In the US banks file SARs with FinCEN; in the UK reports go to the National Crime Agency; in the EU they go to the national FIU. The firm must not tell the customer about the report (tipping off), and reporters are generally protected from liability for filing in good faith. Filing deadlines and thresholds differ by country.
Example
A bank notices a customer receiving many small transfers from unrelated people and immediately wiring them abroad, cannot find a business reason, and files a report.
Where it appears in the exams
This topic is relevant for CAMS, CFCS.
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SAR and STR reporting explained: when to file, deadlines, tipping off and safe harbour
Related terms
- Tipping off: Tipping off is telling a customer, or anyone else, that a suspicious activity report has been or will be filed, or that an investigation is under way.
- Financial intelligence unit (FIU): A financial intelligence unit is the national agency that receives, analyses and shares suspicious activity reports and other financial information to fight money laundering and terrorist financing.
- Transaction monitoring: Transaction monitoring is the ongoing review of customer transactions to spot activity that is unusual or inconsistent with what is known about the customer, so that it can be investigated and, if needed, reported.
Source: FATF Recommendation 20; US 31 CFR 1020.320; UK Proceeds of Crime Act 2002. Independent explanation for study purposes, not legal advice.