Importance of Accurate and Complete Narratives

Law enforcement and regulatory agencies, the primary users of SAR data, continue to report to FinCEN that SARs are filed with missing and incomplete data. Approximately 1% of SARs filed have neither an activity characterization nor sufficient narrative to explain what activity is being reported. This condition most often occurs when filers check the activity characterization box marked "other" but fail to specify the suspicious activity on the line provided. The problem is compounded when filers enter the phrase "see attached" in the narrative section of the form and attach items such as spreadsheets or computer printouts as documentation. When forms are received at the IRS Detroit Computing Center (DCC), only information in an explicit, narrative format is keypunched; thus, tables and other numeric data are not included in the narrative. SARs that do not specify the suspicious activity being reported or fail to provide an explanation as to what led the institution to become suspicious are of minimal value to law enforcement or regulators.

Financial institutions should review and follow the instructions found in the "Suspicious Activity Information Explanation/Description" section of the SAR form. Remember, the narrative section of the report is critical. The care with which it is written may make the difference in whether or not the described conduct and possible criminal nature are clearly understood by law enforcement and regulators. Also, do not attach any supporting documents to the SAR but rather, provide a detailed description of the documentation in the narrative and retain the documentation for five years. Also, always select and mark the appropriate box(es) in the "summary characterization of suspicious activity" section.

Excerpted from SAR Activity Review Issue 5, page 55