Fincen Issues Frequently Asked Questions Clarifying Suspicious Activity Reporting Requirements

The following is a bulletin prepared by Stefan Lawrence, Counsel at Early Warning Services, LLC.

Summary

On October 8, 2025, the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), in collaboration with 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, issued several frequently asked questions (FAQs) concerning suspicious activity reports (SARs). These new FAQs clarify SAR obligations related to potential structuring, continuing activity reviews, and decisions to not file a SAR.

Key Issues Addressed by the New FAQs

• No Automatic Filing for Near-Threshold Transactions. Financial institutions are not required to file a SAR for transactions near the $10,000 Currency Transaction Report (CTR) threshold unless there is an actual reason to suspect the transaction is designed to evade reporting requirements (structuring).
• Revised Guidance for Post-Filing Reviews. Financial institutions are not legally required to conduct a separate, standalone review of a customer or account after a SAR has been filed to determine if suspicious activity has continued. Instead, institutions can rely on their existing, risk-based monitoring processes.
• No Mandatory Requirement to Document Decision to Not File a SAR. Financial institutions are not required to document every decision not to file a SAR. While documentation can be useful for internal purposes, it is not a legal requirement, and the level of documentation should align with an institution’s risk-based policies.

The FAQs Reinforce a Risk-based Approach to SAR Filing

The overall guidance provided by these FAQs emphasizes that compliance should focus on efforts that provide the most value to law enforcement. It reinforces a principles-based, rather than a rules-based, approach to compliance, which FinCEN’s Undersecretary had previously described as encouraging a “mechanical SAR mindset” that leads to wasted resources.