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FinCEN and Federal Banking Agencies Issue Frequently Asked Questions Regarding Suspicious Activity Reporting and Other Anti-Money Laundering Requirements

The Financial Crimes Enforcement Network (FinCEN), jointly 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, and in consultation with the staff of certain other federal functional regulators, has issued responses to Frequently Asked Questions (FAQs) Regarding Suspicious Activity Reporting and Other Anti-Money Laundering (AML) Requirements.

Summary below.

Issued Date
19 January, 2021
Guidance Subject
Answers to Frequently Asked Questions Regarding Suspicious Activity Reporting and Other Anti-Money Laundering Considerations
Financial Institution
Casinos
Depository Institutions
Insurance Industry
Money Services Businesses
Mortgage Companies/Brokers
Precious Metals/Jewellery Industry
Securities and Futures

https://www.fincen.gov/sites/d... (232kb)

There follows a summary of the Questions and Answers. Readers should refer to the document via the link above for the detailed response.

1. 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?

A: Yes. It "can" but that does not mean it "must."

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

A. No. This is gratifying: in the mid 1990s, I acted for a lawyer who was prosecuted because she did not file a SAR after being informed that her client was under suspicion for money laundering. The case was eventually withdrawn.

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

A: No. There is and never has been any such obligation: whether to continue is a a matter for the reporting entity.

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

A. No. The term "negative news" is a recent buzzword and means very little - which is why FinCEN says the answer is "no." But it should be a reason to make enquiries.

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

A. No, says FinCEN then qualifies it in a way that almost says "yes." Each "alert" should be checked against those previously considered to see if there are new facts or factors that mean a previous decision should be reviewed.

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

A. No, say it once, say it clearly and don't repeat yourself.

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

A. No. Say it once, say it clearly, don't repeat yourself - and say it concisely. If what you want to say doesn't fit, shorten it, says FinCEN. Or add an attachment.

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Author: 
World Money Lau...

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