314(a) Information Sharing: FinCEN Publishes Updated Fact Sheet
Section 314(a) of the USA PATRIOT ACT (implemented by 31 CFR 1010.520) encourages information sharing between law enforcement and financial institutions regarding individuals, entities, and organizations engaged in or reasonably suspected of engaging in terrorist activity or acts of money laundering. The 314(a) process allows law enforcement to periodically seek information from the nation’s financial institutions. Financial institutions are then required to query their records for data matches, which if found, are to be reported back to the Financial Crimes Enforcement Network (FinCEN).
The FFIEC BSA/AML Examination Manual provides a complete overview of the Special Information Sharing Procedures. General Instructions and Frequently Asked Questions (FAQ) relating to the section 314(a) process are available on the Secure Information Sharing System (SISS). Alternatively, they can be obtained by calling the FinCEN resource center’s toll-free number (800)767-2825 or (703)905-3591 or by emailing FCR@fincen.gov. Credit unions are required to search the records specified in the General Instructions, unless otherwise instructed by an information request. But… how does it work?
Information requests. When a credit union receives an information request, it is required to conduct a one-time search of its records to identify accounts or transactions of a named suspect. Generally, this includes searching for current accounts, accounts maintained during the preceding 12 months, and transactions conducted outside of an account by or on behalf of a named suspect during the preceding six months, unless otherwise instructed by an information request. Any positive matches must be reported to FinCEN within 14 days, or as specified in the information request.
314(a) Secure Information Sharing System. FinCEN posts section 314(a) subject lists through the Web-based 314(a) SSIS. Section 314(a) notifications are generated from FinCEN about every two weeks, or more frequently if an emergency request is transmitted. The credit union’s point of contact will receive an e-mail notification when the 314(a) list is available for review. Within ten days (or less if a special request) from the date of the notice, the 314(a) list should be compared to all account holders of record during the previous twelve months. In addition, transactions involving non-account holders must be checked for the prior six months.
If a positive match exists, the credit union is required to promptly report it via the SISS to FinCEN. No details should be provided to FinCEN other than the fact that the credit union has a match. It is important to point out, a negative response is not required. FinCEN has indicated that to obtain documents from a credit union that has reported a positive 314(a) subject match, a law enforcement agency is required to meet the legal standards that apply to the particular investigative tool that it chooses to use to obtain the documents.
Credit unions are not prohibited from providing the 314(a) subject lists to a third-party service provider or vendor to perform or facilitate record searches. If that is the case, credit unions are required to take the necessary steps to ensure that the third-party safeguards and maintains the confidentiality of the information.
Retroactive searches. According to the FAQs available on the SISS, if a credit union receiving 314(a) subject lists through the SISS fails to perform or complete searches on one or more information requests received during the previous 12 months, it is required to obtain these prior requests immediately from FinCEN and perform a retroactive search of its records. When performing such searches, credit unions are not required to search records created after the date of the original information request.
For information sharing requests that were transmitted more than 12 months before the date upon which it discovers that it failed to perform or complete searches, credit unions are not required to perform retroactive searches.
How is the shared information used? FinCEN recently published an updated 314(a) fact sheet. The fact sheet provides some background about the filing process, the criteria for money laundering requests, and how feedback from institutions is used. According to the fact sheet, as of December 31, 2019, the 314 Program Office processed 4,465 requests pertinent to significant criminal investigations (652 cases related to Terrorism/Terrorist Financing and 3,813 related to Money Laundering).
NAFCU is hoping to gather your input on a variety of regulatory issues included in this month’s Economic & CU Monitor Survey, available here. NAFCU relies on your responses to identify trends affecting the credit union industry as a whole and to inform its advocacy efforts on Capitol Hill and with agencies such as the NCUA, CFPB and Federal Reserve.