Fri. Aug 19th, 2022

The Financial Crimes Enforcement Network (FinCEN) today issued a Notice of Proposed Rulemaking (NPRM) that proposes and solicits public comment on the establishment of a limited-duration pilot program for sharing suspicious activity reports (SARs), in accordance with Section 6212 of the Anti-Money Laundering Act of 2020.

The pilot program would permit a financial institution with a SAR reporting obligation to share SARs and information related to SARs with the institution’s foreign branches, subsidiaries, and affiliates for the purpose of combating illicit finance risks, subject to approval and conditions set by FinCEN.  The proposed rule aims to ensure that the sharing of information is limited by the requirements of federal and state law enforcement, takes into account potential concerns of the intelligence community, and is subject to appropriate standards and requirements regarding data security and the confidentiality of personally identifiable information.

“This NPRM builds on the experience that FinCEN has gained in administering existing pilot programs and once finalized, will assist financial institutions in further combating illicit finance risks.  We expect that the pilot program will provide valuable feedback to FinCEN as longer-term approaches towards SAR sharing with foreign affiliates are considered,” said FinCEN Acting Director Himamauli Das.  “We urge stakeholders to provide input to assist us in developing a program that will help combat illicit finance risks and promote enterprise-wide risk management, while ensuring adequate safeguards are in place to protect SAR confidentiality.”

FinCEN’s previously issued guidance on sharing SARs within a corporate organizational structure stated that financial institutions may share SARs with foreign head offices, controlling companies (whether domestic or foreign), and domestic affiliates.  If finalized, the proposed rule would establish a limited-duration pilot program to allow SAR sharing with foreign affiliates, which would also provide FinCEN with valuable feedback about the value of such SAR sharing for participating financial institutions and for FinCEN and law enforcement.

The proposed rule seeks public comment on questions related to the establishment of a SAR sharing pilot program, such as expected costs and benefits, technical challenges, the merits of quarterly reporting, and how to protect SAR confidentiality.  Answers to these questions will help inform the final rule that FinCEN issues and the annual Congressional briefings that FinCEN is required to provide.

FinCEN strongly encourages all interested parties, including those that may want to participate in the SAR sharing pilot program when it is finalized, to submit written comments.

Comments on the NPRM should be submitted by March 28, 2022.

News Release: https://www.fincen.gov/news/news-releases/fincen-issues-proposed-rule-suspicious-activity-report-sharing-pilot-program

Notice of Proposed Rulemaking: https://www.federalregister.gov/public-inspection/2022-01331/pilot-program-on-sharing-of-suspicious-activity-reports-and-related-information-with-foreign