The Bank should deploy adequate staff to identify, assess and report potentially suspicious activities, taking into account the bank`s overall risk profile and transaction volume. In addition, a bank should ensure that the affected staff have the necessary experience and are fully and continuously trained to maintain their expertise. Staff should also have sufficient internal and external tools to conduct appropriate research on activities and to formulate conclusions. Reporting suspicious activity is the cornerstone of the BSA reporting system. It is critical to the ability of the United States to use financial information to combat terrorism, terrorist financing, money laundering, and other financial crimes. Auditors and banks should recognise that the quality of SAR content is crucial to the adequacy and effectiveness of the suspicious activity reporting system. Given that failure to respect this confidentiality could include civil and criminal penalties, the Recommendation proposes that financial institutions consider SAR confidentiality in the ongoing training of all employees.7 The Recommendation also proposes other risk-based measures to ensure the confidentiality of SARs, including the following: In the final rule, FinCEN clarifies the scope of the SAR Confidentiality Provisions to ensure that transactions identified during the transaction and those identified in the MSAR cannot be informed directly or indirectly by the report. The general introduction of confidentiality provisions in each of the respective SAR rules is amended to make the RAD and any information that would reveal the existence of a SAR confidential.6 A transaction monitoring system, sometimes referred to as a manual transaction monitoring system, generally targets certain types of transactions (e.g.B those involving large amounts of money, in or from foreign regions) and involves a manual review of various reports generated by the bank`s GIS SYSTEMS or supplier systems to identify unusual activities. Examples of MIS reports include monetary activity reports, money transfer reports, monetary instrument sales reports, large item reports, reports on significant balance changes, reports on ATM transactions, and reports on insufficient funds (NSFs). Many GIS systems or vendors include filtering patterns to identify potentially unusual activity. The process may include reviewing daily reports, reports that cover a specific period of time (for example.
B, 30-day rolling reports, monthly reports) or a combination of both types of reports. The nature and frequency of the reviews used and the resulting reports must be consistent with the bank`s BSA/AML risk profile and adequately cover its riskiest products, services, customers, businesses and geographic locations. Often, anti-money laundering officials, as well as compliance and legal staff, find it difficult to assess whether certain information or documents, including the RAD, should be kept confidential. Of course, the RAD is confidential, but is all RAD-related information confidential? The final rule states that any document or other information confirming that a RAD has been filed constitutes information that would reveal the existence of a RAD and, as such, is considered confidential. Conversely, a financial institution must also grant confidentiality for any document indicating that no DAS has been filed. The completion and submission of RAS is an essential part of the SAR monitoring and reporting process. Appropriate policies, procedures and processes should be in place to ensure that SARs are submitted in a timely manner, are complete and accurate, and that the narrative includes a sufficient description of the reported activity and the basis for the submission. FinCEN has developed a new BSA Electronic Suspicious Activity Report (BSAR) which replaced the FinCEN FORM SAR-DI TD F 90-22.47.
The BSAR provides a uniform data collection format that can be used across sectors. Since 1 April 2013, the BSAR is mandatory and must be submitted via FinCEN`s BSA e-filing system. The BSAR does not create or otherwise modify banks` existing legal and regulatory expectations. Such filtering reports, whether implemented through the software system acquired by a provider or through requests from information service providers, significantly improve a bank`s ability to identify and evaluate unusual currency transactions. Records of money transfers. The BSA requires banks to keep records of money transfers of $3,000 or more. Regular review of this information can help banks identify patterns of unusual activity. Regular review of transfer records at banks where money transfer activity is low is usually enough to identify unusual activities. For banks with more extensive money transfer activities, using a spreadsheet or vendor software is an effective way to check money transfer activity for unusual patterns. Most vendor software systems include standard reports for suspicious activity.
These reports typically focus on identifying certain riskier geographic locations and larger money transfer transactions for individuals and businesses. Each bank should define its own screening criteria for individuals and businesses. Non-customer money transfer transactions and transactions payable with appropriate identification (PUPID) should be checked for any unusual activity. The activities identified during these reviews should be further investigated to ensure that the activity identified is consistent with the purpose of the reported account and the planned activity. If inconsistencies are identified, banks may need to conduct a comprehensive relationship review to determine if a RAD is warranted. No bank or director, officer, employee or representative of a bank that reports a suspicious transaction may inform any person involved in the transaction that the transaction has been reported. A RAD and any information that would reveal the existence of a RAD are confidential, unless this is necessary to fulfill BSA`s obligations and responsibilities. For example, the existence or even absence of a SAR must be treated confidentially, as well as the information contained in the SAR, to the extent that the information would reveal the existence of a SAR. 78FinCEN and the BCC have adopted final rules to amend the confidentiality rules applicable to suspicious reports.
The rules specify how, when and to whom SAR information and the presence of a SAR can be transmitted. See 75 Fed. Reg. 75576 (December 3, 2010) (OCC) and 75 Fed. R.R. 75593 (3 December 2010) (FinCEN). In addition, FinCEN and Bundesbank agencies are of the view that a bank`s internal controls for the deposit of DAS should minimise the risk of disclosure. A bank or its representative may disclose the existence of a SAR in order to carry out its responsibilities under the BSA, provided that no person involved in a suspicious transaction is informed that the transaction has been reported. The underlying facts, transactions, and supporting documents of a SAR may be fully disclosed to another financial institution in preparation for a joint SAR or in connection with certain employment references or terminations approved under 31 U.S.C. 5318(g)(2)(B).
The sharing of a SAR by a bank or its representative with certain authorised entities within the bank`s organisational structure for purposes compatible with Title II of the Banking Secrecy Act is also permitted. .