Suspicious Activity Report (SAR)
The mandatory report filed with a Financial Intelligence Unit when an obligated entity has knowledge, suspicion or reasonable grounds to suspect that funds are linked to criminal activity.
Definition
A Suspicious Activity Report (SAR), known as a Suspicious Transaction Report (STR) in some jurisdictions, is the formal communication that an obligated entity must send to its national Financial Intelligence Unit (FIU) when it knows, suspects, or has reasonable grounds to suspect that funds - irrespective of amount - are the proceeds of criminal activity or are related to terrorist financing.
Key features
- No-threshold rule - the obligation arises from the suspicion itself, not from a transaction size.
- Tipping-off prohibition - the customer must not be informed that a SAR has been filed.
- Safe-harbour - filing in good faith protects the institution and the reporter from liability.
- Defensive vs intelligence-driven filings - supervisors increasingly penalise "just-in-case" over-filing.
Regulatory anchor
FATF Recommendation 20; AMLD4 Article 33 in the EU; BSA §5318(g) and 31 CFR Chapter X in the US; the upcoming EU AMLR moves SAR filing into directly applicable EU law via Tracfin / FIU.net.