Audit Report

OIG-17-055

TERRORIST FINANCING/MONEY LAUNDERING

FinCEN’s 314 Information Sharing Programs Are Useful But 

Need FinCEN’s Attention

September 18, 2017

Office of 

Inspector General 

Department of the Treasury 
Contents 

FinCEN’s 314 Information Sharing Programs Are Useful But Need FinCEN’s Page i 

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Audit Report................................................................................................. 1 

 

Results in Brief ................................................................................................ 2 

Background ..................................................................................................... 4 

Audit Results ................................................................................................... 7

FinCEN’s Section 314(a) Program Could be Enhanced .................................... 7

 Recommendation .................................................................................... 9 

FinCEN Does Not Require Financial Institutions To Provide All 

Information Set Forth In Its Regulation ......................................................... 10

 Recommendation .................................................................................... 11

FinCEN Needs to Improve Requests for Section 314(a) User Feedback ............ 12

 Recommendation .................................................................................... 14 

FinCEN Should Continue To Address Concerns Over the 314(b) 

Program .......................................................................................... 14 

 Recommendation .................................................................................... 16 

Other Matter ................................................................................................... 17 

Duplicate Section 314(a) Responses ............................................................ 17 

Appendices

Appendix 1: Objective, Scope, and Methodology ............................................ 19 

Appendix 2: Management Response .............................................................. 22 

Appendix 3: Major Contributors to This Report ............................................... 24 

Appendix 4: Report Distribution .................................................................... 25 

Abbreviations

 BSA Bank Secrecy Act 

 FinCEN Financial Crimes Enforcement Network 

 FAQ Frequently Asked Questions 

 JAMES Joint Audit Management Enterprise System 

LEA Law Enforcement Agency 

OIG Office of Inspector General 
Contents 

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 OMB Office of Management and Budget 

 SISS Secure Information Sharing System 

 Treasury Department of the Treasury
OIG Audit 

Report

The Department of the Treasury 

Office of Inspector General 

FinCEN’s 314 Information Sharing Programs Are Useful But Need FinCEN’s Page 1 

Attention (OIG-17-055) 

September 18, 2017 

Jamal El-Hindi, Acting Director 

Financial Crimes Enforcement Network 

This report presents the results of our audit of the Financial Crimes 

Enforcement Network’s (FinCEN) information sharing with other 

Federal agencies and financial institutions in accordance with 

information sharing procedures under Title III, Section 314, of the 

USA PATRIOT Act1

 (hereinafter Section 314). FinCEN administers 

the Bank Secrecy Act (BSA), which established a framework to 

combat criminal use of the financial system.2

 The USA PATRIOT 

Act amended BSA to focus on additional financial industry sectors 

and the financing of terrorism. 

Section 314 created two programs to facilitate the sharing of 

information about financial crimes between government agencies 

and financial institutions. Section 314(a) requires financial 

institutions to search their records to identify and report to FinCEN 

information regarding a particular subject suspected of engaging in 

terrorist acts or money laundering activities. Section 314(b) 

provides for the voluntary sharing of information among financial 

institutions to identify and report activities that may involve 

terrorist acts or money laundering. 

The objective of this audit was to determine the extent to which 

information sharing is occurring among the government and 

financial institutions. To accomplish our objective, we reviewed 

applicable program documentation and interviewed FinCEN program 

officials, Federal bank regulatory agency officials, and Federal law 

 

1

 Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct 

Terrorism Act of 2001, P.L. 107-56, 115 Stat. 272 through 402 (2001) (USA PATRIOT Act). Title III 

of the USA PATRIOT Act is separately entitled “International Money Laundering and Anti-Terrorist 

Financing Act of 2001.” Title III contains the majority of the USA PATRIOT Act’s anti-money 

laundering and anti-terrorist financing provisions. 

2

 Public Law 91–508 (October 26, 1970). 
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enforcement agency officials regarding the Section 314 programs. 

We conducted the majority of our fieldwork from December 2012

through October 2013 and performed additional procedures to 

update information as of December 2015. Subsequent to our 

fieldwork and prior to the issuance of our report, in August 2016, 

FinCEN officials reported to us that they took steps to improve the 

314 programs. Appendix 1 provides a more detailed description of 

our audit objective, scope, and methodology. 

 Results in Brief 

At the time of our audit, more than 22,000 financial institutions 

had participated in the Section 314(a) program.3 A majority of the 

law enforcement agencies’ (LEA) program users we interviewed 

stated that FinCEN’s Section 314(a) program helped law 

enforcement agencies by locating financial assets owned by 

subjects of terrorism and money-laundering investigations and by 

identifying recent transactions that those subjects made. However, 

some users suggested that FinCEN could make enhancements to 

the program that would provide more information to assist in 

investigations, with subpoena preparation, or with both of these. 

During our fieldwork, we shared this information with FinCEN 

officials. 

We noted that FinCEN did not require financial institutions to 

provide all information set forth by its regulations.4

 FinCEN 

exercised an exemption to its regulations and instructed institutions 

to respond only if the name(s) supplied by a LEA matched the 

name(s) on an account or a transaction, and to provide a point of

contact at the financial institution.5 The instructions, in effect since 

November 2012, directed financial institutions to provide additional 

information in the comment field of their Section 314(a) response if 

they believe additional information is needed. We found that the 

 

3

 Subsequent to our audit fieldwork, the December 20, 2016 FinCEN 314(a) Fact Sheet reported there 

were more than 16,000 financial institutions participating in the 314(a) program. 

4

 31 C.F.R. 1010.520(b)(3)(ii) requires the financial institution to provide, for every match, the number 

of accounts for the subject or, in the case of a transaction, the date and type of each such 

transaction. Institutions must also provide the subject’s social security number, taxpayer identification 

number, passport number, date of birth, address, or other similar identifying information provided by 

the individual, entity, or organization when such account was opened or transaction conducted. 

5

 FinCENnews, “FinCEN to Reinstate USA PATRIOT Act Section 314(a) Information Requests,”

February 6, 2003. 
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comments made by these institutions did not provide consistent 

information for law enforcement. 

Feedback from LEA representatives regarding the Section 314(a) 

program was limited, and FinCEN’s user survey needed 

improvement. FinCEN requested Section 314(a) program feedback 

from users 12 to 18 months after submission of a Section 314(a) 

request, too early in the process given some investigations 

continue for years. We also found that at least one of the 

questions posed in the survey was not well designed. 

As another matter, we noted that financial institutions submitted 

duplicate responses to Section 314(a) inquiries6 despite FinCEN’s

instructions prohibiting them. FinCEN revised the Section 314(a) 

module in a subsequent systems project completed in March 2014, 

which officials stated would prevent duplicate entries. We did not 

review these modifications, but they will be considered for future 

audit follow-up and work. 

Regarding FinCEN’s voluntary Section 314(b) program, Federal 

bank regulatory agency officials we interviewed stated that 

financial institutions were concerned about participating even after 

FinCEN issued guidance (including an explanation of safe harbor 

provisions) for the program in June 2009. We found that 

approximately 4,000 financial institutions had participated in the 

Section 314(b) program by December 2012, just 18 percent of the 

number that participated in the mandatory Section 314(a) program. 

To encourage greater participation, FinCEN issued a fact sheet 

about voluntary Section 314(b) information sharing in October 

2013.

7

 In December 2015, FinCEN reported that participation had 

increased to approximately 5,500 financial institutions. 

We recommend that FinCEN (1) incorporate the user 

recommendations for enhancements in addition to the public 

comments received when evaluating its proposed renewal of the 

Section 314(a) program; (2) identify the impact on LEAs of 

exempting information from the responses to their 314(a) requests 

and determine if FinCEN should continue to exempt information set 

 

6

 FinCEN instructed financial institutions that responses submitted to FinCEN’s Secure Information 

Sharing System (SISS) were to be entered once and could not be revised. 

7

 In October 2013, FinCEN issued a 314(b) Fact Sheet, which provided a program overview and 

explained the benefits of participation, eligibility, the information that can be shared, and how to 

participate in the program. In November 2016, FinCEN issued a new 314(b) Fact Sheet which 

included revised instructions on submitting registrations electronically. 
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forth in its regulations; (3) ensure the Section 314(a) survey 

questions are clarified to provide for consistent interpretation and 

responses about the program, and allow sufficient time for 

feedback in order to gain a more complete understanding of how 

Section 314(a) information benefits law enforcement cases; and (4) 

identify and address areas of concern regarding the Section 314(b) 

program and include these in guidance and outreach to encourage 

greater participation in the program. 

In a written response which is included in its entirety as 

appendix 2, FinCEN management reported that it is making 

progress with the information sharing procedures throughout the 

314 programs. FinCEN implemented enhancements in May 2016 

and has committed to updating the Frequently Asked Questions 

(FAQ). FinCEN management reported that in September 2016, it 

clarified its Section 314(a) survey questions for law enforcement 

and has implemented a minimum waiting period of 18 months 

before surveying law enforcement. Finally, FinCEN issued a 314(b) 

Fact Sheet in November 2016 to address remaining areas of 

concern among financial institutions. FinCEN’s management

response meets the intent of our recommendations, and is 

summarized in the recommendation sections of this report. FinCEN 

will need to record the estimated date for completing its planned 

corrective actions in the Joint Audit Management Enterprise 

System (JAMES), Treasury’s audit recommendation tracking 

system. 

Background 

FinCEN implemented the Section 314(a) program on September 26, 

2002. Under Section 314(a), FinCEN obtains for Federal, State, 

local, and foreign LEAs information from financial institutions to 

locate accounts and transactions of persons who may be involved 

in terrorism or significant money laundering transactions.8

To ensure that Section 314(a) requests are used only for 

appropriate cases, FinCEN requires LEA requesters to provide the 

following assurances: the request has been subject to appropriate 

scrutiny at the LEA, the matter under investigation is significant, 

 

8

 The requesting LEA determines if an investigation is significant based upon suspected monetary 

amounts; criminal organization involvement; multi-regional and/or cross border implications; potential 

multi-agency task force involvement; or importance of the investigation to the requesting agency. 
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and the agency has exhausted all other means of obtaining the 

information being requested. The requester must provide identifiers 

for a suspect, such as date of birth, address, and social security 

number, which would allow a financial institution to differentiate 

between common or similar names. 

FinCEN’s Section 314 program office reviews and approves 

requests, then notifies LEA requesters, via email, of the date when 

the information will be made available to the financial institutions 

via the Section 314(a) Secure Information Sharing System (SISS).9

The financial institutions must query their records10 for data 

matches, including accounts maintained by the subject during the 

preceding 12 months and transactions conducted within the last 6 

months. The financial institutions have 2 weeks from the date the 

case is posted on SISS to report any matches between the 

subject’s name and other identifying information, including any 

accounts or transactions recorded by the financial institution. If no 

matches are found, the financial institution is not required to 

respond. After 2 weeks, FinCEN compiles all responses from the 

financial institutions and forwards them to the 314(a) LEA 

requesters. Subsequent to our field work and prior to the issuance 

of our report, according to FinCEN, as a result of an IT 

enhancement to the 314(a) Program, starting in May 2016 any 

positive responses posted by the financial institutions are sent to 

LEA requesters by email each night. 

During fiscal years 2010 through 2012, FinCEN accepted and 

posted 711 (95 percent) of the 745 Section 314(a) requests 

submitted by law enforcement. FinCEN rejected 34 requests (5 

percent) after LEAs failed to respond to FinCEN’s requests for more 

information. The 711 approved requests resulted in more than 

50,000 matches and contained over 8,500 subjects of interest. 

 

9 A secure website maintained by FinCEN that can only be accessed by the financial institutions’

designated Section 314(a) points of contact who receive biweekly e-mail notifications about new 

information available on the SISS web site for their review. As of August 2016, Section 314(b) points 

of contact could use SISS. 

10

 Financial institutions must review deposit accounts; funds transfers; sales of monetary instruments; 

loans; accounts to purchase, sell, lend, hold, or maintain custody of securities, commodity futures, 

options, or other derivatives; and safe-deposit boxes. 
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More than 2,400 unique financial institutions responded to these 

requests. 

The Section 314(b) program, also launched in September 2002, 

allows two or more financial institutions, under the protection of 

safe harbor from liability, to share information with one another 

regarding individuals, entities, organizations, and countries 

suspected of possible terrorist or money-laundering activities. A 

financial institution that intends to share information must 

complete several steps to be granted the benefit of safe harbor 

provisions.11

 

In June 2009 and October 2013, FinCEN issued guidance clarifying

that financial institutions participating in the Section 314(b) 

program may share information relating to transactions they 

suspect may involve the proceeds of one or more specified 

unlawful activities.12 FinCEN specified that program participants 

remain within the protection of the Section 314(b) safe harbor from 

liability. 

Some financial institutions have additional reporting responsibilities. 

If a financial institution knows, suspects, or has reason to suspect 

that an individual, entity, or organization is involved in, or may be 

involved in terrorist activity or money laundering, as a result of 

information shared through the Section 314(b) program, it must 

also submit a Suspicious Activity Report to FinCEN.

 

11 31 CFR 1010.540, “Voluntary information sharing among financial institutions.” Financial Institutions 

must: (1) submit a notice to FinCEN of intent to share information; (2) take reasonable steps to verify 

that the other financial institution with which it intends to share information has submitted to FinCEN 

a notice to share information; (3) ensure that information received by a financial institution shall not 

be used for any purpose other than identifying and, where appropriate, reporting on money laundering 

or terrorist activities and determining whether to establish or maintain an account or to engage in a 

transaction or assisting the financial institution in complying with any requirement of 31 CFR Chapter 

X; and (4) maintain adequate procedures to protect the security and confidentiality of such 

information. 

12 The unlawful activities are listed in 18 U.S.C. §1956 and §1957. They include fraudulent and 

criminal activities, such as a violation of the Controlled Substances Act (21 U.S.C. §848), the 

smuggling of goods into the United States, and embezzlement. 
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Audit Results 

Finding 1 FinCEN’s Section 314(a) Program Could Be Enhanced 

Under Section 314(a) LEAs, through FinCEN, can request from 

financial institutions account and transaction information related to 

individuals, entities, and organizations suspected of terrorist 

financing and significant money laundering activities. 

During fiscal years 2010 through 2012, a total of 43 LEAs 

submitted 745 individual Section 314(a) requests. The following 

six LEAs submitted 585 (79 percent) of those requests, and we 

interviewed representatives from each of these LEAs to ask about 

the usefulness of the Section 314(a) program: 

 United States Drug Enforcement Administration (two field 

offices) 

 Federal Bureau of Investigation (three field offices) 

 United States Immigration and Customs Enforcement (two field 

offices) 

 Internal Revenue Service Criminal Investigation (three field 

offices) 

 Offices of the United States Attorneys (two field offices) 

 United States Secret Service (one location) 

Positive Comments on the Section 314(a) Program 

Representatives of the six LEAs we interviewed reported that 

FinCEN’s Section 314(a) information was very helpful during 

investigations and that they were satisfied with the way FinCEN 

operated the program. LEA representatives told us that, in almost 

all cases, financial institutions returned responses within the 2 

week time limit, and one representative expected the turnaround 

time to be a lot longer. Many of the LEA representatives said that 

the responses were accurate even though some included false-
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positive matches, such as a same name but different social

security number.

Suggested Enhancements to the Section 314(a) Program 

Although most LEA representatives we interviewed found the 

Section 314(a) program helpful, they suggested the following 

additional information be provided to support their investigation and 

subpoena preparation:

 transactions made by the subject or accounts held at the 

financial institution;

 status of an account identified by the request, such as active or

closed;

 point of contact to coordinate the delivery of subpoenas to the 

institution for specific customer and account information, if 

different than the one provided by the financial institutions;

 identifier(s) that led to the match, such as the name only, social

security number only, or both name and social security number.

In addition, one representative of a LEA preferred that comment 

responses by financial institutions be provided in a consistent 

format for ease of review.

LEAs stated that the enhancements listed above would be helpful 

to law enforcement in several ways. Law enforcement users 

explained that they need to know as many details as possible about 

a match before issuing a subpoena. For example, if a LEA has a 

subpoena issued for a subject’s account, and a match is made

because of a transaction, the LEA must generate another subpoena 

specifically for that transaction. This causes unnecessary delays 

and additional time spent by the LEA and the financial institution.

When a financial institution responds with only a name, a false 

positive could result. According to one LEA, the possibility of 

identifying subjects with the same name but a different social

security number, for example, could indicate a subject is in the 

process of changing their identity.

FinCEN should solicit recommendations for enhancement from its 

Section 314(a) users. In support of making government work more 

efficiently and in following Office of Management and Budget 

(OMB) Memorandum M-11-31, Delivering an Efficient, Effective, 

and Accountable Government which provides that “critical to 
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success is a culture where agencies constantly ask, and try to 

answer, questions that help them find, sustain and spread effective 

and efficient programs, practices, and policies that support the 

agency’s mission”, these recommendations should be evaluated 

and implemented as appropriate. 

We provided information gained from LEA interviews to FinCEN’s 

former director. In December 2015, we met with FinCEN officials 

to determine whether FinCEN addressed enhancements to the 

Section 314(a) program that had been suggested by law 

enforcement. We found that FinCEN officials had not implemented 

changes to the program to address any of the suggested 

enhancements because they believed the financial institutions 

could provide requested information in the comments to their 

responses. In February 2016, FinCEN issued a notice in the Federal 

Register for comment to renew the Section 314(a) program 

without change.13

Recommendation 

We recommend that the Director of FinCEN incorporate the user 

recommendations for enhancements in addition to the public 

comments received when evaluating its proposed renewal of the 

Section 314(a) program. 

Management Response 

Management concurs with the recommendation. FinCEN stated 

that it had implemented a number of information technology 

enhancements in May 2016 that improved the usability of the 314 

program interface. These enhancements included the development 

of a new user-friendly system that includes many of the features 

recommended by the Bank Secrecy Act Advisory Group14 and a 

 

13 Federal Register / Vol. 81, No. 39 / Monday, February 29, 2016 / Notices; Proposed Collection; 

Comment Request; Renewal Without Change of the Requirement for Information Sharing Between 

Government Agencies and Financial Institutions. As of this report date, no comments to the notice 

were posted on FinCEN’s web site.

14 The Bank Secrecy Act Advisory Group includes officials from Federal and State government units, 

banking, and other private sector enterprises and is the means by which the Treasury receives advice 

on the operations of the Bank Secrecy Act. As chair of this group, the Director of FinCEN is 

responsible for ensuring that relevant issues are placed before the group for review, analysis, and 

discussion. 
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process that allows law enforcement to receive the positive results 

from their 314(a) case within 24 hours. 

OIG Comment 

FinCEN’s response meets the intent of our recommendation. We 

believe that FinCEN’s reported enhancements along with those 

discussed in FinCEN’s response to Recommendation 2 below 

demonstrate FinCEN’s commitment to incorporate user 

recommendations for future enhancements to the 314(a) program. 

FinCEN will need to record its corrective actions in JAMES. 

Finding 2 FinCEN Does Not Require Financial Institutions To Provide 

All Information Set Forth In Its Regulation 

FinCEN instructions for responding to Section 314(a) requests do 

not require financial institutions to provide all information set forth 

in its regulation.15 FinCEN has chosen to exempt the requirement 

that financial institutions report the number of accounts for the 

subject or, in the case of a transaction, the date and type of each 

such transaction, and any other identifying information at the time 

the account was opened or transaction was conducted as stated in 

its regulations.16

 

According to FinCEN’s November 2012 instructions, financial 

institutions are only required to indicate the subjects they have a 

match for and to enter a comment, if needed, in their responses 

to requests using SISS. FinCEN originally modified the program in 

2003 to reduce the burden on financial institutions. Subsequent to 

our fieldwork and prior to the issuance of our report, in August 

2016 a FinCEN official stated that the exemption was utilized to 

expedite the response to LEAs, and FinCEN would consider 

whether requiring the additional information would be more 

beneficial, given the cost/benefit factors. 

We identified in our interviews, that the exempted information 

would be beneficial. Five LEA representatives we interviewed 

stated that it would be helpful in their investigations and subpoena 

preparation if the financial institutions supplied all the information 

 

15 31 C.F.R. 1010.520(b)(3)(ii) “Information sharing between government agencies and financial 

institutions.”

16 FinCEN used its exemption authority set forth in 31 U.S.C. §5318(a)(7) to require the financial 

institutions to only report whether it has a match to the 314(a) LEA request. 
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set forth in the regulation and in a consistent format. For example, 

one law enforcement agency official stated that an agency may 

subpoena an account only to find out the positive match was a 

transaction, resulting in a new subpoena needing to be prepared to 

obtain any related information about the subject. The official stated 

that this is a waste of time for both the law enforcement agency 

and the bank. In this case, if the financial institution was required 

to provide all information set forth in the bureau’s regulations, the 

process would have been more efficient. 

Regarding the burden to financial institutions, two Federal bank 

regulatory agencies we interviewed stated that providing 

information set forth by FinCEN regulations would not be a burden 

to financial institutions under their supervision. 

As of this report date, no changes had been made to the Section 

314(a) Instructions requiring financial institutions to provide all

information set forth in FinCEN’s regulation. FinCEN officials stated 

that financial institutions have the ability to provide comments 

related to the match, and LEAs eventually receive underlying 

details related to the match through their own legal means. 

OMB’s M-11-31 discussed previously states that one of the 

objectives of federal performance management is effective 

government, which requires practices, programs, and polices which 

improve the outcomes they are trying to achieve. FinCEN’s policy 

to exempt financial institutions from providing information that 

could be beneficial to LEAs may limit the potential benefits of the 

Section 314(a) program to its users. 

We believe FinCEN should consider the usefulness to law 

enforcement of the exempted information as it works to improve 

the 314(a) program. 

Recommendation 

We recommend that the Director of FinCEN identify the impact on 

LEAs of exempting information from the responses to their 314(a) 

requests and determine if FinCEN should continue to exempt 

information set forth in its regulations. 

Management Response 
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Management concurs with the recommendation. FinCEN stated 

that when it first implemented the 314(a) authorities, it was 

determined that collecting the full extent of information under the 

regulation resulted in unnecessary burdens on financial institutions 

and unnecessary delays to law enforcement for information they 

would be able to collect by following up with a subpoena. 

According to FinCEN’s management response, FinCEN will update 

the 314(a) FAQs notifying financial institutions that in addition to 

providing confirmation of a match on a particular named subject of 

a 314(a) request, a financial institution may also provide the 

specific information outlined in 31 CFR 1010.520(b)(3)(ii) in the 

comment section of their 314(a) response, because such 

information is beneficial to law enforcement. 

OIG Comment 

FinCEN’s decision to notify financial institutions through FAQs that 

additional specific information may be provided when responding to 

a 314(a) request meets the intent of our recommendation. FinCEN 

will need to record the estimated date for completing its planned 

corrective actions in JAMES. 

Finding 3 FinCEN Needs to Improve Requests for Section 314(a) 

User Feedback 

FinCEN requests feedback data from LEAs 12 to 18 months after 

submission of a Section 314(a) request. From that information, 

FinCEN compiles the number of new accounts and transactions 

identified by the financial institutions, the percentage of Section 

314(a) requests contributing to arrests or indictments, and the 

number of follow-up actions taken by LEAs with financial 

institutions on any newly discovered account or transaction 

information. 

FinCEN solicited feedback on the 503 requests processed from 

October 2009 through December 2011 and had received 

information on only 165 of them (33 percent) by the end of August 

2013. 

Our interviews with representatives from six LEAs revealed 

weaknesses in FinCEN’s survey process. Two LEAs stated that 

some investigations take years to complete, so the results are not 

always known when FinCEN requests feedback. Another LEA 

stated that the number of indictments resulting from a Section 
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314(a) response is difficult to quantify because multiple sources of 

information can aid in investigations that lead to indictments.

According to OMB’s Office of Information and Regulatory Affairs,

“Questions and Answers When Designing Surveys For Information 

Collections,” which was originally published in January 2006 and 

modified in October 2016, agencies need to use survey questions 

that will elicit the appropriate information from respondents to fill 

the agencies’ data needs. Agencies should use techniques to test 

the questions that will ensure that the questions they develop 

provide the information they need and have adequate statistical 

reliability.

In this regard, if FinCEN sought feedback at a later time to allow 

LEA cases to be settled, it would likely gather a higher percentage 

of meaningful responses.

We also found that FinCEN needs to revise at least one of the six

survey questions to improve clarity and ensure the consistency of 

responses from Section 314(a) users. This one question reads, 

“Did any newly-discovered account(s) or transaction(s) assist with 

obtaining a complaint, indictment, or arrest in this case? If yes, 

how many?” The wording of this question does not make clear 

whether FinCEN wants the response to represent the number of

newly discovered accounts and transactions or the number of 

complaints, indictments, and arrests. Moreover, this question does 

not specify whether categorical or cumulative totals should be 

provided.

We asked FinCEN to explain how the multiple, varied responses to 

this particular survey question are tabulated. FinCEN replied that it

simply records the numbers provided by LEAs on the feedback 

form and that the intent of the question is to provide general 

information on whether the Section 314(a) information assisted 

law enforcement in making arrests or indictments. We believe 

FinCEN should clarify this question to ensure it receives the 

intended information. Responses to such an ambiguous question 

cannot be considered reliable and conclusive.

As of December 2015, no changes had been made to the Section 

314(a) feedback form or the timeline for requesting feedback. It is 

important for FinCEN to uphold its performance improvement 

responsibilities of conducting more comprehensive data-driven 

reviews, as discussed in Finding 1, which guide decisions and 
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actions to improve performance outcomes for the Section 314(a) 

program. 

Recommendation 

We recommend that the Director of FinCEN ensure the Section 

314(a) survey questions are clarified to provide for consistent 

interpretation and responses about the program. Sufficient time 

should be allowed for feedback in order to gain a more complete 

understanding of how Section 314(a) information benefits law 

enforcement cases. 

Management Response 

Management concurs with the recommendation. According to 

FinCEN both recommendations were implemented in September 

2016. FinCEN has implemented a new standard of waiting a 

minimum of 18 months before feedback is requested from law 

enforcement in hopes of gathering a higher percentage of 

meaningful responses. 

 OIG Comment 

Management’s response meets the intent of our recommendation. 

According to FinCEN, at the conclusion of our audit, it was revising 

the feedback form to improve the clarity of the questions being 

asked. FinCEN will need to record its corrective actions in JAMES. 

Finding 4 FinCEN Should Continue to Address Concerns Over the 

Section 314(b) Program 

Federal bank regulatory agencies stated that some financial 

institutions were concerned about participating in the Section 

314(b) program because they did not fully understand it. This 

response comes even though FinCEN issued guidance to financial 

institutions in June 2009 intended to clarify the scope of 

permissible information sharing covered by the Section 314(b) safe 

harbor. Section 314(b) provides a safe harbor from liability for two 

or more financial institutions that share information with one 

another regarding individuals, entities, organizations, and countries 

suspected of possible terrorist acts or money laundering. 
FinCEN’s 314 Information Sharing Programs Are Useful But Need FinCEN’s Page 15

Attention (OIG-17-055)

FinCEN reported that, as of December 2012, approximately 4,000 

financial institutions had participated in the voluntary Section 

314(b) program, while more than 22,000 financial institutions had 

participated in the mandatory Section 314(a) program. According 

to two Federal bank regulatory agency officials we interviewed, the 

variance in participation may be attributed to the following reasons:

 Financial institutions are concerned about meeting the precise 

requirements of the safe harbor provision, which protects them 

from liability resulting from the voluntary sharing of information 

regarding terrorism and money laundering.

 Financial institutions are concerned about complying with 

financial privacy laws that limit the disclosure of financial 

records or information identified with a particular customer or 

identifiable as being derived from the financial records of a 

particular customer.

 Some small banks are under the impression that other financial 

institutions have an obligation to always share information, 

despite the fact that institutions are not bound to participate in 

all circumstances and have the option of opting not to respond 

to a particular request.

In addition, according to one Federal bank regulatory agency 

official, some financial institutions expressed concern that 

participating in the program could put them at a competitive 

disadvantage. A regulator explained that the information shared 

through the program with other institutions about a customer’s 

financial activity could result in another institution pricing certain 

products and services to attract the customer’s business.

Unlike FinCEN’s requests for information from LEAs regarding the 

usefulness of the 314(a) program used to perform data-driven 

progress reviews, requests are not made of financial institutions 

regarding the usefulness of the 314(b) program to contribute to the 

accomplishment of effective information sharing among financial 

institutions. 

FinCEN issued clarifying guidance regarding Section 314(b) of the 

USA PATRIOT Act stating that a financial institution participating in 

the program may share information relating to transactions that the 

institution suspects may involve the proceeds of one or more 

specified unlawful activities for the purpose of identifying and, 

where appropriate, reporting possible money laundering or terrorist 
FinCEN’s 314 Information Sharing Programs Are Useful But Need FinCEN’s Page 16 

Attention (OIG-17-055) 

 

activity.17 FinCEN should continue to promote greater participation 

in the Section 314(b) program so that the benefits of sharing 

information to support anti-money laundering and combatting 

terrorist financing activities are encouraged. 

We provided FinCEN’s former director with the information 

obtained during our interviews of Federal bank regulatory agency 

officials. To promote information sharing through the Section 

314(b) program, FinCEN issued a fact sheet in October 2013 to 

explain program benefits, eligibility requirements, the types of 

information that can be shared, and the procedures necessary to

participate in the program.18 By December 2015, participation in 

the Section 314(b) program had increased to almost 5,500 users. 

FinCEN attributed the 38 percent increase from December 2012 to 

the Section 314(b) Fact Sheet and to the former FinCEN director’s

speeches to the financial industry promoting the program. 

As of December 2015, FinCEN had not implemented any changes 

to the Section 314(b) program. According to FinCEN officials, 

some of the proposed changes would require a legislative change 

to update safe harbor provisions and others would be addressed 

with the Section 314(b) Fact Sheet. 

Subsequent to the completion of our field work and prior to the 

issuance of our report, FinCEN officials reported that as of 

August 22, 2016, they implemented Information Technology 

enhancements to the 314(b) Program. These enhancements 

included the integration of the program into SISS, an improved 

registration and renewal process for participation in the program, 

and ability to search participating financial institutions. 

Recommendation 

We recommend that the Director of FinCEN identify and address 

remaining areas of concern regarding the Section 314(b) program 

 

17 FinCEN, Guidance on the Scope of Permissible Information Sharing Covered by Section 314(b) Safe 

Harbor of the USA PATRIOT Act; (FIN-2009-G002; issued June 16, 2009). 

18 In November 2016, FinCEN replaced the October 2013 314(b) Fact Sheet, which included an update 

to program registration. This is available at 

https://www.fincen.gov/sites/default/files/shared/314bfactsheet.pdf 
FinCEN’s 314 Information Sharing Programs Are Useful But Need FinCEN’s Page 17 

Attention (OIG-17-055) 

 

and include these in guidance and outreach to encourage greater 

participation in the program. 

Management Response 

Management concurs with the recommendation. According to 

FinCEN, a Fact Sheet on the 314(b) process was issued in 

November 2016. FinCEN understands the financial institutions' 

request for strengthening safe harbor protections which would 

require legislative changes to implement. 

OIG Comment 

FinCEN’s response meets the intent of our recommendation. The 

November 2016 Section 314(b) Fact Sheet is used by FinCEN as a 

means of outreach to the financial institutions. It provides many of 

the benefits of participating in the program. It details who is eligible 

to participate, what information can be shared, how financial 

institutions participate so they may benefit from safe harbor 

protection, as well as the sharing and safeguarding of information. 

FinCEN will need to record its corrective actions in JAMES. 

Other Matter 

Duplicate Section 314(a) Responses 

During our review of 76 of the 711 approved Section 314(a) 

requests and related responses, we discovered 6 duplicate 

responses by financial institutions, with at least one instance 

occurring in each year of the 3-year period under audit. Financial 

institutions submit their responses to Section 314(a) requests 

through SISS. 

FinCEN’s instructions on SISS remind financial institutions that, 

once they submit a positive response, they may not add to or 

modify their submission using SISS. Accordingly, financial 

institutions are to submit only one response for each 314(a) 

request. 

In June 2013, FinCEN told us that it modified its existing database 

system controls to prevent duplicative submissions. Afterward, 

FinCEN created a permanent solution as part of the second release 

of the Section 314(a) module for its BSA IT Modernization 

Program, in the Broker Information Exchange project, completed in 
FinCEN’s 314 Information Sharing Programs Are Useful But Need FinCEN’s Page 18 

Attention (OIG-17-055) 

 

March 2014. Subsequent to the completion of our field work and 

prior to the issuance of our report, FinCEN told us that after a point 

of contact submits a response to a transmission, that transmission 

is locked in SISS so that no additional responses may be entered 

by the financial institution. We plan to review FinCEN’s efforts 

during future BSA IT Modernization audits to ensure duplication of 

requests are resolved. 

* * * * * *

We appreciate the cooperation and courtesies extended to our staff 

during the audit. If you wish to discuss the report, you may 

contact me at (617) 223-8638 or Maryann Costello, Audit 

Manager, at (617) 223-8642. Major contributors to this report are 

listed in appendix 3. A distribution for this report is provided as 

appendix 4. 

/s/ 

Sharon Torosian 

Audit Director 
Appendix 1 

Objective, Scope, and Methodology 

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Attention (OIG-17-055) 

 

The objective of this audit was to determine the extent to which 

information sharing is occurring among the government and 

financial institutions. 

To accomplish our audit objective, we interviewed officials from 

the Financial Crimes Enforcement Network’s (FinCEN) 314 program 

office, law enforcement agency (LEA) representatives who used 

the Section 314(a) program during the period October 2009 

through September 2012, and Federal bank regulatory agencies 

involved in ensuring participant compliance with the Section 314(b)

program requirements. We also reviewed applicable program 

documentation, procedures, and databases. 

At FinCEN, we interviewed officials from the following divisions 

that were in place during the time of our audit:19

 Office of Special Program Development 

 Analysis and Liaison Division 

 Office of Regulatory Policy, Policy Division 

 Office of Compliance and Enforcement, Enforcement Division 

 Technology Solutions and Services Division 

External to FinCEN, we interviewed representatives of the following 

six Federal LEAs: 

 United States Drug Enforcement Administration (two field 

offices) 

 Federal Bureau of Investigation (three field offices) 

 United States Immigration and Customs Enforcement (two field 

offices) 

 Internal Revenue Service Criminal Investigation (three field 

offices) 

 Offices of the United States Attorneys (two field offices) 

 United States Secret Service (one location) 

We interviewed officials from four Federal bank regulatory agencies 

to gain insight about Section 314(b) compliance: 

 

19 FinCEN implemented a reorganization on June 24, 2013, that realigned employees by job function 

rather than the stakeholders they serve. 
Appendix 1 

Objective, Scope, and Methodology 

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Attention (OIG-17-055) 

 

 Federal Deposit Insurance Corporation 

 Federal Reserve Board 

 National Credit Union Association 

 Office of the Comptroller of the Currency 

We reviewed prior Department of the Treasury (Treasury) Office of 

Inspector General and Government Accountability Office reports, 

Treasury Orders and Directives, legislation, and Federal regulations 

pertaining to the Section 314 programs. We also reviewed 

FinCEN’s Standard Operating Procedures for reviewing Section 

314(a) requests made by LEAs, international law enforcement 

entities, and units from Treasury and FinCEN. 

We reviewed guidance issued to financial institutions on how to 

respond to Section 314(a) requests using the Secure Information 

Sharing System. We also reviewed instructions for financial 

institutions on how to register for participation in the Section 

314(b) program. In addition, we reviewed FinCEN’s procedures for 

processing Section 314(b) program registration. 

We reviewed a listing of the requests received and approved by 

FinCEN during our audit period and identified the users of the 

Section 314(a) program. We also determined the number of 

financial institutions that registered to participate in the Section 

314(b) program for fiscal years 2010, 2011, and 2012. 

To determine adherence with 314(a) program guidelines and 

requirements, we selected a stratified non-statistical20 sample of 76 

of the 711 Section 314(a) case files for fiscal years 2010 through 

2012. Our sample was stratified to capture case files of the top six 

law enforcement agencies that submitted 79 percent of all Section 

314(a) requests and all other domestic LEA users of the program. 

For the 76 Section 314(a) case files reviewed, we determined the 

accuracy of data in the FinCEN database by comparing the number 

of subjects, financial institutions responding, and matches from the 

Section 314(a) case files to those fields in the FinCEN database.21

We evaluated FinCEN’s monitoring of financial institution 

 

20 By using a non-statistical sample, we are not projecting the results of the intended population. 

21 The FinCEN database is part of FinCEN’s General Support System, which supports efforts to provide 

a multisource intelligence and analytical network to support the detection, investigation, and 

prosecution of domestic and international money laundering and other financial crimes, as well as

other domestic and international criminal, tax, and regulatory matters. 
Appendix 1 

Objective, Scope, and Methodology 

FinCEN’s 314 Information Sharing Programs Are Useful But Need FinCEN’s Page 21 

Attention (OIG-17-055) 

 

compliance with Section 314(a) requests and evaluated controls 

over the tracking of Section 314(a) requests to ensure proper 

review of these by FinCEN and distribution to the financial 

institutions. 

Additionally, we assessed FinCEN’s Section 314(b) outreach 

efforts and the financial institutions’ level of participation. 

We conducted the majority of our fieldwork from December 2012 

through October 2013, and performed additional procedures to 

update information as of December 2015. Subsequent to our 

fieldwork and prior to the issuance of our report, in August 2016, 

FinCEN officials reported to us they took steps to improve the 314 

programs. We did not perform additional fieldwork to verify these 

actions. 

We conducted this performance audit in accordance with generally 

accepted government auditing standards. Those standards require 

that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the 

evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 
Appendix 2 

Management Response 

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Attention (OIG-17-055) 

 
Appendix 2

Management Response

FinCEN’s 314 Information Sharing Programs Are Useful But Need FinCEN’s Page 23

Attention (OIG-17-055)
Appendix 3 

Major Contributors to This Report 

FinCEN’s 314 Information Sharing Programs Are Useful But Need FinCEN’s Page 24 

Attention (OIG-17-055) 

 

Maryann Costello, Audit Manager 

Patrick Arnold, Auditor-In-Charge 

Kevin Guishard, Referencer 
Appendix 4 

Report Distribution 

FinCEN’s 314 Information Sharing Programs Are Useful But Need FinCEN’s Page 25 

Attention (OIG-17-055) 

 

The Department of the Treasury 

Deputy Secretary 

Under Secretary, Office of Terrorism and Financial Intelligence 

Office of Strategic Planning and Performance Improvement 

Office of the Deputy Chief Financial Officer, Risk and Control 

Group 

Financial Crimes Enforcement Network 

Acting Director 

OIG Audit Liaison 

Office of Management and Budget 

OIG Budget Examiner 

U.S. Senate 

Chairman and Ranking Member 

Committee on Banking, Housing, and Urban Affairs 

Chairman and Ranking Member 

Committee on Finance 

U.S. House of Representatives 

Chairman and Ranking Member 

Committee on Financial Services 
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