PRACTICAL SOLUTIONS
SARs: A template for success
A
nti-money laundering (AML)
officers are increasingly utilizing templates to draft Suspicious
Activity Reports (SARs) as a way to drive
efficiencies, enable a consistent writing
style among investigators and address
deficiencies in AML programs. But to reap
the full benefits templates can provide and
to prevent unintended negative impacts,
financial institutions need to first consider
several factors around the people and processes involved in template creation, usage
and management.
Not all templates are created equal
The definition of a template varies among
financial institutions. While some templates, for example, address the entire SAR
form, others only focus on the narrative
section of the report. This article focuses
on the use of templates to standardize the
narrative section of SARs, as the Financial
Crimes Enforcement Network (FinCEN)
has identified SARs as a critical component in the fight against money laundering
and has called on financial institutions to
improve the clarity and accuracy of their
SAR reporting.
“The data derived from analyzing SARs
is only as good as the information submitted in the actual SAR form,” said FinCEN
Director James H. Freis, Jr., in an Oct. 2007
press release offering compliance tips for
money services businesses (MSBs) and
other SAR filers.
Templates also vary by degree of
structure. In the most structured templates for example, the entire narrative
is pre-populated, and the investigator
need only add key names, dates and
amounts. Less structured templates provide more flexibility in layout and may
or may not have a standardized opening
and closing, but most have at least bullets of key points the investigator can
incorporate into the narrative.
Very straightforward SAR narratives
are often naturally best suited for highlystructured templates. For example, a SAR
reporting potential cash structuring lends
itself easily to a structured template,
given the cut-and-dry nature of the report.
Similarly, a report for an unregistered MSB
or check casher is another good candidate
for a structured template, as the type of
supporting information contained within
this kind of report seldom varies.
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On the other hand, SARs reporting
Black Market Peso Exchanges (BPMEs) or
terrorist financing may be more difficult to
standardize in template format. However,
even if structured templates are not utilized for the more advanced type of report,
investigators may benefit from having a
less structured template ]