A Suspicious Activity Report must be filed when funds involved in a transaction are suspected of what?

A Suspicious Activity Report (SAR) must be filed when there is a suspicion that funds involved in a transaction are derived from illegal activity. This is a crucial requirement for financial institutions and is mandated by regulations aimed at preventing money laundering and other financial crimes.

When there are indications that funds may be linked to illicit sources, such as fraud, drug trafficking, or other types of crime, institutions are obligated to report these transactions to regulatory bodies. The filing of a SAR is a key tool for the U.S. Department of the Treasury and other law enforcement agencies, aiding in the detection and investigation of financial crimes. This safeguard helps maintain the integrity of the financial system by enabling authorities to identify and counteract illegal activities.

The other options presented do not align with the primary purpose of a SAR. Delays in processing are typically operational concerns and do not inherently indicate illegal activity. Similarly, monetary thresholds may be relevant in other contexts but are not the primary reason for filing a SAR; rather, the focus is on suspicion of illegal origins of funds. Lastly, normal audits are part of standard due diligence and compliance processes, not indicative of a suspicious activity that necessitates filing a SAR.