FAQ: FinCEN Provides Responses to some SAR and AML Questions

Question:

Did FinCEN recently issue guidance with regard to suspicious activity reports (“SARs”) and anti-money laundering (“AML”) requirements?

 

Answer:

Yes, in January 2021, FinCEN, in collaboration with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency, published answers to the following seven (7) frequently asked questions (“FAQs”) regarding SARs and other AML considerations:

  • Can a financial institution maintain an account or customer relationship for which it has received a written “keep open” request from law enforcement, even though the financial institution has identified suspicious or potentially illicit activity?

Yes, a financial institution may decide to maintain an account based on a written “keep open” request from a law enforcement agency, however, it is not obligated to do so.

  • Should a financial institution file a SAR solely on the basis of receiving a grand jury subpoena or other law enforcement inquiries?

No, but a financial institution should determine whether SAR filing is necessary based on its assessment of all information available and applicable regulatory requirements.

  • Is a financial institution required to terminate a customer relationship following the filing of a SAR or multiple SARs?

No, a financial institution has authority to decide whether to maintain or close a customer relationship as a result of suspicious activity based on the information it has available, its assessment of money laundering or other illicit financial activity risks, and its established policies and procedures.

  • Is a financial institution required to file a SAR based solely on negative news?

No, but a financial institution may review media reports and other news references to assist in its performance of customer due diligence and to evaluate transactions or activity it considers unusual or possibly suspicious.

  • If there are multiple negative news alerts based on the same event, is a financial institution expected to independently investigate each of those alerts?

No, but a financial institution may consider whether additional alerts contain new or different information that warrant further investigation.

  • Do financial institutions need to repeat information in the SAR narrative that has already been included in other SAR data fields?

No, information provided in other sections of a SAR does not need to be repeated in the narrative unless necessary to provide a clear and complete description of the suspicious activity.

  • Should financial institutions file additional SARs on the same suspicious activity to accommodate narratives that are longer than the SAR narrative character limits?

No, filers must provide a clear, complete, and concise description of the suspicious activity. Filers may include additional, relevant information as an attachment to the SAR if necessary, or note that it is available as supporting documentation.