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BOARD OF GOVERNORS

OF THE

FEDERAL RESERVE SYSTEM

WASHINGTON, D.C. 20551 

DIVISION OF SUPERVISION

AND REGULATION

SR 21-2 

January 19, 2021 

TO THE OFFICER IN CHARGE OF SUPERVISION

 AT EACH FEDERAL RESERVE BANK

SUBJECT: Answers to Frequently Asked Questions Regarding Suspicious Activity 

Reporting and Other Anti-Money Laundering Considerations

Applicability: This guidance applies to all financial institutions supervised by the Federal 

Reserve that are subject to the Bank Secrecy Act.

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance

Corporation, the National Credit Union Administration, and the Office of the Comptroller of the 

Currency (collectively, the federal banking agencies) and the U.S Department of the Treasury’s 

Financial Crimes Enforcement Network are issuing the attached Answers to Frequently Asked 

Questions (FAQs) Regarding Suspicious Activity Reports (SARs) and Other Anti-Money 

Laundering (AML) Considerations. 

Financial institutions, including those supervised by the Federal Reserve1, have a legal 

obligation to report suspicious activity. SARs are a cornerstone of the Bank Secrecy Act (BSA) 

reporting system, and are a critical tool for combating financial crimes. The FAQs are intended 

to provide clarity to industry questions regarding certain SAR filing requirements and 

compliance processes. The FAQs have been issued as a result of discussions among law 

enforcement, regulators, and industry representatives through the Bank Secrecy Act Advisory 

Group. The FAQs do not alter existing BSA/AML legal or regulatory requirements, or establish 

new supervisory expectations. 

Federal Reserve Banks are asked to distribute this letter to the supervised institutions in 

their districts and to appropriate supervisory staff. In addition, supervised organizations may 

send questions regarding the FAQs via the Board’s public website.2

Michael Gibson

Director

1 The Federal Reserve supervises bank holding companies, which have a regulatory obligation to report suspicious 

activity under 12 CFR 225.4(f) (Regulation Y). Accordingly, the SAR FAQs may be relevant in part to bank 

holding companies.

2 See, http://www.federalreserve.gov/apps/contactus/feedback.aspx
 

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Attachment:

• Answers to Frequently Asked Questions Regarding Suspicious Activity Reporting and Other 

Anti-Money Laundering Considerations 
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Board of Governors of the Federal Reserve System

Federal Deposit Insurance Corporation

Financial Crimes Enforcement Network

National Credit Union Administration

Office of the Comptroller of the Currency

Answers to Frequently Asked Questions Regarding Suspicious Activity Reporting 

and Other Anti-Money Laundering Considerations

January 19, 2021

The Financial Crimes Enforcement Network (FinCEN), jointly with the Board of Governors of the 

Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), 

the National Credit Union Administration (NCUA), and the Office of the Comptroller of the 

Currency (OCC) (collectively, the Federal banking agencies), and in consultation with the staff 

of certain other federal functional regulators, is issuing answers to frequently asked questions 

(FAQs) regarding suspicious activity reports (SARs) and other anti-money laundering (AML) 

considerations for financial institutions covered by SAR rules.1 The answers to these FAQs 

clarify the regulatory requirements related to SARs to assist such financial institutions with their 

compliance obligations, while enabling financial institutions to focus resources on activities that 

produce the greatest value to law enforcement agencies and other government users of Bank 

Secrecy Act (BSA) reporting. The answers to these FAQs neither alter existing BSA/AML legal 

or regulatory requirements, nor establish new supervisory expectations; they were developed in 

response to recent Bank Secrecy Act Advisory Group (BSAAG) recommendations, as described 

in more detail in FinCEN’s Advance Notice of Proposed Rulemaking (ANPRM) on Anti-Money 

Laundering Program Effectiveness, published in September 2020.2

Question 1: Requests by Law Enforcement for Financial Institutions to Maintain Accounts

Can a financial institution maintain an account or customer relationship for which it has 

received a written “keep open” request from law enforcement, even though the financial 

institution has identified suspicious or potentially illicit activity?3

1. Financial institutions subject to SAR requirements include: Banks (31 CFR § 1020.320), Casinos and Card Clubs (31 

CFR § 1021.320), Money Services Businesses (31 CFR § 1022.320), Brokers or Dealers in Securities (31 CFR § 1023.320), 

Mutual Funds (31 CFR § 1024.320), Insurance Companies (31 CFR § 1025.320), Futures Commission Merchants and 

Introducing Brokers in Commodities (31 CFR § 1026.320), Loan or Finance Companies (31 CFR § 1029.320), and 

Housing Government Sponsored Enterprises (31 CFR § 1030.320).

2. See https://www.federalregister.gov/documents/2020/09/17/2020-20527/anti-money-laundering-program-effectiveness.

3. The response provided to this question clarifies current regulatory requirements. Under the recently-enacted AntiMoney Laundering Act of 2020, the Secretary of the Treasury is required to issue guidance on the required elements 

of a keep open request, which is forthcoming. See § 6306 of the Anti-Money Laundering Act of 2020, Pub. L. No. 116-

283, §§ 6001 – 6511 (enacted as Division F of the National Defense Authorization Act for Fiscal Year 2021).
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Yes. Law enforcement may have an interest in ensuring that certain accounts and customer 

relationships remain open notwithstanding suspicious or potential criminal activity in 

connection with the account. A financial institution may decide to maintain an account based 

on a written “keep open” request from a law enforcement agency, however, it is not obligated 

to do so. The written request should be specific and indicate both that the law enforcement 

agency has requested that the financial institution maintain the account, as well as the purpose 

and duration of the request.4 Keeping such an account open as requested may be highly useful 

to law enforcement and may further efforts to identify and combat money laundering, terrorist 

financing, and other illicit financial activities. 

A financial institution should not be criticized solely for its decision to maintain an account 

relationship at the request of law enforcement or for its decision to close the account. 

Ultimately, the decision to maintain or close an account should be made by a financial 

institution in accordance with its own policies, procedures, and processes. It may be useful 

for financial institutions to maintain documentation of “keep open” requests, including after 

a request has expired. If financial institutions keep such an account open as requested by law 

enforcement, they are still required to comply with all applicable BSA requirements, including 

requirements to conduct ongoing risk-based monitoring, and, as appropriate, file SARs,5

including continuing activity SARs consistent with FinCEN guidance.6

Question 2: Receipt of Grand Jury Subpoenas/Law Enforcement Inquiries and SAR Filing

Should a financial institution file a SAR solely on the basis of receiving a grand jury 

subpoena or other law enforcement inquiries? 

No. The receipt of a law enforcement inquiry, such as a grand jury subpoena, does not by 

itself indicate that the criteria requiring the filing of a SAR have been met. However, receipt of 

a grand jury subpoena or other law enforcement inquiry is pertinent information relevant to a 

financial institution’s overall assessment of risk and the risk profile for the relevant customer(s) 

and account(s). Generally, a financial institution will assess and review all relevant 

information it has about a customer that is the subject of a grand jury subpoena or other law 

enforcement inquiries, in accordance with its risk-based AML program. For example, the 

receipt of a grand jury subpoena should cause a financial institution to review relevant account 

activity and transactions.7

4. A written request from a federal law enforcement agency should be issued by a supervisory agent or by an attorney 

within a United States Attorney’s Office or another office of the Department of Justice. If a state or local law 

enforcement agency requests that an account be maintained, then the financial institution should obtain a written 

request from a supervisor of the state or local law enforcement agency or from an attorney within a state or local 

prosecutor’s office. For additional guidance about the content of “keep open” requests, see “Requests by Law 

Enforcement for Financial Institutions to Maintain Accounts,” available at https://www.fincen.gov/resources/statutesregulations/guidance/requests-law-enforcement-financial-institutions-maintain.

5. See 12 CFR 208.62, 211.5(k), 211.24(f), and 225.4(f) (Federal Reserve); 12 CFR 353 (FDIC); 12 CFR 748.1(c) (NCUA); 12 

CFR 21.11 and 12 CFR 163.180 (OCC); and 31 CFR Chapter X (FinCEN).

6. See https://www.fincen.gov/sites/default/files/shared/sar_tti_21.pdf at p. 53.

7. See https://www.fincen.gov/sites/default/files/shared/sar_tti_10.pdf at p. 43.
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The financial institution should determine whether SAR filing is necessary based on its 

assessment of all information available and applicable regulatory requirements. If a financial 

institution files a SAR on a customer or transaction following the receipt of a grand jury 

subpoena or other law enforcement inquiry, the SAR should focus on the facts and circumstances 

that support a finding of suspicious activity rather than the subpoena or inquiry itself.8

Question 3: Maintaining a Customer Relationship Following the Filing of a SAR or Multiple SARs

Is a financial institution required to terminate a customer relationship following the filing of 

a SAR or multiple SARs? 

No. There is no BSA regulatory requirement to terminate a customer relationship after the filing 

of a SAR or any number of SARs. The decision to maintain or close a customer relationship as a 

result of the identification of suspicious activity is a determination for a financial institution to 

make based on the information available to it, its assessment of money laundering or other illicit 

financial activity risks, and established policies, procedures, and processes. 

Financial institutions have the flexibility to develop risk-based procedures and monitoring 

processes for the purpose of updating the customer risk profile and determining when to 

maintain or close accounts. Generally, financial institutions have policies, procedures, and 

processes in place that establish an escalation process for decisions to maintain or terminate 

customer relationships based on relevant factors, including SAR filing(s). These processes 

establish criteria, including when review by senior management and legal staff is warranted, 

for the decision to maintain or terminate the customer relationship in light of elevated risk 

factors. As indicated above, there is no specific number of SAR filings that a financial institution 

must consider to trigger any particular escalation step. Rather, the number of SAR filings and 

other factors that trigger escalation steps may vary based upon, among other things, the risk 

profile of the customer, including the geographical locations involved, the volume and type of 

transactions conducted by customers, the type of account, and the types of SARs filed by the 

financial institution in relation to the customer.9

Question 4: SAR Filing on Negative News Identified in Media Searches

Is a financial institution required to file a SAR based solely on negative news?

No. The existence of negative news related to a customer or other activity at a financial 

institution does not by itself indicate that the criteria requiring the filing of a SAR have been 

met, and does not automatically require the filing of a SAR by a financial institution. A financial 

institution may review media reports, news articles and/or other references to assist in its 

performance of customer due diligence, as well as its evaluation of any transactions or activity it 

8. Financial institutions are reminded that grand jury proceedings and certain law enforcement inquiries may be 

subject to specific confidentiality provisions. For example, National Security Letters are subject to certain disclosure 

prohibitions. See, e.g., https://www.fincen.gov/sites/default/files/shared/sar_tti_08.pdf at p. 36.

9. As referenced in Question 1, there may be instances where law enforcement requests a financial institution to 

maintain an account relationship, notwithstanding potential suspicious activity, and the financial institution should 

continue filing SARs, or continuing activity SARs, as applicable.
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considers unusual or potentially suspicious. For example, negative news may cause a financial 

institution to review customer activity as well as other related information, such as that of third 

parties with transactions involving the customer’s account. As with other identified unusual or 

potentially suspicious activity, financial institutions should comply with applicable regulatory 

requirements and follow their established policies, procedures, and processes to determine the 

extent to which it investigates and evaluates negative news, in conjunction with its review of 

transactions occurring by, at, or through the institution, to determine if a SAR filing is required. 

Question 5: SAR Monitoring on Multiple Negative Media Alerts

If there are multiple negative news alerts based on the same event, is a financial institution 

expected to independently investigate each of those alerts?

No. In circumstances where there are multiple negative news alerts (as identified through 

monitoring for unusual or suspicious activity) based on the same underlying events, a financial 

institution does not need to independently investigate each alert, but rather may consider 

whether the alert contains new or different information that warrants further investigation or 

whether the negative news otherwise assists or informs the evaluation of the activity at issue. 

Many financial institutions maintain a process for managing a high volume of alerts generated 

by news. This type of process will allow the financial institution to identify and evaluate new 

information and assess whether to update customer information and risk profile, investigate 

transactions which may result in the filing of a SAR, or escalate or terminate a customer 

relationship, as appropriate consistent with its policies, procedures, and processes. Financial 

institutions have flexibility in developing risk-based procedures and monitoring processes for 

the purpose of complying with customer due diligence requirements and, where appropriate, 

consideration of negative news.10

Question 6: Information in Data Fields and Narrative

Do financial institutions need to repeat information in the SAR narrative that has already 

been included in other SAR data fields?

No. As stated in the SAR instructions, information provided in other sections of a SAR does 

not need to be repeated in the narrative unless necessary to provide a clear and complete 

description of the suspicious activity.11 Consistent with FinCEN’s SAR instructions, financial 

institutions should focus the SAR narrative on the information necessary to enable the reader 

to understand the activity reported, including what was unusual or irregular about the activity 

10. Customer Due Diligence (CDD) regulations (31 CFR §§ 1020.210, 1021.210, 1022.210, 1023.210, 1024.210, 1025.210, 

1026.210, 1027.210, 1028.210, 1029.210, and 1030.210) do not categorically require the performance of media searches 

or particular screenings. However, in certain circumstances, a financial institution might assess, on the basis of risk, 

that a customer presents a higher risk profile and, accordingly, collect more information (such as media searches) to 

better understand the customer relationship. Such information also assists a financial institution in determining when 

transactions are potentially suspicious. See, e.g., “Frequently Asked Questions Regarding Customer Due Diligence 

Requirements for Covered Financial Institutions,” August 3, 2020, https://www.fincen.gov/resources/statutesregulations/guidance/frequently-asked-questions-regarding-customer-due-1.

11. See FinCEN Suspicious Activity Report Electronic Filing Requirements, last updated July 2020, available at: 

https://bsaefiling.fincen.treas.gov/docs/XMLUserGuide_FinCENSAR.pdf at p. 167.
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that caused suspicion. For example, granular detail (such as subject identification data) that is 

reported in the appropriate SAR data fields does not need to be repeated in the SAR narrative, 

unless such information is necessary to clearly describe the activity reported. Additionally, 

the SAR narrative may benefit from information about the suspicious activity that may not be 

readily evident from SAR data fields alone, such as an explanation about why the filer selected 

different characterizations of suspicious activity in the SAR data fields. Note, however, that 

FinCEN Advisories may include requests for financial institutions to incorporate certain 

terms in SAR field 2 (Financial Institution Note to FinCEN) and in the narrative to indicate a 

connection between the suspicious activity being reported and the subject of an advisory.12

Question 7: SAR Character Limits

Should financial institutions file additional SARs on the same suspicious activity to 

accommodate narratives that are longer than the SAR narrative character limits?

No. Filers must provide a clear, complete, and concise description of the suspicious activity 

that led to the decision to file the SAR.13 A financial institution that reaches the SAR narrative 

character limit should not file an additional SAR to continue a narrative in order to avoid 

duplicate filings on the same activity in the database.14 Instead, filers should focus the relevant 

information in the narrative as much as possible, and may include additional, relevant 

information as an attachment to the SAR, or note that it is available as supporting documentation. 

To keep narratives within the character limit and enable efficient review of information (such as 

transaction records) that is displayed most clearly in tabular format, filers can include a single 

comma-separated values (CSV) file with no more than one megabyte of data as an attachment to 

a SAR. If a filer wishes to include information in a tabular format in a SAR, the CSV attachment 

should be used; filers should not include tabular information within the SAR narrative.

Filers must retain all supporting documentation or a business record equivalent for five years 

from the date of the report.15 All supporting documentation (such as copies of instruments; 

receipts; sale, transaction or clearing records; photographs; and surveillance audio or video 

recordings) must be made available to appropriate authorities upon request.16

12. For additional information on FinCEN Advisories, see https://www.fincen.gov/resources/advisoriesbulletinsfactsheets.

13. See FinCEN Suspicious Activity Report Electronic Filing Requirements, last updated July 2020, available at: 

https://bsaefiling.fincen.treas.gov/docs/XMLUserGuide_FinCENSAR.pdf at p. 167.

14. A SAR narrative can have a maximum of 20,000 characters. For more information, see FinCEN Suspicious Activity 

Report Electronic Filing Requirements, last updated July 2020, available at: https://bsaefiling.fincen.treas.gov/docs/

XMLUserGuide_FinCENSAR.pdf at p. 105.

15. 31 CFR § 1010.430; 31 CFR § 1010.320; subpart C of the relevant financial institution part of 31 CFR Chapter X.

16. 31 CFR § 1010.320; subpart C of the relevant financial institution part of 31 CFR Chapter X.