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FEDERAL RESERVE BANK
OF NEW YORK
March 7,1996

Simplified Reporting of Suspected Crimes
and Suspicious Activities

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To the Chief Executive Officers of All State Member Banks, Bank Holding
Companies, Uninsured State-Chartered Agencies of Foreign Banks, and
Edge and Agreement Corporations, in the Second Federal Reserve District:

Following is the text o f a statem ent issued by the B oard o f Governors of the Federal Reserve
System:

The Federal Reserve Board has announced a final rule to simplify the process for reporting sus
pected crimes and suspicious activities by banking organizations supervised by the Federal Reserve.
The final rule is effective April 1, 1996.
The rule was developed by the Federal Reserve, the other federal banking agencies, and the
Financial Crimes Enforcement Network of the U.S. Department of the Treasury (FinCEN).
The rule significantly reduces reporting burdens, while at the same time enhancing the ability of
law enforcement authorities to investigate and prosecute criminal offenses involving our Nation’s finan
cial institutions.
The new suspicious activity reporting rule:
• combines the current criminal referral rules of the Federal Reserve and the other federal bank
ing agencies with FinCEN’s suspicious activity reporting requirements relating to money laun
dering offenses;
• creates a uniform reporting form and instructions — the new “Suspicious Activity Report” or
“SAR” — for use by banking organizations to report all violations;
• requires the filing of only one form with FinCEN;
• enables a filer, through computer software that will be provided by the Federal Reserve to all of
the domestic and foreign banking organizations it supervises, to prepare a SAR on a computer
and file it by magnetic media, such as a computer disc or tape;
• raises the thresholds for mandatory reporting in two categories and creates a threshold for the
reporting of suspicious transactions related to money laundering and violations of the Bank
Secrecy Act in order to reduce the reporting burdens of banking organizations; and
• emphasizes recent changes in the law that provide a safe harbor from civil liability to banking
organizations and their employees for reporting of known or suspected criminal offenses or sus
picious activities.
Substantially identical suspicious activity reporting rules are being issued by FinCEN, the Office
of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift
Supervision, and the National Credit Union Administration.

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Enclosed is the text of the B oard’s ruling on this m atter, as published in the F e d e ra l R egister.
A lso enclosed is a copy of the SAR, the new uniform reporting form , for your use beginning on
A pril 1. You m ay m ake duplicates of the SAR for your institution’s use. The SAR replaces the
Federal R eserve’s form er crim inal referral form. The instructions included w ith the SAR set forth
all o f the pertinent rules relating to your obligations to report known or suspected federal crim inal
law violations and suspicious activities.
Through the use o f the new SAR, the reporting burden o f all financial institutions is substan
tially reduced. First, the reporting thresholds for non-insider related offenses are significantly
increased. Specifically, the threshold for reporting know n or suspected violations involving non
insider suspects increases from $1,000 to $5,000, and the threshold for reporting known or sus
pected violations w here the institution cannot identify a suspect increases from $5,000 to $25,000.
In addition, for the first time, there is a $5,000 threshold for reporting suspicious transactions relat
ed to m oney laundering and violations o f the Bank Secrecy Act. Further, you no longer have to sub
m it copies o f crim inal referrals to several different federal agencies, but, instead, you only need to
file the SAR with one agency, FinCEN. Last, you no longer have the burden o f including support
ing docum entation w ith the report. Instead, you are required to identify and keep, for a period o f
five years, all supporting docum entation relating to a SA R and, if requested by law enforcem ent
authorities, m ake the docum entation available to them.
In order to further assist banking organizations w ith their new reporting obligations, a soft
ware package has been developed to allow them to com plete a SA R using a com puter rather than
com pleting a paper form. Using the SAR software will allow a banking organization to have the
SAR appear on screen, insert the appropriate inform ation and then store the com pleted SAR on a
disk, w hich can be m ailed to FinCEN , in lieu o f the paper form. M ultiple com pleted SARs can be
stored on one disk and then mailed. On-screen instructions, various help m enus and a w ritten
instruction m anual will easily guide a user through the SA R software. For those banking organiza
tions that so desire, the SAR software will create a database o f all com pleted SARs.
Prior to the A pril 1, 1996 effective date, the Federal R eserve will provide to each state m em
ber bank, uninsured state chartered branch and agency o f a foreign bank, Edge and A greem ent cor
poration, as w ell as to each bank holding com pany that files a F.R. Y-9C or that owns or controls
m ore than one bank subsidiary, a package containing the SA R software, in both W indows and DOS
versions, along w ith the instruction manual. Those bank holding com panies not receiving the SAR
software and instruction manual from *he Federal R eserve will have access to the SA R-related
m aterials because their subsidiary banks will receive copies o f them from either the Federal D eposit
Insurance Corporation or the Office of the C om ptroller o f the Currency.
We strongly encourage those receiving the software to use it to com plete SARs and file them
on disk, rather than using the paper form. Use of the SAR software will significantly ease report
ing obligations and ensure that accurate inform ation is obtained.

For banking organizations that currently subm it Currency Transaction R eports (CTRs) using
m agnetic tape, you should have already received inform ation regarding the inclusion o f SARs on
the m agnetic tape along with the CTRs. If you have not yet received such inform ation you may con
tact the Internal Revenue S ervice’s Detroit C om puting C enter at (313) 234-1446.
In the near future, you will be able to retrieve the SAR softw are from the Federal R eserve’s
w eb site on the World W ide Web at “http://w w w .bog.frb.fed.us”.

We emphasize that after April 1,1996, banking organizations can only report known or
suspected criminal law violations and suspicious activities pursuant to the Board’s, the other
banking agencies’, and Treasury’s regulations by using a paper copy of the enclosed SAR
form or the computer software that is provided to you by the Board or the IR S’s Detroit
Computing Center. No other reports, such as those prepared by internally generated com
puter programs, are permitted.
In the event you have any questions concerning the new suspicious activity reporting regula
tions, please contact Joseph L. Galati II, Exam ining Officer (212-720-7946) or Joseph E. Buckley,
Jr., Supervising Exam iner (212-720-2393), o f the A dvisory and Technical Services Function.

C h r is t in e M. C u m m in g ,

S e n io r V ice P re sid e n t.

Enclosures

/q r ,O 8 * H O 0

Monday
February 5,1996

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Federal Reserve
System
Regulations H, K, and Y
12 CFR Parts 208, 211, and 225
Docket No. R-0885

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Simplified Reporting of
Suspected Crimes and
Suspicious Activities

Printed in N e w York, from F ederal R egister, Internet address
h ttp ://w w w .a c c e ss.g p o .g o v /

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Federal Register / Vol. 61, No. 24 / Monday, February 5, 1996 / Rules and Regulations

FEDERAL RESERVE SYSTEM

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12 CFR Parts 208, 211 and 225
[Regulations H, K and Y; Docket No. R -

088 S]

Membership of State Banking
Institutions in the Federal Reserve
System; International Banking
Operations; Bank Holding Companies
and Change in Control; Reports of
Suspicious Activities Under Bank
Secrecy Act

Board of Governors of the
Federal Reserve System.
ACTION: Final rule.

agency:

The Board of Governors of the
Federal Reserve System (Board) is
amending its regulations on the
reporting of known or suspected
criminal and suspicious activities by the
domestic and foreign banking
organizations supervised by the Board.
This final rule streamlines reporting
requirements by providing that such an
organization file a new Suspicious
Activity Report (SAR) with the Board
and the appropriate federal law
enforcement agencies by sending a SAR
to the Financial Crimes Enforcement
Network of the Department of the
Treasury (FinCEN) to report a known or
suspected criminal offense or a
transaction that it suspects involves
money laundering or violates the Bank
Secrecy Act (BSA).
EFFECTIVE DATE: April 1, 1996.

SUMMARY:

FOR FURTHER INFORMATION CONTACT:

Herbert A. Biern, Deputy Associate
Director, Division of Banking
Supervision and Regulation, (202) 4522620, Richard A. Small, Special
Counsel, Division of Banking
Supervision and Regulation, (202) 4525235, or Mary Frances Monroe, Senior
Attorney, Division of Banking
Supervision and Regulation, (202) 4525231. For the users of
Telecommunications Devices for the
Deaf (TDD) only, contact Dorothea
Thompson, (202) 452-3544, Board of
Governors of the Federal Reserve
System, 20th Street and Constitution
Avenue, NW., Washington, DC 20551.
SUPPLEMENTARY INFORMATION:

Background
The Board, the Office of the
Comptroller of the Currency (OCC), the

Federal Register / Vol. 61, No. 24 / Monday, February 5, 1996 / Rules and Regulations
banking organizations it supervises, to
> Federal Deposit Insurance Corporation
prepare a SAR on a computer and file
(FDIC), and the Office of Thrift
Supervision (OTS) (collectively, the
it by magnetic media, such as a
computer disc or tape;
Agencies) have issued for public
(7) Establish a database that will be
* comment substantially similar proposals
■
accessible to federal and state financial
to revise their regulations on the
institutions regulators and law
reporting of known or suspected
enforcement agencies;
criminal conduct and suspicious
(8) Raise the thresholds for mandatory
activities. The Department of the
reporting in two categories and create a
Treasury, through FinCEN, has issued
threshold for the reporting of suspicious
for public comment a substantially
similar proposal to require the reporting transactions related to money
laundering and violations of the BSA in
of suspicious transactions relating to
order to reduce the reporting burdens on
money laundering activities.
banking organizations; and
The Board’s proposed regulation (60
(9) Emphasize recent changes in the
. FR 34481, July 3, 1995) noted that the
interagency Bank Fraud Working Group, law that provide a safe harbor from civil
liability to banking organizations and
* consisting of representatives from the
their employees for reporting of known
Agencies, the National Credit Union
or suspected criminal offenses or
* Administration, law enforcement
agencies, and FinCEN, has been working suspicious activities, by filing a SAR or
* on the development of a single form, the by reporting by other means, and
provide criminal sanctions for the
SAR, for the reporting of known or
unauthorized disclosure of such report
suspected federal criminal law
violations and suspicious activities. The to any party involved in the reported
transaction.
Board’s proposed regulation, as well as
those proposed by the OCC, FDIC, OTS
Section-by-Section Analysis
and FinCEN, attempted to simplify and
Under the Board’s final rule, state
, t clarify reporting requirements and
reduce banking organizations’ reporting member banks, bank holding companies
* burdens by raising mandatory reporting and their nonbank subsidiaries, most
U.S. branches and agencies and other
thresholds for criminal offenses and by
offices of foreign banks, and Edge and
requiring the filing of only one report
Agreement corporations need only
with FinCEN.
follow SAR instructions for completing
The Board’s final rule adopts its
and filing the SAR to be in compliance
proposal with a few additional changes
with the Board’s and FinCEN’s reporting
that have been made in response to the
requirements. The following section-bycomments received. The changes will
section analysis correlates the specific
* result in burden reductions even greater
SAR instruction number with the
than those that were proposed. The
applicable section of the Board’s final
Board’s, the other Agencies’, and
rule:
FinCEN’s final rules relating to the
Section 208.20(a) (Instruction No. 1
reporting of suspicious activities are
on the SAR) provides that a state
> now substantially identical, and they:
member bank must file a SAR when it
(1) Combine the current criminal
detects a known or suspected violation
>referral rules of the federal financial
institutions regulatory agencies with the of federal law or a suspicious activity
Department of the Treasury’s suspicious pertinent to a money laundering offense.
Section 208.20(b) provides pertinent
activity reporting requirements;
definitions.
,
(2) Create a uniform reporting form,
Sections 208.20(c) (1), (2), and (3)
the new Suspicious Activity Report or
(Instructions 1 a., b., and c. on the SAR)
* SAR, for use by banking organizations
instruct a state member bank to file a
in reporting known or suspected
SAR with FinCEN in order to comply
v criminal offenses, or suspicious
with the requirement to notify federal
activities related to money laundering
law enforcement agencies if the bank
and violations of the BSA;
detects any known or suspected federal
(3)
Provide a system whereby a
criminal violation, or pattern of
banking organization need only refer to
violations, committed or attempted
the SAR and its instructions in order to
against the bank, or involving one or
complete and file the form in
more transactions conducted through
conformance with the Agencies’ and
the bank, and the bank believes it was
FinCEN’s reporting regulations;
(4)
Require the filing of only one forman actual or potential victim of a crime,
or was used to facilitate a crime. If the
with FinCEN;
bank has a substantial basis for
identifying one of its insiders or other
(5)
Eliminate the need to file
institution-affiliated parties in
supporting documentation with a SAR;
connection with the known or
(6)
Enable a filer, through computer
suspected crime, reporting is required
software that will be provided by the
, Board to all of the domestic and foreign

4339

regardless of the dollar amount
involved. If the bank can identify a non
insider suspect, the applicable
transaction threshold is $5,000. In cases
in which no suspect can be identified,
the applicable transaction threshold is
$25,000. These sections were not
changed from the proposed regulations
published for public comment in July
1995.
Section 208.20(c)(4) (Instruction 1 d.
on the SAR) instructs a state member
bank to file a SAR with FinCEN in order
to comply with the requirement to
notify federal law enforcement agencies
and the Department of the Treasury of
transactions involving $5,000 or more in
funds or other assets when the bank
knows, suspects or has reason to suspect
that the transaction: (i) Involves money
laundering, (ii) is designed to evade any
regulations promulgated under the Bank
Secrecy Act, or (iii) has no business or
apparent lawful purpose or is not the
sort in which the particular customer
normally engages and, after examining
the available facts, the bank knows of no
reasonable explanation for the
transaction. Section 208.20(c)(4) has
been modified in the final rule to reflect
comments received on the proposal.
Most notably, the circumstances under
which a transaction should be reported
under this section were clarified, and a
reporting threshold of $5,000 was
added.
Section 208.20(c)(4) recognizes the
emerging international consensus that
the efforts to deter, substantially reduce,
and eventually eradicate money
laundering are greatly assisted by the
reporting of suspicious transactions by
banking organizations. The
requirements of this section comply
with the recommendations adopted by
multi-country organizations in which
the United States is an active
participant, including the Financial
Action Task Force of G-7 nations and
the Organization of American States,
and are consistent with the European
Community’s directive on preventing
money laundering through financial
institutions.
Section 208.20(d) (Instruction 2 on
the SAR) provides that SARs must be
filed within 30 calendar days of the
initial detection of the criminal or
suspicious activity. An additional 30
days is permitted in order to enable a
bank to identify a suspect, but in no
event may a SAR be filed later than 60
days after the initial detection of the
reportable conduct. The Board and law
enforcement must be notified in the case
of a violation requiring immediate
action, such as an on-going violation.
These reporting requirements were not
changed from the July 1995 proposal,

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Federal Register / Vol. 61, No. 24 / Monday, February 5, 1996 / Rules and Regulations

with the exception of the addition of the
requirement that the Board be notified
about on-going offenses requiring
immediate notification to law
enforcement authorities.
Section 208.20(e) encourages a state
member bank to file a SAR with state
and local law enforcement agencies.
This section is unchanged from the July
1995 proposal.
Section 208.20(f) (Instruction 3 on the
SAR) provides that a state member bank
need not file a SAR for an attempted or
committed burglary or robbery reported
to the appropriate law enforcement
agencies. In addition, a SAR need not be
filed for missing or counterfeit securities
that are the subject of a report pursuant
to Rule 17f— under the Securities
1
Exchange Act of 1934. This section of
the final rule was not modified from the
version published for public comment
in July 1995.
Section 208.20(g) requires that a state
member bank retain a copy of the SAR
and the original or business record
equivalent of supporting documentation
for a period of five years. The section
also requires that a state member bank
identify and maintain supporting
documentation in its files and that the
bank make available such
documentation to law enforcement
agencies upon their request. The Board
made three changes to this section from
the version published for public
comment in July 1995. First, the record
retention period was shortened from 10
years to five years. Second, provision
was made for the retention of business
record equivalents of original
documents, such as microfiche and
computer imaged record systems, in
recognition of modern record retention
technology. The third change involves
the clarification of a state member
bank’s obligation to provide supporting
documentation upon request to law
enforcement officials. Supporting
documentation is deemed filed with a
SAR in accordance with this section of
the Board’s final rule; as such, law
enforcement authorities need not make
their access requests through subpoena
or other legal processes.
Section 208.20(h) requires the
management of a state member bank to
report the filing of all SARs to the board
of directors of the bank, or a designated
committee thereof. No change was made
from the July 1995 proposal.
Section 208.20(i) reminds a state
member bank and its institutionaffiliated parties that failure to file a
SAR may expose them to supervisory
action. No change from the July 1995
proposal was made.
Section 208.20(j) provides that SARs
are confidential. Requests for SARs or

the information contained therein
should be declined. The final rule also
adds a requirement that a request for a
SAR or the information contained
therein should be reported to the Board.
With the exception of the added
requirement that requests for SARs be
reported to the Board, no changes were
made to this section from the July 1995
proposal.
Section 208.20(k) sets forth the safe
harbor provisions of 31 U.S.C. 5318(g).
This new section, which was added to
the final rule as the result of many
comments concerning this important
statutory protection for banking
organizations, states that the safe harbor
provisions of the law are triggered by a
report of known or suspected criminal
violations or suspicious activities to law
enforcement authorities, regardless
whether the report is made by the filing
of a SAR in accordance with the Board’s
rules or for other reasons by different
means.
Sections 211.8, 211.24(f), and 225.4(f)
of the Board’s rules relating to the
activities of foreign banking
organizations and bank holding
companies have not been changed in a
substantive manner. Only the references
in the sections to “criminal referral
forms” have been changed to reflect the
new name for the reporting form, the
SAR. The SAR filing requirements, as
well as the safe harbor and notification
prohibition provisions of 31 U.S.C.
5318(g), continue to be applicable to all
foreign banking organizations and bank
holding companies and their nonbank
subsidiaries supervised by the Federal
Reserve through these provisions.
Comments Received
The Board received letters from 44
public commenters. Comments were
received from 15 community banks, 13
multinational or large regional banks,
eight trade and industry research
groups, seven Federal Reserve Banks
and one law firm.
The large majority of commenters
expressed general support for the
Board’s proposal. None of the
commenters opposed the proposed new
suspicious activity reporting rules. A
number of suggestions and requests for
clarification were received. They are as
follows.
Criminal Versus Suspicious Activities
Many commenters expressed
confusion over the difference between
the known or suspected criminal
conduct that would be subject to the
dollar reporting thresholds (provided
such conduct does not involve an
institution-affiliated party of the
reporting entity) and the suspicious

activities that would be reported
regardless of dollar amount. Section
208.20(c)(4) has been revised to add a
$5,000 reporting threshold and to clarify
that the suspicious activity must relate
to money laundering and Bank Secrecy
Act violations. A threshold for the
reporting of suspicious activities was
added to reduce further the reporting
burdens on banking organizations.
Reporting of Crimes Under State Law
A number of commenters requested
clarification of whether activities
constituting crimes under state law, but
not under federal law, should be
reported on the SAR. The Board
continues to encourage banking
organizations to refer criminal and
suspicious activities under both federal
and state law by filing a SAR. Under the
new reporting system designed by the
Board, the other Agencies, and FinCEN,
state chartered banking organizations
should be able to fulfill their state
reporting obligations by filing a SAR
with FinCEN.
Safe Harbor Protections; Potential
Liability Under Federal and State Laws
Some commenters expressed the
concern that banking organizations and
their institution-affiliated parties could
be liable under federal and state laws,
such as the Right to Financial Privacy
Act, for filing SARs with respect to
conduct that is later found not to have
been criminal. Another concern was
that the filing of SARs with state and
local law enforcement agencies would
subject filers to claims under state law.
Both of these concerns are addressed by
the scope of the safe harbor protections
provided in 31 U.S.C. 5318(g).
The Board is of the opinion that the
safe harbor statute is broadly defined to
include the reporting of known or
suspected criminal offenses or
suspicious activities, by filing a SAR or
by reporting by other means, with state
and local law enforcement authorities,
as well as with the Agencies and
FinCEN.
A few commenters requested that the
Board make explicit the safe harbor
protections of 31 U.S.C. 5318(g)(2) and
(3) on the SAR. They are included in
new Section 208.20(k) of this rule and
on the form.
Record Retention
Several commenters expressed the
view that the 10-year period for the
retention of records in Section 208.20(g)
was excessive, especially in light of a
five-year record retention requirement
for records that is contained in the Ban
Secrecy Act. The 10-year period in the
Board’s proposed regulation would have

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continued the Board’s existing record
retention requirement for criminal
referral forms. However, in recognition
of the potential burden of document
retention on Financial institutions, the
Board has limited the record retention
period to five years.
Dollar Thresholds
A few commenters encouraged the
Board to raise the dollar thresholds for
known or suspected criminal conduct
by non-insiders, or to establish a dollar
threshold for insiders. The Board has
considered these comments, but at this
time it believes that the thresholds meet
y and properly balance the dual concerns
of prosecuting criminal activity
involving banking organizations and
minimizing the burden on banking
organizations. With respect to the
suggestion that the Board adopt a dollar
threshold for insider violations, it is
noted that insider abuse has long been
a key concern and focus of enforcement
efforts at the Board. With the
development of a new sophisticated
automated database, the Board and law
enforcement agencies will have the
benefit of a comprehensive and easily
accessible catalogue of known or
suspected insider wrongdoing. The
Board does not wish to limit the
information it receives regarding insider
wrongdoing. Some petty crimes, for
example, repetitive thefts of small
amounts of cash by an employee who
frequently moves between banking
organizations, may warrant enforcement
action or criminal prosecution.
One commenter suggested an indexed
threshold, based on the regional
differences in the various dollar
thresholds below which the federal,
staie, and local prosecutors generally
decline prosecution. While the Board
recognizes that there may be regional
variations in the dollar amount of
financial crimes generally prosecuted,
the Board’s concern is to place the
relevant information in the hands of the
investigating and prosecuting
authorities. The prosecuting authorities
then may consider whether to pursue a
V
particular matter. In the Board’s view,
the dollar thresholds proposed and
adopted in this final rule best balance
the interests of law enforcement and
banking organizations. The Board also
believes that indexed thresholds could
create more confusion than benefit to
banking organizations.
Commenters also suggested the
creation of a dollar threshold for the
reporting of suspicious activities
relating to money laundering offenses. A
$5,000 threshold has been established
for reporting of such suspicious
activities.

Questions were raised regarding the
permissibility of filing SARs in
situations in which the dollar
thresholds for known or suspected
criminal conduct or suspicious activity
are not met and the applicability of the
safe harbor provisions of 31 U.S.C.
5318(g) to such non-mandatory filings.
It is the opinion of the Board that the
safe harbor provisions of 31 U.S.C.
5318(g) cover all reports of suspected or
known criminal violations and
suspicious activities to law enforcement
authorities, regardless of whether such
reports are filed pursuant to the
mandatory requirements of the Board’s
regulations or are voluntary.
Notification of On-Going Violations and
of State and Local Law Enforcement
Authorities
Proposed Section 208.20(d) required a
banking organization to notify
immediately the law enforcement
authorities in the event of an on-going
violation. Section 208.20(e) encourages
the filing of a copy of the SAR with state
and local law enforcement agencies in
appropriate cases. This requirement and
guidance were found by some
commenters to be unclear as to when
immediate notification or the filing of
the SAR with state and local authorities
would be required. The Board wishes to
clarify that immediate notification is
limited to situations involving on-going
violations, for example, when a check
kite or money laundering has been
detected and may be continuing. It is
impossible for the Board to contemplate
all of the possible circumstances in
which it might be appropriate for a
banking organization to advise state and
local law enforcement authorities.
Banking organizations should use their
best judgment regarding when to alert
them regarding on going criminal
offenses or suspicious activities.
Supporting Documentation
The proposed requirements that an
institution maintain “related”
documentation and make “supporting”
documentation available to the law
enforcement agencies upon request were
criticized as inconsistent and vague.
One commenter questioned whether the
Board intended a substantive difference
in meaning between “related” and
“supporting.” As a substantive
difference is not intended, the Board has
referred to “supporting” documentation
in the final rule in reference both to the
maintenance and production
requirements. The Board believes that
the use of the word “supporting” is
more precise and limits the scope of the
information which must be retained to
that which would be useful in proving

that the crime has been committed and
by whom it has been committed. As to
the criticism that the meaning of
“related” or “supporting”
documentation is vague, it is anticipated
that banking organizations will use their
judgment in determining the
information to be retained. It is
impossible for the Board to catalogue
the precise types of information covered
by this requirement, as it necessarily
depends upon the facts of a particular
case.
Scope of Confidentiality Requirement
One commenter correctly noted that
the proposed regulation is unclear as to
whether the confidentiality requirement
applies only to the information
contained on the SAR itself, or whether
the requirement extends to the
“supporting” documentation. The Board
takes the position that only the SAR and
the fact that supporting documentation
to a SAR exists are subject to the
confidentiality requirements of 31
U.S.C. 5318(g). The supporting
documentation itself is not subject to
the confidentiality provisions of 31
U.S.C. 5318(g). The safe harbor
provisions of 31 U.S.C. 5318(g),
however, apply to the SAR and
supporting documentation, as set forth
in Section 208.20(k).
Provisions of Supporting
Documentation to Law Enforcement
Authorities Upon Request
Many commenters noted that the
guidance provided in the Board’s
proposed regulation regarding giving
supporting documentation to law
enforcement agencies upon their request
after the filing of a SAR was unclear or
contrary to law. Some questioned
whether law enforcement agencies
would still need to subpoena relevant
documents from a banking organization.
The Board’s regulation requires banking
organizations filing SARs to identify,
maintain and treat the documentation
supporting the report as if it were
actually filed with the SAR. This means
that subsequent requests from law
enforcement authorities for the
supporting documentation relating to a
particular SAR does not require the
service of a subpoena or other legal
processes normally associated with
providing information to law
enforcement agencies.
Civil Litigation
The Board was encouraged to adopt
regulations that would make SARs
undiscoverable in civil litigation in
order to avoid situations in which a
banking organization could be ordered
by a court to produce a SAR in civil

4342

Federal Register / Vol. 61, No. 24 / Monday, February 5, 1996 / Rules and Regulations

litigation and could be confronted with
the prospect of having to choose
between being found in contempt or
violating the Board’s rules. In the
opinion of the Board, 31 U.S.C. 5318(g)
precludes the disclosure of SARs. The
final rule requires a banking
organization that receives a subpoena or
other request for a SAR to notify the
Board so that the Board may, if
appropriate, intervene in litigation or
seek the assistance of the U.S.
Department of Justice.
Maintenance of Originals
Proposed Section 208.20(g) required
the maintenance of supporting
documentation in its original form. A
number of commenters noted that
electronic storage of documents is
becoming the rule rather than the
exception, and that requiring the storage
of paper originals would impose undue
burdens on financial institutions.
Moreover, some records are retained
only in a computer database. The
proposed regulation reflected the
concerns of the law enforcement
agencies that the best evidence be
preserved. However, upon further
consideration, the Board wishes to
clarify that the electronic storage of
original documentation related to the
filing of a SAR is permissible. In
addition, the Board recognizes that a
banking organization will not always
have custody of the originals of
documents and that some documents
will not exist at the organization in
paper form. In those cases, preservation
of the best available evidentiary
documents, for example, computer disks
or photocopies, should be acceptable.
This has been reflected in the final rule
by changing the reference to original
documents to “original documents or
business record equivalents.”
Investigation and Proof Burdens
One commenter expressed the
concern that a banking organization
would need to establish probable cause
before reporting crimes for which an
essential element of the proof of the
crime was the intent of the actor. The
Board does not intend that banking
organizations assume the burden of
proving illegal conduct; rather, banking
organizations are required to report
known or suspected crimes or
suspicious activities in accordance with
this final rule.
Supplementary or Corrective
Information; Reporting of Multiple
Crimes or Suspects
Material information that
supplements or corrects a SAR should
be filed with FinCEN by means of a

subsequent SAR. The first page of the
SAR provides boxes for the reporter to
indicate whether the report is an initial,
a corrected or a supplemental report.
One commenter requested guidance
on the reporting of multiple crimes or
related crimes committed by more than
one individual. The instructions to the
SAR contemplate that additional
suspects may be reported by means of
a supplemental page. Likewise, multiple
crimes committed by a suspect may be
reported by means of multiple check
offs on the SAR, or if needed, by a
written addendum to the SAR. In the
event that related crimes have been
committed by more than one person, a
description of the related crimes may be
made by addendum to the SAR. The
Board encourages filers to make a
complete report of all known or
suspected criminal or suspicious
activity. The SAR may be supplemented
in order to facilitate a complete
disclosure.
Calculation of Time Frame for Reporting
A number of commenters requested
that the Board clarify the application of
the deadline for filing SARs. The
Board’s proposed regulation used the
broadest possible language to set the
time frames for the reporting of known
or suspected criminal offenses and
suspicious activities in order to best
guide reporting institutions. Absolute
deadlines for the filing of SARs are
important to the investigatory and
prosecutorial efforts of law enforcement
authorities. It is expected that banking
organizations will meet the filing
deadlines once conduct triggering the
reporting requirements is identified.
Further clarification of the time frames
is not needed in the Board’s view.
Board Notification Requirements
Several commenters expressed
general support for the modification of
the reporting requirement that permits
reporting of SARs to a committee of the
board. As a matter of clarification,
notification of a committee of the board
relieves the banking organization of the
obligation to disclose the SARs filed to
the entire board. It would be expected,
however, that the appointed committee,
such as the audit committee, would
report to the full board at regular
intervals with respect to routine matters
in the same manner and to the same
extent as other committees report at
board meetings. With respect to serious
crimes or insider malfeasance, the
appointed committee likely should
consider it appropriate to make more
immediate disclosure to the full board.
Some larger banking organizations
expressed the view that prompt

disclosure of SARs to the board or a
committee would impose a serious
burden because larger organizations
typically file a larger number of criminal
referral forms (now, SARs). While the
Board acknowledges that larger
institutions may have more SARs to
report to the board or a committee, this
does not alter the directors’ fiduciary
obligation to monitor, for example, the
condition of the institution and to take
action to prevent losses. The final
regulation does not dictate the content
of the board or committee notification,
and, in some cases, such as when
relatively minor non-insider crimes are
to be reported, it may be completely
appropriate to provide only a summary
listing of SARs filed. The Board expects
the management of banking
organizations to provide a more detailed
notification to the boards or committees
of SARs involving insiders or a potential
material loss to the institutions.
Information Sharing
Commenters suggested that the final
regulations should somehow facilitate
the sharing of information among
banking organizations in order to better
detect new fraudulent schemes. It is
anticipated that the Treasury
Department, through FinCEN, and the
Agencies, will keep reporting entities
apprised of recent developments and
trends in banking-related crimes
through periodic pronouncements,
meetings, and seminars.
Single Filing Requirement;
Acknowledgement of Filings
Some commenters requested
clarification of the single form filing
requirement. The Board reiterates that
the filing of a SAR with FinCEN is the
only filing that is required. Federal and
state law enforcement and bank
supervisory agencies will have access to
the database created and maintained by
FinCEN on behalf of the Agencies and
the Department of Treasury; thus, a
single filing with FinCEN is all that is
required under the new reporting
system.
Commenters also requested that the
final rule permit the filing of SARs via
telecopier. Such filings are not
compatible with the system developed
by the Agencies and FinCEN. Banking
organizations can file the SAR via
magnetic media using the computer
software to be provided to all banking
organizations by the Board and each of
the other Agencies with respect to the
institutions they supervise. Larger
banking organizations that currently file
currency transaction reports via
magnetic tape with FinCEN may also
file SARs by magnetic tape.

Federal Register / Vol. 61, No. 24 / Monday, February 5, 1996 / Rules and Regulations
Regulatory Flexibility Act
The Board certifies that this final
regulation will not have a significant
financial impact on a substantial
number of small banks or other small
entities.
Paperwork Reduction Act
In accordance with Section 3506 of
the Paperwork Reduction Act of 1995
(44 U.S.C. Ch. 35; 5 CFR 1320 Appendix
A.l), the Board reviewed the rule under
the authority delegated to the Board by
the Office of Management and Budget.
The collection of information
requirements in this regulation are
found in 12 CFR 208.20, 211.8, 211.24,
and 225.4. This information is
mandatory and is necessary to inform
appropriate law enforcement agencies of
known or suspected criminal or
suspicious activities that take place at or
were perpetrated against financial
institutions. Information collected on
this form is confidential (5 U.S.C.
552(b)(7) and 552a(k)(2), and 31 U.S.C.
5318(g)). The federal financial
institution regulatory agencies and the
U.S. Department of Justice may use and
share the information. The respondents/
recordkeepers are for-profit financial
institutions, including small businesses.
The Federal Reserve may not conduct
or sponsor, and an organization is not
required to respond to, this information
collection unless it displays a currently
valid OMB control number. The OMB
control number is 7100-0212.
No comments specifically addressing
the hour burden estimate were received.
It is estimated that there will be
12,000 responses from state member
banks, bank holding companies, Edge
and agreement corporations, and U.S.
branches and agencies of foreign banks.
Both the new regulation and revisions
made to the proposed regulation and
reflected in this final rule simplify the
submission of the reporting form and
shorten the records retention
requirement. However, the same amount
of information will be collected under
the new rule. The burden per
respondent varies depending on the
nature of the criminal or suspicious
activity being reported. The Federal
Reserve estimates that the average
annual burden for reporting and
recordkeeping per response will remain
.6 hours. Thus the Federal Reserve
estimates the total annual hour burden
to be 7,200 hours. Based on an hourly
cost of $20, the annual cost to the public
is estimated to be $144,000.
Send comments regarding the burden
estimate, or any other aspect of this
collection of information, including
suggestions for reducing the burden, to:

Secretary, Board of Governors of the
Federal Reserve System, 20th and C
Streets, N.W., Washington, D.C. 20551
and to the Office of Management and
Budget, Paperwork Reduction Project
(7100-0212), Washington, D.C. 20503.
List of Subjects
12 CFR Part 208
Accounting, Agriculture, Banks,
banking, Confidential business
information, Crime, Currency, Federal
Reserve System, Flood insurance,
Mortgages, Reporting and recordkeeping
requirements, Securities.
12 CFR Part 211
Exports, Federal Reserve System,
Foreign banking, Holding companies,
Investments, Reporting and
recordkeeping requirements.
12 CFR Part 225
Administrative practice and
procedures, Banks, banking, Federal
Reserve System, Holding companies,
Reporting and recordkeeping
requirements, Securities.
For the reasons set forth in the
preamble, Parts 208, 211 and 225 of
chapter II of title 12 of the Code of
Federal Regulations are amended as set
forth below:
PART 208—MEMBERSHIP OF STATE
BANKING INSTITUTIONS IN THE
FEDERAL RESERVE SYSTEM
(REGULATION H)

1. The authority citation for 12 CFR
Part 208 continues to read as follows:
Authority: 12 U.S.C. 36, 248(a), 248(c),
321-338a, 371d, 461, 481-486, 601, 611,
1814, 1823Q), 1828(o), 1831o, 1831p-l, 3105,
3310, 3331-3351, and 3906-3909; 15 U.S.C.
78b, 781(b), 781(g), 781(i), 78o-4(c)(5), 78q,
78 q -l and 78w; 31 U.S.C. 5318; 42 U.S.C.
4102a, 4104a, 4104b, 4106, and 4128.

2. Section 208.20 is revised to read as
follows:
§ 208.20

Suspicious Activity Reports.

(a) Purpose. This section ensures that
a state member bank files a Suspicious
Activity Report when it detects a known
or suspected violation of Federal law, or
a suspicious transaction related to a
money laundering activity or a violation
of the Bank Secrecy Act. This section
applies to all state member banks.
(b) Definitions. For the purposes of
this section:
(1) FinCEN means the Financial
Crimes Enforcement Network of the
Department of the Treasury.
(2) Institution affiliated party means
any institution-affiliated party as that
term is defined in 12 U.S.C. 1786(r), or
1813(u) and 1818(b) (3), (4) or (5).

4343

(3)
SAR means a Suspicious Activity
Report on the form prescribed by the
Board.
(c)
SARs required. A state member
bank shall file a SAR with the
appropriate Federal law enforcement
agencies and the Department of the
Treasury in accordance with the form’s
instructions by sending a completed
SAR to FinCEN in the following
circumstances:
(1) Insider abuse involving any
amount. Whenever the state member
bank detects any known or suspected
Federal criminal violation, or pattern of
criminal violations, committed or
attempted against the bank or involving
a transaction or transactions conducted
through the bank, where the bank
believes that it was either an actual or
potential victim of a criminal violation,
or series of criminal violations, or that
the bank was used to facilitate a
criminal transaction, and the bank has
a substantial basis for identifying one of
its directors, officers, employees, agents
or other institution-affiliated parties as
having committed or aided in the
commission of a criminal act regardless
of the amount involved in the violation.
(2) Violations aggregating $5,000 or
more where a suspect can be identified.
Whenever the state member bank
detects any known or suspected Federal
criminal violation, or pattern of criminal
violations, committed or attempted
against the bank or involving a
transaction or transactions conducted
through the bank and involving or
aggregating $5,000 or more in funds or
other assets, where the bank believes
that it was either an actual or potential
victim of a criminal violation, or series
of criminal violations, or that the bank
was used to facilitate a criminal
transaction, and the bank has a
substantial basis for identifying a
possible suspect or group of suspects. If
it is determined prior to filing this
report that the identified suspect or
group of suspects has used an “alias,”
then information regarding the true
identity of the suspect or group of
suspects, as well as alias identifiers,
such as drivers’ license or social
security numbers, addresses and
telephone numbers, must be reported.
(3) Violations aggregating $25,000 or
more regardless o f a potential suspect.
Whenever the state member bank
detects any known or suspected Federal
criminal violation, or pattern of criminal
violations, committed or attempted
against the bank or involving a
transaction or transactions conducted
through the bank and involving or
aggregating $25,000 or more in funds or
other assets, where the bank believes
that it was either an actual or potential

4344

Federal Register / Vol. 61, No. 24 / Monday, February 5, 1996 / Rules and Regulations

victim of a criminal violation, or series
of criminal violations, or that the bank
was used to facilitate a criminal
transaction, even though there is no
substantial basis for identifying a
possible suspect or group of suspects.
(4)
T ra n sa ctio n s aggregatin g $ 5 ,0 0 0

than 60 calendar days after the date of
initial detection of a reportable
transaction. In situations involving
violations requiring immediate
attention, such as when a reportable
violation is on-going, the financial
institution shall immediately notify, by
or
telephone, an appropriate law
m ore th a t in v o lv e p o te n tia l m o n e y
enforcement authority and the Board in
la u n d erin g o r v io la tio n s o f th e B ank
S ecrecy A ct. Any transaction (which for addition to filing a timely SAR.
(e) R e p o rts to sta te a n d lo c a l
purposes of this paragraph (c)(4) means
a deposit, withdrawal, transfer between a u th orities. State member banks are
encouraged to file a copy of the SAR
accounts, exchange of currency, loan,
with state and local law enforcement
extension of credit, purchase or sale of
any stock, bond, certificate of deposit, or agencies where appropriate.
(f) E xception s. (1) A state member
other monetary instrument or
bank need not file a SAR for a robbery
investment security, or any other
or burglary committed or attempted that
payment, transfer, or delivery by,
through, or to a financial institution, by is reported to appropriate law
enforcement authorities.
whatever means effected) conducted or
(2) A state member bank need not file
attempted by, at or through the state
a SAR for lost, missing, counterfeit, or
member bank and involving or
stolen securities if it files a report
aggregating $5,000 or more in funds or
pursuant to the reporting requirements
other assets, if the bank knows,
of 17CFR240.17f-l.
suspects, or has reason to suspect that:
(g) R eten tio n o f records. A state
(i) The transaction involves funds
member bank shall maintain a copy of
derived from illegal activities or is
any SAR filed and the original or
intended or conducted in order to hide
business record equivalent of any
or disguise funds or assets derived from supporting documentation for a period
illegal activities (including, without
of five years from the date of the filing
limitation, the ownership, nature,
of the SAR. Supporting documentation
source, location, or control of such
shall be identified and maintained by
funds or assets) as part of a plan to
the bank as such, and shall be deemed
violate or evade any law or regulation or to have been filed with the SAR. A state
to avoid any transaction reporting
member bank must make all supporting
requirement under federal law;
documentation available to appropriate
(ii) The transaction is designed to
law enforcement agencies upon request.
evade any regulations promulgated
(h) N o tifica tio n to b o a rd o f directors.
under the Bank Secrecy Act; or
The management of a state member
(iii) The transaction has no business
bank shall prompdy notify its board of
or apparent lawful purpose or is not the directors, or a committee thereof, of any
sort in which the particular customer
report filed pursuant to this section.
would normally be expected to engage,
(i) C om plian ce. Failure to file a SAR
and the bank knows of no reasonable
in accordance with this section and the
explanation for the transaction after
instructions may subject the state
examining the available facts, including member bank, its directors, officers,
the background and possible purpose of employees, agents, or other institutionthe transaction.
affiliated parties to supervisory action.
(d)
T im e fo r reportin g. A state member (j) C o n fid en tia lity o f SARs. SARs are
confidential. Any state member bank
bank is required to file a SAR no later
subpoenaed or otherwise requested to
than 30 calendar days after the date of
disclose a SAR or the information
initial detection of facts that may
contained in a SAR shall decline to
constitute a basis for filing a SAR. If no
produce the SAR or to provide any
suspect was identified on the date of
information that would disclose that a
detection of the incident requiring the
SAR has been prepared or filed citing
filing, a state member bank may delay
this section, applicable law (e.g., 31
filing a SAR for an additional 30
U.S.C. 5318(g)), or both, and notify the
calendar days to identify a suspect. In
no case shall reporting be delayed more Board.

(k)
Safe harbor. The safe harbor
provisions of 31 U.S.C. 5318(g), which
exempts any state member bank that
makes a disclosure of any possible
violation of law or regulation from
liability under any law or regulation of
the United States, or any constitution,
law or regulation of any state or political
subdivision, covers all reports of
suspected or known criminal violations
and suspicious activities to law
enforcement and financial institution
supervisory authorities, including
supporting documentation, regardless of
whether such reports are filed pursuant
to this section or are filed on a voluntary
basis.
PART 211— INTERNATIONAL
BANKING OPERATIONS
(REGULATION K)

1. The authority citation for 12 CFR
Part 211 continues to read as follows:
Authority: 12 U.S.C. 221 et seq., 1818,
1841-etseg., 3101 et seq., 3901 et seq.
§§211.8 and 211.24

[Amended]

2. In §§211.8 and 211.24(f), remove
the words “criminal referral form” and
add, in their place, the words
“suspicious activity report”.
PART 225— BANK HOLDING
COMPANIES AND CHANGE IN BANK
CONTROL (REGULATION Y)

1. The authority citation for 12 CFR
Part 225 continues to read as follows:
Authority: 12 U.S.C. 1817(j)(13), 1818,
18311, 1831p-l, 1843(c)(8), 1844(b), 19720),
3 1 0 6 ,3 108,3310,3331-3351,3907,and
3909.
§225.4

[Amended]

2. In §225.4, the heading of paragraph
(1) is revised to read “ S u sp icio u s
A c tiv ity R e p o rt.”.

3. In §225.4(0, remove the words
“criminal referral form” and add, in
their place, the words “suspicious
activity report”.
By order of the Board of Governors of the
Federal Reserve System, January 30, 1996.
William W. Wiles,
Secretary of the Board.
[FR Doc. 96-2271 Filed 2-2-96 8:45 am]
BILLING CODE 6210-01-P

Suspicious
A ctivity Report

FRB:
FDIC:
OCC:
OTS:
NCUA:
TREASURY:

ALWAYS COMPLETE ENTIRE REPORT
1

OMB
OMB
OMB
OMB
OMB
OMB

No.
No.
No.
No.
No.
No.

7 1 0 0 -0 2 1 2
3 0 6 4 -0 0 7 7
1 5 5 7 -0 1 8 0
1 5 5 0 -0 0 0 3
3 1 3 3 -0 0 9 4
1 5 0 6 -0 0 0 1

Expires September 3 0 , 1 9 9 8

Check appropriate box:

a □

b □

Initial Report

Corrected Report

□

Supplemental Report

Reporting Financial Institution Information

Part I
2

FR 2 2 3 0
6 7 1 0 /0 6
8 0 1 0 -9 ,8 0 1 0 -1
1601
2362
TD F 9 0 -2 2 .4 7

Name of Financial Institution

Primary Federal Regulator

a □

d EHocc

b □

FDIC

e □

c □

Federal Reserve

NCUA

Address of Financial Institution

State

City

Zip Code

Address of Branch Office(s) where activity occurred

OTS

EIN or TIN

Asset size of financial institution

.00

$
11

City

State

Zip Code

If institution closed, date closed
(M M D D Y Y )

Account number(s) affected, if any

a __________________________________

Have any of the institution's accounts related to this m atter been closed?
a □

Yes

b CD No

If yes, identify

_____________________________

b_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Part II

Suspect Information

Last Name or Name of Entity

Address

City

First Name

State

Zip Code

Country

SSN, EIN or TIN (as applicable)

Date of Birth (M M D D Y Y )
/

Phone Number - Residence (include area code)
(

Middle Initial

)

Phone Number - W ork (include area code)
(

)

Occupation

Forms of Identification for Suspect:

a
e
31

□

Passport

Number

EH Alien Registration

Driver's License

d□

Issuing Authority.

Other

Relationship to Financial Institution:
a

EH Accountant

□

EH Appraiser

Agent

d EH Attorney
e EH Borrower
f EH Broker

EHCustomer j EH Officer
h EH Director
k EH Shareholder
i
EHEmployee I EH O ther______

Is insider suspect still affiliated w ith the financial institution?

EH Yes
EH No

|f no specjfy

J c EH Suspended
v d

EH Terminated

EH Resigned

Date of Suspension,
34
Termination, Resigna
a
tion (M M D D Y Y )

Admission/Confession

EH Yes

b EHNo

Suspicious Activity Information
36

Date of suspicious activity (M M D D YY )

Dollar amount involved in known or suspicious activity

Summary characterization of suspicious activity:

.00

a EH Bank Secrecy Act/Structuring/

g
h

Money Laundering

b EH Bribery/Gratuity
EH Check Fraud
d EH Check Kiting
e EH Commercial Loan Fraud
f EHConsumer Loan Fraud

i
j

r
38

k
I

.00

EH False Statem ent
EH Misuse of Position or
Self-Dealing

EH M ortgage Loan Fraud
p EH Mysterious Disappearance
q EH W ire Transfer Fraud
o

Dollar amount of recovery
(if applicable)

a □

Yes

Has the suspicious activity had a
material impact on or otherwise affected
the financial soundness of the institution?

.00

Has the institution's bonding company been notified?

EH Other
Amount of loss prior to recovery
(if applicable)

EH Counterfeit Check
EH Counterfeit Credit/Debit Card
EH Counterfeit Instrument (other)
EH Credit Card Fraud
EH Debit Card Fraud
EH Defalcation/Embezzlement

EH Yes

I INo

b EH No

Has any law enforcement agency already been advised by telephone, w ritten communication, or otherwise?
If so, list the agency and local address.
Agency

Address

______________________________________________________________________________________________

City

State

Zip Code

First Name

Part IV Witness Information
47

Last Name

Address

City

State

Zip Code

SSN

Date of Birth (M M D D Y Y )
/

Title

Phone Number (include area code)
(

Part V
59

Title

First Name

Title

Agency (If applicable)

EH Yes

I No

Middle Initial

Date (M M D D Y Y )

)

___ /

First Name

Phone Number (include area code)
(

Interviewed
a

Contact for Assistance (If different than Preparer Information in Part V)

Last Name

Phone Number (include area code)
(

Part VI

)

Preparer Information

Last Name

Middle Initial

)

Middle Initial

Part VII Suspicious Activity Information Explanation/Description
Explanation/description of known or suspected violation of law or
suspicious activity. This section of the report is critical. The care
w ith which it is w ritten may make the difference in w hether or
not the described conduct and its possible criminal nature are
clearly understood. Provide below a chronological and complete
account of the possible violation of law , including w hat is
unusual, irregular or suspicious about the transaction, using the
following checklist as you prepare your account. If necessary,
continue the narrative on a duplicate of this page.

a
b

Describe supporting documentation and retain for 5 years,
Explain who benefited, financially or otherwise, from the
transaction, how much, and how.
Retain any confession, admission, or explanation of the
transaction provided by the suspect and indicate to
whom and when it was given,
Retain any confession, admission, or explanation of the
transaction provided by any other person and indicate
to whom and when it was given.

f
g
h
i

Retain any evidence of cover-up or evidence of an attem pt
to deceive federal or state examiners or others,
Indicate where the possible violation took place
(e.g., main office, branch, other),
Indicate w hether the possible violation is an isolated
incident or relates to other transactions,
Indicate w hether there is any related litigation; if so,
specify.
Recommend any further investigation that might assist law
enforcement authorities.
Indicate w hether any information has been excluded from
this report; if so, why?

For Bank Secrecy Act/Structuring/M oney Laundering reports,
include the following additional information:
k
I

Indicate w hether currency and/or monetary instruments
w ere involved. If so, provide the amount and/or description.
Indicate any account number that may be involved or
affected.

Paperwork Reduction Act Notice: The purpose of this form is to provide an effective and consistent means for financial institutions to notify appropriate law enforcement
agencies of known or suspected criminal conduct or suspicious activities that take place at or were perpetrated against financial institutions. This report is required by law,
pursuant to authority contained in the following statutes. Board of Governors of the Federal Reserve System: 12 U.S.C. 324 , 334, 611a, 1844(b) and (c), 3105(c) (2) and
3106(a). Federal Deposit Insurance Corporation: 12 U.S.C. 93a, 1818, 1881-84, 3 40 1-2 2. Office of the Comptroller of the Currency: 12 U.S.C. 93a, 1818, 1881-84. 340 1-2 2.
Office of Thrift Supervision: 12 U.S.C. 1463 and 1464. National Credit Union Administration: 12 U.S.C. 1766(a), 1786(q). Financial Crimes Enforcement Network: 31 U.S.C.
5318(g). Information collected on this report is confidential (5 U.S.C. 552(b)(7) and 552a(k)(2), and 31 U.S.C. 5318(g)). The Federal financial institutions regulatory agencies
and the U.S. Departments of Justice and Treasury may use and share the information. Public reporting and recordkeeping burden for this information collection is estimated to
average 36 minutes per response, and includes time to gather and maintain data in the required report, review the instructions, and complete the information collection. Send
comments regarding this burden estimate, including suggestions for reducing the burden, to the Office of Management and Budget, Paperwork Reduction Project, Washington,
DC 205 03 and, depending on your primary Federal regulatory agency, to Secretary, Board of Governors of the Federal Reserve System, Washington, DC 20551; or Assistant
Executive Secretary, Federal Deposit Insurance Corporation, Washington, DC 20429; or Legislative and Regulatory Analysis Division, Office of the Comptroller of the Currency,
Washington, DC 20219; or Office of Thrift Supervision, Enforcement Office, Washington, DC 205 52; or National Credit Union Administration, 1775 Duke Street, Alexandria, VA
22314; or Office of the Director, Financial Crimes Enforcement Network, Department of the Treasury, 20 7 0 Chain Bridge Road, Vienna, VA 2 21 82.

Suspicious Activity Report
Instructions
Safe Harbor Federal law (31 U.S.C. 5318(g)(3)) provides complete protection from civil liability for all reports of
suspected or known criminal violations and suspicious activities to appropriate authorities, including supporting
documentation, regardless of whether such reports are filed pursuant to this report's instructions or are filed on a
voluntary basis. Specifically, the law provides that a financial institution, and its directors, officers, employees and
agents, that make a disclosure of any possible violation of law or regulation, including in connection with the
preparation of suspicious activity reports, "shall not be liable to any person under any law or regulation of the United
States or any constitution, law, or regulation of any State or political subdivision thereof, for such disclosure or for
any failure to notify the person involved in the transaction or any other person of such disclosure."
Notification Prohibited Federal law (31 U.S.C. 5318(g)(2)) requires that a financial institution, and its directors,
officers, employees and agents who, voluntarily or by means of a suspicious activity report, report suspected or
known criminal violations or suspicious activities may not notify any person involved in the transaction that the
transaction has been reported.
In situations involving violations requiring immediate attention, such as when a reportable violation is
ongoing, the financial institution shall immediately notify, by telephone, appropriate law enforcement and
financial institution supervisory authorities in addition to filing a timely suspicious activity report.
WHEN TO MAKE A REPORT:
1. All financial institutions operating in the United States, including insured banks, savings associations,
savings association service corporations, credit unions, bank holding companies, nonbank subsidiaries of
bank holding companies, Edge and Agreement corporations, and U.S. branches and agencies of foreign
banks, are required to make this report following the discovery of:
a. Insider abuse involving any amount. Whenever the financial institution detects any known or
suspected Federal criminal violation, or pattern of criminal violations, committed or attempted against
the financial institution or involving a transaction or transactions conducted through the financial
institution, where the financial institution believes that it was either an actual or potential victim of a
criminal violation, or series of criminal violations, or that the financial institution was used to facilitate
a criminal transaction, and the financial institution has a substantial basis for identifying one of its
directors, officers, employees, agents or other institution-affiliated parties as having committed or
aided in the commission of a criminal act regardless of the amount involved in the violation.
b. Violations aggregating $5,000 or more where a suspect can be identified. Whenever the financial
institution detects any known or suspected Federal criminal violation, or pattern of criminal violations,
committed or attempted against the financial institution or involving a transaction or transactions
conducted through the financial institution and involving or aggregating $5,000 or more in funds or
other assets, where the financial institution believes that it was either an actual or potential victim of
a criminal violation, or series of criminal violations, or that the financial institution was used to
facilitate a criminal transaction, and the financial institution has a substantial basis for identifying a
possible suspect or group of suspects. If it is determined prior to filing this report that the identified
suspect or group of suspects has used an "alias," then information regarding the true identity of the
suspect or group of suspects, as well as alias identifiers, such as drivers' licenses or social security
numbers, addresses and telephone numbers, must be reported.
c. Violations aggregating $25,000 or more regardless of a potential suspect. Whenever the financial
institution detects any known or suspected Federal criminal violation, or pattern of criminal violations,
committed or attempted against the financial institution or involving a transaction or transactions
conducted through the financial institution and involving or aggregating $25,000 or more in funds or
other assets, where the financial institution believes that it was either an actual or potential victim of
a criminal violation, or series of criminal violations, or that the financial institution was used to
facilitate a criminal transaction, even though there is no substantial basis for identifying a possible
suspect or group of suspects.
d. Transactions aggregating $5,000 or more that involve potential money laundering or violations of the
Bank Secrecy Act. Any transaction (which for purposes of this subsection means a deposit,
withdrawal, transfer between accounts, exchange of currency, loan, extension of credit, purchase or

sale of any stock, bond, certificate of deposit, or other monetary instrument or investment security, or
any other payment, transfer, or delivery by, through, or to a financial institution, by whatever means
effected) conducted or attempted by, at or through the financial institution and involving or
aggregating $5,000 or more in funds or other assets, if the financial institution knows, suspects, or
has reason to suspect that:
i. The transaction involves funds derived from illegal activities or is intended or conducted in order to
hide or disguise funds or assets derived from illegal activities (including, without limitation, the
ownership, nature, source, location, or control of such funds or assets) as part of a plan to violate
or evade any law or regulation or to avoid any transaction reporting requirement under Federal law;
ii. The transaction is designed to evade any regulations promulgated under the Bank Secrecy Act; or
y

iii. The transaction has no business or apparent lawful purpose or is not the sort in which the
particular customer would normally be expected to engage, and the financial institution knows of
no reasonable explanation for the transaction after examining the available facts, including the
background and possible purpose of the transaction.
The Bank Secrecy Act requires all financial institutions to file currency transaction reports (CTRs) in
accordance with the Department of the Treasury's implementing regulations (31 CFR Part 103).
These regulations require a financial institution to file a CTR whenever a currency transaction exceeds
$10,000. If a currency transaction exceeds $10,000 and is suspicious, the institution must file both a
CTR (reporting the currency transaction) and a suspicious activity report (reporting the suspicious or
criminal aspects of the transaction). If a currency transaction equals or is below $10,000 and is
suspicious, the institution should only file a suspicious activity report.

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A financial institution is required to file a suspicious activity report no later than 30 calendar days after
the date of initial detection of facts that may constitute a basis for filing a suspicious activity report.
If no suspect was identified on the date of detection of the incident requiring the filing, a financial
institution may delay filing a suspicious activity report for an additional 30 calendar days to identify a
suspect. In no case shall reporting be delayed more than 60 calendar days after the date of initial
detection of a reportable transaction.

3. This suspicious activity report does not need to be filed for those robberies and burglaries that are
reported to local authorities, or (except for savings associations and service corporations) for lost,
missing, counterfeit or stolen securities that are reported pursuant to the requirements of 17 CFR
2 4 0 .1 7 M .
HOW TO MAKE A REPORT:
1.

Send each completed suspicious activity report to:
FinCEN, Detroit Computing Center, P.O. Box 33980, Detroit, Ml 48232

For items that do not apply or for which information is not available, leave blank.

Complete each suspicious activity report in its entirety, even when the suspicious activity report is a
corrected or supplemental report.

Do not include supporting documentation with the suspicious activity report. Identify and retain a copy
of the suspicious activity report and all original supporting documentation or business record equivalent
for 5 years from the date of the suspicious activity report. All supporting documentation must be made
available to appropriate authorities upon request.

If more space is needed to complete an item (for example, to report an additional suspect or witness),
a copy of the page containing the item should be used to provide the information.

Financial institutions are encouraged to provide copies of suspicious activity reports to state
and local authorities, where appropriate.

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Full text of Federal Reserve Bank of New York Circulars : Simplified Reporting of Suspected Crimes and Suspicious Activities

FRASER