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Understanding Its Suspicious Activity Reporting (SAR) Requirement

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What is Suspicious Activity Report (SAR)?

BSA requires every US national bank to file a Suspicious Activity Report (SAR) when they detect certain known or suspected violations of federal law or suspicious transactions related to a money laundering activity or a violation of the BSA.

Purpose of SAR:
Identify new methodologies of money-laundering
Offer data for law enforcement investigation
Deter and Constraint money-laundering

BSA requires every US national bank to file a Suspicious Activity Report (SAR) when they detect certain known or suspected violations of federal law or suspicious transactions related to a money laundering activity or a violation of the BSA.

Purpose of SAR:
Identify new methodologies of money-laundering
Offer data for law enforcement investigation
Deter and Constraint money-laundering

Distinction between CTR and SAR
CTR is required whenever the transaction or series of transactions exceeds the minimum threshold requirement in a 24 hour period.
SAR is required to be filed when there are elements of uselessness, suspicion or indicators of potential illegal activity. Minimum threshold requirement is not applicable to SAR situation.

How to Identify Suspicious Activity?

Banks can use a number of methods to track and identify unusual activity – this may include:
Employee identification
Law enforcement enquiries and requests
Transaction and surveillance monitoring system output
Any combination of the above


When is SAR Filling Required?
A SAR filing is required for any potential crimes:
involving insider abuse regardless of the dollar amount;
where there is an identifiable suspect and the transaction involves $5,000 or more; and
where there is no identifiable suspect and the transaction involves $25,000 or more

When to File SARs:
A SAR should be filed no later than 30 calendar days from the date of the initial detection of facts that may constitute a basis for filing a SAR.
In cases where no suspect can be identified, the time period for filing a SAR is extended to 60 days.

SAR Narratives
SAR Narratives Should:
Be concise and clear
Be chronological and complete
Provide a detailed description of the known or suspected criminal violation or suspicious activity
Identify the essential elements of the information

Outline of Effective SAR Narrative:
Introduction
Body
Conclusion

Want to learn more about anti-money laundering process, BSA requirements and best practices? ComplianceOnline webinars and seminars are a great training resource. Check out the following links:

How to Write an Effective SAR Narratives
Best Practices for Writing Effective SAR.
Managing an Effective AML Compliance Program
Are You Doing Your BSA/AML Risk Assessment Properly?
How to Report under AML/BSA?
BSA/AML Compliance Checklist
How to Create Effective AML/BSA Compliance Program?
How to Develop Risk Models for AML Monitoring Program?

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Understanding Its Suspicious Activity Reporting (SAR) Requirement

  1. 1. BSA: Understanding Its Suspicious Activity Reporting (SAR) Requirement
  2. 2. What is Suspicious Activity Report (SAR)? BSA requires every US national bank to file a Suspicious Activity Report (SAR) when they detect certain known or suspected violations of federal law or suspicious transactions related to a money laundering activity or a violation of the BSA. Purpose of SAR: • Identify new methodologies of money-laundering • Offer data for law enforcement investigation • Deter and Constraint money-laundering
  3. 3. Distinction between CTR and SAR • CTR is required whenever the transaction or series of transactions exceeds the minimum threshold requirement in a 24 hour period. • SAR is required to be filed when there are elements of uselessness, suspicion or indicators of potential illegal activity. Minimum threshold requirement is not applicable to SAR situation.
  4. 4. How to Identify Suspicious Activity? • Banks can use a number of methods to track and identify unusual activity – this may include: – Employee identification – Law enforcement enquiries and requests – Transaction and surveillance monitoring system output – Any combination of the above
  5. 5. When is SAR Filling Required? A SAR filing is required for any potential crimes: – involving insider abuse regardless of the dollar amount; – where there is an identifiable suspect and the transaction involves $5,000 or more; and – where there is no identifiable suspect and the transaction involves $25,000 or more When to File SARs: – A SAR should be filed no later than 30 calendar days from the date of the initial detection of facts that may constitute a basis for filing a SAR. – In cases where no suspect can be identified, the time period for filing a SAR is extended to 60 days.
  6. 6. SAR Narratives SAR Narratives Should: • Be concise and clear • Be chronological and complete • Provide a detailed description of the known or suspected criminal violation or suspicious activity • Identify the essential elements of the information Outline of Effective SAR Narrative: • Introduction • Body • Conclusion
  7. 7. Want to learn more about anti-money laundering process, BSA requirements and best practices? ComplianceOnline webinars and seminars are a great training resource. Check out the following links: • How to Write an Effective SAR Narratives • Best Practices for Writing Effective SAR. • Managing an Effective AML Compliance Program • Are You Doing Your BSA/AML Risk Assessment Properly? • How to Report under AML/BSA? • BSA/AML Compliance Checklist • How to Create Effective AML/BSA Compliance Program? • How to Develop Risk Models for AML Monitoring Program?

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