FinCEN Issues Guidance to Financial Institutions on Accounts and Suspicious Activity Reports
The Financial Crimes Enforcement Network (FinCEN) yesterday issued two guidance notices to financial institutions.
The first guidance notice (FIN-2007-G002) contained information on accounts that law enforcement may have an interest in ensuring remain open notwithstanding suspicious or potential criminal activity in connection with the account. FinCEN noted that while there is no requirement that a financial institution maintain a particular account relationship, financial institutions should be mindful that complying with such a request may further law enforcement efforts to combat money laundering, terrorist financing and other crimes.
Specifically, FinCEN stated that if a law enforcement agency requests that a financial institution maintain a particular account, the financial institution should ensure that such a request be made in writing and should state the purpose and duration of the request.
Written requests by federal law enforcement agencies should be issued by a supervisory agent or by an attorney within a United States Attorney’s Office or another office of the Department of Justice. Requests from state or local law enforcement agencies should be issued by a supervisor of the state or local law enforcement agency or from an attorney within a state or local prosecutor’s office. Such requests from law enforcement to maintain accounts may not exceed six months, although additional requests can be issued after the expiration of the initial request. FinCEN also recommends that financial institutions maintain documentation of such requests for at least five years after the request has expired.
Finally, FinCEN noted that if a financial institution chooses to maintain the account at law enforcement's request it is still required to comply with all applicable Bank Secrecy Act recordkeeping and reporting requirements, including the requirement to file Suspicious Activity Reports.
FinCen's second guidance notice (FIN-2007-G003) related to the supporting documentation requirements for Suspicious Activity Reports (SAR). The guidance stated that when when a financial institution files a SAR, it is required to maintain a copy of the SAR and the original or business record equivalent of any supporting documentation for a period of five years from the date of filing the SAR. Financial institutions must also provide all documentation supporting the filing of a SAR upon request by FinCEN or an appropriate law enforcement or supervisory agency.With respect to "supporting documentation", FinCen stated that the the term “supporting documentation” refers to all documents or records that assisted a financial institution in making the determination that certain activity required a SAR filing. FinCen noted, however, that the scope of supporting documentation will depend on the facts and circumstances of each filing.
Finally, FinCen noted that there is no legal process requirement for the disclosure of a SAR or the underlying supporting documents when the financial institution provides the financial records or information to FinCEN or a supervisory agency in the exercise of its “supervisory, regulatory or monetary functions.”