Pub. 8 2018-2019 Issue 2

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S September • October 2018 9 targets a financial institution constitutes some type of illicit activity and can serve as a conduit to commit numerous types of wide-ranging crimes. This has resulted in the additional subtype selections being added to Part II. The subtypes are new or modified options for: structuring, fraud, gaming, money laundering, identification/documentation, activities around securities, futures, options, and mortgage fraud. Due to these events becoming more prevalent, FinCEN has issued situations in which a SAR filing is required. Third, in Part II of the new field, the “Cyber-Event” indicator field that allows the filer to report various events such as com - mand and control IP addresses, ports, suspicious files names, and more, was added. This addition was due to the continued and increasing use of electronic systems and resources that are often utilized to perpetrate illicit activities. This increased use of electronic means requires institutions to capture information associated with Cyber-related activities. It is becoming ever more important for BSA and IT departments to work closely together to implement tracking and reporting of potential cyber-related incidents to ensure the institution is aware of all possible suspicious activities occurring. The cooperation between BSA and IT can help to better understand the pos- sible cyber-related occurrences and know if there is a pattern or practice being utilized when illicit actors are perpetrating these activities. Next, let’s discuss the revisions made to the SAR form that are not due to additional fields. The first revision is located in Part II and allows for subtype selections associated with various suspicious activity types to be made. Selecting these will help the institution better capture the true activity being conduct- ed. FinCEN can also better determine any course of action in regard to the suspicious activity. Looking next at the revised date and time stamp fields, located in Part II, help determine if the activities are being conducted on a schedule or are random in nature. Information of this nature can assist in being pre- pared for future activities. The third revision, located in Part II, expands on the suspicious activity relating to specific product types. The information gathered here helps both the institution and FinCEN determine if specific products are being exploited and are resulting in illicit activities being perpetrated. The fourth revision, located in Part III/IV, deals with securities and futures. This revision was made to ensure that the institutions are capturing information in relation to where the activity oc- curred and filing instructions in case of illicit activity. The final addition to the above noted additions and revi - sions are directed at batch filers. Batch filers will be required to submit SAR information in a XML file format rather than in fixed-length file delimitation such as the current ASCII. The BSA E-filing systemwill continue to accept ASCII batch submissions until January 1, 2019 in order to give batch filers a six-month go-live date window from June 2018 until January 2019. This window allows financial institutions the opportunity to ensure they are ready to file batches using the new required XML file format prior to the required date. n Chance Williams brings a wealth of knowledge and practical expe - rience to our banks. Chance developed an expertise in compliance while working as a BSA and Compliance Officer in banks of all sizes during his career. He contributed as a member of Business Development Teams, Loan Committees, Audit Committees, Product Steering Committees, IT Committees and as a direct liaison with the regulatory agencies. Chance also holds 10 years of experience as a compliance officer/auditor and 4 years as a senior compliance/audit consultant. As a Compliance Officer and Auditor, Chance has spent his career working with banks under enforcement action to strengthen bank compliancemanagement systems. Chance holds the ICB CRCM certification; as well as ICBA certifications in BSA (CBAP), Compliance (CCBCO), and IT (CCBTO). He has worked in the banking industry for 20 years in all departments of the bank. He possesses a strong working knowledge of bank operations and compliance.