BSA/AML Examiner School - Case Study Oct 2023

unusual activity for a final decision to file a SAR. Proper documentation will be retained by the BSA for those decisions made to not file a SAR. Reporting Process If the bank determines it is necessary to report a suspected illegal activity to law enforcement authorities, the BSA Officer and the Senior Management will carefully review all known facts and maintain documentation on this process. The SAR will be filed within the time frame established by the regulation. (The SAR will be filed no later than 30 calendar days after the date of discovery or notification of the suspicious activity. If no suspect is identified on the date of detection of an act, management may delay filing the SAR for an additional 30 calendar days. However, in no case will management delay reporting a SAR to federal authorities more than 60 calendar days after the date of detecting a known or suspected violation. If a situation involving violations requires immediate attention, such as when a reportable violation is ongoing, management should immediately notify by telephone or other expeditious means the appropriate law enforcement agency and FinCEN, in addition to filing a timely report.) After an initial SAR is filed, additional SARs for continuing suspicious activity will be filed every 90 days. At this time, management will consider closing the account as a result of continuous suspicious activity. Law enforcement inquires and requests (national Security letters (NSLs), grand jury subpoenas and section 314(a) request All law enforcement inquiries and requests (such as grand jury subpoenas, National Security Letters (NSLs) and section 314(a) requests are to be referred to the BSA/OFAC Officer for assistance. In the event the Bank receives a NSL it must be forwarded to the BSA/OFAC Officer to ensure that appropriate measures are taken to ensure the confidentiality of the letter and taking appropriate action. In the event the Bank files a SAR after receiving a NSL, the SAR must not contain any reference to the receipt or existence of the NSL. The SAR is to only reference those facts and activities that support a finding of unusual or suspicious transactions identified by the Bank. Notification of the SAR filing to the Board of Directors On a monthly basis, the BSA Officer will notify the BOD of any SARs filed for the month, SARs considered-but not filed and if no SARs are filed. This shall be notated in the Board Minutes. Confidentiality SARs are confidential. No Bank, director, officer, employee or agent of the Bank, that reports a suspicious transaction may notify any person involved in the transaction that the transaction has been reported. Safe Harbor Banks from Civil Liability for Suspicious Activity Reporting Under federal law, the Bank, the BOD, officers, employees and Bank agents will not be held liable to any person for reporting suspicious transactions on the Suspicious Activity Report (SAR). In addition, it is against the law to tell a suspect or customer about the information reported on the SAR, or that a SAR has been completed. Failure to file the forms when appropriate can cause tines to be levied on both the Bank and the BOD. Record Retention for SAR The BSA Officer will retain the following information for 5 years: • The Bank will retain all copies of SARs and all supporting documentation of the SAR (i.e., checks, deposits, loan documents, general ledger tickets);

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