Suspicious Activity Report (SAR) Vs. Suspicious Transaction Report (STR)– What’s The Difference?

SAR and STR are the final steps before an AML investigation begins. Getting clear on the difference between SAR and STR is the name of the game.

In anti-money laundering (AML) efforts, the comparison between “suspicious activity report vs suspicious transaction report” often comes up.

SAR and STR are the final AML checks that come after the initial steps, like verifying who someone is and keeping an eye on transactions regularly.

Generally, SAR and STR reports are made only when a transaction seems off in some way.

This article will highlight the key difference between SAR and STR [SAR vs STR]. Each serves a unique purpose in spotting and reporting unusual financial activity. Let’s understand the specifics of how SAR and STR differ and when each is used.

What Is The Meaning Of A Suspicious Activity Report (SAR)?

A suspicious activity report (SAR) is a document that financial institutions use to flag unusual or suspicious transactions that could indicate illegal activities, such as money laundering or fraud.

It’s part of suspicious activity monitoring, where banks and other financial bodies keep an eye out for patterns or actions that don’t fit the typical profile of a customer’s usual transactions.

When a potential red flag comes up, a SAR transaction is processed.

The SAR involves –

compiling detailed information about the transaction in question,
the individuals involved,
and why it was deemed suspicious.

Next, this report then goes to the relevant authorities, who may use it to initiate investigations.

The goal is to prevent and detect illegal financial activities by making sure nothing slips through the cracks.

What Is The Meaning Of A Suspicious Transaction Report (STR)?

A suspicious transaction report (STR) is a record filed by financial institutions when a particular transaction appears unusual or inconsistent with an individual’s known financial behavior.

The meaning of an STR lies in its role as a tool for suspicious transaction monitoring.

The steps in STR involves –

screening transactions,
to identify those that stand out,
because they might signify money laundering,
or terrorist financing,
or other financial crimes.

Next, when a transaction raises a red flag, it’s marked as an STR transaction. This report, containing details about the transaction and the parties involved, is then submitted to the nation’s Financial Intelligence Unit (FIU) for further examination.

The goal is to help authorities in piecing together financial activities that may otherwise go unnoticed, playing a crucial role in combating financial crimes.

Difference Between SAR and STR – A Comparative Overview

When distinguishing between a “suspicious activity report vs suspicious transaction report”, keep in mind that both are tools used in the detection and reporting of potential money laundering or fraudulent activities, but they have their unique triggers and uses.

✅SAR is about spotting and reporting broader suspicious behaviors that may span multiple transactions or patterns without a defined monetary limit.

✅STR, conversely, zeroes in on single transactions that stand out due to their size, frequency, or nature, often crossing a specified monetary threshold.

Grasping the nuances between “SAR vs STR” is essential for AML compliance. Especially, knowing when to use SAR and STR is a must-have skill for financial professionals. It ensures they meet legal requirements and thwarts financial crimes.

Here is a comparative table that outlines their primary differences:

	Suspicious Activity Report (SAR)	Suspicious Transaction Report (STR)
Purpose	To report activities that are suspicious, with no minimum transaction amount required.	To report transactions specifically that are suspicious, usually above a certain threshold.
When to File	When a financial institution detects signs of potential money laundering, terrorist financing, or other illegal activities, regardless of transaction amount.	When a specific transaction occurs, that is deemed unusual or inconsistent with a customer’s normal behavior and meets or exceeds a certain value.
Filed By	Financial institutions such as banks, casinos, and money services businesses.	Same as SAR—financial institutions like banks and other money services entities.
Use	Used more broadly for suspicious activities, which may include multiple transactions or patterns of behavior.	Used for identifying singular transactions that stand out as suspicious.
Reporting Authority	Reports are filed with the respective FIUs or the relevant body in other countries.	Filed with the same authorities as a SAR, which varies by country.
Visibility to Customer	The customer is not notified about the report to avoid tipping off potential criminals.	Similar to SAR, the customer is not informed about the report for the same reasons.
Threshold Amount	Not typically applicable; any amount can be suspicious and warrant a SAR.	Often has a set monetary threshold that triggers the need for a report; varies by jurisdiction.
Typical Responders	Broader range of financial professionals may file SARs due to the more varied nature of suspicious activities.	STRs may be more commonly filed by those monitoring transactions, such as compliance officers or transaction monitoring systems.
Feedback to Filing Institution	May receive limited or no feedback on the filed report due to confidentiality and ongoing investigations.	Similar to SAR, feedback is usually not provided to maintain the integrity of any potential investigations.
Timing for Filing	Must be filed within a specified timeframe from the date of detection of suspicious activity (usually 30 days).	Timeframe for filing after the suspicious transaction is identified is also regulated (often immediately or within a set number of days).

Final Thoughts On SAR and STR

In the fight against financial crimes, the difference between sar and str is more than just procedural; it’s about creating a two-pronged approach where both play an integral role.

With SAR and STR, financial institutions have a robust framework to detect a wide array of suspicious activities.

✅SARs cast a wide net, capturing a range of unusual patterns,

✅while STRs zoom in on specific transactions that scream “this is not normal”.

Having both SAR and STR at hand ensures a thorough AML monitoring process to abide by regulations and keep the bad actors at bay.

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Top FAQs On Suspicious Activity Report Vs Suspicious Transaction Report

What is a suspicious activity report?

A SAR is a document filed by financial institutions to report unusual behavior that may indicate a financial crime.

What is a suspicious transaction report?

An STR is filed for specific transactions that appear out of the ordinary, suggesting potential illegal activity.

What triggers suspicious activity reports?

Activities inconsistent with a customer’s usual transactions or patterns that suggest money laundering or fraud can trigger a SAR.

What happens when you report suspicious activity?

When suspicious activity is reported, authorities review it and may investigate further to prevent financial crimes.

What is the difference between a SAR and a UAR?

A SAR is specific to reporting potential financial crimes, while a UAR (Unusual Activity Report) may cover a broader range of unusual but not necessarily illicit activities.

Rachna Pandya

Rachna is a skilled Technical Content Writer specializing in financial crime prevention, with expertise in Anti-Money Laundering, Identity Verification, Sanctions Screening, Transaction Monitoring, and Fraud & Risk. She offers valuable insights and strategies through her content, particularly in Trade-Based Money Laundering, Transaction Monitoring, and Cyber Laundering.

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