Pub. 9 2019 Issue 2

6 www.azbankers.org Fulfilling Your SAR Requirements O NE OF THE MOST COMMON TYPES OF QUESTIONS THAT WE GET AT COMPLIANCE ALLIANCE CONCERNS THE DEADLINE OF PARTICULAR REGULATORY REQUIREMENTS. WHILE SOME REQUIREMENTS HAVE A DEFINITE DUE DATE AND A KNOWABLE TRIGGER, THE TRIGGER FOR OTHER REQUIREMENTS IS A BIT IS MORE OF A JUDGMENT CALL. THE SUSPICIOUS ACTIVITY REPORT (“SAR”) MUST BE FILED “NO LATER THAN 30 CALENDAR DAYS AFTER THE DATE OF INITIAL DETECTION BY THE BANK OF FACTS THAT MAY CONSTITUTE A BASIS FOR FILING A SAR.” YOU HAVE TO LOVE ANY RULE WITH A SELF- REFERENTIAL DEADLINE. WHAT CAN BE CLEARER THAN THE NOTION THAT YOU HAVE TO FILE A SAR WITHIN 30 DAYS OF KNOWING YOU NEED TO FILE A SAR? A CLOSER LOOK AT THE SAR RULES CAN HELP BREAK THIS REQUIREMENT DOWN INTO A MORE MANAGEABLE EXPECTATION AND TUNE UP YOUR SUSPICIOUS ACTIVITY REPORTING SYSTEM. The first thing to keep in mind is what constitutes “suspicious activity.” The Bank Secrecy Act (“BSA”) tells banks, bank holding companies, and their subsidiaries to monitor transactions and file a SAR on any transaction that they deem suspicious. A transaction includes “a deposit; a withdrawal; a transfer between accounts; an exchange of currency; an extension of credit; a purchase or sale of any stock, bond, certificate of deposit, or other monetary instrument or investment security; or any other payment, transfer, or delivery by, through, or to a bank.” You must file a SAR when you have reason to suspect: • Insider abuse (regardless of amount); • Criminal violations aggregating $5,000 or more when you can identify a suspect; • Criminal violations aggregating $25,000 or more, even when you are unable to identify a suspect; or • Transaction(s) involving your bank that aggregate to $5,000 or more, if you know, suspect, or have reason to suspect that the transaction(s):  Potentially involve money laundering or other illegal activity (e.g., terrorism financing);  Is designed to evade the BSA or its implementing regulations; or By Chris W. Bell, Esq, Compliance Alliance