This bank's policy is to provide the executive committee of the BOD a copy of the SAR prior to mailing to IRS. A certain situation of smurfing has occurred and looks like an obvious attempt to evade the CTR reporting. The committee chair may object to the report and instruct that SAR is not to be mailed.
My plan is to make a stab at convincing the committee to mail the report as submitted. I have good instructional material from the OCC Sept. 2000 Exam handbook and the enforcement section 103.46 of the Act.

After doing this, as compliance officer, if the report is not mailed what is the next step? Have I fulfilled my obligation?

We were sited (at a previous employer) for not filing a SAR when I didn't think it was appropriate. After that point, we would record the SAR and the reason it wasn't filed and signed by two employees. Are the reasons for not filing legitimate? I'd make sure all of this was in the board minutes. CYA

Off Topic: One of my pet peeves: Sight, Cite, Site

Sight - related to vision
Cite - related to law or regulation
Site - related to location (real or virtual, such as a web site)

Autumn, you weren't sited (I don't think), you were more probably cited.

OK, I'm getting off the soapbox now.

Boy, I can't go anywhere without being correct <grin>. My 15 year old son and my 81 year old father love to correct me, which really isn't all that much. I thank you for the lesson (honestly).

One of the best Q&A's I read on BOL was this:

Reporting SARs to the Board of Directors
Answers by Barbara Hurst, Dana Turner and Ken Golliher, BOL Gurus

Question: I know I have to let the Board of Directors know when a SAR is filed. I was told all I can tell them is that one is being filed. Is this correct... how does it get in the minutes and what does it have to state?

Answer by Barbara Hurst:
BIO AND CONTACT INFO
I take an even harder line than Dana and Ken do below, because the less the Board of Directors knows about an SAR the safer the financial institution is from committing disclosure. Years ago a very knowledgeable speaker from Chase shared a letter she had been using for some time that met with the approval of both FinCEN and her BOD. It said:

Date: _________________

To: Board of Directors

___Name of Institution_____

Re: Notification of suspected crimes from __Date__ to __Date__.

All instances of suspected crimes have been reported to the regulatory authorities as required by law. These reports include a total of __#__ INTERNAL cases with losses/exposures totaling $________, and __#__ EXTERNAL cases with losses/exposures totaling $______.

The required reports have been filed with FinCEN (Financial Crimes Enforcement Network) as required, and with other law enforcement agencies as were deemed appropriate.

Copies of the actual Suspicious Activity Reports have been provided to the Secretary's office, and will be maintained on file as required.

_____(Signed)_______________

(The Reporting Officer)

cc: Senior Staff - including the Chief Compliance Officer

Answer by Dana Turner:
BIO AND CONTACT INFO
Please don't tell the board that you're filing a SAR -- tell the board that you have filed one. I suggest that you include only minimal information when you advise the board, including only:

That a SAR has been filed;
The date the SAR was filed;
The title and section of the law or regulation that was used.

Answer by Ken Golliher:
BIO AND CONTACT INFO
Like Dana, I recommend that the board be told after the fact, not before. We also concur in the suggestion that it is not necessary or advisable to disclose the specific contents of the SAR to the board. There is no regulatory prohibition that the board cannot see the SAR or (involuntary shiver) vote on it.

I might be willing to give them a bit more information than Dana. Following is a sample from some of our recent seminar materials:

SAR File 02-18 - Consumer account opened approximately two months prior with no significant activity since, suddenly had deposits of several large, non-local checks. Funds were verified by calls to drawee institutions, but when we attempted to verify checks with issuers, checks were determined to be counterfeit. No loss incurred. Classified as "counterfeit check." Also reported to local law enforcement authorities.

I would change how things are done. I, as compliance officer, determine whether or not a SAR should be filed. On a monthly basis I submit a memo to the board detailing any SARs that were filed. If no SARs were filed the memo states that.

Isn't the requirement to file on any known or suspected criminal activity?

I've take all the above under advisement. I feel like I am the best qualified to make the decision, being the CRCM and all, but, up to this point, I have only being making a the pitch to the committee without any dissention. This situation has had lots of discussion around the table and by the time it came back to me, I could only say with my mouth wide open that, there's not decision here. But, they want to hear more convincing info.
For the future SAR, the cumulative report letter to the BOD really creates the interest. The letter is the clearest way to handle an insider/criminal situation. But the practice has been, my recommendation and the Committee approves. I agree that we may need to steer away from this policy and mail the report and then give the logistics (what, where, when) to the committee.