Suspicious Activity Reports (SARs)
Certain financial institutions and other businesses subject to the US AML program requirements must file (SARs).1 SARs are generally required when a financial institution “knows, suspects, or has reason to suspect” that a transaction conducted or attempted by, at, or through the financial institution involving at least $5,000 ($25,000 or more for banks when the suspect is unknown):
- involves money laundering;
- is designed to evade any BSA regulation or requirement;
- has no business or apparently lawful purpose, or is not the type of transaction in which that customer would be expected to engage; or
- involves the use of the financial institution to facilitate criminal activity.2
There are very few exceptions to the SAR filing requirements, so it is important to analyze the situation in detail in order to ascertain whether an exception may apply.
SARs must generally be filed in the BSA E-Filing System within 30 calendar days after the initial detection of facts that may trigger the SAR reporting requirement. Note that the 30-day period may begin after a reasonable amount of time has elapsed to enable the investigation of a transaction flagged by the institution’s monitoring system. The fact that a SAR has been filed is strictly confidential, as is the information contained in the SAR; it should not be shared with anyone outside the reporting institution.
Filing a SAR protects the financial institution and its officers, directors, and employees from civil—but not criminal—liability under a safe harbor provision of the BSA.3
A financial institution must determine whether it will terminate the customer relationship to prevent further potential liability for money laundering. Generally, the entity should consult the appropriate regulator to determine whether the account should be kept open for investigative purposes.
Currency Transaction Reporting (CTR)
Banks, broker-dealers, futures commission merchants, introducing brokers in commodities transactions, mutual funds, money services businesses, casinos, and card clubs are required to file CTRs with FinCEN on all transactions involving physical currency in excess of $10,000 (or its foreign equivalent). The transaction must be conducted by, through, or to the financial institution, by or on behalf of the same person, on the same day.4 Note that the regulations prohibit the structuring of transactions over multiple days, using multiple financial institutions, or in smaller amounts for the purpose of evading the reporting requirement.
Report of International Transportation of Currency or Monetary Instruments (CMIR)
All persons and entities that transport, mail, or ship (or cause to be transported, mailed, or shipped) currency or monetary instruments in the amount of $10,000 or more (or the foreign equivalent) in or out of the United States must file a CMIR with Customs and Border Protection.5 Persons and entities include individuals, companies, corporations, partnership, associations, trusts, and estates. Monetary instruments include travelers checks, checks with the payee name blank, negotiable instruments, and securities in bearer form.6
Form 8300 – Reports of Cash Payments Over $10,000 Received in a Trade or Business
All persons and entities who receive more than $10,000 in cash in a single transaction or in related transactions that occur in whole or in part within the United States must file a Form 8300 with the Internal Revenue Service. A series of related transactions may take place over multiple days. When required, the Form 8300 must be filed within fifteen days of the cash transaction. The IRS Form 8300 Reference Guide is available here.
1 31 CFR Chapter X.
2 E.g., 31 CFR § 1023.320(a)(2)(iv) (broker-dealers).
3 31 CFR § 1020.320(f).
4 31 CFR § 1010.310-315.
5 31 CFR § 1010.340.
6 31 CFR § 1010.100(dd).