(a) Purpose. This section ensures that a 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 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 USC 1786(r), or 1813(u) and 1818(b)(3),
(4), or (5).
(3) SAR means
a suspicious-activity report on the form prescribed by the Board.
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(c) SARs required. A 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 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 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 driver’s licenses or Social Security numbers, addresses, and
telephone numbers, must be reported.
(3) Violations aggregating $25,000 or more
regardless of a potential suspect. Whenever the 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 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) 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 paragraph (c)(4)
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 state member bank and involving
or aggregating $5,000 or more in funds or other assets, if the bank
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
(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 bank knows of no reasonable explanation for the transaction after
examining the available facts, including the background and possible
purpose of the transaction.
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(d) Time for reporting. A member bank is required
to file a SAR no later than 30 calendar days after the date of initial
detection of facts that may constitute a basis for filing a SAR. If
no suspect was identified on the date of detection of the incident
requiring the filing, a member bank may delay filing a SAR 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. In situations involving
violations requiring immediate attention, such as when a reportable
violation is ongoing, the financial institution shall immediately
notify, by telephone, an appropriate law enforcement authority and
the Board in addition to filing a timely SAR.
(e) Reports to state and local authorities. Member banks are encouraged to file a copy of the SAR with state
and local law enforcement agencies where appropriate.
(f) Exceptions.
(1) A member bank need not file a SAR for
a robbery or burglary committed or attempted that is reported to appropriate
law enforcement authorities.
(2)
A member bank need not file a SAR for lost, missing, counterfeit,
or stolen securities if it files a report pursuant to the reporting
requirements of 17 CFR 240.17f-1.
(g) Retention of records. A member bank shall
maintain a copy of any SAR filed and the original or business record
equivalent of any supporting documentation for a period of five years
from the date of the filing of the SAR. Supporting documentation shall
be identified and maintained by the bank as such, and shall be deemed
to have been filed with the SAR. A member bank must make all supporting
documentation available to appropriate law enforcement agencies upon
request.
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(h) Notification to board of directors. The management of a member bank shall promptly notify its board
of directors, or a committee thereof, of any report filed pursuant
to this section.
(i) Compliance. Failure to file a SAR in accordance with this section and the instructions
may subject the member bank, its directors, officers, employees, agents,
or other institution-affiliated parties to supervisory action.
(j) Confidentiality of SARs. SARs
are confidential. Any member bank subpoenaed or otherwise requested
to disclose a SAR or the information contained in a SAR shall decline
to produce the SAR or to provide any information that would disclose
that a SAR has been prepared or filed citing this section, applicable
law (e.g., 31 U.S.C. 5318(g)), or both, and notify the Board.
(k) Safe harbor. The safe-harbor provisions
of 31 U.S.C. 5318(g), which exempts any 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.
