A Suspicious Activity Report (SAR) and a Suspicious Transaction Report (STR) — are a types of formal report submitted by an obliged entity to its national Financial Intelligence Unit (FIU) when it knows, suspects, or has reasonable grounds to suspect that funds are linked to money laundering, terrorist financing, or other criminal activity. Crucially, the threshold for filing a SAR is suspicion, not proof — businesses are not required to investigate or confirm wrongdoing before reporting; they simply need a reasonable basis for their concern, even though investigation of some degree does take place.
Law imposes a strict requirement to file SARs promptly and prohibits the business from “tipping off” the customer that a report has been made, as this could compromise a potential investigation. The obligation to report applies to all employees of an obliged entity, not just compliance staff. Failure to file a SAR when there are grounds for suspicion can result in criminal liability. Conversely, a business that files a SAR in good faith is generally protected from civil or criminal liability for having made the report.
SAR and STR are sometimes considered as one, however there is a distinction. SAR is a report about suspicious behavior of the client as a whole, while STR concerns only specific transactions. In a sense, STR can be understood as a subtype of SAR.
