Sunday, October 22, 2017

Clarifying Regulatory Obligations Regarding Continuing Activity SAR Filings

Posted by David September 14, 2012 2:05pm

Photo Credit: Michaelaw

The Financial Crimes EnforcementNetwork published guidance in the May 2012 “The SAR Activity Review: Trends,Tips, & Issues, Issue 21”, which clarifies regulatory obligations forfinancial institutions regarding continuing activity SAR filings. According tothe 2010 FFIEC BSA/AML Examination Manual, “FinCEN’s guidelines suggest thatbanks should report continuing suspicious activity by filing a report at leastevery 90 days. This practice will notify law enforcement of the continuingnature of the activity in aggregate. In addition, this practice will remind thebank that it should continue to review the suspicious activity to determinewhether other actions may be appropriate, such as bank management determiningthat it is necessary to terminate a relationship with the customer or employeethat is the subject of the filing”.

Therehas been uncertainty amongst financial institutions regarding the requireddeadline for continuing activity SAR filings. In 2000, the “SAR ActivityReview” Issue 1, provided financial relief for institutions stating that SARsidentifying continuing activity of a previously filed SAR may be updated every90 days. However, the uncertainty we have seen in the industry pertains towhether the Bank is obligated to file a continuing activity SAR filing by the90 day timeframe, or must the investigation of the continuing activity begin 90days subsequent to the previous SAR filing date.  FinCEN has provided clarity for financialinstitutions regarding these requirements. Financial institutions with SARrequirements may now file SARs for continuing activity after a 90 day reviewwith the filing deadline being 120 days after the date of the previouslyrelated SAR filing. Furthermore, financial institutions may also file SARs oncontinuing activity earlier than the 120 day deadline if the institutionbelieves the activity warrants earlier review by law enforcement.

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