Suspicious activity report definition
A suspicious activity report is a report of suspected fraudulent or illegal activities. It’s for alerting authorities about suspicious transactions. These usually look like money laundering, fraud, or terrorism financing. The report doesn’t prove wrongdoing. It flags unusual or suspicious behavior for further investigation by the authorities.
- Employees report suspicious activities internally to the compliance department.
- The department then evaluates the situation to determine if it warrants filing a SAR.
- The institution files the SAR with the appropriate regulatory body.
After-effects of filing:
The regulatory body reviews the SAR. They forward the case to law enforcement agencies if the suspicion is credible.
The institution keeps records of filed SARs for a set period, often five years.
Financial institutions can’t inform the individual or business involved about the report. It’s to ensure investigations are not compromised.
Implications for Individuals or Businesses:
Being the subject of a SAR doesn’t mean the individual or business is guilty of wrongdoing. It’s an alert to authorities to investigate further.
If the investigation uncovers criminal activity, legal proceedings will ensue.
If there is no wrongdoing, the individual or business remains unaware that someone ever reported them.