SAR Confidentiality Reminder for Internal and External Counsel of Financial Institutions (FinCEN Advisory – FIN-2012-A002)

Department of the Treasury
Financial Crimes Enforcement Network
Advisory
FIN-2012-A002
Issued: March 2, 2012
Subject: SAR Confidentiality Reminder for Internal and External Counsel of Financial Institutions The Financial Crimes Enforcement Network (FinCEN) is issuing this Advisory to remind financial institutions, and in particular, the lawyers that advise them, of the requirement to maintain the confidentiality of Suspicious Activity Reports (SARs). FinCEN is concerned that an increasing number of private parties, who are not authorized to know of the existence of filed SARs, are seeking SARs from financial institutions for use in civil litigation and other matters. Financial institutions, and their current and former directors, officers, employees, agents, and contractors, are prohibited from disclosing SARs, or any information that would reveal the existence of a SAR.1 FinCEN recognizes that an escalation in the number of requests for use of SARs in private litigation may increase the likelihood of an unauthorized disclosure of a SAR. This is especially true when external counsel is unfamiliar with the regulations covering SAR confidentiality. Financial institutions, and their current and former directors, officers, employees, agents, and contractors could be subject to civil and criminal penalties for the unauthorized disclosure of a SAR. FinCEN is responsible for both safeguarding the information it collects under its regulations implementing the Bank Secrecy Act, including SARs, and promoting appropriate protection of this by authorized users of the data across the Federal, State and local levels of government. The unauthorized disclosure of SARs could undermine ongoing and future investigations by tipping off suspects, deterring financial institutions from filing SARs, and threatening the safety and security of institutions and individuals who file such reports. Such disclosure of SARs compromises the essential role SARs play in protecting our financial system and in preventing and detecting financial crimes and terrorist financing. The success of the SAR reporting system depends upon the financial sector's confidence that these reports will be appropriately protected. Possible Civil and Criminal Penalties for Unauthorized SAR Disclosures The unauthorized disclosure of a SAR is a violation of federal law.2 Both civil and criminal penalties may be imposed for SAR disclosure violations. Violations may be enforced through civil penalties3 of up to $100,000 for each violation and criminal