My "Banking with Big Brother" article: http://www.wired.com/news/news/politics/story/16749.html This is the existing system that will keep track of "suspicious activities" under the Know Your Customer proposed regulation. I described it in my article. This Department of Justice published this description today. -Declan System name: Suspicious Activity Reporting System (the ``SAR System''). System location: The SAR System is housed at the Internal Revenue Service Computing Center (``DCC'') in Detroit, Michigan and is managed by the Financial Crimes Enforcement Network (``FinCEN''), 2070 Chain Bridge Road, Suite 200, Vienna, VA 22182, with the assistance of the staff of DCC. Categories of individuals covered by the system: The SAR System contains information about: (1) Individuals or entities that are known perpetrators or suspected perpetrators of a known or suspected federal criminal violation, or pattern of criminal violations, committed or attempted against a financial institution, or participants in a transaction or [[Page 69745]] transactions conducted through the financial institution, that has been reported by the financial institution, either voluntarily or because such a report is required under the rules of FinCEN, one or more of the Federal Supervisory Agencies (the Board of Governors of the Federal Reserve System (``the Board''), the Office of the Comptroller of the Currency (``OCC''), the Federal Deposit Insurance Corporation (``FDIC''), the Office of Thrift Supervision (``OTS''), and the National Credit Union Administration (``NCUA'') (collectively, the ``Federal Supervisory Agencies'')), or both. (2) Individuals or entities that are participants in transactions, conducted or attempted by, at or through a financial institution, that have been reported because the institution knows, suspects, or has reason to suspect that: (a) The transaction involves funds derived from illegal activities, the transaction is intended or conducted to hide or disguise funds or assets derived from illegal activities as part of a plan to violate or evade any law or regulation or to avoid any transaction reporting requirement under Federal law; (b) the transaction is designed to evade any regulations promulgated under the Bank Secrecy Act, Pub. L. 91-508, as amended, codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-5330; or (c) the transaction has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the financial institution knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction; (3) Individuals who are directors, officers, employees, agents, or otherwise affiliated with a financial institution; (4) Individuals or entities that are actual or potential victims of a criminal violation or series of violations; (5) Individuals who are named as possible witnesses in connection with matters arising from any such report; (6) Individuals or entities named as preparers of any such report; (7) Individuals or entities named as persons to be contacted for assistance by government agencies in connection with any such report; (8) Individuals or entities who have or might have information about individuals or criminal violations described above; and (9) Individuals or entities involved in evaluating or investigating any matters arising from any such report. Categories of records in the system: The SAR System contains information reported to FinCEN by financial institutions on a Suspicious Activity Report (``SAR'') required under the authority of FinCEN or one or more of the Federal Supervisory Agencies, or both. SARs contain information about the categories of persons or entities specified in ``Categories of Individuals Covered by the System.'' The SAR System may also contain records pertaining to criminal prosecutions, civil actions, enforcement proceedings, and investigations resulting from or relating to SARs. Additionally, it will contain records pertaining to criminal prosecutions, civil actions, enforcement proceedings, and investigations relating to institutions required to file reports or under the supervision of one or more of the Federal Supervisory agencies. Authority for maintenance of the system: The system is established and maintained in accordance with 31 U.S.C. 5318(g); 31 CFR part 103; 31 U.S.C. 321; and Department of the Treasury Order 105-08. Purpose(s): The requirements of FinCEN and the Federal Supervisory Agencies create an integrated process for reporting suspicious activity and known or suspected crimes by, at, or through depository institutions and certain of their affiliates. The process is based on a single uniform SAR filed with FinCEN. The SAR System has been created, as a key part of this integrated reporting process, to permit coordinated and enhanced analysis and tracking of such information, and rapid dissemination of SAR information to appropriate law enforcement and supervisory agencies. The provisions of 31 U.S.C. 5318(g)(4)(B) specifically require that the agency designated as repository for SARs refer those reports to any appropriate law enforcement or supervisory agency. Data from the SAR System will be exchanged, retrieved, and disseminated, both manually and electronically among FinCEN, the Federal Supervisory Agencies, appropriate federal, state, and local law enforcement agencies, and state banking supervisory agencies. Agencies to which information will be referred electronically, which in certain cases may involve electronic transfers of batch information, include the Federal Supervisory Agencies, the Federal Bureau of Investigation (FBI), the Criminal Investigation Division of the Internal Revenue Service, the United States Secret Service, the United States Customs Service, the Executive Office of the United States Attorneys and the Offices of the 93 United States Attorneys, and state bank supervisory agencies and certain state law enforcement agencies, which have entered into appropriate agreements with FinCEN. (The FBI and Secret Service may receive electronic transfers of batch information as forms are filed to permit those agencies more efficiently to carry out their investigative responsibilities.) Organizations to which information is regularly disseminated are referred to as SAR System Users. It is anticipated that information from the SAR system will also be disseminated to other appropriate federal, state, or local law enforcement organizations and regulatory agencies that enter into appropriate agreements with FinCEN. In addition, information may be disseminated to non-United States financial regulatory and law enforcement agencies. Routine uses of records maintained in the system, Including Categories of Users and the Purposes of Such Uses: These records and information in these records may be used to: (1) Provide information or records, electronically or manually, to SAR System Users relevant to the enforcement and supervisory programs and operations of those Users; (2) Provide SAR System Users and their Executive Departments with reports that indicate the number, amount, individual identity, and other details concerning potential violations of the law that have been the subject of Suspicious Activity Reports; (3)Provide information or records to any appropriate domestic or non- United States governmental agency or self-regulatory organization charged with the responsibility of administering law or investigating or prosecuting violations of law, or charged with the responsibility of enforcing or implementing a statute, rule, regulation, order, or policy, or charged with the responsibility of issuing a license, security clearance, contract, grant, or benefit, when relevant to the responsibilities of these agencies or organizations; (4) Provide information or records, when appropriate, to international and foreign governmental authorities in accordance with law and formal or informal international agreement; (5) Disclose on behalf of a SAR System User, the existence, but not necessarily the content, of information or records to a third party, in cases where a SAR System User is a party or has a direct interest and where the SAR System User has concluded that such disclosure is necessary; (6)Provide information or records to the Department of Justice, or in a [[Page 69746]] proceeding before a court, adjudicative body, or other administrative body before which the SAR System User is authorized to appear, when (a) the SAR System User, or any component thereof; or (b) any employee of the SAR System User in his or her official capacity; or (c) any employee of the SAR System User, where the Department of Justice or the SAR System User has agreed to represent the employee; or (d) the United States is a party to litigation or has an interest in such litigation, when the SAR System User determines that litigation is likely to affect the SAR System User or any of its components and the use of such records by the Department of Justice or the SAR System User is deemed by the SAR System User to be relevant and necessary to the litigation, provided, however, that in each case it has been determined that the disclosure is compatible with the purpose for which the records were collected; (7) Disclose information or records to individuals or entities to the extent necessary to elicit information pertinent to the investigation, prosecution, or enforcement of civil or criminal statutes, rules, regulations, or orders; (8) In accordance with Executive Order 12968 (August 2, 1995), provide information or records to any appropriate government authority in connection with investigations and reinvestigations to determine eligibility for access to classified information to the extent relevant for matters that are by statute permissible subjects of inquiry; (9) Provide, when appropriate, information or records to a bar association, or other trade or professional organization performing similar functions, for possible disciplinary action; (10) Provide information or records to the Department of State and to the United States Intelligence Community, within the meaning of Executive Order 12333 (December 4, 1981) to further those agencies' efforts with respect to national security and international narcotics trafficking; (11) Furnish analytic and statistical reports to government agencies and the public providing information about trends and patterns derived from information contained on Suspicious Activity Reports, in a form in which individual identities are not revealed; and (12) Disclose information or records to any person with whom FinCEN, the DCC or a SAR System User contracts to provide consulting, data processing, clerical, or secretarial functions relating to the official programs and operations of FinCEN, DCC, or the SAR System User. Policies and practices for storing, Retrieving, Accessing, Retaining, and Disposing of Records in the System: Storage: Records are maintained in magnetic media and on hard paper copy. Retrievability: Data in the SAR System may be retrieved by sectionalized data fields (i.e., name of financial institution or holding company, type of suspected violation, individual suspect name, witness name, and name of individual authorized to discuss the referral with government officials) or by the use of search and selection criteria. Safeguards: The system is located in a guarded building that has restricted access. Access to the computer facilities and any paper records is subject to additional physical safeguards that restrict access. Access to any electronic records in the system is restricted by means of passwords and non-transferable identifiers issued to authorized SAR System Users. The system complies with all applicable security requirements of the Department of the Treasury. Retention and Disposal: Records in this system will be updated periodically to reflect changes, and will be maintained in electronic form as long as needed for the purpose for which the information was collected. Records will then be disposed of in accordance with applicable law. System Managers and Address: Deputy Director, Financial Crimes Enforcement Network, United States Department of the Treasury, 2070 Chain Bridge Road, Suite 200, Vienna, Virginia 22182. Notification Procedure: This system is exempt from notification requirements, record access requirements, and requirements that an individual be permitted to contest its contents, pursuant to the provisions of 5 U.S.C. 552a(j)(2) and (k)(2). Record Access Procedures: See ``Notification Procedure'' above. Contesting Record Procedures: See ``Notification Procedure'' above. Record Source Categories: Records in this system may be provided by or obtained from: Individuals; financial institutions and certain of their affiliates; Federal Supervisory Agencies; State financial institution supervisory agencies; domestic or foreign governmental agencies; foreign or international organizations; and commercial sources. Pursuant to the provisions of 5 U.S.C. 552a(j)(2) and (k)(2), this system is exempt from the requirement that the record source categories be disclosed. Exemptions Claimed for the System: This system is exempt from 5 U.S.C. 552a(c)(3), (c)(4), (d)(1), (d)(2), (d)(3), (d)(4), (e)(1), (e)(2), (e)(3), (e)(4)(G), (e)(4)(H), (e)(4)(I), (e)(5), (e)(8), (f) and (g) of the Privacy Act pursuant to 5 U.S.C. 552a(j)(2) and (k)(2). 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