1 2 Note: The following slides represent suggestions to enhance the writing of a SAR narrative. This...

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Note: The following slides represent suggestions to enhance the writing of a SAR narrative. This information should be used in conjunction with the instructions provided with the appropriate SAR form used by your institution & through guidance issued by FinCEN & regulatory authorities.

Note: The following slides represent suggestions to enhance the writing of a SAR narrative. This information should be used in conjunction with the instructions provided with the appropriate SAR form used by your institution & through guidance issued by FinCEN & regulatory authorities.

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The Importance of Filing a SARThe Importance of Filing a SAR

1. Identifies potential & actual illegal activity:

1. Identifies potential & actual illegal activity:

• Money laundering• Money laundering

• Terrorist financing• Terrorist financing

• Other financial fraud & abuse• Other financial fraud & abuse

2. Detects & prevents flow of illicit funds2. Detects & prevents flow of illicit funds

3. Establishes emerging threats through analysis of patterns & trends

3. Establishes emerging threats through analysis of patterns & trends

4. It’s required by law!4. It’s required by law!

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#1 Rule:#1 Rule:

Do not assume the reader is familiar with your institution’s internal terminology, acronyms, operational processes, or has other knowledge related to the reported violation.

Do not assume the reader is familiar with your institution’s internal terminology, acronyms, operational processes, or has other knowledge related to the reported violation.

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The Narrative should:The Narrative should: Be concise & clear

Provide a detailed description of the known or suspected criminal violation or suspicious activity

Identify the essential elements of information (the 5 W’s)

Be chronological & complete

Be concise & clear

Provide a detailed description of the known or suspected criminal violation or suspicious activity

Identify the essential elements of information (the 5 W’s)

Be chronological & complete

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The 5 “W’s” of Information The 5 “W’s” of InformationWho?Who?

What?What?

When?When?

Where?Where?

Why?Why?

“How?”can be important, too!“How?”can be important, too!

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Who is conducting the criminal or suspicious activity?

Who is conducting the criminal or suspicious activity?Describe additional details about the suspect(s) other than those provided earlier in the SAR form (Part I for SAR-MSB, SAR-SF & SAR-C or Part II for the depository institution SAR) :

Describe additional details about the suspect(s) other than those provided earlier in the SAR form (Part I for SAR-MSB, SAR-SF & SAR-C or Part II for the depository institution SAR) :

– Employer & occupation information– Employer & occupation information

– Relationship between the suspect & the filing institution

– Relationship between the suspect & the filing institution

– Length of the financial relationship– Length of the financial relationship

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What instruments or mechanisms facilitate the suspect activity/transactions?

What instruments or mechanisms facilitate the suspect activity/transactions?

Identify & describe the transactions raising the suspicions of the financial institution. Examples include:

Identify & describe the transactions raising the suspicions of the financial institution. Examples include:

– Cash deposits and/or withdrawals– Cash deposits and/or withdrawals

– Checks & other monetary instruments (money orders; traveler’s checks; cashiers or bank checks)

– Checks & other monetary instruments (money orders; traveler’s checks; cashiers or bank checks)

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Additional types of transactions raising the suspicions of the financial institution:

Additional types of transactions raising the suspicions of the financial institution:

– Wire or other electronic transfers (ATM, ACH)

– Wire or other electronic transfers (ATM, ACH)

– Cash Letters, Pouch Activity or other correspondent account activity

– Cash Letters, Pouch Activity or other correspondent account activity

– Stocks, bonds or notes– Stocks, bonds or notes

– Casino chips or markers– Casino chips or markers

– Foreign currency– Foreign currency

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When did the criminal or suspicious activity occur?

When did the criminal or suspicious activity occur?

– If a one-time occurrence, identify the date

– If a one-time occurrence, identify the date

– If a pattern of activity occurred over a span of time, state when the activity first initiated and then describe the activity during the duration

– If a pattern of activity occurred over a span of time, state when the activity first initiated and then describe the activity during the duration

– Identify when the activity was detected– Identify when the activity was detected

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Where did the suspicious activity take place?

Where did the suspicious activity take place?

– Identify the branch/department location or locations within the institution where the activity occurred (name of branch, office or department and the street address for each)

– Identify the branch/department location or locations within the institution where the activity occurred (name of branch, office or department and the street address for each)

– Indicate if suspect transactions involve other domestic or international banks & identify the banks, their locations, account numbers, etc.

– Indicate if suspect transactions involve other domestic or international banks & identify the banks, their locations, account numbers, etc.

– Identify all account numbers & types of accounts affected by the transactions/activity

– Identify all account numbers & types of accounts affected by the transactions/activity

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Why does the institution think the activity is suspicious?

Why does the institution think the activity is suspicious?

– First, describe the filer’s type of institution (i.e., XYZ Bank is a commercial bank with 400 branches located in 5 northeastern states; Send

Money Quick is an international money transmitter with five offices in metropolitan Pretend City; We Make U

Money is a securities broker, etc.)

– First, describe the filer’s type of institution (i.e., XYZ Bank is a commercial bank with 400 branches located in 5 northeastern states; Send

Money Quick is an international money transmitter with five offices in metropolitan Pretend City; We Make U

Money is a securities broker, etc.)

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Why does the institution think the activity or transaction is suspicious (cont.)?

Why does the institution think the activity or transaction is suspicious (cont.)?– Next, describe concisely but fully, why the institution considers the activity as suspicious

– Next, describe concisely but fully, why the institution considers the activity as suspicious

– Be sure to include any relevant information about suspicious customer

activity that the institution has in its files at the time the SAR is filed

– Be sure to include any relevant information about suspicious customer

activity that the institution has in its files at the time the SAR is filed

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How did the suspicious activity occur? How did the suspicious activity occur?

– In a concise, accurate and logical manner, describe how the suspect transaction or pattern of transactions

were completed

– In a concise, accurate and logical manner, describe how the suspect transaction or pattern of transactions

were completed

– For account activity, provide as completely as possible an

explanation of the cycle of funds including the source of the funds in the account & application of those funds

– For account activity, provide as completely as possible an

explanation of the cycle of funds including the source of the funds in the account & application of those funds

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Suggested structure of the narrative

Suggested structure of the narrative

1. Introduction

2. Body3. Conclusion

1. Introduction

2. Body3. Conclusion

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1. The Introduction

1. The Introduction Provide a brief statement of the SAR’s purpose Generally describe the known or

suspected violation Identify the date of any SARs

previously filed on the subject & the purpose of that SAR

Indicate any internal investigative numbers used by the filing institution to maintain records of the SAR

Provide a brief statement of the SAR’s purpose Generally describe the known or

suspected violation Identify the date of any SARs

previously filed on the subject & the purpose of that SAR

Indicate any internal investigative numbers used by the filing institution to maintain records of the SAR

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2. The Body 2. The Body Provide the relevant facts about all

parties facilitating the suspect activity or transactions

Provide the relevant facts about all parties facilitating the suspect activity or transactions

Answers Who? Answers Who?

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2. The Body (cont.)2. The Body (cont.) Identify all involved accounts and

transactions in chronological order by date and amount – do not use or insert tabular objects, tables, or pre-formatted spread sheets

Identify all involved accounts and transactions in chronological order by date and amount – do not use or insert tabular objects, tables, or pre-formatted spread sheets

AnswersAnswers What?What? Where?Where? When? When?

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2. The Body (cont.)2. The Body (cont.) Explain in detail the filer’s position that

the activity or transaction is illegal or suspicious

Explain in detail the filer’s position that the activity or transaction is illegal or suspicious

Answers Why? Answers Why?

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2. The Body (cont.)2. The Body (cont.) Describe the method of operation

of the subject:

Describe the method of operation of the subject:

– Manner in which the activity and/or transactions were completed;

– Manner in which the activity and/or transactions were completed;

– Any relationship to other transactions, accounts, conductors, etc.; and

– Any relationship to other transactions, accounts, conductors, etc.; and

– Subsequent results of the activity– Subsequent results of the activity

Answers How? Answers How?

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3. The Conclusion3. The Conclusion

– Any planned or completed follow-up actions by the institution

– Any planned or completed follow-up actions by the institution

– Location within the institution where all SAR-related records are maintained

– Location within the institution where all SAR-related records are maintained

– Names & telephone numbers of persons with additional information about the reported activity

– Names & telephone numbers of persons with additional information about the reported activity

Summarize the report & include:

Summarize the report & include:

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Important ReminderImportant Reminder

Do not include any supporting documentation or attachments to the SAR when filed

Do not include any supporting documentation or attachments to the SAR when filed

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Financial institution shall retain for 5 years from the date of the filing:

Financial institution shall retain for 5 years from the date of the filing: A copy of any SAR filed; and The original or business record of any

supporting documentation; and Make all supporting documentation

available to FinCEN & any appropriate law enforcement agencies or regulatory authorities

A copy of any SAR filed; and The original or business record of any

supporting documentation; and Make all supporting documentation

available to FinCEN & any appropriate law enforcement agencies or regulatory authorities

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Another Important Reminder

Another Important ReminderFederal law requires that a financial institution, & its directors, officers, employees, and agents who, voluntarily or by means of a suspicious activity report, report suspected or known criminal violations or suspicious activity may not notify any person involved in the transaction that the transaction has been reported.

Federal law requires that a financial institution, & its directors, officers, employees, and agents who, voluntarily or by means of a suspicious activity report, report suspected or known criminal violations or suspicious activity may not notify any person involved in the transaction that the transaction has been reported.

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Questions?Call the FinCEN

Regulatory Help Line at

1-800-949-2732

Questions?Call the FinCEN

Regulatory Help Line at

1-800-949-2732