Suspicious Activity Report (SAR)
Definition
A Suspicious Activity Report (SAR) is a confidential document filed by financial institutions to report suspicious transactions that may indicate money laundering, fraud, or other financial crimes.
Explanation
SARs are filed when a financial institution detects suspicious activity, such as unusual transaction patterns, attempts to avoid reporting thresholds, or transactions inconsistent with the customer's known business. SARs are filed with the Financial Crimes Enforcement Network (FinCEN) in the US.
It is illegal to disclose to the subject of a SAR that a report has been filed. SARs are critical tools for law enforcement in investigating financial crimes and are used to build cases against criminals and terrorist financiers.
Example
A customer makes multiple cash deposits of $9,500 each over several days, just below the $10,000 reporting threshold. The bank identifies this as structuring and files a SAR.