Compliance Blog

Written by Shari R. Pogach, Regulatory Paralegal, NAFCU

I recently attended the 12thAnnual Mid-Atlantic Anti-Money Laundering (AML) Conference that brings together law enforcement, regulatory and private-sector AML compliance professionals to share the latest trends in criminal finance and money laundering activity.  We heard from law enforcement agents from the conference sponsoring agencies including: Immigration and Customs Enforcement - Homeland Security Investigations, the Federal Bureau of Investigation, the Drug Enforcement Administration, the United States Secret Service, and the Internal Revenue Service - Criminal Investigation.   I’ve attended this conference for the past several years but hearing this got me very excited – for the first time, we were told that several of the criminal investigation examples provided to us were either triggered or significantly enhanced by a credit union’s Suspicious Activity Report (SAR)! In case you don’t hear it enough – you guys rock!

So what makes a SAR valuable to law enforcement?  Use the KISS principle: “Keep it simple, stupid,” don’t try to rewrite Leo Tolstoy’s War and Peace. Here are some tips on what makes a good SAR narrative:

• Keep the opening to one to two sentences.
• Be as detailed as possible.
• Use the exact information applicable to the situation, don’t speculate or fictionalize. 
• Use specific identifiers in the narrative to help connect the dots (providing date-of-birth, account numbers, etc.).
• Summarize, don’t itemize all the transactions in a narrative.
• Don’t talk yourself out of putting something into a narrative that you wouldn’t normally put in.
• Be descriptive of the behavior behind the transaction.
• Put names of the tellers (or any witnesses) in the documentation, if not in the narrative, for trial purposes due to time delay.

According to one speaker, criminal investigations take an average of three years to adjudicate.  One case example took much longer to adjudicate, closer to ten or more years.  This, and for protection reasons, is why you may never be aware of how much your SAR(s) helped.  But several agents said: SARs matter, communication matters and generous documentation matters.  And, small SARs might not be important tomorrow to law enforcement but likely will be down the road.  Five or six SARs for smaller amounts are a definite trigger.

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FinCEN Temporary Relief Expires This Thursday.  Back in May, I blogged about FinCEN’s ruling, FIN-2018-R002, giving a 90-day limited exceptive relief on the beneficial ownership requirements for certain products and services that automatically rollover or renew established before May 11, 2018.  That exception expires Thursday, August 9 and although FinCEN had indicated it would give further consideration to the issue, as yet, it has provided nothing since. It appears the expectation will be compliance and, unfortunately, we don't expect we will see anything else on the topic in the short term.