Suspicious transaction report (STR)

A suspicious transaction report (STR) is generally considered an interchangeable term with suspicious activity report (SAR), as both terms refer to the mandatory form that financial institutions must file with the Financial Crimes Enforcement Network (FinCEN) whenever there is a suspected case of money laundering or fraud. These reports wave a figurative red flag for regulators and law enforcement, alerting them to client activity deemed out of the ordinary and which could be a sign of illegal activity that potentially threatens public safety or the integrity of the U.S. financial system. 

Since 2012, all suspicious transaction reporting filings have been required to be submitted via FinCEN's Bank Secrecy Act (BSA) e-filing system.

As part of the process of reporting suspicious transactions, financial institutions identify who is conducting the suspicious activity, what instruments/mechanisms they are using, when and where the activity took place, and why they think the activity is suspicious.

The suspicious transaction report may have derived its name from the similarly named currency transaction report (CTR). The CTR is a BSA reporting mandate that banks must follow whenever one or more cash transactions through or to the bank exceeds $10,000 in a 24-hour period by or on behalf of one person. CTRs can also concurrently trigger STRs if there is a related cause for concern. For example, a customer, upon realizing that a $10,000 deposit will prompt additional questions from the teller, decides to intentionally remove $100 from the deposit in order to skirt the threshold. This is known as “structuring” and is illegal. In addition to a CTR, the bank witnessing this crime would also need to submit a SAR or, as many instead call it, an STR.

Frequently asked questions

What triggers a suspicious activity report?

Financial institutions must file suspicious transaction reports (STRs) whenever they notice any transaction activity that is out of the ordinary — for example, if an individual appears to be hiding information, such as the source of funds, or if they are making or attempting to make transactions that are abnormally large, frequent, or a sudden departure from past or expected activity. The reports act as leads for possible illegal activity; institutions don’t necessarily need proof that crime has occurred in order to file a report.

When must a SAR report be filed?

Financial institutions must file an STR within 30 calendar days of noticing any activity that may indicate money laundering or fraud. If no suspect was identified within those first 30 days, a financial institution can get an additional 30 days to file the report.

What happens when a SAR is filed?

Once a financial institution files an STR, the Financial Crimes Enforcement Network (FinCEN) will investigate the incident. Millions of these reports are filed each year; according to the Bank Policy Institute, only about 4% result in law enforcement follow–up. 

What constitutes suspicious activity?

In the context of suspicious transaction reports, “suspicious transactions” include any transactional activity, either attempted or completed, that seems unusual. For example, financial institutions should file a report if they suspect someone of engaging in insider trading activity or transferring funds that suggest that an unlicensed money services business (MSB) is operating with bank products. Other examples include frequent bulk cash deposits, sudden large debits over a short period of time using a long-dormant account, or even a retail bank transaction where an individual seems coerced or uninformed.

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