SAR Means Suspicious Activity Report

SAR is a very important regulatory tool, and a financial institution that ignores it ignores it with great peril. The Report is filed with FinCEN, but nearly ever other regulatory body has a link to FinCEN regarding SAR’s. The OCC, the IRS, even the Department of Homeland Security has a link to FinCEN regarding SAR’s. Here’s an example of the form:
FinCEN Form 109

This form is three pages long and this attachment comes with three pages of instructions. The instructions are written so that even a lay-person without a legal or compliance background should be able to fill it out. A small financial institution may not have a dedicated compliance officer, so, it is very important to understand that there is a 30-day deadline from the moment of the suspicious activity.
The consequences could be detrimental to your business. Your business or you specifically could be charged with enabling, abetting or in any other way aiding terrorist or other money laundering activity.

Generally, this is not an issue that should require a legal counsel. FinCEN is out to enforce the law, not to prosecute it. Its goal is to catch bad guys and if you are helping them, they are likely to look at your favorably. However, should you run out of time before you can determine whether you need to file a report or not, or you are made aware of the activity after the deadline, filing the form late is better than not filing at all. Explaining the reasons for delay is acceptable.
Should you find that your business is starting to attract suspicious activities more frequently than desired, connecting with lawyers who specialize in compliance for counsel will be a very important investment in mitigating this particular risk.

Ultimately, it is in the interest of the business to file a SAR with FinCEN rather than not file.

About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.

Managing Regulatory Risk

On Monday, January 26, Associations of Certified Anti-Money Laundering Specialists (hereon ACAMS) held its Third Annual AML Risk Management Conference at The Conrad Hotel in downtown New York. Over the course of this week, summaries and takeaways from the key notes and panel discussions will be shared in this blog.

  • John Byrne, Moderator, Former President of Condor Consulting LLC
  • Jamal El-Hindi, Associate Director, Policy Division, Financial Crimes Enforcement Network (FinCEN), US Department of the Treasury
  • Sarah Green, Senior Director, AML Compliance, Financial Industry Regulatory Authority (FINRA)
  • Denise Reilly, Managing Director, Global Head of BSA/AML Compliance, Citibank
  • James Vivenzio, Senior Counsel for BSA/AML, Office of the Comptroller of the Currency (OCC)

HeaderThis panel discussion covered topics ranging from expectations from regulators, culture of compliance in a firm, and personal liability. The following are  ten takeaways:

  1. Enterprise-wide consistency helps to mange the professionals and reduce gap risk.
  2. Regulators like to see consistency because it shows the effort an institution is putting into trying to be compliant.
  3. Communicate to Boards of Directors that OCC would like to see more focus on compliance from them
  4. Alert Suppression is okay and critical to executing priorities, but the alerts should be logged and revisited to keep the compliance programs up-to-date with the changing environment both ex-firm and intra-firm.
  5. Personal Liability of compliance officers will increase, so, keep good documentation
  6. FINRA does not target individuals, though individuals will face penalties if found willfully unaware or intentionally non-compliant. FINRA focuses on systemic risks to protect investors.
  7. FinCEN does not target individuals, especially trying to avoid dissuading the most talented compliance professionals from fleeing the most difficult problems.
  8. Intra-firm talent development is key to today’s labor market where supply of veteran compliance officers are small compared to demand.
  9. OCC intends to staff lead experts on all exams in the future.
  10. The new OCC Exam Manual, published November 11, 2014, does not have much substantive changes, mostly it is an administrative update to make sure changes to exams since the last major update are documented.

About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.
He tweets @MoneyCompliance