AML Software and SAR Decision Making

• January 21, 2019
• CLA Regulatory Compliance Team

Pay attention to situations where your anti money laundering (AML) software provides an alert to suspicious activity but you decide not to file a suspicious activity report (SAR).The Federal Financial Institution Examination Council (FFIEC) Bank Secrecy Act (BSA) Exam Manual encourages financial institutions to document the information used to make the decision of whether or not to file a SAR. It states:

“Banks should document SAR decisions, including the specific reason for filing or not filing a SAR. Thorough documentation provides a record of the SAR decision-making process, including final decisions not to file a SAR. However, due to the variety of systems used to identify, track, and report suspicious activity, as well as the fact that each suspicious activity reporting decision will be based on unique facts and circumstances, no single form of documentation is required when a bank decides not to file.” 

Consequently, should your AML software produce a suspicious activity alert, and your institution decides not to file a SAR, verify that your AML procedures include capturing the decision-making process in some form. 

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