SAR Reporting
Last Updated: 2025-02-17 Status: Complete
Suspicious Activity Reports (SARs) are the primary mechanism for reporting potential money laundering and financial crimes to FinCEN. Understanding when and how to file SARs is a critical compliance obligation.
Quick Reference
| Report Type | Threshold | Deadline | Filed With |
|---|---|---|---|
| SAR (known suspect) | $5,000 | 30 days | FinCEN |
| SAR (no suspect) | $25,000 | 30-60 days | FinCEN |
| SAR (insider) | Any amount | 30 days | FinCEN |
| CTR | > $10,000 | Same day | FinCEN |
Suspicious Activity Reports (SARs)
What Triggers a SAR?
A SAR must be filed when the institution knows, suspects, or has reason to suspect:
SAR Thresholds
| Situation | Threshold | Notes |
|---|---|---|
| Known suspect identified | $5,000 | Subject can be identified |
| No suspect identified | $25,000 | Unknown perpetrator |
| Insider abuse | Any amount | Employee, director, agent |
| Money laundering | $5,000 | Know, suspect, or reason to suspect |
| BSA violation | $5,000 | Structuring, evasion |
| MSB point of sale | $2,000 | Money services business transactions |
SAR Filing Deadlines
| Situation | Initial Deadline | Maximum |
|---|---|---|
| Suspect identified | 30 calendar days from detection | 30 days |
| No suspect, investigation ongoing | 30 days, may extend | 60 days |
| Ongoing activity | Continuing SARs every 90 days | N/A |
SAR Filing Process
SAR Narrative Requirements
The narrative is the most critical part of the SAR:
| Element | Description |
|---|---|
| Who | Subject name, address, identification |
| What | Type of suspicious activity |
| When | Dates and times of activity |
| Where | Locations, accounts involved |
| Why | Why activity is suspicious |
| How | Method used, transaction details |
Narrative Best Practices:
| Do | Don't |
|---|---|
| Be specific and factual | Use vague language |
| Include dollar amounts | Omit key details |
| Describe the pattern | Make conclusions of guilt |
| Reference supporting docs | Include privileged info |
| Use clear chronology | Ramble without structure |
SAR Confidentiality
Tipping Off Prohibited
It is illegal to notify the subject that a SAR has been or will be filed. Violation carries criminal penalties.
- Do not tell the customer
- Do not include SAR reference in customer communications
- Limit internal knowledge to need-to-know
Currency Transaction Reports (CTRs)
CTR Requirements
| Requirement | Details |
|---|---|
| Threshold | > $10,000 in currency (cash) |
| Aggregation | Multiple transactions by same person in one business day |
| Filing deadline | 15 days after transaction |
| Form | FinCEN Form 112 |
What Counts as Currency
| Currency | Not Currency |
|---|---|
| US paper money | Checks |
| US coins | Wire transfers |
| Foreign paper money | Card transactions |
| Foreign coins | Money orders |
CTR Exemptions
Certain customers may be exempt from CTR filing:
| Exempt Category | Examples |
|---|---|
| Banks | Domestic banks |
| Government | Federal, state, local agencies |
| Listed companies | NYSE, NASDAQ listed |
| Subsidiaries | Of listed companies |
| Established customers | After proper documentation |
Exemption Requirements
Exemptions require:
- Annual review
- Proper documentation
- No suspicious activity
Filing Procedures
Electronic Filing
All SARs and CTRs must be filed electronically through FinCEN's BSA E-Filing System:
| Step | Action |
|---|---|
| 1 | Register for BSA E-Filing account |
| 2 | Complete appropriate form |
| 3 | Submit electronically |
| 4 | Receive acknowledgment |
| 5 | Retain confirmation |
Record Retention
| Record | Retention Period |
|---|---|
| SAR filing | 5 years |
| CTR filing | 5 years |
| Supporting documentation | 5 years |
| Investigation notes | 5 years |
| Decision not to file | 5 years |
Common SAR Scenarios
Scenario 1: Structuring
Pattern: Customer makes multiple cash deposits of $9,500 over several days
Analysis:
- Appears designed to avoid CTR threshold
- Meets $5,000 SAR threshold
- File SAR citing structuring
Scenario 2: Unusual Merchant Activity
Pattern: New merchant has sudden spike in volume, all transactions just under $1,000, high refund rate
Analysis:
- Pattern suggests potential laundering
- Evaluate total dollar amount
- If > $5,000 suspicious, file SAR
Scenario 3: Related Party Transactions
Pattern: Multiple merchants owned by same individual transacting with each other
Analysis:
- May be layering activity
- Document the relationships
- If suspicious and > $5,000, file SAR
SAR Quality Metrics
Common Deficiencies
| Deficiency | Impact |
|---|---|
| Incomplete narrative | Can't understand activity |
| Missing subject info | Can't identify suspect |
| Late filing | Regulatory violation |
| No supporting docs | Can't verify |
| Vague descriptions | Not actionable |
Quality Checklist
| Item | Verified |
|---|---|
| All fields completed | ☐ |
| Narrative addresses 5 W's | ☐ |
| Dollar amounts accurate | ☐ |
| Dates correct | ☐ |
| Subject info complete | ☐ |
| Supporting docs referenced | ☐ |
| Filed within deadline | ☐ |
| Retained confirmation | ☐ |
PayFac SAR Considerations
Who Files?
| Entity | Responsibility |
|---|---|
| PayFac | File SAR if you detect suspicious activity |
| Sponsor bank | May also file based on their monitoring |
| Both | Possible for same activity |
PayFac-Specific Red Flags
| Red Flag | SAR Consideration |
|---|---|
| Transaction laundering | Sub-merchant processing for others |
| Bust-out | Rapid processing then abandonment |
| Unusual refunds | Refunds without corresponding sales |
| Geographic anomalies | Transactions inconsistent with business |
| Velocity spikes | Sudden unexplained volume |
Related Topics
- Money Laundering - Understanding what to look for
- Transaction Monitoring - Detection systems
- Merchant Monitoring - Ongoing oversight