Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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10/11/2007 FinCEN Finds Persistent Failures in SAR Filings by Many MSBs

The Financial Crimes Enforcement Network has found that certain common errors are appearing in suspicious activity reporting by money services businesses and the agency has released a list of the ten most common errors. Some MSBs have been leaving the narrative field blank. The narrative field of the SAR (Part IV of FinCEN Form 109, Suspicious Activity Report by Money Service Business) is where the MSB should tell why the activity being reported is unusual for the customer, taking into consideration the products and services the customer offers and the nature and typical activities of similar customers. Supporting documents should not be attached to SARs, but the information contained in such documents should be “reasonably described.” Narratives should not just repeat data from the fixed form fields of the SAR. “Wired $5,000 to Colombia” is not very useful to law enforcement personnel looking at the SAR. Many of the errors indicate that the filer is not even reading the instructions that accompany the form. Thus, if the subject’s date of birth is not precisely known, the filer could state “00/00/1969,” which indicates that the subject was born sometime in 1969. “N/A” would not be appropriate in this case. EIN entries of 000000000 are invalid. Other common errors will be discussed in the December issue of the USA PATRIOT Act Monitor. Also see the section on completing the SAR narrative in section 2.1-4 of Banoun and Ensminger, Money Laundering, Terrorism and Financial Institutions, where prior guidance regarding SAR filing requirements is discussed in detail.

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