The Financial Crimes Enforcement Network (FinCEN), jointly with other regulatory agencies on January 19, 2021 issued answers to frequently asked questions (FAQs) regarding suspicious activity reports (SARs) and other anti-money laundering (AML) considerations for financial institutions covered by SAR rules. The answers to these FAQs clarify the regulatory requirements related to SARs to assist such financial institutions with their compliance obligations, while enabling financial institutions to focus resources on activities that produce the greatest value to law enforcement agencies and other government users of Bank Secrecy Act (BSA) reporting. The purpose of this outline is to reference this clarification and to focus on a couple of the most common questions faced by financial institutions.
Question 1: Requests by Law Enforcement for Financial Institutions to Maintain Accounts
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. Law enforcement may have an interest in ensuring that certain accounts and customer relationships remain open notwithstanding suspicious or potential criminal activity in connection with the account. 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.
A financial institution should not be criticized solely for its decision to maintain an account relationship at the request of law enforcement or for its decision to close the account.
Question 3: Maintaining a Customer Relationship Following the Filing of a SAR or Multiple SARs
Is a financial institution required to terminate a customer relationship following the filing of a SAR or multiple SARs?
No. There is no BSA regulatory requirement to terminate a customer relationship after the filing of a SAR or any number of SARs. The decision to maintain or close a customer relationship as a result of the identification of suspicious activity is a determination for a financial institution to make based on the information available to it, its assessment of money laundering or other illicit financial activity risks, and established policies, procedures, and processes.
Question 6: Information in Data Fields and Narrative
Do financial institutions need to repeat information in the SAR narrative that has already been included in other SAR data fields?
No. As stated in the SAR instructions, 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.
Regulators are placing increased emphasis on not only SARs, but their usefulness. BSA is evolving overall with the key summary word being USEFULNESS. As a result, a review of the referenced FinCEN document may be useful to BSA staff.