FinCEN Delays Implementation of Revised Suspicious Activity Report (SAR) Forms

The Financial Crimes Enforcement Network (FinCEN) today filed a Federal Register notice announcing the delayed implementation of certain revised Suspicious Activity Report (SAR) forms that were scheduled to become effective on June 30, 2007. The agency is withdrawing this effective date for the revised SAR forms for depository institutions, casinos and card clubs, insurance companies, and the securities and futures industries. FinCEN will establish new effective and mandatory compliance dates for these revised forms in a future notice. The delay does not impact ongoing suspicious activity reporting, which will continue using the current forms.

FinCEN, in cooperation with the Internal Revenue Service (IRS), recently initiated an information-technology modernization strategy that includes a newly-established Bank Secrecy Act (BSA) data quality management program to further ensure that the data is accurate, complete and available in a timely manner to law enforcement agencies and financial institution regulators. Program staff re-examined many legacy data management protocols and discovered problems that, if not corrected, could continue to adversely impact how certain limited information sets are loaded into the database. As a result, FinCEN and the IRS have agreed to focus on optimizing the current database environment prior to introducing any new products or procedures.

"As FinCEN and the IRS move forward with this optimization process, we need to be vigilant in monitoring for any transitional problems that may arise. This modernization strategy affirms our responsibility to make the financial sector's contributions to law enforcement and national security most useful," said Ed Dorris, FinCEN's Chief Information Officer. "This temporary delay allows FinCEN, working with the IRS, to make certain that the data protocol issues are addressed before accepting the new SAR format. It is also very important that financial institutions receive as much notice as possible to make business decisions based on our deadlines."

IRS Chief Information Officer Richard Spires noted, "The IRS and FinCEN are working collaboratively to identify issues and implement improvements to strengthen the reliability of the BSA data."

This announcement does not affect the BSA filing requirements, and financial institutions should continue filing using the current SAR forms. The delay of the SAR forms for depository institutions, casinos and card clubs, insurance companies, and the securities and futures industries does not alter the effective date of the revised forms for money services businesses, which became effective on March 31, 2007 and will become mandatory October 1, 2007.

FinCEN has alerted BSA data users, such as the law enforcement community and regulators, of the data protocol issues and is providing information on the actions that have been taken to address them. As FinCEN and the IRS continue to pursue their data-quality management objectives, they will advise database users of pending adjustments to ensure that the system retains its superior investigatory value.