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Financial Institutions Urged to Conduct Further Research on Customers’ Transactions

In light of recent reports, financial institutions are being advised to conduct thorough research on customers’ transactions and determine whether a Suspicious Activity Report (SAR) should be filed with the Financial Crimes Enforcement Network (FinCEN).

Requirements Under the Bank Secrecy Act (BSA)

According to the BSA, foreign bank account holders with a financial interest or signature authority over accounts maintained in a foreign country must report their relationships to the Internal Revenue Service (IRS) annually if the aggregate value of the accounts exceeds $10,000 at any point during the calendar year. The report, filed on Form TD F 90-22.1, is due by June 30 of the succeeding calendar year.

Record Keeping Requirements

Financial institutions are also required to maintain records of certain transactions, including:

• Reports of foreign bank accounts
• Funds transfers exceeding $3,000

These records must be retained for a period of five years.

Conducting Thorough Research and Filing SARs

In addition, financial institutions are advised to conduct thorough research on customers’ transactions and determine whether a SAR should be filed with FinCEN if there is suspicion of money laundering or other illegal activities.

“We urge financial institutions to take a proactive approach in monitoring their customers’ transactions and reporting any suspicious activity to FinCEN,” said a spokesperson for the Treasury Department. “This is an important step in preventing and detecting money laundering and other financial crimes.”

Additional Guidance

Financial institutions are reminded to refer to the discussion on “Customer Due Diligence” and “Suspicious Activity Reporting” within this chapter for detailed guidance on how to conduct thorough research on customers’ transactions and determine whether a SAR should be filed with FinCEN.