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Suspicious Activity Report guidance issued by FinCEN

WASHINGTON (6/15/07)—The Financial Crimes Enforcement Network (FinCEN) this week issued, in apparent response to questions fielded by its Financial Institutions Hotline, two sets of guidance: one addressing Suspicious Activity Report (SAR) filings, the other law enforcement requests to maintain an account.

Credit Union National Association (CUNA) Federal Compliance Counsel Nichole Seabron said Thursday that credit unions will find the first document a valuable resource for SAR filing compliance issues. The second will fill in some blanks about financial institutions' responsibility to maintain an account based on law enforcement's request, she added. The first set of tips (FIN-2007-G003), entitled "Suspicious Activity Report Supporting Documentation," includes such information as:

  • Confirmation that no additional legal process—such as a written request or subpoena--is required from "appropriate law enforcement and supervisory agencies" that request supporting documentation or a copy of the SAR)related to a Suspicious Activity Report (SAR) filing;

  • Clarification that "supporting documentation" refers to all documents or records that assisted the financial institution in making the SAR filing determination. What qualifies as supporting documentation will vary based on the facts and circumstances of each particular case;

  • Confirmation that disclosure of SARs to appropriate law enforcement and supervisory agencies is protected under the safe harbor provisions; and

  • An assertion that Right to Financial Privacy Act prohibitions against disclosure do not apply when FinCEN or a supervisory agency requests financial records or information during the exercise of its "supervisory, regulatory, or monetary functions" or where FinCEN, appropriate law enforcement, or a supervisory agency requests a copy of a SAR or the supporting documentation related to a particular SAR.
The second guidance document (fin-2007-g002) zeroed in on requests by law enforcement for financial institutions to maintain accounts. It acknowledged:

  • Law enforcement may request that a financial institution maintain a particular account despite suspicious or potentially criminal activity flowing through it, but ultimately the final decision is left to the financial institution based on its policies and guidelines; and

  • While there is no requirement that a financial institution maintain such an account at law enforcement's request, FinCEN would like it to consider the value of such an account in the fight against money laundering, terrorist financing, and other crimes.

The guidance also provides a number of suggestions for credit unions, banks and thrifts that plan to comply with law enforcement requests such as: getting the request in writing from a supervisory agent or attorney; limiting the duration of the request to no more than six months; and maintaining documentation of these requests for at least five years after the request has expired.

It also clarifies that a financial institution choosing to maintain such an accounts is still obligated to comply with all Bank Secrecy Act requirements, such as filing SARs.

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Resource Links
FIN-2007-G003 - Suspicious Activity Report Supporting Documentation.
FIN-2007-G002 - Requests by Law Enforcement for Financial Institutions to Maintain Accounts
CUNA's What's New in Compliance


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