Bank Secrecy Act (BSA) Regulations - Filing Suspicious Activity Reports

Gregory J. Cook, EA, CPA    Suspicious Activity Reports (SARs) are among the government’s main weapons in the battle against money laundering and other financial crimes. Such reports are also a key component of an effective anti-money-laundering compliance program.

Cook and Company, Enrolled Agents

Many MSBs are required to file SARs when they suspect that potentially illegal activity has occurred and when the activity has met the relevant reporting threshold.

The types of MSBs that are currently covered by the MSB SAR requirements are:

*Money transmitters,
*Currency dealers or exchangers,
*Money order – issuers, sellers or redeemers,
*Traveler’s checks – issuers, sellers, or redeemers,
*U.S. Postal Service

MSBs that provide only check cashing or stored value services are not required to report suspicious activity at this time.

Refer to www.msb.gov for updates on which MSBs are required to file SARs.

A SAR must be filed by an MSB when a transaction is both:

*Suspicious, and
*$2,000 or more ($5,000 or more for issuers reviewing clearance records).

A SAR must be filed within 30 days of detection of the suspicious transaction by the MSB.

MSBs that are not currently covered by the SAR rule – check cashers, and issuers, sellers or redeemers of stored value – may voluntarily file SARs. Any MSB may also voluntarily file SARs for suspicious activity below the reporting threshold.

It is illegal to tell any person involved in a transaction that a SAR has been filed. Maintaining the confidentiality of SARs will prevent suspected individuals involved in criminal activity from structuring their activity in such a way as to evade detection by law enforcement. It also will help protect the MSB filing the report. A SAR and/or the information contained in a SAR must only be provided to FinCEN or an appropriate law enforcement or supervisory agency when requested.

Some suspicious transactions require immediate action. If the MSB has reason to suspect that a customer’s transactions may be linked to terrorist activity against the United States, the MSB should immediately call the Financial Institutions Hotline, toll-free at : 1-866-556-3974.

Similarly, if any other suspected violations – such as ongoing money-laundering schemes – require immediate attention, the MSB should notify the appropriate law enforcement agency. In any case, the MSB must also file a SAR if the MSB is subject to mandatory reporting. A BSA provision (called a “safe harbor”) provides broad protection from civil liability to MSBs and their employees that file SARs or otherwise report suspicious activity.