This report must be completed by a financial institution, including a state member bank, a bank holding company and its nonbank subsidiaries, an Edge or an agreement corporation and a domestic branch or agency of a foreign bank, when it knows of or suspects criminal activity that violates a federal criminal statute involving, among other things, financial crimes, money laundering, and violations of the Bank Secrecy Act or when it identifies any suspicious financial transactions. Suspicious financial transactions include transactions that the financial institution suspects involve funds derived from illegal activities; that were conducted for the purpose of hiding or disguising funds from illegal activities; or that were designed to evade the recordkeeping or reporting requirement of the Bank Secrecy Act. Suspicious financial transactions also include transactions that the financial institution believes are suspicious for any other reason.
Purpose: Financial institutions, the Board, and other supervisory agencies use this form to report suspected criminal misconduct directed at financial institutions to federal law enforcement agencies. Financial institutions must file an FR 2230 in certain cases when they know of or suspect criminal activity. Reporting triggers safe-harbor provisions whether the report is made by the filing of a Suspicious Activity Report in accordance with the Board's rules or voluntarily for other reasons by different means.
In 1985, the federal financial institution supervisory agencies jointly developed similar criminal referral procedures and forms to be used by all financial institutions operating in the United States. After the development of the form, the agencies each issued regulations imposing reporting requirements on the institutions subject to their jurisdiction and mandated the use of the newly developed criminal referral form. In 1996, the agencies, along with the Financial Crimes Enforcement Network (FinCEN), U.S. Department of the Treasury, collaborated on a new form for reporting suspicious transactions, the Suspicious Activity Report (SAR). Financial institutions file SARs with the Detroit Computing Center of the Internal Revenue Service, which maintains a database for the exclusive use of the agencies and law enforcement. In June 2000, the agencies and FinCEN revised the current SAR to reduce the burden of preparation and to obtain more accurate and useful information regarding the matters being reported.
The Federal Reserve's panel consists of all state member banks, bank holding companies and their nonbank subsidiaries, Edge and agreement corporations, and domestic branches and agencies of foreign banks.