As a follow-up to my last blog post on some of the highlights from FinCEN’s FAQ on CTRs, I wanted to provide you with some highlights from FinCEN’s FAQ on SARs. I found these FAQs to be quite helpful when I am answering questions received while conducting BSA Independent Tests and trainings.
Pay close attention to number 16 below, as I am still seeing several instances where continual activity SARs contain inaccurate information and are not being filed within the required time frame.
11. What are my recordkeeping requirements when I submit a file electronically?
After submitting a report via the BSA E-Filing System, filers are required to save a printed or electronic copy of the report in accordance with applicable record retention policies and procedures. Filers are reminded that they are generally required to keep copies of their filings for five years. See 31 CFR § 1010.306(a)(2), 31 CFR § 1010.330(e)(3), 31 CFR § 1010.340(d), 31 CFR § 1020.320(d), 31 CFR § 1021.320(d), 31 CFR § 1022.320(c), 31 CFR § 1023.320(d), 31 CFR § 1024.320(c), 31 CFR § 1025.320(d), 31 CFR § 1026.320(d), 31 CFR § 1029.320(d), and 31 CFR § 1022.380(b)(1)(iii).
15. How do I determine whether or not to indicate a North American Industry Classification System (NAICS) Code?
FinCEN previously issued guidance in March 2012 that addressed the selection of the NAICS Code on the FinCEN SAR and FinCEN CTR. FinCEN emphasized that financial institutions will continue to be expected to provide only that information for which they have direct knowledge. As noted in that guidance, the issuance of the FinCEN SAR does not create any new obligation or otherwise change existing statutory and regulatory requirements for the filing institution. In addition, use of a NAICS code is not mandatory, and a financial institution may still provide a text response with respect to this information within the “Occupation” field.
Please note that batch filers must use only the 3-4 digit NAICS codes on our approved list of codes. Discrete filers can select from the available drop-down list embedded within the SAR.
16. What is the filing timeframe for submitting a continuing activity report?
FinCEN provided clarifying guidance on this question in Section 4 (Page 53) of SAR Activity Review Trends, Tips, & Issues #21. The guidance states “Financial institutions with SAR requirements may file SARs for continuing activity after a 90-day review with the filing deadline being 120 days after the date of the previously related SAR filing. Financial institutions may also file SARs on continuing activity earlier than the 120-day deadline if the institution believes the activity warrants earlier review by law enforcement.”
So, for filings where a subject has been identified, the timeline is as follows:
- Identification of suspicious activity and subject: Day 0.
- Deadline for initial SAR filing: Day 30.
- End of 90 day review: Day 120.
- Deadline for continuing activity SAR with subject information: Day 150 (120 days from the date of the initial filing on Day 30).
- If the activity continues, this timeframe will result in three SARs filed over a 12-month period.
Have a great week.