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.