The Financial Crimes Enforcement Network and other federal agencies have developed new rules on suspicious activity report (SAR) confidentiality.
FinCEN, an arm of the U.S. Treasury Department, and federal bank and thrift regulatory agencies, today published a final rule stating that financial institutions must not reveal SARs even when they receive subpoenas.
Congress created the SAR system encourage financial institutions to identify and report activities that might be related to money laundering, international narcotics trafficking or financing of terrorism.
State, federal and non-U.S. investigators can ask for information about SARs, but even a federal agency such as the Securities and Exchange Commission can ask only about SARs involving entities it regulates, officials say in a preamble to the proposed regulations.
“Any insurance company, and any director, officer, employee, or agent of any insurance company that is subpoenaed or otherwise requested to disclose a SAR or any information that would reveal the existence of a SAR, shall decline to produce the SAR or such information, citing this section … and shall notify FinCEN of any such request and the response thereto,” according to the text of the new final rule.