Suspicious Activities: Some Advice on that Safe Harbor Provision

The new suspicious activity rules provide a powerful safe harbor. The regulation itself restates the safe harbor provisions. This in itself is unusual. Regulatory agencies usually leave liability issues to the courts.

This safe harbor provision may be challenged in the future. After all, someone charged with money laundering or other crimes will grab anything that seems or could be construed (by a creative imagination) as available to the defense.

In the interests of ensuring that reporting is as timely, accurate, and complete as possible, the regulatory agencies have included in the new regulation a broad restatement of the safe harbor provision. In addition, the "Federal Register Document", the introductory material and explanation published in the Federal Register with the new regulation, explains their intent. For example, the explanation appears on page 4340 of the Federal Reserve's published regulation in 61 Federal Register, No. 24.

We strongly recommend that you make copies of this language and keep it to use in the event of a challenge. Although the published final regulation will be codified in the Code of Federal Regulations, the Federal Register document will not be codified. It will not be easily accessed except in your files. Keep a copy with your SAR materials and in your file on Right to Financial Privacy.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 8, 5/96