ALEXANDRIA, Va. – An attorney who specializes in regulatory issues is offering insights into newly issued answers from the NCUA, FDIC, Federal Reserve, and OCC on frequently asked questions about Suspicious Activity Reports (SARs) and other anti-money-laundering/countering the financing of terrorism (AML/CFT) considerations.
According to the agencies, the answers are intended to clarify commonly asked questions by financial institutions about SAR rules to assist with AML/CFT compliance obligations and enable institutions to focus resources on activities that produce the greatest value to law enforcement agencies and other authorized government users of Bank Secrecy Act reports.
The questions address the topics of structuring, continuing activity reviews, timelines for continuing activity reviews, and documentation for decisions not to file a SAR, the agencies said.
In a posting on LinkedIn, Brandy Bruyere, regulatory compliance attorney—consumer financial services and credit unions, and partner at Honigman, LLP, highlighted several issues, including:
On Whether a SAR Is Required When There May Be Structuring to Avoid the $10,000 Transaction Report Threshold
Bruyere noted the new answers state, “The mere presence of a transaction or series of transactions … at or near the $10,000 CTR threshold is not information sufficient to require the filing of a SAR.”
Rather, a SAR is only required “if the institution knows, suspects, or has reason to suspect” a series of transactions are “designed to evade” CTR filings. “The FAQ goes on to explain where the lines may be drawn here,” Bruyere wrote.
On Continued SAR Filings Every 90 Days on the Same Customer/Member Account if Suspicious Activity Seems to Be Persisting
“As these are a ‘burden,’ [a financial institution] is not required to conduct a separate review—manual or otherwise—of a customer or account following the filing of a SAR to determine whether suspicious activity has continued,” Bruyere wrote. “Financial institutions instead may rely on risk-based internal policies, procedures, and controls to monitor and report suspicious activity as appropriate, provided those internal policies, procedures, and controls are reasonably designed to identify and report such activity.”
Bruyere added the third FAQ provides a timeline for filing any continuing SARs, and the fourth FAQ clarifies that if a financial institution decides not to file a SAR, there is not a requirement to document this.
Good Reminder
“The FAQs are a good reminder that even deregulation would take some work to implement,” Bruyere wrote. “As these are guidance, the FAQs could be changed relatively easily under different FinCEN leadership in the future, but for now this could reduce BSA reporting burdens.”
Additional information is available here.
