Role of SARs in High Risk Money Laundering and Related Financial Crime Areas

The National Money Laundering Strategy for 200014 established a requirement to focus anti-money laundering law enforcement resources in ?High-Risk Money Laundering and Related Financial Crime Areas,? or HIFCAs. A HIFCA should be understood as a geographic area, industry, sector or institution, or group of financial institutions which is being victimized by, or is particularly vulnerable to, money laundering and related financial crimes and, therefore, warrants concentrated law enforcement efforts at the federal, state and local levels. During 2000, three metropolitan HIFCAs have been designated: Los Angeles, New York/New Jersey, and San Juan, Puerto Rico. A fourth HIFCA, reflecting the systemic problem of cross-border currency movements, was created for the southwest border areas of Arizona and Texas. Additional designations are expected.

SARs are important to the HIFCA process in two key ways. First, the number of SARs filed in a geographic area is used as a factor in identifying the overall scope of potential financial crime in the area, and in ranking the area for possible HIFCA designation in comparison to other geographic areas. Second, and even more importantly, the number of SARs filed provides HIFCA action teams with a road map to assist in identifying potential criminal financial activity for the coordinated federal, state and local law enforcement initiatives envisioned by The National Money Laundering Strategy for 2000.

Real advancements have been made over the past year in building the tools needed to create such SAR ?road maps.? Each HIFCA will have access, through an on-site FinCEN analyst, to a prototype SAR data-mining capability that significantly enhances law enforcement?s ability to identify organized criminal financial activity over large geographic areas. HIFCAs will use this new tool to help guide their anti-money laundering initiatives and to beta test it for wider distribution to law enforcement.

14 The National Money Laundering Strategies of 1999 and 2000 were jointly developed by the Departments of Justice and Treasury to describe detailed plans to combat money laundering as required by The Money Laundering and Financial Crimes Strategy Act of 1998, P.L. 105-310 (October 30, 1998). See 31 U.S. Code 5341(b) and 5342(b).
Excerpted from SAR Activity ReviewOct. 2000 Issue , page 14