HomePublicationsNewsletter ArchiveNewslettersVolume 23Issue 1FinCEN Issues Guidance on Sharing Suspicious Activity Reports with U.S. Parents and Affiliates of Casinos

On January 4, 2016, the Financial Crimes Enforcement Network (“FinCEN”) issued a statement to remind and confirm that, under the Bank Secrecy Act (“BSA”) and its implementing regulations, a casino that has filed a Suspicious Activity Report (“SAR”) may share the SAR, or any information that would reveal the existence of the SAR, with each office or other place of business located within the United States of either the casino itself or a parent or affiliate of the casino.

FinCEN states that sharing SARs with domestic parents and affiliates will facilitate a casino’s ability to identify suspicious transactions and, in addition, a parent or affiliate’s respective anti-money laundering (“AML”) efforts may be enhanced by reviewing the casino’s SARs and obtaining a clearer and more comprehensive understanding of the activities the casino has identified as suspicious. Additionally, the released statement notes that the sharing of SARS within a casino’s domestic corporate organization structure is consistent with the purpose of Title II of the BSA. FinCEN concludes that, while BSA regulations generally prohibit SAR disclosure, casinos may share SARS and any information that would reveal the existence of a SAR, with U.S. parents and affiliates that are subject to the SAR requirement under the BSA.

In particular, SAR disclosures are authorized to explicitly recognized parties. According to FinCEN, provided that no person involved in the transaction is notified that the transaction has been reported, casinos are expressly permitted to disclose SARs to:

· FinCEN

· Any Federal, state, or local law enforcement agency;

· Any Federal regulatory agency that examines the casino for compliance with BSA;

· Any state regulatory authority that examines the casino for compliance with state laws requiring compliance with the BSA;

· Or any tribal regulatory authority that examines the casino for compliance with tribal laws requiring compliance with the BSA.

Regulations also provide that casinos may:

· Disclose the underlying, transactions, and documents upon which a SAR is based, including, but not limited to disclosures to another financial institution, or any director, officer, employee or agent of a financial institution, for the preparation of a joint SAR;

· And share a SAR, or any information that would reveal the existence of a SAR, within a casino’s corporate organization structure for purposes consistent with Title II of the BSA, as determined by regulation or in guidance.

However, there do exist limitations on sharing SARs or information that would reveal the existence of a SAR. Specifically, casinos may not share SARs or revealing information with:

· Parents, affiliates, offices, or other places of business located outside the United States, including non-U.S. offices of domestic parents or affiliates;

· Individuals or entities within a parent or casino’s organization structure who perform functions unrelated to gaming;

· A financial institution without an independent SAR-filing obligation, such as a check casher; or

· A money services business that may be co-located with a casino but is not an affiliate of the casino.

Notably, an affiliate that obtains a SAR (or information that reveals the existence of a SAR) cannot forward that SAR (or information) to another affiliate. According to FinCEN, there may also be circumstances under which a casino, its parent or affiliate, or both would be liable for direct or indirect disclosure of a SAR, or any information that would reveal the existence of a SAR, to any person who is the subject of the SAR. 

In this regard, FinCEN suggests that casinos have policies, procedures, and internal controls in place to ensure that the confidentiality of SARs is protected.

To view the official FinCEN guidance page, click here.

 

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