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What is a Suspicious Activity Report (SAR)?

In this article, you’ll gain a clear understanding of what SARs are, how and when they should be filed, and why they matter for your organisation.

Published 2025-06-03
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A Suspicious Activity Report (SAR) is a report used to flag suspicious activities within the financial system. It helps authorities detect and prevent financial crimes such as money laundering, terrorist financing, and fraud. By reporting suspicious transactions, businesses contribute to a safer and more transparent financial ecosystem. 

In this article, you’ll gain a clear understanding of what SARs are, how and when they should be filed, and why they matter for your organisation. It’s a practical guide for anyone working with compliance, finance, or risk management.

Regulation and origin of SARs

The requirement for SAR reporting emerged in the 1970s alongside growing efforts to combat money laundering. In the United States, the Bank Secrecy Act (BSA) of 1970 became one of the first laws mandating the reporting of suspicious activities. 

Since then, many countries have developed similar frameworks, often based on recommendations from international organisations like the Financial Action Task Force (FATF).

In the EU, SAR reporting is a key part of the Anti-Money Laundering Directives (AMLD), which member states are required to implement through national legislation.

Examples of suspicious activities

Here are three common examples of activities that may trigger a SAR:

  • A customer makes an unusually large cash deposit without being able to explain the source.
  • A business partner insists on using unnecessarily complex payment structures.
  • A transaction involves countries known for weak anti-money laundering and counter-terrorism measures.

Common patterns of suspicious activity

Suspicious activities often follow certain recurring patterns:

  • Structured deposits, where small amounts are deposited repeatedly to exceed reporting thresholds.
  • Sudden changes in customer behaviour, such as a client shifting from small to very large transactions.
  • Complex chains of transactions, with money moving through numerous accounts across different countries to hide its origin.

Recognising these patterns is critical to detecting and preventing financial crime early. Read more about key alert triggers that can be implemented to strengthen your AML programme. 

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When is a SAR required?

A SAR should be filed as soon as a business reasonably suspects that a transaction or customer activity may be linked to illegal operations, even without full proof. It’s about reasonable suspicion, not evidence of a crime.

What are the requirements for a SAR?

For a SAR to be complete, it should include:

  • Identity information: Details about the individuals or entities involved.
  • Background information: Relevant context explaining why the activity is suspicious.
  • Reason for suspicion: A clear description of what raised concerns.
  • Description of activity: Observations and reasons the activity deviates from the norm.
  • Transaction details: Amounts, dates, accounts, and any other related information.
  • Source of funds: If known, information about where the funds originated.
  • Compliance officer information: Contact details of the reporting officer, in case authorities require further follow-up.

Who can report suspicious activity?

Any employee handling customer relationships or transactions can and should report suspicious activity, especially in sectors subject to AML regulations, such as:

While any staff member can identify suspicious activities, compliance officers typically compile and submit the SARs.

Are SARs confidential?

Yes, SARs are confidential. The identity of the reporting individual is protected by law in most countries to encourage reporting and safeguard whistleblowers. SAR information is accessible only to authorised authorities and investigators.

What institutions receive the SAR?

SARs are typically submitted to national Financial Intelligence Units (FIUs). Examples include:

  • In Sweden: Finanspolisen (a division of the Swedish Police Authority)
  • In the UK: National Crime Agency (NCA)
  • In the USA: Financial Crimes Enforcement Network (FinCEN)

These agencies analyse the information and may initiate further investigations or collaborate with other authorities.

The importance of SAR reporting

SARs play a critical role in identifying and stopping financial crime before it escalates. By submitting SARs, businesses and institutions help to:

  • Prevent money laundering and terrorism financing
  • Protect the financial system from misuse
  • Strengthen public trust in financial actors

Every SAR contributes a crucial piece to the larger fight against crime. 

Want to learn more about how Trapets can support your organisation in detecting and reporting suspicious activity? 

Contact us today for a personal consultation.