When must a bank file a SAR, and what are the dollar thresholds?

A bank must file a SAR on a transaction conducted or attempted by, at or through it that involves or aggregates at least $5,000 in funds or other assets, when it knows, suspects or has reason to suspect illegal funds, evasion of BSA requirements, or no business or apparent lawful purpose. The SAR is due no later than 30 calendar days after initial detection of facts that may constitute a basis for filing, or up to 60 calendar days if no suspect was identified.

What the rule says:

• Threshold: the transaction must involve or aggregate at least $5,000 in funds or other assets. This is the only dollar threshold in the rule (31 CFR 1020.320(a)(2)).
• Trigger 1: the transaction involves funds derived from illegal activities, or is intended or conducted to hide or disguise such funds or assets as part of a plan to violate or evade federal law or regulation or to avoid a transaction reporting requirement (31 CFR 1020.320(a)(2)(i)).
• Trigger 2: the transaction is designed to evade any requirements of the chapter or of other regulations under the Bank Secrecy Act (31 CFR 1020.320(a)(2)(ii)).
• Trigger 3: 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 after examining the available facts, including the background and possible purpose (31 CFR 1020.320(a)(2)(iii)).
• Exception: no SAR is required for a robbery or burglary, committed or attempted, that is reported to appropriate law enforcement authorities, or for lost, missing, counterfeit or stolen securities for which the bank files a report under 17 CFR 240.17f-1 (31 CFR 1020.320(c)).

Timing:

The clock starts at the date of initial detection of facts that may constitute a basis for filing, not when an investigation ends. If no suspect was identified on that date, the bank may delay filing for an additional 30 calendar days to identify one. In no case may reporting be delayed more than 60 calendar days after initial detection (31 CFR 1020.320(b)(3)).

Where a violation requires immediate attention, such as an ongoing money laundering scheme, the bank must also immediately notify an appropriate law enforcement authority by telephone. That call is in addition to filing a timely SAR, not a replacement for it (31 CFR 1020.320(b)(3)).

What we would look at:

• Record the date of initial detection for each matter, since every deadline runs from it.
• Document why activity was or was not treated as meeting a trigger, including the examination of available facts, background and possible purpose under the third trigger.
• Check whether a suspect was identified on the detection date before relying on the extra 30 days.

This answer covers banks only. Other institution types, such as MSBs, should check their own SAR rule.

Sources

1. 31 CFR § 1020.320(a)(2): https://www.law.cornell.edu/cfr/text/31/1020.320
2. 31 CFR 1020.320 (eCFR): https://www.ecfr.gov/current/title-31/section-1020.320

This answer is general information, not legal advice. Forteris is not a law firm.