FinCEN Issues SAR Confidentiality Reminder for Financial Institutions
March 8, 2012
March 8, 2012
The Financial Crimes Enforcement Network (FinCEN) recently issued an advisory to remind financial institutions—and the lawyers that advise them—of the requirement to maintain the confidentiality of suspicious activity reports (SARs).
FinCEN is concerned that an increasing number of private parties who are not authorized to know of the existence of filed SARs are seeking SARs from financial institutions for use in civil litigation and other matters. Financial institutions, as well as their current and former directors, officers, employees, agents and contractors, are prohibited from disclosing SARs. They are prohibited, in fact, from even disclosing any information that would reveal the existence of a SAR.
Possible Civil and Criminal Penalties for Unauthorized SAR Disclosures
The unauthorized disclosure of a SAR is a violation of federal law, and both civil and criminal penalties may be imposed for SAR disclosure violations. Such violations may be enforced through civil penalties of up to $100,000 for each violation and criminal penalties of up to $250,000 and/or imprisonment not to exceed five years.
In addition, financial institutions could be liable for civil money penalties resulting from anti-money laundering program deficiencies (such as internal controls or training, for instance) that led to the SAR disclosure. Such penalties could be up to $25,000 per day for each day the violation continues.
If an institution becomes aware of an unauthorized disclosure of a SAR, or if it receives a subpoena or other request for a SAR from other than an authorized government authority or self-regulatory organization as defined in the applicable SAR regulations, it should immediately contact FinCEN’s Office of Chief Counsel at 703.905.3590.
An institution may also be required to contact its primary federal regulator, as may be applicable in a corresponding SAR rule.
FinCEN maintains a Regulatory Helpline at 800.949.2732 for questions about things such as SAR confidentiality. To report suspicious transactions that may relate to terrorist activity, financial institutions should call the Financial Institutions Toll-Free Hotline at 866.556.3974 (available seven days a week, 24 hours a day).
The purpose of the hotline is to expedite the delivery of this information to law enforcement. Financial institutions should immediately report any imminent threat to local-area law enforcement officials.
Questions? Contact the Compliance Hotline: 1.800.546.4465, firstname.lastname@example.org.