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SARs Pointing to Terrorist Financing Drop for Third Straight Year
By Matt Squire
printDepository institution reports of suspected terrorist financing fell for the third straight year in 2007, a trend that compliance consultants say shows banking compliance departments are getting more savvy about what behaviors might suggest efforts to finance terrorism. Last year, depository institutions filed 687 suspicious activity reports citing possible terrorist financing, according to the data provided to Fortent Inform by the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN). That represents a 7 percent decline from 2006, when 736 terrorist financing SARs were filed. SARs pointing to possible terrorist financing have fallen every year since 2004, when they peaked as...
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Too few law enforcement agents have a good grasp of the potential ties between money laundering and terrorist financing, according to John Cassara, a former case officer for the Central Intelligence Agency who investigated terrorism.
Though mobile banking and stored value cards have created new opportunities for financial crimes, many terrorist organizations still rely on petty fraud to raise money, at times through financial institutions, according to a former U.K. terror investigator.
The number of suspicious activity reports filed by U.S. money services businesses declined by eight percent in 2008, the first drop in such reporting by any financial sector since 1997.
Lawmakers are likely to scrutinize the frequency of suspicious activity reporting by financial institutions that have reduced their anti-money laundering staff, a former Congressional counsel said Wednesday.
The number of suspicious activity reports filed by money services businesses increased slightly in the first half of 2008 compared to the same period in 2007, according to data provided by the U.S. Treasury Department.
Depository institutions are on track to file a record number of suspicious activity reports this year, according to data from the U.S. Treasury Department's Financial Crimes Enforcement Network, but the rate of filings may be leveling off as the year comes to a close.
FinCEN, which drew its conclusions from a review of filings mostly from money service businesses, said other common errors included missing or inaccurate identifications, telephone numbers, Social Security numbers and other data.
Insurers were on pace to file 280 for the year ended this month, according to a FinCEN study issued last week. That compares with 5,723 SARs submitted by money services businesses in 2002, and 4,267 by securities and futures dealers in 2003, the first years those industries had to file the reports.
SARs filed by banks and other financial institutions rose 19 percent to more than 1 million in fiscal 2006, according to FinCENs annual report released Monday. That compares with a 32 percent increase in 2005 and a 61 percent increase in 2004, according to FinCEN data.
The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has revised its suspicious activity reporting form with the aim of reducing duplicate filings for individual suspicious transactions.
The quality of suspicious activity reports targeting terrorism is improving as the volume decreases, U.S. Treasury Undersecretary Stuart Levey said.