A Suspicious Activity Report (SAR) is a formal document filed by financial institutions to report potential suspicious behavior or transactions that may indicate involvement in illegal activities such as money laundering, fraud, or terrorist financing. SARs are a key part of Anti-Money Laundering (AML) and financial crime compliance frameworks. 

When a transaction or account activity appears unusual or inconsistent with a customer's normal behavior, financial institutions are required to submit a SAR to the appropriate financial intelligence unit (FIU), such as FinCEN in the U.S. The report includes details about the transaction, the individuals involved, and the reasons for suspicion. Filing SARs helps regulators and law enforcement agencies investigate potential financial crimes and take appropriate action. SARs are critical in preventing the misuse of the financial system, ensuring institutions remain compliant with AML regulations, and safeguarding against illicit activities.