basis, restricting areas for reviewing SARs, logging of access to SARs, using cover sheets for SARs or information that reveals the existence of a SAR, or providing electronic notices that highlight confidentiality concerns before a person may access or disseminate the information.”

In response to the FinCEN confidentiality reminder, many banks have taken a hard line approach to releasing SAR information; however, we know of no specific regulatory prohibition against sharing SAR information within your organization as long as the recipient would be perceived as someone with a need to know. In fact, the final rule specifically states (in the third rule of construction) “that the prohibition against the disclosure of SAR information did not preclude the sharing by any of those financial institutions, or any director, officer, employee, or agent of those institutions, of a SAR or information that would reveal the existence of the SAR within the institution’s corporate organizational structure, for purposes that are consistent with Title II of the BSA, as determined by regulation or in guidance. This proposed rule of construction recognized that these financial institutions may find it necessary to share SAR information to fulfill reporting obligations under the BSA, and to facilitate more effective enterprise-wide BSA monitoring, reporting, and general risk-management. “

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First published on 05/01/2016

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