Financial institutions are required by law to file a Suspicious Activity Report (SAR) or Suspicious Transaction Report (STR) when they detect any suspicious or potentially suspicious activity related to money laundering, financing of terrorism, or other financial crimes. The criteria for reporting vary from one country to another but generally include any financial transaction that is either:
Does not make sense to the financial institution.
Unusual for that particular client.
Designed to conceal or obscure another transaction.
These reports are submitted to the financial crime enforcement agency of the respective country, which is responsible for collecting and analyzing transactions and reporting them to relevant law enforcement teams.