VIDEO: FinCEN SAR Fields Numbering
In this Compliance Clip (video), Adam explains why the numbers on the FinCEN Suspicious Activity Report (SAR) fields are out of order. This is a “fun fact" from the BSA topics.
Video Transcript
The following is a transcript of this video.
This Compliance Clip is going to talk about the FinCEN SAR fields numbering and the order of the SAR fields on the FinCEN form. This, of course, is a BSA topic.
You may be asking yourself, if you've been involved in BSA at all at some point, why are the numbers on the fields in the SAR out of order? If you’re going to file a SAR, you take a look at the SAR form and it's out of order. It doesn't start at 1, it doesn't even start with Section I, but it's out of order. Some of you may be wondering why and so this is a little fun fact that you might be able to use on jeopardy - compliance jeopardy, something like that - someday. I really doubt that. But the answer, of course, to this question comes from FinCEN SAR Frequently Asked Question Number 14.
What FinCEN does is they explain to us why they did this. They say when they initially published for comment, the SAR itself, the SAR form in the Federal Register, was structured and numbered consistent with the overall format for all the new FinCEN reports, which was the new CTR, the new SAR, and a number of other reports. And they did this to include multiple parts and they began with the information about the persons involved in the transaction, which is the case on how they did all the reports being consistent. As a result, the FinCEN SAR starts numbering the line items on the initial submission page, as with all other reports, and then continues the numbering in the order of parts I, II, III, IV, and V. So number one starts in Part I, moving all the way down through Part V with some minor exceptions. What happened was when FinCEN moved to the electronic form that we currently use today, they realized that it didn't make sense to start with Part I first. In order to fill out the form electronically, it made more sense to start with information from the filing institution.
It does make sense when you think about it logically. If you're going to complete a SAR, first of all, who is completing the SAR? What financial institution? Then who is the SAR on, secondly, and finally, what is the suspicious activity? What they ultimately had to do since they had already published the order of the SAR was to restructure and reorganize the parts. So our SAR no longer starts with Part I being first. They've restructured it now that Part IV and III are in the beginning because those are the parts that include the information from the filing institution.
In the frequently asked question, they go on to justify the benefits of this. One of the benefits, of course, is that by filling out the financial institution information in the beginning, some additional information can auto populate and you don't have to retype it at a later time. That of course is a benefit, but it is funny that they weren't thinking forward, because in the past, the SAR form was still a paper form that could be filed electronically but they went to the new interactive SAR form that we have today, and we've had now for quite a few years. But they weren't thinking ahead and they had to restructure it. Today, we still have a SAR form that is completed in numbers that do not start with one and are essentially out of order.
Maybe that's something new for you. But that is all I have for this Compliance Clip.