regulations concerning the reporting of suspected
crimes and suspicious activities have been issued
by the Federal Deposit Insurance Corporation,
the other federal financial institution regulators,
and the Treasury Department's Financial Crimes
Enforcement Network (FinCEN). The regulations
all require the use of the uniform interagency
Suspicious Activity Report (SAR) to report potential
violations of federal criminal law as well as
suspicious transactions related to money laundering
offenses and violations of the Bank Secrecy Act.
The new suspicious activity reporting regulations
go into effect on April 1, 1996. For your reference,
we have enclosed a copy of the FDIC's February
16, 1996 Federal Register notice relating to the
We have also enclosed the SAR, the new uniform
reporting for, for your use beginning April 1.
The SAR replaces the FDIC's former criminal referral
forms. You may make duplicates of the SAR for
your institution's use. The instructions included
with the SAR detail all of the pertinent reporting
The new SAR will substantially reduce the reporting
burden of all financial institutions.
First, the reporting thresholds for non-insider
related offenses are significantly increased.
Specifically, the threshold for reporting of known
or suspected violations involving non-insiders
increases from $1,000 to $5,000, and the threshold
for reporting known or suspected violations where
the institution cannot identify a suspect increases
from $5,000 to $25,000.
Second, for the first time, there is a $5,000
threshold for reporting suspicious transactions
related to money laundering and violations of
the Bank Secrecy Act.
Third, you are no longer required to submit copies
of criminal referrals to several federal agencies;
instead, you only need to file the SAR with FinCEN.
Finally, you no longer have to include supporting
documentation with the report. Instead, you are
required to identify and keep, for five years,
all supporting documentation relating to a SAR
and, if requested by the law enforcement authorities,
make the documentation available to them.
To further assist you, a software package has
been developed to allow you a complete a SAR using
a computer, rather than completing a paper form.
Using the SAR software will give you access to
the SAR on a desktop computer. Simply insert the
appropriate information and store the completed
SAR on a disk, which can be mailed to FinCEN instead
of the paper form. Multiple completed SARs can
be stored on one disk and then mailed. On-screen
instructions, help menus, and a written instructions
manual will easily guide you through the SAR software.
The SAR software also will create a database of
all completed SARs or a hard copy of the form,
if you wish.
Around April 1, 1996, the effective date, the
FDIC will provide you with a package containing
the SAR software, in both Windows and DOS versions,
along with the instruction manual. We strongly
encourage you to use the SAR software to complete
SARs and to file your report on disk, rather than
using a paper form. Use of the SAR software will
significantly ease your reporting obligations
and ensure that accurate information is obtained
from your institution.
Banking organizations which currently submit Currency
Transaction Reports (CTRs) using magnetic tape
cannot use the same tape to file SARs. Instead,
SARs must be submitted on a separate magnetic
tape. If you have not yet received information
on this process, contact the Internal Revenue
Service's Detroit Computing Center at (313) 234-1445.
In the near future, you will be able to retrieve
a copy of the SAR from the Internal Revenue Service
Bulletin Board and the FDIC's home page on the
World Wide Web.
If you have any questions about the new suspicious
activity reporting regulations, please contact
your Division of Supervision Regional Office.