Suspicious activity report

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In a financial regulation, a Suspicious Activity Report ( SAR ) or Suspicious Transaction Report ( STR ) is a generated report by a financial institution about suspicious activity or potentially suspicious. The criteria for deciding when a report should be made vary from country to country but generally it is any financial transaction that does not make sense to a financial institution, unusual for that particular client or seems to be done only for the purpose of hiding or obscuring a transaction. This report is submitted to the country's financial crime enforcement unit, which is usually a specialist agency designed to collect and analyze transactions and report them to the relevant law enforcement units. Frontline staff at financial institutions have a responsibility to identify suspicious transactions and these are reported to the designated person responsible for reporting the transaction. Financial institutions are not allowed to notify clients or parties in transactions that SAR has been submitted.

For example, in the United States, reports of suspicious transactions should be reported to the Financial Crimes Enforcement Network (FinCEN), an agency of the US Treasury. In Australia, SAR should be reported to the Australian Transaction Analysis and Analysis Center (AUSTRAC), an Australian government agency. Most countries have laws that require financial institutions to report transactions and will have agents designated to receive this. The institution to which the report should be filed for a country is usually part of the law enforcement or the country's financial regulatory department.

Video Suspicious activity report

Reporting

SAR includes detailed information about suspicious-looking transactions. The purpose of SAR submission is to help the government identify individuals, groups and organizations involved in fraud, terrorist financing, money laundering, and other crimes.

The purpose of a suspicious activity report is to report known or suspected violations of law or suspicious activity observed by regulatory financial institutions (eg, Bank Secrecy Act (BSA)). In many cases, SAR has been instrumental in enabling law enforcement to initiate or supplement the investigation of money laundering or terrorist financing and other criminal cases. The information provided in the SAR form also presents FinCEN with a method to identify emerging trends and patterns related to financial crime. Information about these trends and patterns is very important for law enforcement agencies and provide valuable feedback to financial institutions.

In the United States, FinCEN requires that SARs should be filed by a financial institution when a financial institution suspects an employee of abuse; violations of laws that collect more than $ 5,000 in which subjects can be identified; violations of law that collect more than $ 25,000 regardless of potential subject; transactions collecting $ 5,000 or more involving potential money laundering or breach of the Bank Secrecy Act; computer intrusion; or when the financial institution knows that the customer is operating as a money service business without permission.

Each SAR must be submitted within 30 days from the date of initial determination for reporting purposes. A 30-day extension can be obtained if the identity of the person performing the suspicious activity is unknown. However, it should not, if SAR submission is delayed longer than 60 days. The Bank Secrecy Act provides that each company must keep its SAR notes for a period of five years from the date of filing.

Maps Suspicious activity report

Journalist

Reports can begin with any financial services employee. Employees are generally trained to be alert to suspicious activity, such as situations where people try to transfer money abroad without identification, or activity by someone without a job that starts depositing large sums of cash into account. Employees are trained to communicate their suspicions to their chain of command where further decisions are made about whether to file a report or not.

Many different types of finance industries are required to submit a SAR. These include:

• storage institutions (eg, banks and credit unions)
• securities and futures dealers (eg, stock brokers and mutual fund brokers)
• money service business (e.g. check liquefaction service, currency exchange agency, and money order provider)
• casinos and card club
• precious metals dealers and gems (eg, jewelry sellers)
• insurance company
• mortgage and brokerage firms

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Other related forms

There are other forms that FinCEN requires businesses and individuals to file. These include:

• individuals carrying over $ 10,000 in currency into or out of the United States
• the sender and receiver involved in the $ 10,000 transfer in the currency of entry or exit from the United States
• businesses that receive more than $ 10,000 in currency in a single transaction or in related deals
• a person who has control of more than $ 10,000 in a non-US financial account during a calendar year

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Confidentiality

Unauthorized disclosure of SAR archiving is a federal criminal offense.

Financial institutions conduct investigations before submitting a SAR to ensure that reported information is appropriate, complete and accurate. This process will often include review by finance, management and/or lawyers before filing.

To encourage openness and cooperation, there are disclosures and privileges protecting SAR reporters. First, an individual or organization is prohibited to find the existence or content of SAR that includes the name of the individual or organization. The SAR Reporter is immune from the discovery process. Secondly, SAR reporters enjoy immunity for all statements made on their SAR, regardless of whether the statement is allegedly made in bad faith.

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SAR archiving options

Effective July 1, 2012, all SAR Reports must be submitted through the FinCEN BSA E-filing System.

A SAR has five sections each containing information about the archiving agency or the intended activity:

Part I - Subject Information

Any name, address, social security or tax number, date of birth, driver's license number, passport number, occupation and telephone number of all parties involved with the activity.

Part II - Suspicious Activity Information

Date Range and code for Suspicious Activity type

Section III - Information on Financial Institutions to which Activities Happen

Part IV - Archive Contact Information

Usually contains contact information for financial institution or equivalent compliance officers and lists of law enforcement agencies that have been contacted while investigating activities..

Part V - Suspicious Activity Information - Narration

A written description of the activity.

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Punishment for non-compliance

Financial institutions and their employees face civil and criminal penalties for failing to properly report suspicious activity reports, including a combination of large fines, regulatory restrictions, loss of banking charter, or imprisonment.

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History

The requirements for filing a suspicious activity report (as well as implied ordering orders) are added by Section 1517 (b) of the Annunzio-Wylie Anti-Money Laundering Act (part of the Housing and Community Development Act 1992, Pub.L 102-550, 106Ã , Stat.Ã, 3762, 4060).

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See also

• Casino rules under Bank Secrets Act
• Money laundering
• Tax evasion
• Terrorist financing
• Setup
• Suspicious Activity Reports (justice and domestic security)

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References

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External links

• FinCEN: Financial Crime Enforcement Network - the official site

Source of the article : Wikipedia