What Is It? - The Suspicious Activity Report (SAR) is the primary method for financial services firms to report financial activity that may be related to terrorism. Initially designed in 1996 as a tool to detect money laundering, the 2001 USA Patriot Act increased the importance of the SAR, expanding both the number of businesses required to file SARs and the instances in which they must be filed.
Why Do We Need It? - The resulting increase in the number of SARs filed since the Patriot Act has created the need for a more efficient and effective way to collect, analyze, and disseminate the information. In addition, new systems and processes are required to minimize any confusion in the financial community about when to file SARs and what information to include.
Law enforcement must be able to “follow the money” that fuels terrorism. Full cooperation from the private sector and quick, effective SAR procedures to process and disseminate reports are essential to he war on terror.
Why BENS? - Even before the passage of the Patriot Act, BENS members had recognized the potential value of the SAR in tracking terrorists, and began working with government partners – including the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and the FBI – to identify ways of improving the SAR process. Over 75 business leaders from across the country partnered with federal officials in a series of BENS sponsored working sessions to brainstorm improvements, resulting in the BENS Recommendations for Improving the Suspicious Activity Report (SAR), released in May 2003. Some recommendations have been adopted, and BENS members continue to work with government agencies to implement the remainder.
What Needs To Be Done? -BENS Recommendations for Improving the Suspicious Activity Report (SAR) outlined nine changes that had to be made to the SAR including:
- Requiring, where appropriate, all SARs to be filed electronically, increasing speed and efficiency;
- Creating and regularly updating guidance for businesses that file SARs describing characteristics of “suspicious activity” transactions and trends related to terrorist financing; and
- Posting case studies on the web vividly demonstrating how SARs are used to identify, track, and thwart terrorism and providing valuable feedback to the financial institutions that file SARs.
