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Bank Secrecy Act: Suspicious Activity Report Use Is Increasing, but FinCEN Needs to Further Develop and Document Its Form Revision Process

GAO-09-226 Published: Feb 27, 2009. Publicly Released: Mar 30, 2009.
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Highlights

To assist law enforcement agencies in their efforts to combat money laundering, terrorist financing, and other financial crimes, the Bank Secrecy Act (BSA) requires financial institutions to file suspicious activity reports (SAR) to inform the federal government of transactions related to possible violations of law or regulation. Depository institutions have been concerned about the resources required to file SARs and the extent to which SARs are used. GAO was asked to examine (1) factors affecting the number of SARs filed, (2) actions agencies have taken to improve the usefulness of SARs, (3) federal agencies' use of SARs, and (4) the effectiveness of the process used to revise SAR forms. GAO reviewed laws and agency documents; analyzed SAR filings; and interviewed representatives from the Financial Crimes Enforcement Network (FinCEN), law enforcement agencies, bank regulators, and depository institutions.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of the Treasury To better ensure that future revisions to the SAR form result in changes that can be implemented and balance the differing needs of all stakeholders, the Secretary of the Treasury should direct the Director of FinCEN to further develop and document its strategy to fully incorporate certain GAO-identified practices to help enhance and sustain collaboration among federal agencies into the form change process and distribute that documentation to all stakeholders. Such practices could include defining and articulating the common federal outcome or purpose they are seeking to achieve; defining and agreeing on their respective roles and responsibilities; and having processes to monitor, evaluate, and report on their efforts to enable them to identify areas for improvement.
Closed – Implemented
In 2009, FinCEN incorporated the process through which it manages suspicious activity reports (SAR) and other Bank Secrecy Act (BSA) forms, into the charter and operations of its Data Management Council (DMC). The DMC provided a forum for various stakeholders such as law enforcement agencies and the financial regulators to provide input into FinCEN.

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Topics

Bank examinationBanking lawBanking regulationCrimesData collectionData integrityDocumentationFederal formsFederal lawFederal regulationsFederal reserve banksFinancial institutionsFormsInvestigations into federal agenciesLaw enforcementLending institutionsMoney launderingMonitoringProgram managementRegulatory agenciesReporting requirementsStandards evaluationData coordinationProgram goals or objectivesProgram implementation