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The FinCEN files. Pushback.

Sarah Beth Felix of Palmera Consulting, considers whether The FinCEN Files are a help or a hindrance when it comes to trying to engage both the public and senior management with the challenges facing Financial Crime Risk and Compliance Officers.

Was the leak worth it?

My opinion... not at all.

There are many issues and here are the ones that stand out to me.

1) The dollar numbers reported do not seem to include a header regarding the cumulative or ongoing SAR amounts, meaning that if a bank filed recurring SARs, those SAR total amounts can be nested in each future SAR. That exponentially increases the total SAR amount that is shown on the ICIJ data analysis.

2) This leak destroys any respect that the financial crime risk and compliance officers have fought for over the last 15 years. As a result, we will have not-previously-engaged C-suite execs poking around in the day-to-day SAR operations of the AML team... and not in a good way. A whole league of essentially arm-chair quarterbacks in the form of attorneys and C-suiters that will pitch in on SAR filings and narratives. Their angle will be to hedge from future potential black eyes. Overnight, they will become experts on what reportable suspicious activity should look like.

3) There was no consideration for look-back dollar amounts. Almost all of these institutions have had penalties from non-compliance issues for both sanctions and AML over the course of the leaked time frame. So it is absolutely expected that during a remediation, one would go back and see that historical activity now needs to be reported and therefore the dollar amounts would be quite large.

4) There was no explanation or timeline consideration for when the named individuals went from “OK” to corrupt…and hence why the bank may have filed suddenly on the previous activity due to a contextual important data point like news headlines stating that a previously “OK” individual is no longer OK. ; and

5) The SAR data did not seem to provide important context to the respondent relationship of some of these big global banks. They list countries sent/received wires related to the SAR filing but did not classify as part of the respondent relationship, but rather just amounts of money to/from jurisdictions.

About and Contact Sarah Beth Felix

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