CBA Publications >> CBA Regulatory Compliance Bulletin >> Vol 2000 No.28 December 23, 2004

Vol 2004 No.28 December 23, 2004

New FinCEN Guidance Eliminates Duplicative Filings

FinCEN has issued interpretive guidance clarifying that reports filed with the Office of Foreign Assets Control ("OFAC") of blocked transactions with Specially Designated Global Terrorists, Specially Designated Terrorists, Foreign Terrorist Organizations, Specially Designated Narcotics Trafficker Kingpins, and Specially Designated Narcotics Traffickers will be deemed by FinCEN to fulfill the requirement to file suspicious activity reports on such transactions. OFAC will provide the information to FinCEN for inclusion in the suspicious activity reporting database where it will be made available to law enforcement.

This revises prior FinCEN guidance that required institutions to file both blocking reports and SARs on the rationale that a reportable OFAC transaction also relates to potentially suspicious activity. See FinCEN's SAR Activity Review, Issue 6 (Nov 2003).

The exception to this guidance is that an SAR is required if the transaction would be reportable under the SAR regulations independent of an OFAC match; that is, the transaction is suspicious even if a designated entity were not involved. Also, if the financial institution is in possession of information not included on the blocking report filed with OFAC, an SAR "should be" filed with FinCEN including that information. FinCEN notes that a financial institution is not precluded by the guidance from filing an SAR to disclose additional information concerning the OFAC match.

The guidance is effective December 23, 2004. As of this date, FinCEN will deem its SAR rules to be satisfied by the filing of a blocking report with OFAC in accordance with OFAC's regulations. The guidance was published in the Federal Register, Vol. 69, No. 246 (12/23/2004). It is also available at FinCEN's web site at http://www.fincen.gov/sarguidanceofac.pdf.

The information contained in this CBA Regulatory Compliance Bulletin is not intended to constitute, and should not be received as, legal advice. Please consult with your counsel for more detailed information applicable to your institution.