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

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6/14/2006 FinCEN Elaborates on 30-Day Filing Requirement

FinCEN has released its tenth issue of The SAR Activity Review: Trends, Tips & Issues. This issue focuses on money services businesses.  As has been true in prior Reviews, FinCEN answers questions that have been brought to its attention.  One question concerns the requirement that SARs must be filed within 30 calendar days from the date of initial detection of facts that may constitute a basis for filing a SAR.  But what is the date of initial detection?  FinCEN explains:
 
The phrase “initial detection” should not be interpreted as meaning the moment a transaction is highlighted for review. There are a variety of legitimate transactions that could raise a red flag simply because they are inconsistent with an accountholder’s normal account activity. A real estate investment (purchase or sale), the receipt of an inheritance, or a gift, for example, may cause an account to have a significant credit or debit that would be inconsistent with typical account activity. The institution’s automated account monitoring system or initial discovery of information, such as system-generated reports, may flag the transaction; however, this should not be considered initial detection of potential suspicious activity. The 30-day (or 60-day) period does not begin until an appropriate review is conducted and a determination is made that the transaction under review is “suspicious” within the meaning of the SAR regulations.
 
A review, according to FinCEN, must be initiated promptly on identification of unusual activity that warrants investigation.  The review must be completed within a “reasonable period of time.” FinCEN declines to be more specific, stating that what constitutes a reasonable period of time varies with the facts and circumstances.  The 10th SAR Review will be the subject of an upcoming article in the Monitor.

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