Suspicious Activity Report (SAR)

After potential criminal activity is detected, companies should submit the SAR within 30 days. When requiring additional evidence, obliged entities can use an extension of up to 60 days. All SAR filings must be retained for five years from the date of submission. Otherwise, non-compliance can lead to hefty fines, regulatory constraints, and imprisonment.

After a financial institution submits the SAR, it is forwarded to the relevant law enforcement agency for investigation. For example, FinCEN automates this process by routing the case to the appropriate authorities, such as the FBI.

The BSA e-file system has the standard SAR form available online. In the narrative section of the SAR, provide a thorough description of the suspected violation or suspicious activity. Include as much relevant information as possible. If you lack data, numerous online tutorials and databases exist to help specialists navigate the intricacies of the SAR reporting process.

When filing a SAR, reporters must include:

• Personal data of all involved parties, such as names, addresses, social security numbers, birth dates, driver’s license or passport numbers, occupations, and phone numbers.
• Information about the financial institution where the activity occurred, along with its contact details. 
• A written description of the activity, completing a comprehensive explanation of the suspicious activity. 

SARs were initially referred to as “criminal referral forms” before evolving into the standardized SAR forms we have today. The USA Patriot Act broadened SAR requirements to combat both domestic and global terrorism.

A range of companies should file SARs. According to FinCEN, this includes financial institutions and other obliged entities, such as:

• Banks, including Bank and Financial Holding Companies
• Casinos and Card Clubs
• Money Services Businesses
• Brokers or Dealers in Securities
• Mutual Funds 
• Insurance Companies
• Futures Commission Merchants and Introducing Brokers in Commodities
• Residential Mortgage Lenders and Originators 

While the majority of SARs originate from the financial sector, they can also be submitted by law enforcement personnel, solicitors, accountants, state officials, public safety workers, business owners, and the general public if they possess suspicion or knowledge of money laundering or terrorist financing activities.

Law enforcement officials, such as FinCEN, serve as the designated single filing point for SARs and are tasked with disseminating the information within the government. SARs empower governments to anticipate and mitigate fraudulent and criminal behavior before it escalates.