VIDEO: The Continuing SAR Narrative
Adam discusses what should be in a continuing SAR narrative and references all of the FinCEN guidance relevant to writing a narrative for an ongoing SAR filing. A sister article to this video can be found here.
Video Transcript
The following is a transcript of this video:
Today, we are going to be talking about the narrative for continuing SARs. This is a BSA topic. A question that I recently received was: What information needs to be in the narrative of a continuing Suspicious Activity Report or a SAR?
Just to clarify what a continuing Suspicious Activity Report is, it is when a subsequent SAR has already been filed and a new SAR is essentially a follow-up. So you file an initial report for suspicious activity then over time that activity continues on and you keep filing SARs based on that same activity. What the rule states is you must file a continuing SAR at least once every 90 days or essentially 120 days. That's what the continuing activity does. So if somebody is doing transactions every week for a year, you're essentially going to be filing about four SARs because of that activity. That's what a continuing Suspicious Activity Report is.
To answer this question as to what needs to be included in the narrative, we have to look at the guidance that's provided to us by the Financial Crimes Enforcement Network, otherwise known as FinCEN. Specifically, they've given us some guidance and the first piece of guidance they gave us dates all the way back to 2002. This is a publication that they gave in the early two thousands called the SAR Activity Review. This was additional guidance that FinCEN was providing the financial institutions on how to complete SARs. Issue 4 from 2002, says something that's important here. It says, “The narrative may reference prior SARs filed with corresponding dates and dollar amounts. Now of course, the key word in all of this is right here. It is “MAY”, right? The narrative “may reference the SARS filed with corresponding dates and dollar amounts” does not say that you necessarily need to.
That's just one piece of the puzzle because FinCEN gave us some other information. Specifically, they gave us information in the official instructions to completing the Suspicious Activity Report. In those instructions, they say a few things. First of all, they say “Recording Part V”, this is actually the narrative section Part V, “the aggregated date range of all FinCEN SARs filed on the continuing suspicious activity.” So they want the date range included. The official instructions go on, they say something else. They say “The continuing report Part V narrative should include all details of the suspicious activity for the 90 day period that's encompassed by the report, and then only such data from the prior report, which is necessary to understand the activity.” So they only want us to provide the information from prior reports that’s necessary to understand the current activity. They specifically state right here, “Do not reproduce the narratives from prior reports in the continuing activity report.” So I have seen financial institutions where they do that. They actually take the full narrative from the prior reports inserted into the new SAR. That is not what FinCEN wants, they only want enough information in the new continuing SAR so that they understand what is going on from the prior SARs, because they can reference those prior SARs.
The instructions go on and give us one final piece of wonderful advice, a little gem, so to speak. It says, “Record the 90-day loss in item 63, but then you're going to record the cumulative loss in the narrative.” One piece of information that won’t be used that often, unless you have a loss, that will be used there.
That is the information on how you would fill out the narrative on a continuing SAR filing. I hope you found this topic to be interesting and beneficial for you. We have lots of other videos and articles on our site just like this. Please take a few minutes to check it out at www.compliancecohort.com. Again, my name is Adam Witmer and thanks for joining me today. I hope you have a great day.