CAMS Suspicious Activity Reporting 1 — Questions and Answers
Question 1: Within how many calendar days must a financial institution file a Suspicious Activity Report (SAR) after initially detecting a suspicious transaction?
- 15 days
- 30 days (Correct answer)
- 45 days
- 60 days
Correct answer: 30 days
U.S. financial institutions must file a SAR within 30 calendar days of initially detecting facts that may constitute a basis for filing; if no suspect is identified, this extends to 60 days.
Question 2: What is the minimum dollar threshold for SAR filing for a transaction involving a bank insider regardless of suspicion level?
- $1,000
- $2,500
- $5,000 (Correct answer)
- $25,000
Correct answer: $5,000
For transactions involving bank insiders (employees, officers, directors), the SAR filing threshold is $5,000, lower than the general $5,000 threshold but specifically applied to insider misconduct regardless of the transaction type.
Question 3: What is the 'safe harbor' provision in the context of SAR filings?
- A provision allowing institutions to delay SAR filing during regulatory examinations
- Legal protection that shields financial institutions and their employees from civil liability when filing SARs in good faith (Correct answer)
- A provision exempting small institutions from SAR filing requirements
- A harbor area where financial institutions can conduct transactions without reporting obligations
Correct answer: Legal protection that shields financial institutions and their employees from civil liability when filing SARs in good faith
The BSA's safe harbor provision (31 U.S.C. § 5318(g)(3)) protects institutions and employees from civil liability for disclosing suspicious activity in SARs filed in good faith, encouraging reporting without fear of customer lawsuits.
Question 4: A SAR filed with FinCEN is subject to strict confidentiality requirements. Which of the following is prohibited?
- Sharing the SAR with law enforcement upon request
- Disclosing the existence of a SAR to the subject of the report (Correct answer)
- Retaining a copy of the SAR for internal records
- Reporting the SAR to senior management
Correct answer: Disclosing the existence of a SAR to the subject of the report
Federal law prohibits 'tipping off' — disclosing to the SAR subject or any unauthorized person that a SAR has been or will be filed, as this could allow them to evade law enforcement.
Question 5: What are common red flags that may trigger a SAR filing for a retail banking customer?
- A customer who regularly deposits their paycheck each week
- A customer whose transaction volume significantly exceeds what would be expected based on their stated occupation and account purpose (Correct answer)
- A customer who uses multiple ATM locations for withdrawals
- A customer who requests paper statements rather than electronic statements
Correct answer: A customer whose transaction volume significantly exceeds what would be expected based on their stated occupation and account purpose
Transactions that are inconsistent with a customer's known income, occupation, or stated business purpose are classic red flags indicating potential money laundering that may warrant a SAR.
Question 6: After filing a SAR, how long must a financial institution retain the SAR and supporting documentation?
- 1 year
- 3 years
- 5 years (Correct answer)
- 10 years
Correct answer: 5 years
Financial institutions must retain SARs and all supporting documentation for five years from the date of the SAR filing, making these records available to regulators and law enforcement upon request.
CAMS Suspicious Activity Reporting 1
Within how many calendar days must a financial institution file a Suspicious Activity Report (SAR) after initially detecting a suspicious transaction?