By participating in 314(b), BSA professionals provide more robust and complete information in their SARs, making it easier and more efficient for law enforcement to focus on catching these financial criminals. This is especially beneficial for investigations with large dollar amounts that appear layered through different financial institutions.
A common example of that follows this format: “One bank notices suspicious deposits from their customer. Those funds appear to come from the same customer’s account at a different bank. Sometimes these SARs involved hundreds of thousands of dollars (if not millions) in suspicious deposits. Yet, the bank never issues a 314(b) request to the other bank to see if they know the source of funds. They usually close the account, and the bad actor moves to a new bank (or banks), and the cycle continues.”
Law enforcement representatives sitting on regional SAR Review Committees estimate that 50% of the subjects they investigate have multiple financial institutions filing SARs for the same subjects. Each institution has a part of the story, and if 314(b) had been utilized, they could tell the whole story in one SAR, cutting down on additional work for law enforcement and allowing them to solve the case quicker.
Even individual SARs would be much better quality if the source of funds was obtained from a sharing institution.
If your institution decides to register with FinCEN Information Sharing and Section 314(b), avoid the pitfalls and, after registering, remember to:
- Establish written policy & procedures for 314(b) information sharing;
- Have the Board of Directors approve the addition to the BSA Policy;
- Understand what information can be shared (see FinCEN 314(b) Fact Sheet);
- Designate one or more person(s) with the authority to participate in your institution;
- Verify all 314(b) registrants and authorized persons prior to initiating information sharing;
- Renew annually and update points of contact as needed; and
- Use your transaction monitoring system’s case management functions to document and track all incoming and outgoing requests.
It is time to reconsider where the responsibility lies and remind ourselves of the core mission of the Bank Secrecy Act. In his August 14, 2018 remarks at the 11th Annual Las Vegas Anti-Money Laundering Conference and Expo, FinCEN Director Kenneth A. Blanco stressed the importance of this tool and called for the need for information sharing across financial institutions through the voluntary 314(b) program.
Let’s continue to make a difference in our fight against terrorism and money laundering. Perhaps the greatest way to make an impact on our world is to work as a team, using all of the tools and resources available to us, whether they are voluntary or not.