The US Financial Crimes Enforcement Network (FinCEN), together with the Federal Reserve, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Office of the Comptroller of the Currency, has published some answers to frequently asked questions (FAQs) regarding suspicious activity reports and other anti-money-laundering considerations.
Some of the agencies' answers to the questions that they have received are mealy-mouthed and vague; others are helpful. Highlights are as follows.
Q: Can a financial institution keep an account or relationship with a customer about which it has received a written “keep open” request from law enforcers, even though it has spotted suspicious activity?
A: Yes. The law enforcers might write to it to ask it to keep the relationship open, although it need not oblige them. Ultimately, the decision to maintain or close an account is for the institution to take in accordance with its own policies, procedures and processes. The agencies suggest that banks might want to keep records of “keep open” requests from the Government, almost as though they think that they might fare well if they choose not to.
Q: Should a financial institution file a SAR solely on the basis of receiving a grand jury subpoena or other law enforcement inquiries?
A: No. The agencies do not go as far as saying this in their note, but many grand jury subpoenas are 'try-ons' on the part of America's highly opportunistic prosecutors. A grand jury – a type of body unseen in the UK since 1931 – is an inquisitorial 'star chamber' led by a prosecutor with 30 jurors in tow. It can ask any questions it likes and there are special rules to deal with any sensitive answers that it receives. It can issue subpoenas to compel people to testify or hand over documents relating to a case, but ultimately its stated purpose is to find out whether there is enough evidence to pursue a prosecution, not to skewer the guilty there and then.
The agencies do, however, note that the receipt of a grand jury subpoena should cause a bank to check the account activity and transactions of the target.
Q: Does the Bank Secrecy Act require a financial institution to end a relationship with a customer if it has sent off a SAR about him?
A: No, not even if there are many SARs.
Q: Does the law require a financial institution to send off a SAR solely because it has unearthed some negative news about one of its customers?
A: No. The agencies do not even go so far as to say that negative news ought to trigger off a review of the customer's account activity, although common sense suggests that it ought to.
Q: If there are several negative news alerts about the same event, is the bank expected to investigate each of those alerts independently?
Q: Ought financial institutions to repeat information in their 'SAR narratives' that they have already included in other SAR data fields?
FinCEN's Suspicious Activity Report Electronic Filing Requirements were last updated in July.