When an audit or review catches a mistake or omission on a SAR, can those matters be fixed if and when a 90-day follow up SAR is filed?

No. We often encounter this situation with clients where we are either asked to assist in investigating cases or where we review SARs for accuracy and completeness. In the SAR instructions under “How to Make a Report” #3 it states the filer must make the necessary corrections, tick off Box 1 of the SAR and in Part V (Narrative) explain the changes being made. For example Part V may read:

I recently heard someone from Dominion speaking at a conference and they said that SARs are the most important part of an AML risk assessment. What did they mean?

We believe that SARs, and more importantly the data and investigations behind the SARs, can be among the most useful information for a compliance team completing an AML risk assessment.

When I read the FFIEC manual regarding continuing and ongoing activity, the manual states that a SAR should be filed no less than every 90 days. Does this mean that my institution could file a SAR each and every time the suspicious activity occurs (i.e. structuring) instead of creating a 90-day review process (i.e. the structuring activity is currently being picked up by an automated transaction monitoring system)?

The FFIEC manual cites Section 5 — Issues and Guidance, The SAR Activity Review, Issue 1, October 2000, page 27 that states, “FinCEN’s guidelines suggest that banks should report continuing suspicious activity by filing a report at least every 90 days.”

Whether your institution should file a SAR each time a suspect conducts similar suspicious activity within 90 days of a SAR is addressed in The SAR Activity Review Trends, Tips & Issues, Issue 8, April 2005, page 32:

I would like to know what the industry's practice on SAR aggregation is. Do you see financial institutions aggregate with the prior SAR(s) under this situation: If the suspicious activity in question has not continued during the 90-day review period, but a new alert on related activity reoccurs at a later date, should a financial institution aggregate with the prior SAR(s)? What if the activity occurs a year after the 90-day review, should a financial institution aggregate the new SAR with the previous one?

The answer to the question can be found in The SAR Activity Review Trends, Tips & Issues, Issue 8, April 2005, pages 32 and 33.

In this guidance, FinCEN addresses the issue of continuing suspicious activity. When reading the FinCEN language we believe it can confidently be inferred that “ongoing” activity is defined as suspicious activity that occurs within 90 days of a previous SAR filing.

FinCEN specifically addresses instances where the suspicious activity originally reported changes. To quote from Issue 8,

There is a lot of debate at my bank regarding what constitutes a “reasonable time frame” for completing an AML investigation. We are a duel regulated Bank (Federal Reserve and OCC) and even our two regulators seem to have differing opinions about the term “reasonable” as described in the available guidance. What does Dominion think?

Sometimes the issue often referred to as the “30 day clock” and the issue of “reasonable time frame” get confused.” They shouldn’t. The 30 day clock issue has been discussed within the AML community ad nauseam for several years, and FinCEN has issued very clear guidance on that issue. However, what is not so clear is what constitutes a reasonable amount of time from the point an alert is created to the point the ensuing investigation is completed, and in some instances a SAR is filed.