[Title 31 CFR 103]
[Code of Federal Regulations (annual edition) - July 1, 2002 Edition]
[Title 31 - MONEY AND FINANCE: TREASURY]
[Subtitle B - Regulations Relating to Money and Finance]
[Chapter I - MONETARY OFFICES,]
[Part 103 - FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGN TRANSACTIONS]
[From the U.S. Government Printing Office]
31MONEY AND FINANCE: TREASURY12002-07-012002-07-01falseFINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGN TRANSACTIONS103PART 103MONEY AND FINANCE: TREASURYRegulations Relating to Money and FinanceMONETARY OFFICES,
PART 103--FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGN TRANSACTIONS--Table of Contents
Subpart A--Definitions
Sec.
103.11 Meaning of terms.
Subpart B--Reports Required To Be Made
103.15 Determination by the Secretary.
103.18 Reports by banks of suspicious transactions.
103.19 Reports by brokers or dealers in securities of suspicious
transactions.
103.20 Reports by money services businesses of suspicious transactions.
103.22 Reports of transactions in currency.
103.23 Reports of transportation of currency or monetary instruments.
103.24 Reports of foreign financial accounts.
103.25 Reports of transactions with foreign financial agencies.
103.26 Reports of certain domestic coin and currency transactions.
103.27 Filing of reports.
103.28 Identification required.
103.29 Purchases of bank checks and drafts, cashier's checks, money
orders and traveler's checks.
103.30 Reports relating to currency in excess of $10,000 received in a
trade or business.
Subpart C--Records Required To Be Maintained
103.31 Determination by the Secretary.
103.32 Records to be made and retained by persons having financial
interests in foreign financial accounts.
103.33 Records to be made and retained by financial institutions.
103.34 Additional records to be made and retained by banks.
103.35 Additional records to be made and retained by brokers or dealers
in securities.
103.36 Additional records to be made and retained by casinos.
103.37 Additional records to be made and retained by currency dealers
or exchangers.
103.38 Nature of records and retention period.
103.39 Person outside the United States.
Subpart D--Special Rules for Money Services Businesses
103.41 Registration of money services businesses.
Subpart E--General Provisions
103.51 Dollars as including foreign currency.
103.52 Photographic or other reproductions of Government obligations.
103.53 Availability of information.
103.54 Disclosure.
103.55 Exceptions, exemptions, and reports.
103.56 Enforcement.
103.57 Civil penalty.
103.58 Forfeiture of currency or monetary instruments.
103.59 Criminal penalty.
103.60 Enforcement authority with respect to transportation of currency
or monetary instruments.
103.61 Access to records.
103.62 Rewards for informants.
103.63 Structured transactions.
103.64 Special rules for casinos.
Subpart F--Summons
103.71 General.
103.72 Persons who may issue summons.
103.73 Contents of summons.
103.74 Service of summons.
103.75 Examination of witnesses and records.
103.76 Enforcement of summons.
103.77 Payment of expenses.
Subpart G--Administrative Rulings
103.80 Scope.
103.81 Submitting requests.
103.82 Nonconforming requests.
103.83 Oral communications.
103.84 Withdrawing requests.
103.85 Issuing rulings.
103.86 Modifying or rescinding rulings.
103.87 Disclosing information.
Subpart H--Special Information Sharing Procedures To Deter Money
Laundering and Terrorist Activity
Sec.
103.90 Definitions.
103.100 Information sharing with federal law enforcement agencies.
[Reserved]
103.110 Voluntary information sharing among financial institutions.
Subpart I--Anti-Money Laundering Programs
Sec.
103.120 Anti-money laundering program requirements for financial
institutions regulated by a Federal functional regulator
[[Page 331]]
or a self-regulatory organization, and casinos.
103.125 Anti-money laundering programs for money services businesses.
103.130 Anti-money laundering programs for mutual funds.
103.135 Anti-money laundering programs for operators of credit card
systems.
103.170 Deferred anti-money laundering programs for certain financial
institutions.
Appendix A to Part 103--Administrative Rulings
Appendix B to Part 103--Certification for Purposes of Section 314(b) of
the USA Patriot Act and 31 CFR 103.110
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5331; title
III, secs. 314, 352, Pub. L. 107-56, 115 Stat. 307.
Source: 37 FR 6912, Apr. 5, 1972, unless otherwise noted.
Subpart A--Definitions
Sec. 103.11 Meaning of terms.
When used in this part and in forms prescribed under this part,
where not otherwise distinctly expressed or manifestly incompatible with
the intent thereof, terms shall have the meanings ascribed in this
section.
(a) Accept. A receiving financial institution, other than the
recipient's financial institution, accepts a transmittal order by
executing the transmittal order. A recipient's financial institution
accepts a transmittal order by paying the recipient, by notifying the
recipient of the receipt of the order or by otherwise becoming obligated
to carry out the order.
(b) At one time. For purposes of Sec. 103.23 of this part, a person
who transports, mails, ships or receives; is about to or attempts to
transport, mail or ship; or causes the transportation, mailing, shipment
or receipt of monetary instruments, is deemed to do so ``at one time''
if:
(1) That person either alone, in conjunction with or on behalf of
others;
(2) Transports, mails, ships or receives in any manner; is about to
transport, mail or ship in any manner; or causes the transportation,
mailing, shipment or receipt in any manner of;
(3) Monetary instruments;
(4) Into the United States or out of the United States;
(5) Totaling more than $10,000;
(6)(i) On one calendar day or (ii) if for the purpose of evading the
reporting requirements of Sec. 103.23, on one or more days.
(c) Bank. Each agent, agency, branch or office within the United
States of any person doing business in one or more of the capacities
listed below:
(1) A commercial bank or trust company organized under the laws of
any State or of the United States;
(2) A private bank;
(3) A savings and loan association or a building and loan
association organized under the laws of any State or of the United
States;
(4) An insured institution as defined in section 401 of the National
Housing Act;
(5) A savings bank, industrial bank or other thrift institution;
(6) A credit union organized under the law of any State or of the
United States;
(7) Any other organization (except a money services business)
chartered under the banking laws of any state and subject to the
supervision of the bank supervisory authorities of a State;
(8) A bank organized under foreign law;
(9) Any national banking association or corporation acting under the
provisions of section 25(a) of the Act of Dec. 23, 1913, as added by the
Act of Dec. 24, 1919, ch. 18, 41 Stat. 378, as amended (12 U.S.C. 611-
32).
(d) Beneficiary. The person to be paid by the beneficiary's bank.
(e) Beneficiary's bank. The bank or foreign bank identified in a
payment order in which an account of the beneficiary is to be credited
pursuant to the order or which otherwise is to make payment to the
beneficiary if the order does not provide for payment to an account.
(f) Broker or dealer in securities. A broker or dealer in
securities, registered or required to be registered with the Securities
and Exchange Commission under the Securities Exchange Act of 1934.
(g) Common carrier. Any person engaged in the business of
transporting individuals or goods for a fee who holds himself out as
ready to engage in such
[[Page 332]]
transportation for hire and who undertakes to do so indiscriminately for
all persons who are prepared to pay the fee for the particular service
offered.
(h) Currency. The coin and paper money of the United States or of
any other country that is designated as legal tender and that circulates
and is customarily used and accepted as a medium of exchange in the
country of issuance. Currency includes U.S. silver certificates, U.S.
notes and Federal Reserve notes. Currency also includes official foreign
bank notes that are customarily used and accepted as a medium of
exchange in a foreign country.
(i) [Reserved]
(j) Deposit account. Deposit accounts include transaction accounts
described in paragraph (q) of this section, savings accounts, and other
time deposits.
(k) Domestic. When used herein, refers to the doing of business
within the United States, and limits the applicability of the provision
where it appears to the performance by such institutions or agencies of
functions within the United States.
(l) Established customer. A person with an account with the
financial institution, including a loan account or deposit or other
asset account, or a person with respect to which the financial
institution has obtained and maintains on file the person's name and
address, as well as taxpayer identification number (e.g., social
security or employer identification number) or, if none, alien
identification number or passport number and country of issuance, and to
which the financial institution provides financial services relying on
that information.
(m) Execution date. The day on which the receiving financial
institution may properly issue a transmittal order in execution of the
sender's order. The execution date may be determined by instruction of
the sender but cannot be earlier than the day the order is received,
and, unless otherwise determined, is the day the order is received. If
the sender's instruction states a payment date, the execution date is
the payment date or an earlier date on which execution is reasonably
necessary to allow payment to the recipient on the payment date.
(n) Financial institution. Each agent, agency, branch, or office
within the United States of any person doing business, whether or not on
a regular basis or as an organized business concern, in one or more of
the capacities listed below:
(1) A bank (except bank credit card systems);
(2) A broker or dealer in securities;
(3) A money services business as defined in paragraph (uu) of this
section;
(4) A telegraph company;
(5)(i) Casino. A casino or gambling casino that: Is duly licensed or
authorized to do business as such in the United States, whether under
the laws of a State or of a Territory or Insular Possession of the
United States, or under the Indian Gaming Regulatory Act or other
federal, state, or tribal law or arrangement affecting Indian lands
(including, without limitation, a casino operating on the assumption or
under the view that no such authorization is required for casino
operation on Indian lands); and has gross annual gaming revenue in
excess of $1 million. The term includes the principal headquarters and
every domestic branch or place of business of the casino.
(ii) For purposes of this paragraph (i)(7), ``gross annual gaming
revenue'' means the gross gaming revenue received by a casino, during
either the previous business year or the current business year of the
casino. A casino or gambling casino which is a casino for purposes of
this part solely because its gross annual gaming revenue exceeds
$1,000,000 during its current business year, shall not be considered a
casino for purposes of this part prior to the time in its current
business year that its gross annual gaming revenue exceeds $1,000,000.
(iii) Any reference in this part, other than in this paragraph
(n)(7) and in paragraph (n)(8) of this section, to a casino shall also
include a reference to a card club, unless the provision in question
contains specific language varying its application to card clubs or
excluding card clubs from its application;
(6)(i) Card club. A card club, gaming club, card room, gaming room,
or similar gaming establishment that is duly licensed or authorized to
do business as such in the United States, whether
[[Page 333]]
under the laws of a State, of a Territory or Insular Possession of the
United States, or of a political subdivision of any of the foregoing, or
under the Indian Gaming Regulatory Act or other federal, state, or
tribal law or arrangement affecting Indian lands (including, without
limitation, an establishment operating on the assumption or under the
view that no such authorization is required for operation on Indian
lands for an establishment of such type), and that has gross annual
gaming revenue in excess of $1,000,000. The term includes the principal
headquarters and every domestic branch or place of business of the
establishment. The term ``casino,'' as used in this Part shall include a
reference to ``card club'' to the extent provided in paragraph
(n)(7)(iii) of this section.
(ii) For purposes of this paragraph (n)(8), gross annual gaming
revenue means the gross revenue derived from or generated by customer
gaming activity (whether in the form of per-game or per-table fees,
however computed, rentals, or otherwise) and received by an
establishment, during either the establishment's previous business year
or its current business year. A card club that is a financial
institution for purposes of this Part solely because its gross annual
revenue exceeds $1,000,000 during its current business year, shall not
be considered a financial institution for purposes of this Part prior to
the time in its current business year when its gross annual revenue
exceeds $1,000,000;
(7) A person subject to supervision by any state or federal bank
supervisory authority.
(o) Foreign bank. A bank organized under foreign law, or an agency,
branch or office located outside the United States of a bank. The term
does not include an agent, agency, branch or office within the United
States of a bank organized under foreign law.
(p) Foreign financial agency. A person acting outside the United
States for a person (except for a country, a monetary or financial
authority acting as a monetary or financial authority, or an
international financial institution of which the United States
Government is a member) as a financial institution, bailee, depository
trustee, or agent, or acting in a similar way related to money, credit,
securities, gold, or a transaction in money, credit, securities, or
gold.
(q) Funds transfer. The series of transactions, beginning with the
originator's payment order, made for the purpose of making payment to
the beneficiary of the order. The term includes any payment order issued
by the originator's bank or an intermediary bank intended to carry out
the originator's payment order. A funds transfer is completed by
acceptance by the beneficiary's bank of a payment order for the benefit
of the beneficiary of the originator's payment order. Funds transfers
governed by the Electronic Fund Transfer Act of 1978 (Title XX, Pub. L.
95-630, 92 Stat. 3728, 15 U.S.C. 1693, et seq.), as well as any other
funds transfers that are made through an automated clearinghouse, an
automated teller machine, or a point-of-sale system, are excluded from
this definition.
(r) Intermediary bank. A receiving bank other than the originator's
bank or the beneficiary's bank.
(s) Intermediary financial institution. A receiving financial
institution, other than the transmittor's financial institution or the
recipient's financial institution. The term intermediary financial
institution includes an intermediary bank.
(t) Investment security. An instrument which:
(1) Is issued in bearer or registered form;
(2) Is of a type commonly dealt in upon securities exchanges or
markets or commonly recognized in any area in which it is issued or
dealt in as a medium for investment;
(3) Is either one of a class or series or by its terms is divisible
into a class or series of instruments; and
(4) Evidences a share, participation or other interest in property
or in an enterprise or evidences an obligation of the issuer.
(u) Monetary instruments. (1) Monetary instruments include:
(i) Currency;
(ii) Traveler's checks in any form;
(iii) All negotiable instruments (including personal checks,
business checks, official bank checks, cashier's
[[Page 334]]
checks, third-party checks, promissory notes (as that term is defined in
the Uniform Commercial Code), and money orders) that are either in
bearer form, endorsed without restriction, made out to a fictitious
payee (for the purposes of Sec. 103.23), or otherwise in such form that
title thereto passes upon delivery;
(iv) Incomplete instruments (including personal checks, business
checks, official bank checks, cashier's checks, third-party checks,
promissory notes (as that term is defined in the Uniform Commercial
Code), and money orders) signed but with the payee's name omitted; and
(v) Securities or stock in bearer form or otherwise in such form
that title thereto passes upon delivery.
(2) Monetary instruments do not include warehouse receipts or bills
of lading.
(v) Originator. The sender of the first payment order in a funds
transfer.
(w) Originator's bank. The receiving bank to which the payment order
of the originator is issued if the originator is not a bank or foreign
bank, or the originator if the originator is a bank or foreign bank.
(x) Payment date. The day on which the amount of the transmittal
order is payable to the recipient by the recipient's financial
institution. The payment date may be determined by instruction of the
sender, but cannot be earlier than the day the order is received by the
recipient's financial institution and, unless otherwise prescribed by
instruction, is the date the order is received by the recipient's
financial institution.
(y) Payment order. An instruction of a sender to a receiving bank,
transmitted orally, electronically, or in writing, to pay, or to cause
another bank or foreign bank to pay, a fixed or determinable amount of
money to a beneficiary if:
(1) The instruction does not state a condition to payment to the
beneficiary other than time of payment;
(2) The receiving bank is to be reimbursed by debiting an account
of, or otherwise receiving payment from, the sender; and
(3) The instruction is transmitted by the sender directly to the
receiving bank or to an agent, funds transfer system, or communication
system for transmittal to the receiving bank.
(z) Person. An individual, a corporation, a partnership, a trust or
estate, a joint stock company, an association, a syndicate, joint
venture, or other unincorporated organization or group, an Indian Tribe
(as that term is defined in the Indian Gaming Regulatory Act), and all
entities cognizable as legal personalities.
(aa) Receiving bank. The bank or foreign bank to which the sender's
instruction is addressed.
(bb) Receiving financial institution. The financial institution or
foreign financial agency to which the sender's instruction is addressed.
The term receiving financial institution includes a receiving bank.
(cc) Recipient. The person to be paid by the recipient's financial
institution. The term recipient includes a beneficiary, except where the
recipient's financial institution is a financial institution other than
a bank.
(dd) Recipient's financial institution. The financial institution or
foreign financial agency identified in a transmittal order in which an
account of the recipient is to be credited pursuant to the transmittal
order or which otherwise is to make payment to the recipient if the
order does not provide for payment to an account. The term recipient's
financial institution includes a beneficiary's bank, except where the
beneficiary is a recipient's financial institution.
(ee) Secretary. The Secretary of the Treasury or any person duly
authorized by the Secretary to perform the function mentioned.
(ff) Sender. The person giving the instruction to the receiving
financial institution.
(gg) Structure (structuring). For purposes of section 103.53, a
person structures a transaction if that person, acting alone, or in
conjunction with, or on behalf of, other persons, conducts or attempts
to conduct one or more transactions in currency, in any amount, at one
or more financial institutions, on one or more days, in any manner, for
the purpose of evading the reporting requirements under section 103.22
of this part. ``In any manner'' includes, but is not limited to, the
breaking
[[Page 335]]
down of a single sum of currency exceeding $10,000 into smaller sums,
including sums at or below $10,000, or the conduct of a transaction, or
series of currency transactions, including transactions at or below
$10,000. The transaction or transactions need not exceed the $10,000
reporting threshold at any single financial institution on any single
day in order to constitute structuring within the meaning of this
definition.
(hh) Transaction account. Transaction accounts include those
accounts described in 12 U.S.C. 461(b)(1)(C), money market accounts and
similar accounts that take deposits and are subject to withdrawal by
check or other negotiable order.
(ii) Transaction. (1) Except as provided in paragraph (ii)(2) of
this section, transaction means a purchase, sale, loan, pledge, gift,
transfer, delivery, or other disposition, and with respect to a
financial institution includes a deposit, withdrawal, transfer between
accounts, exchange of currency, loan, extension of credit, purchase or
sale of any stock, bond, certificate of deposit, or other monetary
instrument or investment security, purchase or redemption of any money
order, payment or order for any money remittance or transfer, or any
other payment, transfer, or delivery by, through, or to a financial
institution, by whatever means effected.
(2) For purposes of Sec. 103.22, and other provisions of this part
relating solely to the report required by that section, the term
``transaction in currency'' shall mean a transaction involving the
physical transfer of currency from one person to another. A transaction
which is a transfer of funds by means of bank check, bank draft, wire
transfer, or other written order, and which does not include the
physical transfer of currency, is not a transaction in currency for this
purpose.
(jj) Transmittal of funds. A series of transactions beginning with
the transmittor's transmittal order, made for the purpose of making
payment to the recipient of the order. The term includes any transmittal
order issued by the transmittor's financial institution or an
intermediary financial institution intended to carry out the
transmittor's transmittal order. The term transmittal of funds includes
a funds transfer. A transmittal of funds is completed by acceptance by
the recipient's financial institution of a transmittal order for the
benefit of the recipient of the transmittor's transmittal order. Funds
transfers governed by the Electronic Fund Transfer Act of 1978 (Title
XX, Pub. L. 95-630, 92 Stat. 3728, 15 U.S.C. 1693, et seq.), as well as
any other funds transfers that are made through an automated
clearinghouse, an automated teller machine, or a point-of-sale system,
are excluded from this definition.
(kk) Transmittal order. The term transmittal order includes a
payment order and is an instruction of a sender to a receiving financial
institution, transmitted orally, electronically, or in writing, to pay,
or cause another financial institution or foreign financial agency to
pay, a fixed or determinable amount of money to a recipient if:
(1) The instruction does not state a condition to payment to the
recipient other than time of payment;
(2) The receiving financial institution is to be reimbursed by
debiting an account of, or otherwise receiving payment from, the sender;
and
(3) The instruction is transmitted by the sender directly to the
receiving financial institution or to an agent or communication system
for transmittal to the receiving financial institution.
(ll) Transmittor. The sender of the first transmittal order in a
transmittal of funds. The term transmittor includes an originator,
except where the transmittor's financial institution is a financial
institution or foreign financial agency other than a bank or foreign
bank.
(mm) Transmittor's financial institution. The receiving financial
institution to which the transmittal order of the transmittor is issued
if the transmittor is not a financial institution or foreign financial
agency, or the transmittor if the transmittor is a financial institution
or foreign financial agency. The term transmittor's financial
institution includes an originator's bank, except where the originator
is a transmittor's financial institution other than a bank or foreign
bank.
[[Page 336]]
(nn) United States. The States of the United States, the District of
Columbia, the Indian lands (as that term is defined in the Indian Gaming
Regulatory Act), and the Territories and Insular Possessions of the
United States.
(oo) Business day. Business day, as used in this part with respect
to banks, means that day, as normally communicated to its depository
customers, on which a bank routinely posts a particular transaction to
its customer's account.
(pp) Postal Service. The United States Postal Service.
(qq) FinCEN. FinCEN means the Financial Crimes Enforcement Network,
an office within the Office of the Under Secretary (Enforcement) of the
Department of the Treasury.
(rr) Indian Gaming Regulatory Act. The Indian Gaming Regulatory Act
of 1988, codified at 25 U.S.C. 2701-2721 and 18 U.S.C. 1166-68.
(ss) State. The States of the United States and, wherever necessary
to carry out the provisions of this part, the District of Columbia.
(tt) Territories and Insular Possessions. The Commonwealth of Puerto
Rico, the United States Virgin Islands, Guam, the Commonwealth of the
Northern Mariana Islands, and all other territories and possessions of
the United States other than the Indian lands and the District of
Columbia.
(uu) Money services business. Each agent, agency, branch, or office
within the United States of any person doing business, whether or not on
a regular basis or as an organized business concern, in one or more of
the capacities listed in paragraphs (uu)(1) through (uu)(6) of this
section. Notwithstanding the preceding sentence, the term ``money
services business'' shall not include a bank, nor shall it include a
person registered with, and regulated or examined by, the Securities and
Exchange Commission or the Commodity Futures Trading Commission.
(1) Currency dealer or exchanger. A currency dealer or exchanger
(other than a person who does not exchange currency in an amount greater
than $1,000 in currency or monetary or other instruments for any person
on any day in one or more transactions).
(2) Check casher. A person engaged in the business of a check casher
(other than a person who does not cash checks in an amount greater than
$1,000 in currency or monetary or other instruments for any person on
any day in one or more transactions).
(3) Issuer of traveler's checks, money orders, or stored value. An
issuer of traveler's checks, money orders, or, stored value (other than
a person who does not issue such checks or money orders or stored value
in an amount greater than $1,000 in currency or monetary or other
instruments to any person on any day in one or more transactions).
(4) Seller or redeemer of traveler's checks, money orders, or stored
value. A seller or redeemer of traveler's checks, money orders, or
stored value (other than a person who does not sell such checks or money
orders or stored value in an amount greater than $1,000 in currency or
monetary or other instruments to or redeem such instruments for an
amount greater than $1,000 in currency or monetary or other instruments
from, any person on any day in one or more transactions).
(5) Money transmitter--(i) In general. Money transmitter:
(A) Any person, whether or not licensed or required to be licensed,
who engages as a business in accepting currency, or funds denominated in
currency, and transmits the currency or funds, or the value of the
currency or funds, by any means through a financial agency or
institution, a Federal Reserve Bank or other facility of one or more
Federal Reserve Banks, the Board of Governors of the Federal Reserve
System, or both, or an electronic funds transfer network; or
(B) Any other person engaged as a business in the transfer of funds.
(ii) Facts and circumstances; Limitation. Whether a person ``engages
as a business'' in the activities described in paragraph (uu)(5)(i) of
this section is a matter of facts and circumstances. Generally, the
acceptance and transmission of funds as an integral part of the
execution and settlement of a transaction other than the funds
transmission itself (for example, in connection with a bona fide sale of
securities or other property), will not cause a person to be a money
transmitter within
[[Page 337]]
the meaning of paragraph (uu)(5)(i) of this section.
(6) United States Postal Service. The United States Postal Service,
except with respect to the sale of postage or philatelic products.
(vv) Stored value. Funds or monetary value represented in digital
electronics format (whether or not specially encrypted) and stored or
capable of storage on electronic media in such a way as to be
retrievable and transferable electronically.
[52 FR 11441, Apr. 8, 1987; 52 FR 12641, Apr. 17, 1987, as amended at 53
FR 777, Jan. 13, 1988; 53 FR 4138, Feb. 12, l988; 54 FR 3027, Jan. 23,
1989; 54 FR 28418, July 6, 1989; 55 FR 20143, May 15, 1990; 58 FR 13546,
Mar. 12, 1993; 60 FR 228, Jan. 3, 1995; 61 FR 4331, Feb. 5, 1996; 61 FR
7055, Feb. 23, 1996; 61 FR 14249, 14385, Apr. 1, 1996; 63 FR 1923, Jan.
13, 1998; 64 FR 45450, Aug. 20, 1999; 65 FR 13692, Mar. 14, 2000]
Effective Date Note: At 67 FR 44055, July 1, 2002, Sec. 103.11 was
amended by revising paragraph (ii)(1) and adding paragraph (ww),
effective July 31, 2002. For the convenience of the user the revised
text is set forth as follows:
Sec. 103.11 Meaning of terms.
* * * * *
(ii) Transaction. (1) Except as provided in paragraph (ii)(2) of
this section, transaction means a purchase, sale, loan, pledge, gift,
transfer, delivery, or other disposition, and with respect to a
financial institution includes a deposit, withdrawal, transfer between
accounts, exchange of currency, loan, extension of credit, purchase or
sale of any stock, bond, certificate of deposit, or other monetary
instrument or security, purchase or redemption of any money order,
payment or order for any money remittance or transfer, or any other
payment, transfer, or delivery by, through, or to a financial
institution, by whatever means effected.
* * * * *
(ww) Security. Security means any instrument or interest described
in section 3(a)(10) of the Securities Exchange Act of 1934, 15 U.S.C.
78c(a)(10).
Subpart B--Reports Required To Be Made
Sec. 103.15 Determination by the Secretary.
The Secretary hereby determines that the reports required by this
subpart have a high degree of usefulness in criminal, tax, or regulatory
investigations or proceedings.
[37 FR 6912, Apr. 5, 1972. Redesignated at 61 FR 4331, Feb. 5, 1996 and
further redesignated at 65 FR 13692, Mar. 14, 2000]
Sec. 103.18 Reports by banks of suspicious transactions.
(a) General. (1) Every bank shall file with the Treasury Department,
to the extent and in the manner required by this section, a report of
any suspicious transaction relevant to a possible violation of law or
regulation. A bank may also file with the Treasury Department by using
the Suspicious Activity Report specified in paragraph (b)(1) of this
section or otherwise, a report of any suspicious transaction that it
believes is relevant to the possible violation of any law or regulation
but whose reporting is not required by this section.
(2) A transaction requires reporting under the terms of this section
if it is conducted or attempted by, at, or through the bank, it involves
or aggregates at least $5,000 in funds or other assets, and the bank
knows, suspects, or has reason to suspect that:
(i) The transaction involves funds derived from illegal activities
or is intended or conducted in order to hide or disguise funds or assets
derived from illegal activities (including, without limitation, the
ownership, nature, source, location, or control of such funds or assets)
as part of a plan to violate or evade any federal law or regulation or
to avoid any transaction reporting requirement under federal law or
regulation;
(ii) The transaction is designed to evade any requirements of this
part or of any other 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
(iii) 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 bank knows of no reasonable explanation for
the transaction after examining the available facts, including the
background and possible purpose of the transaction.
[[Page 338]]
(b) Filing procedures--(1) What to file. A suspicious transaction
shall be reported by completing a Suspicious Activity Report (``SAR''),
and collecting and maintaining supporting documentation as required by
paragraph (d) of this section.
(2) Where to file. The SAR shall be filed with FinCEN in a central
location, to be determined by FinCEN, as indicated in the instructions
to the SAR.
(3) When to file. A bank is required to file a SAR no later than 30
calendar days after the date of initial detection by the bank of facts
that may constitute a basis for filing a SAR. If no suspect was
identified on the date of the detection of the incident requiring the
filing, a bank may delay filing a SAR for an additional 30 calendar days
to identify a suspect. In no case shall reporting be delayed more than
60 calendar days after the date of initial detection of a reportable
transaction. In situations involving violations that require immediate
attention, such as, for example, ongoing money laundering schemes, the
bank shall immediately notify, by telephone, an appropriate law
enforcement authority in addition to filing timely a SAR.
(c) Exceptions. A bank is not required to file a SAR for a robbery
or burglary committed or attempted that is reported to appropriate law
enforcement authorities, or for lost, missing, counterfeit, or stolen
securities with respect to which the bank files a report pursuant to the
reporting requirements of 17 CFR 240.17f-1.
(d) Retention of records. A bank shall maintain a copy of any SAR
filed and the original or business record equivalent of any supporting
documentation for a period of five years from the date of filing the
SAR. Supporting documentation shall be identified, and maintained by the
bank as such, and shall be deemed to have been filed with the SAR. A
bank shall make all supporting documentation available to FinCEN and any
appropriate law enforcement agencies or bank supervisory agencies upon
request.
(e) Confidentiality of reports; limitation of liability. No bank or
other financial institution, and no director, officer, employee, or
agent of any bank or other financial institution, who reports a
suspicious transaction under this part, may notify any person involved
in the transaction that the transaction has been reported. Thus, any
person subpoenaed or otherwise requested to disclose a SAR or the
information contained in a SAR, except where such disclosure is
requested by FinCEN or an appropriate law enforcement or bank
supervisory agency, shall decline to produce the SAR or to provide any
information that would disclose that a SAR has been prepared or filed,
citing this paragraph (e) and 31 U.S.C. 5318(g)(2), and shall notify
FinCEN of any such request and its response thereto. A bank, and any
director, officer, employee, or agent of such bank, that makes a report
pursuant to this section (whether such report is required by this
section or is made voluntarily) shall be protected from liability for
any disclosure contained in, or for failure to disclose the fact of such
report, or both, to the full extent provided by 31 U.S.C. 5318(g)(3).
(f) Compliance. Compliance with this section shall be audited by the
Department of the Treasury, through FinCEN or its delegees under the
terms of the Bank Secrecy Act. Failure to satisfy the requirements of
this section may be a violation of the reporting rules of the Bank
Secrecy Act and of this part. Such failure may also violate provisions
of Title 12 of the Code of Federal Regulations.
[61 FR 4331, Feb. 5, 1996, as amended at 61 FR 14249, Apr. 1, 1996; 61
FR 18250, Apr. 25, 1996. Redesignated at 65 FR 13692, Mar. 14, 2000]
Effective Date Note: At 67 FR 44056, July 1, 2002, Sec. 103.19 was
added effective July 31, 2002. For the convenience of the user, the
added text is set forth as follows:
Sec. 103.19 Reports by brokers or dealers in securities of suspicious
transactions.
(a) General. (1) Every broker or dealer in securities within the
United States (for purposes of this section, a ``broker-dealer'') shall
file with FinCEN, to the extent and in the manner required by this
section, a report of any suspicious transaction relevant to a possible
violation of law or regulation. A broker-dealer may also file with
FinCEN a report of any suspicious transaction that it
[[Page 339]]
believes is relevant to the possible violation of any law or regulation
but whose reporting is not required by this section. Filing a report of
a suspicious transaction does not relieve a broker-dealer from the
responsibility of complying with any other reporting requirements
imposed by the Securities and Exchange Commission or a self-regulatory
organization (``SRO'') (as defined in section 3(a)(26) of the Securities
Exchange Act of 1934, 15 U.S.C. 78c(a)(26)).
(2) A transaction requires reporting under the terms of this section
if it is conducted or attempted by, at, or through a broker-dealer, it
involves or aggregates funds or other assets of at least $5,000, and the
broker-dealer knows, suspects, or has reason to suspect that the
transaction (or a pattern of transactions of which the transaction is a
part):
(i) Involves funds derived from illegal activity or is intended or
conducted in order to hide or disguise funds or assets derived from
illegal activity (including, without limitation, the ownership, nature,
source, location, or control of such funds or assets) as part of a plan
to violate or evade any federal law or regulation or to avoid any
transaction reporting requirement under federal law or regulation;
(ii) Is designed, whether through structuring or other means, to
evade any requirements of this part or of any other regulations
promulgated under the Bank Secrecy Act, Public Law 91-508, as amended,
codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-
5332;
(iii) 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 broker-dealer knows of no reasonable explanation for the
transaction after examining the available facts, including the
background and possible purpose of the transaction; or
(iv) Involves use of the broker-dealer to facilitate criminal
activity.
(3) The obligation to identify and properly and timely to report a
suspicious transaction rests with each broker-dealer involved in the
transaction, provided that no more than one report is required to be
filed by the broker-dealers involved in a particular transaction (so
long as the report filed contains all relevant facts).
(b) Filing procedures--(1) What to file. A suspicious transaction
shall be reported by completing a Suspicious Activity Report--Brokers or
Dealers in Securities (``SAR-BD''), and collecting and maintaining
supporting documentation as required by paragraph (d) of this section.
(2) Where to file. The SAR-BD shall be filed with FinCEN in a
central location, to be determined by FinCEN, as indicated in the
instructions to the SAR-BD.
(3) When to file. A SAR-BD shall be filed no later than 30 calendar
days after the date of the initial detection by the reporting broker-
dealer of facts that may constitute a basis for filing a SAR-BD under
this section. If no suspect is identified on the date of such initial
detection, a broker-dealer may delay filing a SAR-BD for an additional
30 calendar days to identify a suspect, but in no case shall reporting
be delayed more than 60 calendar days after the date of such initial
detection. In situations involving violations that require immediate
attention, such as terrorist financing or ongoing money laundering
schemes, the broker-dealer shall immediately notify by telephone an
appropriate law enforcement authority in addition to filing timely a
SAR-BD. Broker-dealers wishing voluntarily to report suspicious
transactions that may relate to terrorist activity may call FinCEN's
Financial Institutions Hotline at 1-866-556-3974 in addition to filing
timely a SAR-BD if required by this section. The broker-dealer may also,
but is not required to, contact the Securities and Exchange Commission
to report in such situations.
(c) Exceptions. (1) A broker-dealer is not required to file a SAR-BD
to report:
(i) A robbery or burglary committed or attempted of the broker-
dealer that is reported to appropriate law enforcement authorities, or
for lost, missing, counterfeit, or stolen securities with respect to
which the broker-dealer files a report pursuant to the reporting
requirements of 17 CFR 240.17f-1;
(ii) A violation otherwise required to be reported under this
section of any of the federal securities laws or rules of an SRO by the
broker-dealer or any of its officers, directors, employees, or other
registered representatives, other than a violation of 17 CFR 240.17a-8
or 17 CFR 405.4, so long as such violation is appropriately reported to
the SEC or an SRO.
(2) A broker-dealer may be required to demonstrate that it has
relied on an exception in paragraph (c)(1) of this section, and must
maintain records of its determinations to do so for the period specified
in paragraph (d) of this section. To the extent that a Form RE-3, Form
U-4, or Form U-5 concerning the transaction is filed consistent with the
SRO rules, a copy of that form will be a sufficient record for purposes
of this paragraph (c)(2).
(3) For the purposes of this paragraph (c) the term ``federal
securities laws'' means the ``securities laws,'' as that term is defined
in section 3(a)(47) of the Securities Exchange Act of 1934, 15 U.S.C.
78c(a)(47), and the rules and regulations promulgated by the Securities
and Exchange Commission under such laws.
(d) Retention of records. A broker-dealer shall maintain a copy of
any SAR-BD filed and the original or business record equivalent of any
supporting documentation for a period of five years from the date of
filing the SAR-BD. Supporting documentation
[[Page 340]]
shall be identified as such and maintained by the broker-dealer, and
shall be deemed to have been filed with the SAR-BD. A broker-dealer
shall make all supporting documentation available to FinCEN, any other
appropriate law enforcement agencies or federal or state securities
regulators, and for purposes of paragraph (g) of this section, to an SRO
registered with the Securities and Exchange Commission, upon request.
(e) Confidentiality of reports. No financial institution, and no
director, officer, employee, or agent of any financial institution, who
reports a suspicious transaction under this part, may notify any person
involved in the transaction that the transaction has been reported,
except to the extent permitted by paragraph (a)(3) of this section.
Thus, any person subpoenaed or otherwise requested to disclose a SAR-BD
or the information contained in a SAR-BD, except where such disclosure
is requested by FinCEN, the Securities and Exchange Commission, or
another appropriate law enforcement or regulatory agency, or for
purposes of paragraph (g) of this section, an SRO registered with the
Securities and Exchange Commission, shall decline to produce the SAR-BD
or to provide any information that would disclose that a SAR-BD has been
prepared or filed, citing this paragraph (e) and 31 U.S.C. 5318(g)(2),
and shall notify FinCEN of any such request and its response thereto.
(f) Limitation of liability. A broker-dealer, and any director,
officer, employee, or agent of such broker-dealer, that makes a report
of any possible violation of law or regulation pursuant to this section
or any other authority (or voluntarily) shall not be liable to any
person under any law or regulation of the United States (or otherwise to
the extent also provided in 31 U.S.C. 5318(g)(3), including in any
arbitration proceeding) for any disclosure contained in, or for failure
to disclose the fact of, such report.
(g) Examination and enforcement. Compliance with this section shall
be examined by the Department of the Treasury, through FinCEN or its
delegees, under the terms of the Bank Secrecy Act. Reports filed under
this section shall be made available to an SRO registered with the
Securities and Exchange Commission examining a broker-dealer for
compliance with the requirements of this section. Failure to satisfy the
requirements of this section may constitute a violation of the reporting
rules of the Bank Secrecy Act and of this part.
(h) Effective date. This section applies to transactions occurring
after December 30, 2002.
Sec. 103.20 Reports by money services businesses of suspicious transactions.
(a) General. (1) Every money services business, described in
Sec. 103.11(uu) (3), (4), (5), or (6), shall file with the Treasury
Department, to the extent and in the manner required by this section, a
report of any suspicious transaction relevant to a possible violation of
law or regulation. Any money services business may also file with the
Treasury Department, by using the form specified in paragraph (b)(1) of
this section, or otherwise, a report of any suspicious transaction that
it believes is relevant to the possible violation of any law or
regulation but whose reporting is not required by this section.
(2) A transaction requires reporting under the terms of this section
if it is conducted or attempted by, at, or through a money services
business, involves or aggregates funds or other assets of at least
$2,000 (except as provided in paragraph (a)(3) of this section), and the
money services business knows, suspects, or has reason to suspect that
the transaction (or a pattern of transactions of which the transaction
is a part):
(i) Involves funds derived from illegal activity or is intended or
conducted in order to hide or disguise funds or assets derived from
illegal activity (including, without limitation, the ownership, nature,
source, location, or control of such funds or assets) as part of a plan
to violate or evade any federal law or regulation or to avoid any
transaction reporting requirement under federal law or regulation;
(ii) Is designed, whether through structuring or other means, to
evade any requirements of this part or of any other regulations
promulgated under the Bank Secrecy Act, Public Law 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
(iii) Serves no business or apparent lawful purpose, and the
reporting money services business knows of no reasonable explanation for
the transaction after examining the available facts, including the
background and possible purpose of the transaction.
[[Page 341]]
(3) To the extent that the identification of transactions required
to be reported is derived from a review of clearance records or other
similar records of money orders or traveler's checks that have been sold
or processed, an issuer of money orders or traveler's checks shall only
be required to report a transaction or pattern of transactions that
involves or aggregates funds or other assets of at least $5,000.
(4) The obligation to identify and properly and timely to report a
suspicious transaction rests with each money services business involved
in the transaction, provided that no more than one report is required to
be filed by the money services businesses involved in a particular
transaction (so long as the report filed contains all relevant facts).
Whether, in addition to any liability on its own for failure to report,
a money services business that issues the instrument or provides the
funds transfer service involved in the transaction may be liable for the
failure of another money services business involved in the transaction
to report that transaction depends upon the nature of the contractual or
other relationship between the businesses, and the legal effect of the
facts and circumstances of the relationship and transaction involved,
under general principles of the law of agency.
(5) Notwithstanding the provisions of this section, a transaction
that involves solely the issuance, or facilitation of the transfer of
stored value, or the issuance, sale, or redemption of stored value,
shall not be subject to reporting under this paragraph (a), until the
promulgation of rules specifically relating to such reporting.
(b) Filing procedures--(1) What to file. A suspicious transaction
shall be reported by completing a Suspicious Activity Report-MSB (``SAR-
MSB''), and collecting and maintaining supporting documentation as
required by paragraph (c) of this section.
(2) Where to file. The SAR-MSB shall be filed in a central location
to be determined by FinCEN, as indicated in the instructions to the SAR-
MSB.
(3) When to file. A money services business subject to this section
is required to file each SAR-MSB no later than 30 calendar days after
the date of the initial detection by the money services business of
facts that may constitute a basis for filing a SAR-MSB under this
section. In situations involving violations that require immediate
attention, such as ongoing money laundering schemes, the money services
business shall immediately notify by telephone an appropriate law
enforcement authority in addition to filing a SAR-MSB.
(c) Retention of records. A money services business shall maintain a
copy of any SAR-MSB filed and the original or business record equivalent
of any supporting documentation for a period of five years from the date
of filing the SAR-MSB. Supporting documentation shall be identified as
such and maintained by the money services business, and shall be deemed
to have been filed with the SAR-MSB. A money services business shall
make all supporting documentation available to FinCEN and any other
appropriate law enforcement agencies or supervisory agencies upon
request.
(d) Confidentiality of reports; limitation of liability. No
financial institution, and no director, officer, employee, or agent of
any financial institution, who reports a suspicious transaction under
this part, may notify any person involved in the transaction that the
transaction has been reported. Thus, any person subpoenaed or otherwise
requested to disclose a SAR-MSB or the information contained in a SAR-
MSB, except where such disclosure is requested by FinCEN or an
appropriate law enforcement or supervisory agency, shall decline to
produce the SAR-MSB or to provide any information that would disclose
that a SAR-MSB has been prepared or filed, citing this paragraph (d) and
31 U.S.C. 5318(g)(2), and shall notify FinCEN of any such request and
its response thereto. A reporting money services business, and any
director, officer, employee, or agent of such reporting money services
business, that makes a report pursuant to this section (whether such
report is required by this section or made voluntarily) shall be
protected from liability for any disclosure contained in, or for
[[Page 342]]
failure to disclose the fact of, such report, or both, to the extent
provided by 31 U.S.C. 5318(g)(3).
(e) Compliance. Compliance with this section shall be audited by the
Department of the Treasury, through FinCEN or its delegees under the
terms of the Bank Secrecy Act. Failure to satisfy the requirements of
this section may constitute a violation of the reporting rules of the
Bank Secrecy Act and of this part.
(f) Effective date. This section applies to transactions occurring
after December 31, 2001.
[65 FR 13692, Mar. 14, 2000]
Sec. 103.22 Reports of transactions in currency.
(a) General. This section sets forth the rules for the reporting by
financial institutions of transactions in currency. The reporting
obligations themselves are stated in paragraph (b) of this section. The
reporting rules relating to aggregation are stated in paragraph (c) of
this section. Rules permitting banks to exempt certain transactions from
the reporting obligations appear in paragraph (d) of this section.
(b) Filing obligations--(1) Financial institutions other than
casinos. Each financial institution other than a casino shall file a
report of each deposit, withdrawal, exchange of currency or other
payment or transfer, by, through, or to such financial institution which
involves a transaction in currency of more than $10,000, except as
otherwise provided in this section. In the case of the Postal Service,
the obligation contained in the preceding sentence shall not apply to
payments or transfers made solely in connection with the purchase of
postage or philatelic products.
(2) Casinos. Each casino shall file a report of each transaction in
currency, involving either cash in or cash out, of more than $10,000.
(i) Transactions in currency involving cash in include, but are not
limited to:
(A) Purchases of chips, tokens, and plaques;
(B) Front money deposits;
(C) Safekeeping deposits;
(D) Payments on any form of credit, including markers and counter
checks;
(E) Bets of currency;
(F) Currency received by a casino for transmittal of funds through
wire transfer for a customer;
(G) Purchases of a casino's check; and
(H) Exchanges of currency for currency, including foreign currency.
(ii) Transactions in currency involving cash out include, but are
not limited to:
(A) Redemptions of chips, tokens, and plaques;
(B) Front money withdrawals;
(C) Safekeeping withdrawals;
(D) Advances on any form of credit, including markers and counter
checks;
(E) Payments on bets, including slot jackpots;
(F) Payments by a casino to a customer based on receipt of funds
through wire transfer for credit to a customer;
(G) Cashing of checks or other negotiable instruments;
(H) Exchanges of currency for currency, including foreign currency;
and
(I) Reimbursements for customers' travel and entertainment expenses
by the casino.
(c) Aggregation--(1) Multiple branches. A financial institution
includes all of its domestic branch offices, and any recordkeeping
facility, wherever located, that contains records relating to the
transactions of the institution's domestic offices, for purposes of this
section's reporting requirements.
(2) Multiple transactions--general. In the case of financial
institutions other than casinos, for purposes of this section, multiple
currency transactions shall be treated as a single transaction if the
financial institution has knowledge that they are by or on behalf of any
person and result in either cash in or cash out totaling more than
$10,000 during any one business day (or in the case of the Postal
Service, any one day). Deposits made at night or over a weekend or
holiday shall be treated as if received on the next business day
following the deposit.
(3) Multiple transactions--casinos. In the case of a casino,
multiple currency transactions shall be treated as a single transaction
if the casino has knowledge that they are by or on behalf of any person
and result in either cash in
[[Page 343]]
or cash out totaling more than $10,000 during any gaming day. For
purposes of this paragraph (c)(3), a casino shall be deemed to have the
knowledge described in the preceding sentence, if: any sole proprietor,
partner, officer, director, or employee of the casino, acting within the
scope of his or her employment, has knowledge that such multiple
currency transactions have occurred, including knowledge from examining
the books, records, logs, information retained on magnetic disk, tape or
other machine-readable media, or in any manual system, and similar
documents and information, which the casino maintains pursuant to any
law or regulation or within the ordinary course of its business, and
which contain information that such multiple currency transactions have
occurred.
(d) Transactions of exempt persons--(1) General. No bank is required
to file a report otherwise required by paragraph (b) of this section
with respect to any transaction in currency between an exempt person and
such bank, or, to the extent provided in paragraph (d)(6)(vi) of this
section, between such exempt person and other banks affiliated with such
bank. In addition, a non-bank financial institution is not required to
file a report otherwise required by paragraph (b) of this section with
respect to a transaction in currency between the institution and a
commercial bank. (A limitation on the exemption described in this
paragraph (d)(1) is set forth in paragraph (d)(7) of this section.)
(2) Exempt person. For purposes of this section, an exempt person
is:
(i) A bank, to the extent of such bank's domestic operations;
(ii) A department or agency of the United States, of any State, or
of any political subdivision of any State;
(iii) Any entity established under the laws of the United States, of
any State, or of any political subdivision of any State, or under an
interstate compact between two or more States, that exercises
governmental authority on behalf of the United States or any such State
or political subdivision;
(iv) Any entity, other than a bank, whose common stock or analogous
equity interests are listed on the New York Stock Exchange or the
American Stock Exchange or whose common stock or analogous equity
interests have been designated as a Nasdaq National Market Security
listed on the Nasdaq Stock Market (except stock or interests listed
under the separate ``Nasdaq Small-Cap Issues'' heading), provided that,
for purposes of this paragraph (d)(2)(iv), a person that is a financial
institution, other than a bank, is an exempt person only to the extent
of its domestic operations;
(v) Any subsidiary, other than a bank, of any entity described in
paragraph (d)(2)(iv) of this section (a ``listed entity'') that is
organized under the laws of the United States or of any State and at
least 51 percent of whose common stock or analogous equity interest is
owned by the listed entity, provided that, for purposes of this
paragraph (d)(2)(v), a person that is a financial institution, other
than a bank, is an exempt person only to the extent of its domestic
operations;
(vi) To the extent of its domestic operations and only with respect
to transactions conducted through its exemptible accounts, any other
commercial enterprise (for purposes of this paragraph (d), a ``non-
listed business''), other than an enterprise specified in paragraph
(d)(6)(viii) of this section, that:
(A) Has maintained a transaction account, as defined in paragraph
(d)(6)(ix) of this section, at the bank for at least 12 months;
(B) Frequently engages in transactions in currency with the bank in
excess of $10,000; and
(C) Is incorporated or organized under the laws of the United States
or a State, or is registered as and eligible to do business within the
United States or a State; or
(vii) With respect solely to withdrawals for payroll purposes from
existing exemptible accounts, any other person (for purposes of this
paragraph (d), a ``payroll customer'') that:
(A) Has maintained a transaction account, as defined in paragraph
(d)(6)(ix) of this section, at the bank for at least 12 months;
(B) Operates a firm that regularly withdraws more than $10,000 in
order to pay its United States employees in currency; and
[[Page 344]]
(C) Is incorporated or organized under the laws of the United States
or a State, or is registered as and eligible to do business within the
United States or a State.
(3) Initial designation of exempt persons--(i) General. A bank must
designate each exempt person with which it engages in transactions in
currency by the close of the 30-day period beginning after the day of
the first reportable transaction in currency with that person sought to
be exempted from reporting under the terms of this paragraph (d). Except
as provided in paragraph (d)(3)(ii) of this section, designation by a
bank of an exempt person shall be made by a single filing of Treasury
Form TD F 90-22.53. (A bank is not required to file a Treasury Form TD F
90-22.53 with respect to the transfer of currency to or from any of the
twelve Federal Reserve Banks.) The designation must be made separately
by each bank that treats the person in question as an exempt person,
except as provided in paragraph (d)(6)(vi) of this section. The
designation requirements of this paragraph (d)(3) apply whether or not
the particular exempt person to be designated has previously been
treated as exempt from the reporting requirements of prior
Sec. 103.22(a) under the rules contained in 31 CFR 103.22(a) through
(g), as in effect on October 20, 1998 (see 31 CFR Parts 0 to 199 revised
as of July 1, 1998). A special transitional rule, which extends the time
for initial designation for customers that have been previously treated
as exempt under such prior rules, is contained in paragraph (d)(11) of
this section.
(ii) Special rules for banks. When designating another bank as an
exempt person, a bank must either make the filing required by paragraph
(d)(3)(i) of this section or file, in such a format and manner as FinCEN
may specify, a current list of its domestic bank customers. In the event
that a bank files its current list of domestic bank customers, the bank
must make the filing as described in paragraph (d)(3)(i) of this section
for each bank that is a new customer and for which an exemption is
sought under this paragraph (d).
(4) Annual review. The information supporting each designation of an
exempt person, and the application to each account of an exempt person
described in paragraphs (d)(2)(vi) or (d)(2)(vii) of this section of the
monitoring system required to be maintained by paragraph (d)(9)(ii) of
this section, must be reviewed and verified at least once each year.
(5) Biennial filing with respect to certain exempt persons--(i)
General. A biennial filing, as described in paragraph (d)(5)(ii) of this
section, is required for continuation of the treatment as an exempt
person of a customer described in paragraph (d)(2)(vi) or (vii) of this
section. No biennial filing is required for continuation of the
treatment as an exempt person of a customer described in paragraphs
(d)(2)(i) through (v) of this section.
(ii) Non-listed businesses and payroll customers. The designation of
a non-listed business or a payroll customer as an exempt person must be
renewed biennially, beginning on March 15 of the second calendar year
following the year in which the first designation of such customer as an
exempt person is made, and every other March 15 thereafter, on Treasury
Form TD F 90-22.53. Biennial renewals must include a statement
certifying that the bank's system of monitoring the transactions in
currency of an exempt person for suspicious activity, required to be
maintained by paragraph (d)(9)(ii) of this section, has been applied as
necessary, but at least annually, to the account of the exempt person to
whom the biennial renewal applies. Biennial renewals also must include
information about any change in control of the exempt person involved of
which the bank knows (or should know on the basis of its records).
(6) Operating rules--(i) General rule. Subject to the specific rules
of this paragraph (d), a bank must take such steps to assure itself that
a person is an exempt person (within the meaning of the applicable
provision of paragraph (d)(2) of this section), to document the basis
for its conclusions, and document its compliance, with the terms of this
paragraph (d), that a reasonable and prudent bank would take and
document to protect itself from loan or other fraud or loss based on
misidentification of a person's status,
[[Page 345]]
and in the case of the monitoring system requirement set forth in
paragraph (d)(9)(ii) of this section, such steps that a reasonable and
prudent bank would take and document to identify suspicious transactions
as required by paragraph (d)(9)(ii) of this section.
(ii) Governmental departments and agencies. A bank may treat a
person as a governmental department, agency, or entity if the name of
such person reasonably indicates that it is described in paragraph
(d)(2)(ii) or (d)(2)(iii) of this section, or if such person is known
generally in the community to be a State, the District of Columbia, a
tribal government, a Territory or Insular Possession of the United
States, or a political subdivision or a wholly-owned agency or
instrumentality of any of the foregoing. An entity generally exercises
governmental authority on behalf of the United States, a State, or a
political subdivision, for purposes of paragraph (d)(2)(iii) of this
section, only if its authorities include one or more of the powers to
tax, to exercise the authority of eminent domain, or to exercise police
powers with respect to matters within its jurisdiction. Examples of
entities that exercise governmental authority include, but are not
limited to, the New Jersey Turnpike Authority and the Port Authority of
New York and New Jersey.
(iii) Stock exchange listings. In determining whether a person is
described in paragraph (d)(2)(iv) of this section, a bank may rely on
any New York, American or Nasdaq Stock Market listing published in a
newspaper of general circulation, on any commonly accepted or published
stock symbol guide, on any information contained in the Securities and
Exchange Commission ``Edgar'' System, or on any information contained on
an Internet World-Wide Web site or sites maintained by the New York
Stock Exchange, the American Stock Exchange, or the National Association
of Securities Dealers.
(iv) Listed company subsidiaries. In determining whether a person is
described in paragraph (d)(2)(v) of this section, a bank may rely upon:
(A) Any reasonably authenticated corporate officer's certificate;
(B) Any reasonably authenticated photocopy of Internal Revenue
Service Form 851 (Affiliation Schedule) or the equivalent thereof for
the appropriate tax year; or
(C) A person's Annual Report or Form 10-K, as filed in each case
with the Securities and Exchange Commission.
(v) Aggregated accounts. In determining the qualification of a
customer as a non-listed business or a payroll customer, a bank may
treat all exemptible accounts of the customer as a single account. If a
bank elects to treat all exemptible accounts of a customer as a single
account, the bank must continue to treat such accounts consistently as a
single account for purposes of determining the qualification of the
customer as a non-listed business or payroll customer.
(vi) Affiliated banks. The designation required by paragraph (d)(3)
of this section may be made by a parent bank holding company or one of
its bank subsidiaries on behalf of all bank subsidiaries of the holding
company, so long as the designation lists each bank subsidiary to which
the designation shall apply.
(vii) Sole proprietorships. A sole proprietorship may be treated as
a non-listed business if it otherwise meets the requirements of
paragraph (d)(2)(vi) of this section, as applicable. In addition, a sole
proprietorship may be treated as a payroll customer if it otherwise
meets the requirements of paragraph (d)(2)(vii) of this section, as
applicable.
(viii) Ineligible businesses. A business engaged primarily in one or
more of the following activities may not be treated as a non-listed
business for purposes of this paragraph (d): serving as financial
institutions or agents of financial institutions of any type; purchase
or sale to customers of motor vehicles of any kind, vessels, aircraft,
farm equipment or mobile homes; the practice of law, accountancy, or
medicine; auctioning of goods; chartering or operation of ships, buses,
or aircraft; gaming of any kind (other than licensed parimutuel betting
at race tracks); investment advisory services or investment banking
services; real estate brokerage; pawn brokerage; title
[[Page 346]]
insurance and real estate closing; trade union activities; and any other
activities that may be specified by FinCEN. A business that engages in
multiple business activities may be treated as a non-listed business so
long as no more than 50% of its gross revenues is derived from one or
more of the ineligible business activities listed in this paragraph
(d)(6)(viii).
(ix) Exemptible accounts of a non-listed business or payroll
customer. The exemptible accounts of a non-listed business or payroll
customer include transaction accounts and money market deposit accounts.
However, money market deposit accounts maintained other than in
connection with a commercial enterprise are not exemptible accounts. A
transaction account, for purposes of this paragraph (d), is any account
described in section 19(b)(1)(C) of the Federal Reserve Act, 12 U.S.C.
461(b)(1)(C), and its implementing regulations (12 CFR part 204). A
money market deposit account, for purposes of this paragraph (d), is any
interest-bearing account that is described as a money market deposit
account in 12 CFR 204.2(d)(2).
(x) Documentation. The records maintained by a bank to document its
compliance with and administration of the rules of this paragraph (d)
shall be maintained in accordance with the provisions of Sec. 103.38.
(7) Limitation on exemption. A transaction carried out by an exempt
person as an agent for another person who is the beneficial owner of the
funds that are the subject of a transaction in currency is not subject
to the exemption from reporting contained in paragraph (d)(1) of this
section.
(8) Limitation on liability. (i) No bank shall be subject to penalty
under this part for failure to file a report required by paragraph (b)
of this section with respect to a transaction in currency by an exempt
person with respect to which the requirements of this paragraph (d) have
been satisfied, unless the bank:
(A) Knowingly files false or incomplete information with respect to
the transaction or the customer engaging in the transaction; or
(B) Has reason to believe that the customer does not meet the
criteria established by this paragraph (d) for treatment of the
transactor as an exempt person or that the transaction is not a
transaction of the exempt person.
(ii) Subject to the specific terms of this paragraph (d), and absent
any specific knowledge of information indicating that a customer no
longer meets the requirements of an exempt person, a bank satisfies the
requirements of this paragraph (d) to the extent it continues to treat
that customer as an exempt person until the date of that customer's next
periodic review, which, as required by paragraph (d)(4) of this section,
shall occur no less than once each year.
(iii) A bank that files a report with respect to a currency
transaction by an exempt person rather than treating such person as
exempt shall remain subject, with respect to each such report, to the
rules for filing reports, and the penalties for filing false or
incomplete reports that are applicable to reporting of transactions in
currency by persons other than exempt persons.
(9) Obligations to file suspicious activity reports and maintain
system for monitoring transactions in currency. (i) Nothing in this
paragraph (d) relieves a bank of the obligation, or reduces in any way
such bank's obligation, to file a report required by Sec. 103.21 with
respect to any transaction, including any transaction in currency that a
bank knows, suspects, or has reason to suspect is a transaction or
attempted transaction that is described in Sec. 103.21(a)(2)(i), (ii),
or (iii), or relieves a bank of any reporting or recordkeeping
obligation imposed by this part (except the obligation to report
transactions in currency pursuant to this section to the extent provided
in this paragraph (d)). Thus, for example, a sharp increase from one
year to the next in the gross total of currency transactions made by an
exempt customer, or similarly anomalous transaction trends or patterns,
may trigger the obligations of a bank under Sec. 103.21.
(ii) Consistent with its annual review obligations under paragraph
(d)(4)of this section, a bank shall establish and maintain a monitoring
system that is reasonably designed to detect, for each account of a non-
listed business or payroll customer, those transactions in currency
involving such account that
[[Page 347]]
would require a bank to file a suspicious transaction report. The
statement in the preceding sentence with respect to accounts of non-
listed and payroll customers does not limit the obligation of banks
generally to take the steps necessary to satisfy the terms of paragraph
(d)(9)(i) of this section and Sec. 103.21 with respect to all exempt
persons.
(10) Revocation. The status of any person as an exempt person under
this paragraph (d) may be revoked by FinCEN by written notice, which may
be provided by publication in the Federal Register in appropriate
situations, on such terms as are specified in such notice. Without any
action on the part of the Treasury Department and subject to the
limitation on liability contained in paragraph (d)(8)(ii) of this
section:
(i) The status of an entity as an exempt person under paragraph
(d)(2)(iv) of this section ceases once such entity ceases to be listed
on the applicable stock exchange; and
(ii) The status of a subsidiary as an exempt person under paragraph
(d)(2)(v) of this section ceases once such subsidiary ceases to have at
least 51 per cent of its common stock or analogous equity interest owned
by a listed entity.
(11) Transitional rule. (i) No accounts may be newly granted an
exemption or placed on an exempt list on or after October 21, 1998,
under the rules contained in 31 CFR 103.22(b) through (g), as in effect
on October 20, 1998 (see 31 CFR Parts 0 to 199 revised as of July 1,
1998).
(ii) If a bank properly treated an account (a ``previously exempted
account'') as exempt on October 20, 1998 under the rules contained in 31
CFR 103.22(b) through (g), as in effect on October 20, 1998 (see 31 CFR
Parts 0 to 199 revised as of July 1, 1998), it may continue to treat
such account as exempt under such prior rules with respect to
transactions in currency occurring on or before June 30, 2000, provided
that it does so consistently until the earlier of June 30, 2000, and the
date on which the bank makes the designation or the determination
described in paragraph (d)(11)(iii) of this section. A bank that
continues to treat a previously exempted account as exempt under the
prior rules, and for the period, specified in the preceding sentence,
shall remain subject to such prior rules, and to the penalties for
failing to comply therewith, with respect to transactions in currency
occurring during such period.
(iii) A bank must, on or before July 1, 2000, either designate the
holder of a previously exempted account as an exempt person under
paragraph (d)(2) of this section or determine that it may not or will
not treat such holder as an exempt person under paragraph (d)(2) of this
section (so that it will be required to make reports under paragraph (a)
of this section with respect to transactions in currency by such person
occurring on or after the date of determination, but no later than July
1, 2000). A bank that initially does not designate the holder of a
previously exempted account as an exempt person for periods beginning
after June 30, 2000, may later make such a designation, to the extent
otherwise permitted to do so by this paragraph (d), for periods after
the effective date of such designation.
(Approved by the Office of Management and Budget under control number
1506-0009)
[63 FR 50156, Sept. 21, 1998, as amended at 65 FR 46360, July 28, 2000]
Sec. 103.23 Reports of transportation of currency or monetary instruments.
(a) Each person who physically transports, mails, or ships, or
causes to be physically transported, mailed, or shipped, or attempts to
physically transport, mail or ship, or attempts to cause to be
physically transported, mailed or shipped, currency or other monetary
instruments in an aggregate amount exceeding $10,000 at one time from
the United States to any place outside the United States, or into the
United States from any place outside the United States, shall make a
report thereof. A person is deemed to have caused such transportation,
mailing or shipping when he aids, abets, counsels, commands, procures,
or requests it to be done by a financial institution or any other
person.
(b) Each person who receives in the U.S. currency or other monetary
instruments in an aggregate amount exceeding $10,000 at one time which
have
[[Page 348]]
been transported, mailed, or shipped to such person from any place
outside the United States with respect to which a report has not been
filed under paragraph (a) of this section, whether or not required to be
filed thereunder, shall make a report thereof, stating the amount, the
date of receipt, the form of monetary instruments, and the person from
whom received.
(c) This section shall not require reports by:
(1) A Federal Reserve;
(2) A bank, a foreign bank, or a broker or dealer in securities, in
respect to currency or other monetary instruments mailed or shipped
through the postal service or by common carrier;
(3) A commercial bank or trust company organized under the laws of
any State or of the United States with respect to overland shipments of
currency or monetary instruments shipped to or received from an
established customer maintaining a deposit relationship with the bank,
in amounts which the bank may reasonably conclude do not exceed amounts
commensurate with the customary conduct of the business, industry or
profession of the customer concerned;
(4) A person who is not a citizen or resident of the United States
in respect to currency or other monetary instruments mailed or shipped
from abroad to a bank or broker or dealer in securities through the
postal service or by common carrier;
(5) A common carrier of passengers in respect to currency or other
monetary instruments in the possession of its passengers;
(6) A common carrier of goods in respect to shipments of currency or
monetary instruments not declared to be such by the shipper;
(7) A travelers' check issuer or its agent in respect to the
transportation of travelers' checks prior to their delivery to selling
agents for eventual sale to the public;
(8) By a person with respect to a restrictively endorsed traveler's
check that is in the collection and reconciliation process after the
traveler's check has been negotiated,
(9) Nor by a person engaged as a business in the transportation of
currency, monetary instruments and other commercial papers with respect
to the transportation of currency or other monetary instruments overland
between established offices of banks or brokers or dealers in securities
and foreign persons.
(d) A transfer of funds through normal banking procedures which does
not involve the physical transportation of currency or monetary
instruments is not required to be reported by this section. This section
does not require that more than one report be filed covering a
particular transportation, mailing or shipping of currency or other
monetary instruments with respect to which a complete and truthful
report has been filed by a person. However, no person required by
paragraph (a) or (b) of this section to file a report shall be excused
from liability for failure to do so if, in fact, a complete and truthful
report has not been filed.
(Approved by the Office of Management and Budget under control number
1505-0063)
[37 FR 26517, Dec. 13, 1972, as amended at 50 FR 18479, May 1, 1985; 50
FR 42693, Oct. 22, 1985; 53 FR 4138, Feb. 12, 1988; 54 FR 28418, July 6,
1989]
Sec. 103.24 Reports of foreign financial accounts.
(a) Each person subject to the jurisdiction of the United States
(except a foreign subsidiary of a U.S. person) having a financial
interest in, or signature or other authority over, a bank, securities or
other financial account in a foreign country shall report such
relationship to the Commissioner of the Internal Revenue for each year
in which such relationship exists, and shall provide such information as
shall be specified in a reporting form prescribed by the Secretary to be
filed by such persons. Persons having a financial interest in 25 or more
foreign financial accounts need only note that fact on the form. Such
persons will be required to provide detailed information concerning each
account when so requested by the Secretary or his delegate.
[42 FR 63774, Dec. 20, 1977, as amended at 52 FR 11443, Apr. 8, 1987; 52
FR 12641, Apr. 17, 1987]
[[Page 349]]
Sec. 103.25 Reports of transactions with foreign financial agencies.
(a) Promulgation of reporting requirements. The Secretary, when he
deems appropriate, may promulgate regulations requiring specified
financial institutions to file reports of certain transactions with
designated foreign financial agencies. If any such regulation is issued
as a final rule without notice and opportunity for public comment, then
a finding of good cause for dispensing with notice and comment in
accordance with 5 U.S.C. 553(b) will be included in the regulation. If
any such regulation is not published in the Federal Register, then any
financial institution subject to the regulation will be named and
personally served or otherwise given actual notice in accordance with 5
U.S.C. 553(b). If a financial institution is given notice of a reporting
requirement under this section by means other than publication in the
Federal Register, the Secretary may prohibit disclosure of the existence
or provisions of that reporting requirement to the designated foreign
financial agency or agencies and to any other party.
(b) Information subject to reporting requirements. A regulation
promulgated pursuant to paragraph (a) of this section shall designate
one or more of the following categories of information to be reported:
(1) Checks or drafts, including traveler's checks, received by
respondent financial institution for collection or credit to the account
of a foreign financial agency, sent by respondent financial institution
to a foreign country for collection or payment, drawn by respondent
financial institution on a foreign financial agency, drawn by a foreign
financial agency on respondent financial institution--including the
following information.
(i) Name of maker or drawer;
(ii) Name of drawee or drawee financial institution;
(iii) Name of payee;
(iv) Date and amount of instrument;
(v) Names of all endorsers.
(2) Transmittal orders received by a respondent financial
institution from a foreign financial agency or sent by respondent
financial institution to a foreign financial agency, including all
information maintained by that institution pursuant to Sec. 103.33.
(3) Loans made by respondent financial institution to or through a
foreign financial agency--including the following information:
(i) Name of borrower;
(ii) Name of person acting for borrower;
(iii) Date and amount of loan;
(iv) Terms of repayment;
(v) Name of guarantor;
(vi) Rate of interest;
(vii) Method of disbursing proceeds;
(viii) Collateral for loan.
(4) Commercial paper received or shipped by the respondent financial
institution--including the following information:
(i) Name of maker;
(ii) Date and amount of paper;
(iii) Due date;
(iv) Certificate number;
(v) Amount of transaction.
(5) Stocks received or shipped by respondent financial institution--
including the following information:
(i) Name of corporation;
(ii) Type of stock;
(iii) Certificate number;
(iv) Number of shares;
(v) Date of certificate;
(vi) Name of registered holder;
(vii) Amount of transaction.
(6) Bonds received or shipped by respondent financial institution--
including the following information:
(i) Name of issuer;
(ii) Bond number;
(iii) Type of bond series;
(iv) Date issued;
(v) Due date;
(vi) Rate of interest;
(vii) Amount of transaction;
(viii) Name of registered holder.
(7) Certificates of deposit received or shipped by respondent
financial institution--including the following information:
(i) Name and address of issuer;
(ii) Date issued;
(iii) Dollar amount;
(iv) Name of registered holder;
(v) Due date;
(vi) Rate of interest;
(vii) Certificate number;
(viii) Name and address of issuing agent.
(c) Scope of reports. In issuing regulations as provided in
paragraph (a) of
[[Page 350]]
this section, the Secretary will prescribe:
(1) A reasonable classification of financial institutions subject to
or exempt from a reporting requirement;
(2) A foreign country to which a reporting requirement applies if
the Secretary decides that applying the requirement to all foreign
countries is unnecessary or undesirable;
(3) The magnitude of transactions subject to a reporting
requirement; and
(4) The kind of transaction subject to or exempt from a reporting
requirement.
(d) Form of reports. Regulations issued pursuant to paragraph (a) of
this section may prescribe the manner in which the information is to be
reported. However, the Secretary may authorize a designated financial
institution to report in a different manner if the institution
demonstrates to the Secretary that the form of the required report is
unnecessarily burdensome on the institution as prescribed; that a report
in a different form will provide all the information the Secretary deems
necessary; and that submission of the information in a different manner
will not unduly hinder the effective administration of this part.
(e) Limitations. (1) In issuing regulations under paragraph (a) of
this section, the Secretary shall consider the need to avoid impeding or
controlling the export or import of monetary instruments and the need to
avoid burdening unreasonably a person making a transaction with a
foreign financial agency.
(2) The Secretary shall not issue a regulation under paragraph (a)
of this section for the purpose of obtaining individually identifiable
account information concerning a customer, as defined by the Right to
Financial Privacy Act (12 U.S.C. 3401 et seq.), where that customer is
already the subject of an ongoing investigation for possible violation
of the Currency and Foreign Transactions Reporting Act, or is known by
the Secretary to be the subject of an investigation for possible
violation of any other Federal law.
(3) The Secretary may issue a regulation pursuant to paragraph (a)
of this section requiring a financial institution to report transactions
completed prior to the date it received notice of the reporting
requirement. However, with respect to completed transactions, a
financial institution may be required to provide information only from
records required to be maintained pursuant to Subpart C of this part, or
any other provision of state or Federal law, or otherwise maintained in
the regular course of business.
(Approved by the Office of Management and Budget under control number
1505-0063)
[50 FR 27824, July 8, 1985, as amended at 53 FR 10073, Mar. 29, 1988; 60
FR 229, Jan. 3, 1995]
Sec. 103.26 Reports of certain domestic coin and currency transactions.
(a) If the Secretary of the Treasury finds, upon the Secretary's own
initiative or at the request of an appropriate Federal or State law
enforcement official, that reasonable grounds exist for concluding that
additional recordkeeping and/or reporting requirements are necessary to
carry out the purposes of this part and to prevent persons from evading
the reporting/recordkeeping requirements of this part, the Secretary may
issue an order requiring any domestic financial institution or group of
domestic financial institutions in a geographic area and any other
person participating in the type of transaction to file a report in the
manner and to the extent specified in such order. The order shall
contain such information as the Secretary may describe concerning any
transaction in which such financial institution is involved for the
payment, receipt, or transfer of United States coins or currency (or
such other monetary instruments as the Secretary may describe in such
order) the total amounts or denominations of which are equal to or
greater than an amount which the Secretary may prescribe.
(b) An order issued under paragraph (a) of this section shall be
directed to the Chief Executive Officer of the financial institution and
shall designate one or more of the following categories of information
to be reported: Each deposit, withdrawal, exchange of currency or other
payment or transfer, by, through or to such financial institution
specified in the order, which involves all or any class of transactions
[[Page 351]]
in currency and/or monetary instruments equal to or exceeding an amount
to be specified in the order.
(c) In issuing an order under paragraph (a) of this section, the
Secretary will prescribe:
(1) The dollar amount of transactions subject to the reporting
requirement in the order;
(2) The type of transaction or transactions subject to or exempt
from a reporting requirement in the order;
(3) The appropriate form for reporting the transactions required in
the order;
(4) The address to which reports required in the order are to be
sent or from which they will be picked up;
(5) The starting and ending dates by which such transactions
specified in the order are to be reported;
(6) The name of a Treasury official to be contacted for any
additional information or questions;
(7) The amount of time the reports and records of reports generated
in response to the order will have to be retained by the financial
institution; and
(8) Any other information deemed necessary to carry out the purposes
of the order.
(d)(1) No order issued pursuant to paragraph (a) of this section
shall prescribe a reporting period of more than 60 days unless renewed
pursuant to the requirements of paragraph (a).
(2) Any revisions to an order issued under this section will not be
effective until made in writing by the Secretary.
(3) Unless otherwise specified in the order, a bank receiving an
order under this section may continue to use the exemptions granted
under Sec. 103.22 of this part prior to the receipt of the order, but
may not grant additional exemptions.
(4) For purposes of this section, the term geographic area means any
area in one or more States of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, the United States Virgin
Islands, Guam, the Commonwealth of the Northern Mariana Islands,
American Samoa, the Trust Territory of the Pacific Islands, the
territories and possessions of the United States, and/or political
subdivision or subdivisions thereof, as specified in an order issued
pursuant to paragraph (a) of this section.
(Approved by the Office of Management and Budget under control number
1505-0063)
[54 FR 33679, Aug. 16, 1989]
Sec. 103.27 Filing of reports.
(a)(1) A report required by Sec. 103.22(a) shall be filed by the
financial institution within 15 days following the day on which the
reportable transaction occurred.
(2) A report required by Sec. 103.22(g) shall be filed by the bank
within 15 days after receiving a request for the report.
(3) A copy of each report filed pursuant to Sec. 103.22 shall be
retained by the financial institution for a period of five years from
the date of the report.
(4) All reports required to be filed by Sec. 103.22 shall be filed
with the Commissioner of Internal Revenue, unless otherwise specified.
(b)(1) A report required by Sec. 103.23(a) shall be filed at the
time of entry into the United States or at the time of departure,
mailing or shipping from the United States, unless otherwise specified
by the Commissioner of Customs.
(2) A report required by Sec. 103.23(b) shall be filed within 15
days after receipt of the currency or other monetary instruments.
(3) All reports required by Sec. 103.23 shall be filed with the
Customs officer in charge at any port of entry or departure, or as
otherwise specified by the Commissioner of Customs. Reports required by
Sec. 103.23(a) for currency or other monetary instruments not physically
accompanying a person entering or departing from the United States, may
be filed by mail on or before the date of entry, departure, mailing or
shipping. All reports required by Sec. 103.23(b) may also be filed by
mail. Reports filed by mail shall be addressed to the Commissioner of
Customs, Attention: Currency Transportation Reports, Washington, DC
20229.
(c) Reports required to be filed by Sec. 103.24 shall be filed with
the Commissioner of Internal Revenue on or before June 30 of each
calendar year with respect to foreign financial accounts exceeding
$10,000 maintained during the previous calendar year.
[[Page 352]]
(d) Reports required by Sec. 103.22, Sec. 103.23 or Sec. 103.24
shall be filed on forms prescribed by the Secretary. All information
called for in such forms shall be furnished.
(e) Forms to be used in making the reports required by Secs. 103.22
and 103.24 may be obtained from the Internal Revenue Service. Forms to
be used in making the reports required by Sec. 103.23 may be obtained
from the U.S. Customs Service.
(Approved by the Office of Management and Budget under control number
1505-0063)
[52 FR 11443, Apr. 8, 1987; 52 FR 12641, Apr. 17, 1987, as amended at 53
FR 4138, Feb. 12, 1988. Redesignated at 54 FR 33678, Aug. 16, 1989]
Sec. 103.28 Identification required.
Before concluding any transaction with respect to which a report is
required under Sec. 103.22, a financial institution shall verify and
record the name and address of the individual presenting a transaction,
as well as record the identity, account number, and the social security
or taxpayer identification number, if any, of any person or entity on
whose behalf such transaction is to be effected. Verification of the
identity of an individual who indicates that he or she is an alien or is
not a resident of the United States must be made by passport, alien
identification card, or other official document evidencing nationality
or residence (e.g., a Provincial driver's license with indication of
home address). Verification of identity in any other case shall be made
by examination of a document, other than a bank signature card, that is
normally acceptable within the banking community as a means of
identification when cashing checks for nondepositors (e.g., a drivers
license or credit card). A bank signature card may be relied upon only
if it was issued after documents establishing the identity of the
individual were examined and notation of the specific information was
made on the signature card. In each instance, the specific identifying
information (i.e., the account number of the credit card, the driver's
license number, etc.) used in verifying the identity of the customer
shall be recorded on the report, and the mere notation of ``known
customer'' or ``bank signature card on file'' on the report is
prohibited.
(Approved by the Office of Management and Budget under control number
1505-0063)
[52 FR 11443, Apr. 8, 1987; 52 FR 12641, Apr. 17, 1987, as amended at 54
FR 3027, Jan. 23, 1989. Redesignated at 54 FR 33678, Aug. 16, 1989; 59
FR 61662, Dec. 1, 1994]
Sec. 103.29 Purchases of bank checks and drafts, cashier's checks, money orders and traveler's checks.
(a) No financial institution may issue or sell a bank check or
draft, cashier's check, money order or traveler's check for $3,000 or
more in currency unless it maintains records of the following
information, which must be obtained for each issuance or sale of one or
more of these instruments to any individual purchaser which involves
currency in amounts of $3,000-$10,000 inclusive:
(1) If the purchaser has a deposit account with the financial
institution:
(i)(A) The name of the purchaser;
(B) The date of purchase;
(C) The type(s) of instrument(s) purchased;
(D) The serial number(s) of each of the instrument(s) purchased; and
(E) The amount in dollars of each of the instrument(s) purchased.
(ii) In addition, the financial institution must verify that the
individual is a deposit accountholder or must verify the individual's
identity. Verification may be either through a signature card or other
file or record at the financial institution provided the deposit
accountholder's name and address were verified previously and that
information was recorded on the signature card or other file or record;
or by examination of a document which is normally acceptable within the
banking community as a means of identification when cashing checks for
nondepositors and which contains the name and address of the purchaser.
If the deposit accountholder's identity has not been verified
previously, the financial institution shall verify the deposit
accountholder's identity by examination of a document which is normally
acceptable within the banking community as a means of identification
when cashing checks for nondepositors and which contains the name and
address of the purchaser, and shall record the
[[Page 353]]
specific identifying information (e.g., State of issuance and number of
driver's license).
(2) If the purchaser does not have a deposit account with the
financial institution:
(i)(A) The name and address of the purchaser;
(B) The social security number of the purchaser, or if the purchaser
is an alien and does not have a social security number, the alien
identification number;
(C) The date of birth of the purchaser;
(D) The date of purchase;
(E) The type(s) of instrument(s) purchased;
(F) The serial number(s) of the instrument(s) purchased; and
(G) The amount in dollars of each of the instrument(s) purchased.
(ii) In addition, the financial institution shall verify the
purchaser's name and address by examination of a document which is
normally acceptable within the banking community as a means of
identification when cashing checks for nondepositors and which contains
the name and address of the purchaser, and shall record the specific
identifying information (e.g., State of issuance and number of driver's
license).
(b) Contemporaneous purchases of the same or different types of
instruments totaling $3,000 or more shall be treated as one purchase.
Multiple purchases during one business day totaling $3,000 or more shall
be treated as one purchase if an individual employee, director, officer,
or partner of the financial institution has knowledge that these
purchases have occurred.
(c) Records required to be kept shall be retained by the financial
institution for a period of five years and shall be made available to
the Secretary upon request at any time.
[59 FR 52252, Oct. 17, 1994]
Sec. 103.30 Reports relating to currency in excess of $10,000 received in a trade or business.
(a) Reporting requirement--(1) Reportable transactions--(i) In
general. Any person (solely for purposes of section 5331 of title 31,
United States Code and this section, ``person'' shall have the same
meaning as under 26 U.S.C. 7701 (a)(1)) who, in the course of a trade or
business in which such person is engaged, receives currency in excess of
$10,000 in 1 transaction (or 2 or more related transactions) shall,
except as otherwise provided, make a report of information with respect
to the receipt of currency. This section does not apply to amounts
received in a transaction reported under 31 U.S.C. 5313 and Sec. 103.22.
(ii) Certain financial transactions. Section 6050I of title 26 of
the United States Code requires persons to report information about
financial transactions to the IRS, and 31 U.S.C. 5331 requires persons
to report similar information about certain transactions to the
Financial Crimes Enforcement Network. This information shall be reported
on the same form as prescribed by the Secretary.
(2) Currency received for the account of another. Currency in excess
of $10,000 received by a person for the account of another must be
reported under this section. Thus, for example, a person who collects
delinquent accounts receivable for an automobile dealer must report with
respect to the receipt of currency in excess of $10,000 from the
collection of a particular account even though the proceeds of the
collection are credited to the account of the automobile dealer (i.e.,
where the rights to the proceeds from the account are retained by the
automobile dealer and the collection is made on a fee-for-service
basis).
(3) Currency received by agents--(i) General rule. Except as
provided in paragraph (a)(3)(ii) of this section, a person who in the
course of a trade or business acts as an agent (or in some other similar
capacity) and receives currency in excess of $10,000 from a principal
must report the receipt of currency under this section.
(ii) Exception. An agent who receives currency from a principal and
uses all of the currency within 15 days in a currency transaction (the
``second currency transaction'') which is reportable under section 5312
of title 31, or 31 U.S.C. 5331 and this section, and who discloses the
name, address, and taxpayer identification number of the principal to
the recipient in the second
[[Page 354]]
currency transaction need not report the initial receipt of currency
under this section. An agent will be deemed to have met the disclosure
requirements of this paragraph (a)(3)(ii) if the agent discloses only
the name of the principal and the agent knows that the recipient has the
principal's address and taxpayer identification number.
(iii) Example. The following example illustrates the application of
the rules in paragraphs (a)(3)(i) and (ii) of this section:
Example. B, the principal, gives D, an attorney, $75,000 in currency
to purchase real property on behalf of B. Within 15 days D purchases
real property for currency from E, a real estate developer, and
discloses to E, B's name, address, and taxpayer identification number.
Because the transaction qualifies for the exception provided in
paragraph (a)(3)(ii) of this section, D need not report with respect to
the initial receipt of currency under this section. The exception does
not apply, however, if D pays E by means other than currency, or effects
the purchase more than 15 days following receipt of the currency from B,
or fails to disclose B's name, address, and taxpayer identification
number (assuming D does not know that E already has B's address and
taxpayer identification number), or purchases the property from a person
whose sale of the property is not in the course of that person's trade
or business. In any such case, D is required to report the receipt of
currency from B under this section.
(b) Multiple payments. The receipt of multiple currency deposits or
currency installment payments (or other similar payments or prepayments)
relating to a single transaction (or two or more related transactions),
is reported as set forth in paragraphs (b)(1) through (b)(3) of this
section.
(1) Initial payment in excess of $10,000. If the initial payment
exceeds $10,000, the recipient must report the initial payment within 15
days of its receipt.
(2) Initial payment of $10,000 or less. If the initial payment does
not exceed $10,000, the recipient must aggregate the initial payment and
subsequent payments made within one year of the initial payment until
the aggregate amount exceeds $10,000, and report with respect to the
aggregate amount within 15 days after receiving the payment that causes
the aggregate amount to exceed $10,000.
(3) Subsequent payments. In addition to any other required report, a
report must be made each time that previously unreportable payments made
within a 12-month period with respect to a single transaction (or two or
more related transactions), individually or in the aggregate, exceed
$10,000. The report must be made within 15 days after receiving the
payment in excess of $10,000 or the payment that causes the aggregate
amount received in the 12-month period to exceed $10,000. (If more than
one report would otherwise be required for multiple currency payments
within a 15-day period that relate to a single transaction (or two or
more related transactions), the recipient may make a single combined
report with respect to the payments. The combined report must be made no
later than the date by which the first of the separate reports would
otherwise be required to be made.)
(4) Example. The following example illustrates the application of
the rules in paragraphs (b)(1) through (b)(3) of this section:
Example. On January 10, Year 1, M receives an initial payment in
currency of $11,000 with respect to a transaction. M receives subsequent
payments in currency with respect to the same transaction of $4,000 on
February 15, Year 1, $6,000 on March 20, Year 1, and $12,000 on May 15,
Year 1. M must make a report with respect to the payment received on
January 10, Year 1, by January 25, Year 1. M must also make a report
with respect to the payments totaling $22,000 received from February 15,
Year 1, through May 15, Year 1. This report must be made by May 30, Year
1, that is, within 15 days of the date that the subsequent payments, all
of which were received within a 12-month period, exceeded $10,000.
(c) Meaning of terms. The following definitions apply for purposes
of this section--
(1) Currency. Solely for purposes of 31 U.S.C. 5331 and this
section, currency means--
(i) The coin and currency of the United States or of any other
country, which circulate in and are customarily used and accepted as
money in the country in which issued; and
(ii) A cashier's check (by whatever name called, including
``treasurer's check'' and ``bank check''), bank draft,
[[Page 355]]
traveler's check, or money order having a face amount of not more than
$10,000--
(A) Received in a designated reporting transaction as defined in
paragraph (c)(2) of this section (except as provided in paragraphs
(c)(3), (4), and (5) of this section), or
(B) Received in any transaction in which the recipient knows that
such instrument is being used in an attempt to avoid the reporting of
the transaction under section 5331 and this section.
(2) Designated reporting transaction. A designated reporting
transaction is a retail sale (or the receipt of funds by a broker or
other intermediary in connection with a retail sale) of--
(i) A consumer durable, (ii) A collectible, or
(iii) A travel or entertainment activity.
(3) Exception for certain loans. A cashier's check, bank draft,
traveler's check, or money order received in a designated reporting
transaction is not treated as currency pursuant to paragraph
(c)(1)(ii)(A) of this section if the instrument constitutes the proceeds
of a loan from a bank. The recipient may rely on a copy of the loan
document, a written statement from the bank, or similar documentation
(such as a written lien instruction from the issuer of the instrument)
to substantiate that the instrument constitutes loan proceeds.
(4) Exception for certain installment sales. A cashier's check, bank
draft, traveler's check, or money order received in a designated
reporting transaction is not treated as currency pursuant to paragraph
(c)(1)(ii)(A) of this section if the instrument is received in payment
on a promissory note or an installment sales contract (including a lease
that is considered to be a sale for Federal income tax purposes).
However, the preceding sentence applies only if--
(i) Promissory notes or installment sales contracts with the same or
substantially similar terms are used in the ordinary course of the
recipient's trade or business in connection with sales to ultimate
consumers; and
(ii) The total amount of payments with respect to the sale that are
received on or before the 60th day after the date of the sale does not
exceed 50 percent of the purchase price of the sale.
(5) Exception for certain down payment plans. A cashier's check,
bank draft, traveler's check, or money order received in a designated
reporting transaction is not treated as currency pursuant to paragraph
(c)(1)(ii)(A) of this section if the instrument is received pursuant to
a payment plan requiring one or more down payments and the payment of
the balance of the purchase price by a date no later than the date of
the sale (in the case of an item of travel or entertainment, a date no
later than the earliest date that any item of travel or entertainment
pertaining to the same trip or event is furnished). However, the
preceding sentence applies only if--
(i) The recipient uses payment plans with the same or substantially
similar terms in the ordinary course of its trade or business in
connection with sales to ultimate consumers; and
(ii) The instrument is received more than 60 days prior to the date
of the sale (in the case of an item of travel or entertainment, the date
on which the final payment is due).
(6) Examples. The following examples illustrate the definition of
``currency'' set forth in paragraphs (c)(1) through (c)(5) of this
section:
Example 1. D, an individual, purchases gold coins from M, a coin
dealer, for $13,200. D tenders to M in payment United States currency in
the amount of $6,200 and a cashier's check in the face amount of $7,000
which D had purchased. Because the sale is a designated reporting
transaction, the cashier's check is treated as currency for purposes of
31 U.S.C. 5331 and this section. Therefore, because M has received more
than $10,000 in currency with respect to the transaction, M must make
the report required by 31 U.S.C. 5331 and this section.
Example 2. E, an individual, purchases an automobile from Q, an
automobile dealer, for $11,500. E tenders to Q in payment United States
currency in the amount of $2,000 and a cashier's check payable to E and
Q in the amount of $9,500. The cashier's check constitutes the proceeds
of a loan from the bank issuing the check. The origin of the proceeds is
evident from provisions inserted by the bank on the check that instruct
the dealer to cause a lien to be placed on the vehicle as security for
the loan. The sale of the automobile is a designated reporting
transaction.
[[Page 356]]
However, under paragraph (c)(3) of this section, because E has furnished
Q documentary information establishing that the cashier's check
constitutes the proceeds of a loan from the bank issuing the check, the
cashier's check is not treated as currency pursuant to paragraph
(c)(1)(ii)(A) of this section.
Example 3. F, an individual, purchases an item of jewelry from S, a
retail jeweler, for $12,000. F gives S traveler's checks totaling $2,400
and pays the balance with a personal check payable to S in the amount of
$9,600. Because the sale is a designated reporting transaction, the
traveler's checks are treated as currency for purposes of section 5331
and this section. However, because the personal check is not treated as
currency for purposes of section 5331 and this section, S has not
received more than $10,000 in currency in the transaction and no report
is required to be filed under section 5331 and this section.
Example 4. G, an individual, purchases a boat from T, a boat dealer,
for $16,500. G pays T with a cashier's check payable to T in the amount
of $16,500. The cashier's check is not treated as currency because the
face amount of the check is more than $10,000. Thus, no report is
required to be made by T under section 5331 and this section.
Example 5. H, an individual, arranges with W, a travel agent, for
the chartering of a passenger aircraft to transport a group of
individuals to a sports event in another city. H also arranges with W
for hotel accommodations for the group and for admission tickets to the
sports event. In payment, H tenders to W money orders which H had
previously purchased. The total amount of the money orders, none of
which individually exceeds $10,000 in face amount, exceeds $10,000.
Because the transaction is a designated reporting transaction, the money
orders are treated as currency for purposes of section 5331 and this
section. Therefore, because W has received more than $10,000 in currency
with respect to the transaction, W must make the report required by
section 5331 and this section.
(7) Consumer durable. The term consumer durable means an item of
tangible personal property of a type that is suitable under ordinary
usage for personal consumption or use, that can reasonably be expected
to be useful for at least 1 year under ordinary usage, and that has a
sales price of more than $10,000. Thus, for example, a $20,000
automobile is a consumer durable (whether or not it is sold for business
use), but a $20,000 dump truck or a $20,000 factory machine is not.
(8) Collectible. The term collectible means an item described in
paragraphs (A) through (D) of section 408 (m)(2) of title 26 of the
United States Code (determined without regard to section 408 (m)(3) of
title 26 of the United States Code).
(9) Travel or entertainment activity. The term travel or
entertainment activity means an item of travel or entertainment (within
the meaning of 26 CFR 1.274-2(b)(1)) pertaining to a single trip or
event where the aggregate sales price of the item and all other items
pertaining to the same trip or event that are sold in the same
transaction (or related transactions) exceeds $10,000.
(10) Retail sale. The term retail sale means any sale (whether for
resale or for any other purpose) made in the course of a trade or
business if that trade or business principally consists of making sales
to ultimate consumers.
(11) Trade or business. The term trade or business has the same
meaning as under section 162 of title 26, United States Code.
(12) Transaction. (i) Solely for purposes of 31 U.S.C. 5331 and this
section, the term transaction means the underlying event precipitating
the payer's transfer of currency to the recipient. In this context,
transactions include (but are not limited to) a sale of goods or
services; a sale of real property; a sale of intangible property; a
rental of real or personal property; an exchange of currency for other
currency; the establishment or maintenance of or contribution to a
custodial, trust, or escrow arrangement; a payment of a preexisting
debt; a conversion of currency to a negotiable instrument; a
reimbursement for expenses paid; or the making or repayment of a loan. A
transaction may not be divided into multiple transactions in order to
avoid reporting under this section.
(ii) The term related transactions means any transaction conducted
between a payer (or its agent) and a recipient of currency in a 24-hour
period. Additionally, transactions conducted between a payer (or its
agent) and a currency recipient during a period of more than 24 hours
are related if the recipient knows or has reason to know that each
transaction is one of a series of connected transactions.
[[Page 357]]
(iii) The following examples illustrate the definition of paragraphs
(c)(12) (i) and (ii) of this section:
Example 1. A person has a tacit agreement with a gold dealer to
purchase $36,000 in gold bullion. The $36,000 purchase represents a
single transaction under paragraph (c)(12)(i) of this section and the
reporting requirements of this section cannot be avoided by recasting
the single sales transaction into 4 separate $9,000 sales transactions.
Example 2. An attorney agrees to represent a client in a criminal
case with the attorney's fee to be determined on an hourly basis. In the
first month in which the attorney represents the client, the bill for
the attorney's services comes to $8,000 which the client pays in
currency. In the second month in which the attorney represents the
client, the bill for the attorney's services comes to $4,000, which the
client again pays in currency. The aggregate amount of currency paid
($12,000) relates to a single transaction as defined in paragraph
(c)(12)(i) of this section, the sale of legal services relating to the
criminal case, and the receipt of currency must be reported under this
section.
Example 3. A person intends to contribute a total of $45,000 to a
trust fund, and the trustee of the fund knows or has reason to know of
that intention. The $45,000 contribution is a single transaction under
paragraph (c)(12)(i) of this section and the reporting requirement of
this section cannot be avoided by the grantor's making five separate
$9,000 contributions of currency to a single fund or by making five
$9,000 contributions of currency to five separate funds administered by
a common trustee.
Example 4. K, an individual, attends a one day auction and purchases
for currency two items, at a cost of $9,240 and $1,732.50 respectively
(tax and buyer's premium included). Because the transactions are related
transactions as defined in paragraph (c)(12)(ii) of this section, the
auction house is required to report the aggregate amount of currency
received from the related sales ($10,972.50), even though the auction
house accounts separately on its books for each item sold and presents
the purchaser with separate bills for each item purchased.
Example 5. F, a coin dealer, sells for currency $9,000 worth of gold
coins to an individual on three successive days. Under paragraph
(c)(12)(ii) of this section the three $9,000 transactions are related
transactions aggregating $27,000 if F knows, or has reason to know, that
each transaction is one of a series of connected transactions.
(13) Recipient. (i) The term recipient means the person receiving
the currency. Except as provided in paragraph (c)(13)(ii) of this
section, each store, division, branch, department, headquarters, or
office (``branch'') (regardless of physical location) comprising a
portion of a person's trade or business shall for purposes of this
section be deemed a separate recipient.
(ii) A branch that receives currency payments will not be deemed a
separate recipient if the branch (or a central unit linking such branch
with other branches) would in the ordinary course of business have
reason to know the identity of payers making currency payments to other
branches of such person.
(iii) Examples. The following examples illustrate the application of
the rules in paragraphs (c)(13)(i) and (ii) of this section:
Example 1. N, an individual, purchases regulated futures contracts
at a cost of $7,500 and $5,000, respectively, through two different
branches of Commodities Broker X on the same day. N pays for each
purchase with currency. Each branch of Commodities Broker X transmits
the sales information regarding each of N's purchases to a central unit
of Commodities Broker X (which settles the transactions against N's
account). Under paragraph (c)(13)(ii) of this section the separate
branches of Commodities Broker X are not deemed to be separate
recipients; therefore, Commodities Broker X must report with respect to
the two related regulated futures contracts sales in accordance with
this section.
Example 2. P, a corporation, owns and operates a racetrack. P's
racetrack contains 100 betting windows at which pari-mutuel wagers may
be made. R, an individual, places currency wagers of $3,000 each at five
separate betting windows. Assuming that in the ordinary course of
business each betting window (or a central unit linking windows) does
not have reason to know the identity of persons making wagers at other
betting windows, each betting window would be deemed to be a separate
currency recipient under paragraph (c)(13)(i) of this section. As no
individual recipient received currency in excess of $10,000, no report
need be made by P under this section.
(d) Exceptions to the reporting requirements of 31 U.S.C. 5331--(1)
Receipt of currency by certain casinos having gross annual gaming
revenue in excess of $1,000,000--(i) In general. If a casino receives
currency in excess of $10,000 and is required to report the receipt of
such currency directly to the Treasury Department under Secs. 103.22
(a)(2) and 103.25 and is subject to the recordkeeping requirements of
Sec. 103.36, then the casino
[[Page 358]]
is not required to make a report with respect to the receipt of such
currency under 31 U.S.C. 5331 and this section.
(ii) Casinos exempt under Sec. 103.55(c). Pursuant to Sec. 103.55,
the Secretary may exempt from the reporting and recordkeeping
requirements under Secs. 103.22, 103.25 and 103.36 casinos in any state
whose regulatory system substantially meets the reporting and
recordkeeping requirements of this part. Such casinos shall not be
required to report receipt of currency under 31 U.S.C. 5331 and this
section.
(iii) Reporting of currency received in a nongaming business.
Nongaming businesses (such as shops, restaurants, entertainment, and
hotels) at casino hotels and resorts are separate trades or businesses
in which the receipt of currency in excess of $10,000 is reportable
under section 5331 and these regulations. Thus, a casino exempt under
paragraph (d)(1)(i) or (ii) of this section must report with respect to
currency in excess of $10,000 received in its nongaming businesses.
(iv) Example. The following example illustrates the application of
the rules in paragraphs (d)(2) (i) and (iii) of this section:
Example. A and B are casinos having gross annual gaming revenue in
excess of $1,000,000. C is a casino with gross annual gaming revenue of
less than $1,000,000. Casino A receives $15,000 in currency from a
customer with respect to a gaming transaction which the casino reports
to the Treasury Department under Secs. 103.22(a)(2) and 103.25. Casino B
receives $15,000 in currency from a customer in payment for
accommodations provided to that customer at Casino B's hotel. Casino C
receives $15,000 in currency from a customer with respect to a gaming
transaction. Casino A is not required to report the transaction under 31
U.S.C. 5331 or this section because the exception for certain casinos
provided in paragraph (d)(1)(i) of this section (``the casino
exception'') applies. Casino B is required to report under 31 U.S.C.
5331 and this section because the casino exception does not apply to the
receipt of currency from a nongaming activity. Casino C is required to
report under 31 U.S.C. 5331 and this section because the casino
exception does not apply to casinos having gross annual gaming revenue
of $1,000,000 or less which do not have to report to the Treasury
Department under Secs. 103.22(a)(2) and 103.25.
(2) Receipt of currency not in the course of the recipient's trade
or business. The receipt of currency in excess of $10,000 by a person
other than in the course of the person's trade or business is not
reportable under 31 U.S.C. 5331. Thus, for example, F, an individual in
the trade or business of selling real estate, sells a motorboat for
$12,000, the purchase price of which is paid in currency. F did not use
the motorboat in any trade or business in which F was engaged. F is not
required to report under 31 U.S.C. 5331 or this section because the
exception provided in this paragraph (d)(2) applies.
(3) Receipt is made with respect to a foreign currency transaction--
(i) In general. Generally, there is no requirement to report with
respect to a currency transaction if the entire transaction occurs
outside the United States (the fifty states and the District of
Columbia). An entire transaction consists of both the transaction as
defined in paragraph (c)(12)(i) of this section and the receipt of
currency by the recipient. If, however, any part of an entire
transaction occurs in the Commonwealth of Puerto Rico or a possession or
territory of the United States and the recipient of currency in that
transaction is subject to the general jurisdiction of the Internal
Revenue Service under title 26 of the United States Code, the recipient
is required to report the transaction under this section.
(ii) Example. The following example illustrates the application of
the rules in paragraph (d)(3)(i) of this section:
Example. W, an individual engaged in the trade or business of
selling aircraft, reaches an agreement to sell an airplane to a U.S.
citizen living in Mexico. The agreement, no portion of which is
formulated in the United States, calls for a purchase price of $125,000
and requires delivery of and payment for the airplane to be made in
Mexico. Upon delivery of the airplane in Mexico, W receives $125,000 in
currency. W is not required to report under 31 U.S.C. 5331 or this
section because the exception provided in paragraph (d)(3)(i) of this
section (``foreign transaction exception'') applies. If, however, any
part of the agreement to sell had been formulated in the United States,
the foreign transaction exception would not apply and W would be
required to report the receipt of currency under 31 U.S.C. 5331 and this
section.
(e) Time, manner, and form of reporting--(1) In general. The reports
required by paragraph (a) of this section must
[[Page 359]]
be made by filing a Form 8300, as specified in 26 CFR 1.6050I-1(e)(2).
The reports must be filed at the time and in the manner specified in 26
CFR 1.6050I-1(e)(1) and (3) respectively.
(2) Verification. A person making a report of information under this
section must verify the identity of the person from whom the reportable
currency is received. Verification of the identity of a person who
purports to be an alien must be made by examination of such person's
passport, alien identification card, or other official document
evidencing nationality or residence. Verification of the identity of any
other person may be made by examination of a document normally
acceptable as a means of identification when cashing or accepting checks
(for example, a driver's license or a credit card). In addition, a
report will be considered incomplete if the person required to make a
report knows (or has reason to know) that an agent is conducting the
transaction for a principal, and the return does not identify both the
principal and the agent.
(3) Retention of reports. A person required to make a report under
this section must keep a copy of each report filed for five years from
the date of filing.
[66 FR 67681, Dec. 31, 2001]
Subpart C--Records Required To Be Maintained
Sec. 103.31 Determination by the Secretary.
The Secretary hereby determines that the records required to be kept
by this subpart have a high degree of usefulness in criminal, tax, or
regulatory investigations or proceedings.
Sec. 103.32 Records to be made and retained by persons having financial interests in foreign financial accounts.
Records of accounts required by Sec. 103.24 to be reported to the
Commissioner of Internal Revenue shall be retained by each person having
a financial interest in or signature or other authority over any such
account. Such records shall contain the name in which each such account
is maintained, the number or other designation of such account, the name
and address of the foreign bank or other person with whom such account
is maintained, the type of such account, and the maximum value of each
such account during the reporting period. Such records shall be retained
for a period of 5 years and shall be kept at all times available for
inspection as authorized by law. In the computation of the period of 5
years, there shall be disregarded any period beginning with a date on
which the taxpayer is indicted or information instituted on account of
the filing of a false or fraudulent Federal income tax return or failing
to file a Federal income tax return, and ending with the date on which
final disposition is made of the criminal proceeding.
[37 FR 6912, Apr. 5, 1972, as amended at 52 FR 11444, Apr. 8, 1987]
Sec. 103.33 Records to be made and retained by financial institutions.
Each financial institution shall retain either the original or a
microfilm or other copy or reproduction of each of the following:
(a) A record of each extension of credit in an amount in excess of
$10,000, except an extension of credit secured by an interest in real
property, which record shall contain the name and address of the person
to whom the extension of credit is made, the amount thereof, the nature
or purpose thereof, and the date thereof;
(b) A record of each advice, request, or instruction received or
given regarding any transaction resulting (or intended to result and
later canceled if such a record is normally made) in the transfer of
currency or other monetary instruments, funds, checks, investment
securities, or credit, of more than $10,000 to or from any person,
account, or place outside the United States.
(c) A record of each advice, request, or instruction given to
another financial institution or other person located within or without
the United States, regarding a transaction intended to result in the
transfer of funds, or of currency, other monetary instruments, checks,
investment securities, or credit, of more than $10,000 to a person,
account or place outside the United States.
[[Page 360]]
(d) A record of such information for such period of time as the
Secretary may require in an order issued under Sec. 103.26(a), not to
exceed five years.
(e) Banks. Each agent, agency, branch, or office located within the
United States of a bank is subject to the requirements of this paragraph
(e) with respect to a funds transfer in the amount of $3,000 or more:
(1) Recordkeeping requirements. (i) For each payment order that it
accepts as an originator's bank, a bank shall obtain and retain either
the original or a microfilm, other copy, or electronic record of the
following information relating to the payment order:
(A) The name and address of the originator;
(B) The amount of the payment order;
(C) The execution date of the payment order;
(D) Any payment instructions received from the originator with the
payment order;
(E) The identity of the beneficiary's bank; and
(F) As many of the following items as are received with the payment
order: \1\
---------------------------------------------------------------------------
\1\ For funds transfers effected through the Federal Reserve's
Fedwire funds transfer system, only one of the items is required to be
retained, if received with the payment order, until such time as the
bank that sends the order to the Federal Reserve Bank completes its
conversion to the expanded Fedwire message format.
---------------------------------------------------------------------------
(1) The name and address of the beneficiary;
(2) The account number of the beneficiary; and
(3) Any other specific identifier of the beneficiary.
(ii) For each payment order that it accepts as an intermediary bank,
a bank shall retain either the original or a microfilm, other copy, or
electronic record of the payment order.
(iii) For each payment order that it accepts as a beneficiary's
bank, a bank shall retain either the original or a microfilm, other
copy, or electronic record of the payment order.
(2) Originators other than established customers. In the case of a
payment order from an originator that is not an established customer, in
addition to obtaining and retaining the information required in
paragraph (e)(1)(i) of this section:
(i) If the payment order is made in person, prior to acceptance the
originator's bank shall verify the identity of the person placing the
payment order. If it accepts the payment order, the originator's bank
shall obtain and retain a record of the name and address, the type of
identification reviewed, the number of the identification document
(e.g., driver's license), as well as a record of the person's taxpayer
identification number (e.g., social security or employer identification
number) or, if none, alien identification number or passport number and
country of issuance, or a notation in the record of the lack thereof. If
the originator's bank has knowledge that the person placing the payment
order is not the originator, the originator's bank shall obtain and
retain a record of the originator's taxpayer identification number
(e.g., social security or employer identification number) or, if none,
alien identification number or passport number and country of issuance,
if known by the person placing the order, or a notation in the record of
the lack thereof.
(ii) If the payment order accepted by the originator's bank is not
made in person, the originator's bank shall obtain and retain a record
of name and address of the person placing the payment order, as well as
the person's taxpayer identification number (e.g., social security or
employer identification number) or, if none, alien identification number
or passport number and country of issuance, or a notation in the record
of the lack thereof, and a copy or record of the method of payment
(e.g., check or credit card transaction) for the funds transfer. If the
originator's bank has knowledge that the person placing the payment
order is not the originator, the originator's bank shall obtain and
retain a record of the originator's taxpayer identification number
(e.g., social security or employer identification number) or, if none,
alien identification number or passport number and country of issuance,
if known by the person placing the order, or a notation in the record of
the lack thereof.
[[Page 361]]
(3) Beneficiaries other than established customers. For each payment
order that it accepts as a beneficiary's bank for a beneficiary that is
not an established customer, in addition to obtaining and retaining the
information required in paragraph (e)(1)(iii) of this section:
(i) if the proceeds are delivered in person to the beneficiary or
its representative or agent, the beneficiary's bank shall verify the
identity of the person receiving the proceeds and shall obtain and
retain a record of the name and address, the type of identification
reviewed, and the number of the identification document (e.g., driver's
license), as well as a record of the person's taxpayer identification
number (e.g., social security or employer identification number) or, if
none, alien identification number or passport number and country of
issuance, or a notation in the record of the lack thereof. If the
beneficiary's bank has knowledge that the person receiving the proceeds
is not the beneficiary, the beneficiary's bank shall obtain and retain a
record of the beneficiary's name and address, as well as the
beneficiary's taxpayer identification number (e.g., social security or
employer identification number) or, if none, alien identification number
or passport number and country of issuance, if known by the person
receiving the proceeds, or a notation in the record of the lack thereof.
(ii) if the proceeds are delivered other than in person, the
beneficiary's bank shall retain a copy of the check or other instrument
used to effect payment, or the information contained thereon, as well as
the name and address of the person to which it was sent.
(4) Retrievability. The information that an originator's bank must
retain under paragraphs (e)(1)(i) and (e)(2) of this section shall be
retrievable by the originator's bank by reference to the name of the
originator. If the originator is an established customer of the
originator's bank and has an account used for funds transfers, then the
information also shall be retrievable by account number. The information
that a beneficiary's bank must retain under paragraphs (e)(1)(iii) and
(e)(3) of this section shall be retrievable by the beneficiary's bank by
reference to the name of the beneficiary. If the beneficiary is an
established customer of the beneficiary's bank and has an account used
for funds transfers, then the information also shall be retrievable by
account number. This information need not be retained in any particular
manner, so long as the bank is able to retrieve the information required
by this paragraph, either by accessing funds transfer records directly
or through reference to some other record maintained by the bank.
(5) Verification. Where verification is required under paragraphs
(e)(2) and (e)(3) of this section, a bank shall verify a person's
identity by examination of a document (other than a bank signature
card), preferably one that contains the person's name, address, and
photograph, that is normally acceptable by financial institutions as a
means of identification when cashing checks for persons other than
established customers. Verification of the identity of an individual who
indicates that he or she is an alien or is not a resident of the United
States may be made by passport, alien identification card, or other
official document evidencing nationality or residence (e.g., a foreign
driver's license with indication of home address).
(6) Exceptions. The following funds transfers are not subject to the
requirements of this section:
(i) Funds transfers where the originator and beneficiary are any of
the following:
(A) A bank;
(B) A wholly-owned domestic subsidiary of a bank chartered in the
United States;
(C) A broker or dealer in securities;
(D) A wholly-owned domestic subsidiary of a broker or dealer in
securities;
(E) The United States;
(F) A state or local government; or
(G) A federal, state or local government agency or instrumentality;
and
(ii) Funds transfers where both the originator and the beneficiary
are the same person and the originator's bank and the beneficiary's bank
are the same bank.
(f) Nonbank financial institutions. Each agent, agency, branch, or
office located within the United States of a
[[Page 362]]
financial institution other than a bank is subject to the requirements
of this paragraph (f) with respect to a transmittal of funds in the
amount of $3,000 or more:
(1) Recordkeeping requirements. (i) For each transmittal order that
it accepts as a transmittor's financial institution, a financial
institution shall obtain and retain either the original or a microfilm,
other copy, or electronic record of the following information relating
to the transmittal order:
(A) The name and address of the transmittor;
(B) The amount of the transmittal order;
(C) The execution date of the transmittal order;
(D) Any payment instructions received from the transmittor with the
transmittal order;
(E) The identity of the recipient's financial institution;
(F) As many of the following items as are received with the
transmittal order: \2\
---------------------------------------------------------------------------
\2\ For transmittals of funds effected through the Federal Reserve's
Fedwire funds transfer system by a domestic broker or dealers in
securities, only one of the items is required to be retained, if
received with the transmittal order, until such time as the bank that
sends the order to the Federal Reserve Bank completes its conversion to
the expanded Fedwire message format.
---------------------------------------------------------------------------
(1) The name and address of the recipient;
(2) The account number of the recipient; and
(3) Any other specific identifier of the recipient; and
(G) Any form relating to the transmittal of funds that is completed
or signed by the person placing the transmittal order.
(ii) For each transmittal order that it accepts as an intermediary
financial institution, a financial institution shall retain either the
original or a microfilm, other copy, or electronic record of the
transmittal order.
(iii) for each transmittal order that it accepts as a recipient's
financial institution, a financial institution shall retain either the
original or a microfilm, other copy, or electronic record of the
transmittal order.
(2) Transmittors other than established customers. In the case of a
transmittal order from a transmittor that is not an established
customer, in addition to obtaining and retaining the information
required in paragraph (f)(1)(i) of this section:
(i) If the transmittal order is made in person, prior to acceptance
the transmittor's financial institution shall verify the identity of the
person placing the transmittal order. If it accepts the transmittal
order, the transmittor's financial institution shall obtain and retain a
record of the name and address, the type of identification reviewed, and
the number of the identification document (e.g., driver's license), as
well as a record of the person's taxpayer identification number (e.g.,
social security or employer identification number) or, if none, alien
identification number or passport number and country of issuance, or a
notation in the record the lack thereof. If the transmittor's financial
institution has knowledge that the person placing the transmittal order
is not the transmittor, the transmittor's financial institution shall
obtain and retain a record of the transmittor's taxpayer identification
number (e.g., social security or employer identification number) or, if
none, alien identification number or passport number and country of
issuance, if known by the person placing the order, or a notation in the
record the lack thereof.
(ii) If the transmittal order accepted by the transmittor's
financial institution is not made in person, the transmittor's financial
institution shall obtain and retain a record of the name and address of
the person placing the transmittal order, as well as the person's
taxpayer identification number (e.g., social security or employer
identification number) or, if none, alien identification number or
passport number and country of issuance, or a notation in the record of
the lack thereof, and a copy or record of the method of payment (e.g.,
check or credit card transaction) for the transmittal of funds. If the
transmittor's financial institution has knowledge that the person
placing the transmittal order is not the transmittor, the transmittor's
financial institution shall obtain and
[[Page 363]]
retain a record of the transmittor's taxpayer identification number
(e.g., social security or employer identification number) or, if none,
alien identification number or passport number and country of issuance,
if known by the person placing the order, or a notation in the record
the lack thereof.
(3) Recipients other than established customers. For each
transmittal order that it accepts as a recipient's financial institution
for a recipient that is not an established customer, in addition to
obtaining and retaining the information required in paragraph
(f)(1)(iii) of this section:
(i) If the proceeds are delivered in person to the recipient or its
representative or agent, the recipient's financial institution shall
verify the identity of the person receiving the proceeds and shall
obtain and retain a record of the name and address, the type of
identification reviewed, and the number of the identification document
(e.g., driver's license), as well as a record of the person's taxpayer
identification number (e.g., social security or employer identification
number) or, if none, alien identification number or passport number and
country of issuance, or a notation in the record of the lack thereof. If
the recipient's financial institution has knowledge that the person
receiving the proceeds is not the recipient, the recipient's financial
institution shall obtain and retain a record of the recipient's name and
address, as well as the recipient's taxpayer identification number
(e.g., social security or employer identification number) or, if none,
alien identification number or passport number and country of issuance,
if known by the person receiving the proceeds, or a notation in the
record of the lack thereof.
(ii) If the proceeds are delivered other than in person, the
recipient's financial institution shall retain a copy of the check or
other instrument used to effect payment, or the information contained
thereon, as well as the name and address of the person to which it was
sent.
(4) Retrievability. The information that a transmittor's financial
institution must retain under paragraphs (f)(1)(i) and (f)(2) of this
section shall be retrievable by the transmittor's financial institution
by reference to the name of the transmittor. If the transmittor is an
established customer of the transmittor's financial institution and has
an account used for transmittals of funds, then the information also
shall be retrievable by account number. The information that a
recipient's financial institution must retain under paragraphs
(f)(1)(iii) and (f)(3) of this section shall be retrievable by the
recipient's financial institution by reference to the name of the
recipient. If the recipient is an established customer of the
recipient's financial institution and has an account used for
transmittals of funds, then the information also shall be retrievable by
account number. This information need not be retained in any particular
manner, so long as the financial institution is able to retrieve the
information required by this paragraph, either by accessing transmittal
of funds records directly or through reference to some other record
maintained by the financial institution.
(5) Verification. Where verification is required under paragraphs
(f)(2) and (f)(3) of this section, a financial institution shall verify
a person's identity by examination of a document (other than a customer
signature card), preferably one that contains the person's name,
address, and photograph, that is normally acceptable by financial
institutions as a means of identification when cashing checks for
persons other than established customers. Verification of the identity
of an individual who indicates that he or she is an alien or is not a
resident of the United States may be made by passport, alien
identification card, or other official document evidencing nationality
or residence (e.g., a foreign driver's license with indication of home
address).
(6) Exceptions. The following transmittals of funds are not subject
to the requirements of this section:
(i) Transmittals of funds where the transmittor and the recipient
are any of the following:
(A) A bank;
(B) A wholly-owned domestic subsidiary of a bank chartered in the
United States;
(C) A broker or dealer in securities;
[[Page 364]]
(D) A wholly-owned domestic subsidiary of a broker or dealer in
securities;
(E) The United States;
(F) A state or local government; or
(G) A federal, state or local government agency or instrumentality;
and
(ii) Transmittals of funds where both the transmittor and the
recipient are the same person and the transmittor's financial
institution and the recipient's financial institution are the same
broker or dealer in securities.
(g) Any transmittor's financial institution or intermediary
financial institution located within the United States shall include in
any transmittal order for a transmittal of funds in the amount of $3,000
or more, information as required in this paragraph (g):
(1) A transmittor's financial institution shall include in a
transmittal order, at the time it is sent to a receiving financial
institution, the following information:
(i) The name and, if the payment is ordered from an account, the
account number of the transmittor;
(ii) The address of the transmittor, except for a transmittal order
through Fedwire until such time as the bank that sends the order to the
Federal Reserve Bank completes its conversion to the expanded Fedwire
format;
(iii) The amount of the transmittal order;
(iv) The execution date of the transmittal order;
(v) The identity of the recipient's financial institution;
(vi) As many of the following items as are received with the
transmittal order: \3\
---------------------------------------------------------------------------
\3\ For transmittals of funds effected through the Federal Reserve's
Fedwire funds transfer system by a financial institution, only one of
the items is required to be included in the transmittal order, if
received with the sender's transmittal order, until such time as the
bank that sends the order to the Federal Reserve Bank completes its
conversion to the expanded Fedwire message format.
---------------------------------------------------------------------------
(A) The name and address of the recipient;
(B) The account number of the recipient;
(C) Any other specific identifier of the recipient; and
(vii) Either the name and address or numerical identifier of the
transmittor's financial institution.
(2) A receiving financial institution that acts as an intermediary
financial institution, if it accepts a transmittal order, shall include
in a corresponding transmittal order at the time it is sent to the next
receiving financial institution, the following information, if received
from the sender:
(i) The name and the account number of the transmittor;
(ii) The address of the transmittor, except for a transmittal order
through Fedwire until such time as the bank that sends the order to the
Federal Reserve Bank completes its conversion to the expanded Fedwire
format;
(iii) The amount of the transmittal order;
(iv) The execution date of the transmittal order;
(v) The identity of the recipient's financial institution;
(vi) As many of the following items as are received with the
transmittal order: \4\
---------------------------------------------------------------------------
\4\ For transmittals of funds effected through the Federal Reserve's
Fedwire funds transfer system by a financial institution, only one of
the items is required to be included in the transmittal order, if
received with the sender's transmittal order, until such time as the
bank that sends the order to the Federal Reserve Bank completes its
conversion to the expanded Fedwire message format.
---------------------------------------------------------------------------
(A) The name and address of the recipient;
(B) The account number of the recipient;
(C) Any other specific identifier of the recipient; and
(vii) Either the name and address or numerical identifier of the
transmittor's financial institution.
(3) Safe harbor for transmittals of funds prior to conversion to the
expanded Fedwire message format. The following provisions apply to
transmittals of funds effected through the Federal Reserve's Fedwire
funds transfer system or otherwise by a financial institution before the
bank that sends the order to the Federal Reserve Bank or otherwise
completes its conversion to the expanded Fedwire message format.
[[Page 365]]
(i) Transmittor's financial institution. A transmittor's financial
institution will be deemed to be in compliance with the provisions of
paragraph (g)(1) of this section if it:
(A) Includes in the transmittal order, at the time it is sent to the
receiving financial institution, the information specified in paragraphs
(g)(1)(iii) through (v), and the information specified in paragraph
(g)(1)(vi) of this section to the extent that such information has been
received by the financial institution, and
(B) Provides the information specified in paragraphs (g)(1)(i), (ii)
and (vii) of this section to a financial institution that acted as an
intermediary financial institution or recipient's financial institution
in connection with the transmittal order, within a reasonable time after
any such financial institution makes a request therefor in connection
with the requesting financial institution's receipt of a lawful request
for such information from a federal, state, or local law enforcement or
financial regulatory agency, or in connection with the requesting
financial institution's own Bank Secrecy Act compliance program.
(ii) Intermediary financial institution. An intermediary financial
institution will be deemed to be in compliance with the provisions of
paragraph (g)(2) of this section if it:
(A) Includes in the transmittal order, at the time it is sent to the
receiving financial institution, the information specified in paragraphs
(g)(2)(iii) through (g)(2)(vi) of this section, to the extent that such
information has been received by the intermediary financial institution;
and
(B) Provides the information specified in paragraphs (g)(2)(i), (ii)
and (vii) of this section, to the extent that such information has been
received by the intermediary financial institution, to a financial
institution that acted as an intermediary financial institution or
recipient's financial institution in connection with the transmittal
order, within a reasonable time after any such financial institution
makes a request therefor in connection with the requesting financial
institution's receipt of a lawful request for such information from a
federal, state, or local law enforcement or regulatory agency, or in
connection with the requesting financial institution's own Bank Secrecy
Act compliance program.
(iii) Obligation of requesting financial institution. Any
information requested under paragraph (g)(3)(i)(B) or (g)(3)(ii)(B) of
this section shall be treated by the requesting institution, once
received, as if it had been included in the transmittal order to which
such information relates.
(4) Exceptions. The requirements of this paragraph (g) shall not
apply to transmittals of funds that are listed in paragraph (e)(6) or
(f)(6) of this section.
(Approved by the Office of Management and Budget under control number
1505-0063)
[37 FR 6912, Apr. 5, 1972, as amended at 52 FR 11444, Apr. 8, 1987; 54
FR 33679, Aug. 16, 1989; 60 FR 229, 238, Jan. 3, 1995; 61 FR 14385,
14388, Apr. 1, 1996; 61 FR 18250, Apr. 25, 1996]
Sec. 103.34 Additional records to be made and retained by banks.
(a)(1) With respect to each certificate of deposit sold or redeemed
after May 31, 1978, or each deposit or share account opened with a bank
after June 30, 1972, a bank shall, within 30 days from the date such a
transaction occurs or an account is opened, secure and maintain a record
of the taxpayer identification number of the customer involved; or where
the account or certificate is in the names of two or more persons, the
bank shall secure the taxpayer identification number of a person having
a financial interest in the certificate or account. In the event that a
bank has been unable to secure, within the 30-day period specified, the
required identification, it shall nevertheless not be deemed to be in
violation of this section if (i) it has made a reasonable effort to
secure such identification, and (ii) it maintains a list containing the
names, addresses, and account numbers of those persons from whom it has
been unable to secure such identification, and makes the names,
addresses, and account numbers of those persons available to the
Secretary as directed by him. A bank acting as an agent for another
person in the purchase or redemption of a certificate of deposit issued
by another bank
[[Page 366]]
is responsible for obtaining and recording the required taxpayer
identification, as well as for maintaining the records referred to in
paragraphs (b) (11) and (12) of this section. The issuing bank can
satisfy the recordkeeping requirement by recording the name and address
of the agent together with a description of the instrument and the date
of the transaction. Where a person is a non-resident alien, the bank
shall also record the person's passport number or a description of some
other government document used to verify his identity.
(2) The 30-day period provided for in paragraph (a)(1) of this
section shall be extended where the person opening the account has
applied for a taxpayer identification or social security number on Form
SS-4 or SS-5, until such time as the person maintaining the account has
had a reasonable opportunity to secure such number and furnish it to the
bank.
(3) A taxpayer identification number required under paragraph (a)(1)
of this section need not be secured for accounts or transactions with
the following: (i) Agencies and instrumentalities of Federal, state,
local or foreign governments; (ii) judges, public officials, or clerks
of courts of record as custodians of funds in controversy or under the
control of the court; (iii) aliens who are (A) ambassadors, ministers,
career diplomatic or consular officers, or (B) naval, military or other
attaches of foreign embassies and legations, and for the members of
their immediate families; (iv) aliens who are accredited representatives
of international organizations which are entitled to enjoy privileges,
exemptions and immunities as an international organization under the
International Organization Immunities Act of December 29, 1945 (22
U.S.C. 288), and the members of their immediate families; (v) aliens
temporarily residing in the United States for a period not to exceed 180
days; (vi) aliens not engaged in a trade or business in the United
States who are attending a recognized college or university or any
training program, supervised or conducted by any agency of the Federal
Government; (vii) unincorporated subordinate units of a tax exempt
central organization which are covered by a group exemption letter,
(viii) a person under 18 years of age with respect to an account opened
as a part of a school thrift savings program, provided the annual
interest is less than $10; (ix) a person opening a Christmas club,
vacation club and similar installment savings programs provided the
annual interest is less than $10; and (x) non-resident aliens who are
not engaged in a trade or business in the United States. In instances
described in paragraphs (a)(3), (viii) and (ix) of this section, the
bank shall, within 15 days following the end of any calendar year in
which the interest accrued in that year is $10 or more use its best
effort to secure and maintain the appropriate taxpayer identification
number or application form therefor.
(4) The rules and regulations issued by the Internal Revenue Service
under section 6109 of the Internal Revenue Code of 1954 shall determine
what constitutes a taxpayer identification number and whose number shall
be obtained in the case of an account maintained by one or more persons.
(b) Each bank shall, in addition, retain either the original or a
microfilm or other copy or reproduction of each of the following:
(1) Each document granting signature authority over each deposit or
share account, including any notations, if such are normally made, of
specific identifying information verifying the identity of the signer
(such as a driver's license number or credit card number);
(2) Each statement, ledger card or other record on each deposit or
share account, showing each transaction in, or with respect to, that
account;
(3) Each check, clean draft, or money order drawn on the bank or
issued and payable by it, except those drawn for $100 or less or those
drawn on accounts which can be expected to have drawn on them an average
of at least 100 checks per month over the calendar year or on each
occasion on which such checks are issued, and which are (i) dividend
checks, (ii) payroll checks, (iii) employee benefit checks, (iv)
insurance claim checks, (v) medical benefit checks, (vi) checks drawn on
government agency accounts, (vii) checks
[[Page 367]]
drawn by brokers or dealers in securities, (viii) checks drawn on
fiduciary accounts, (ix) checks drawn on other financial institutions,
or (x) pension or annuity checks;
(4) Each item in excess of $100 (other than bank charges or periodic
charges made pursuant to agreement with the customer), comprising a
debit to a customer's deposit or share account, not required to be kept,
and not specifically exempted, under paragraph (b)(3) of this section;
(5) Each item, including checks, drafts, or transfers of credit, of
more than $10,000 remitted or transferred to a person, account or place
outside the United States;
(6) A record of each remittance or transfer of funds, or of
currency, other monetary instruments, checks, investment securities, or
credit, of more than $10,000 to a person, account or place outside the
United States;
(7) Each check or draft in an amount in excess of $10,000 drawn on
or issued by a foreign bank which the domestic bank has paid or
presented to a nonbank drawee for payment;
(8) Each item, including checks, drafts or transfers of credit, of
more than $10,000 received directly and not through a domestic financial
institution, by letter, cable or any other means, from a bank, broker or
dealer in foreign exchange outside the United States;
(9) A record of each receipt of currency, other monetary
instruments, investment securities or checks, and of each transfer of
funds or credit, of more than $10,000 received on any one occasion
directly and not through a domestic financial institution, from a bank,
broker or dealer in foreign exchange outside the United States; and
(10) Records prepared or received by a bank in the ordinary course
of business, which would be needed to reconstruct a transaction account
and to trace a check in excess of $100 deposited in such account through
its domestic processing system or to supply a description of a deposited
check in excess of $100. This subparagraph shall be applicable only with
respect to demand deposits.
(11) A record containing the name, address, and taxpayer
identification number, if available, of the purchaser of each
certificate of deposit, as well as a description of the instrument, a
notation of the method of payment, and the date of the transaction.
(12) A record containing the name, address and taxpayer
identification number, if available, of any person presenting a
certificate of deposit for payment, as well as a description of the
instrument and the date of the transaction.
(13) Each deposit slip or credit ticket reflecting a transaction in
excess of $100 or the equivalent record for direct deposit or other wire
transfer deposit transactions. The slip or ticket shall record the
amount of any currency involved.
(Approved by the Office of Management and Budget under control number
1505-0063)
[38 FR 2175, Jan. 22, 1973, as amended at 38 FR 3509, Feb. 7, 1973; 43
FR 21672, May 19, 1978; 52 FR 11444, Apr. 8, 1987]
Sec. 103.35 Additional records to be made and retained by brokers or dealers in securities.
(a)(1) With respect to each brokerage account opened with a broker
or dealer in securities after June 30, 1972, by a person residing or
doing business in the United States or a citizen of the United States,
such broker or dealer shall within 30 days from the date such account is
opened, secure and maintain a record of the taxpayer identification
number of the person maintaining the account; or in the case of an
account of one or more individuals, such broker or dealer shall secure
and maintain a record of the social security number of an individual
having a financial interest in that account. In the event that a broker
or dealer has been unable to secure the identification required within
the 30-day period specified, it shall nevertheless not be deemed to be
in violation of this section if: (i) It has made a reasonable effort to
secure such identification, and (ii) it maintains a list containing the
names, addresses, and account numbers of those persons from whom it has
been unable to secure such identification, and makes the names,
addresses, and account numbers of those persons available to the
Secretary as directed by him. Where a person is a non-resident alien,
the broker
[[Page 368]]
or dealer in securities shall also record the person's passport number
or a description of some other government document used to verify his
identity.
(2) The 30-day period provided for in paragraph (a)(1) of this
section shall be extended where the person opening the account has
applied for a taxpayer identification or social security number on Form
SS-4 or SS-5, until such time as the person maintaining the account has
had a reasonable opportunity to secure such number and furnish it to the
broker or dealer.
(3) A taxpayer identification number for a deposit or share account
required under paragraph (a)(1) of this section need not be secured in
the following instances: (i) Accounts for public funds opened by
agencies and instrumentalities of Federal, state, local, or foreign
governments, (ii) accounts for aliens who are (a) ambassadors,
ministers, career diplomatic or consular officers, or (b) naval,
military or other attaches of foreign embassies, and legations, and for
the members of their immediate families, (iii) accounts for aliens who
are accredited representatives to international organizations which are
entitled to enjoy privileges, exemptions, and immunities as an
international organization under the International Organizations
Immunities Act of December 29, 1945 (22 U.S.C. 288), and for the members
of their immediate families, (iv) aliens temporarily residing in the
United States for a period not to exceed 180 days, (v) aliens not
engaged in a trade or business in the United States who are attending a
recognized college or university or any training program, supervised or
conducted by any agency of the Federal Government, and (vi)
unincorporated subordinate units of a tax exempt central organization
which are covered by a group exemption letter.
(b) Every broker or dealer in securities shall, in addition, retain
either the original or a microfilm or other copy or reproduction of each
of the following:
(1) Each document granting signature or trading authority over each
customer's account;
(2) Each record described in Sec. 240.17a-3(a) (1), (2), (3), (5),
(6), (7), (8), and (9) of Title 17, Code of Federal Regulations;
(3) A record of each remittance or transfer of funds, or of
currency, checks, other monetary instruments, investment securities, or
credit, of more than $10,000 to a person, account, or place, outside the
United States;
(4) A record of each receipt of currency, other monetary
instruments, checks, or investment securities and of each transfer of
funds or credit, of more than $10,000 received on any one occasion
directly and not through a domestic financial institution, from any
person, account or place outside the United States.
(Approved by the Office of Management and Budget under control number
1505-0063)
[37 FR 26518, Dec. 13, 1972, as amended at 38 FR 2176, Jan. 22, 1973; 52
FR 11444, Apr. 8, 1987]
Sec. 103.36 Additional records to be made and retained by casinos.
(a) With respect to each deposit of funds, account opened or line of
credit extended after the effective date of these regulations, a casino
shall, at the time the funds are deposited, the account is opened or
credit is extended, secure and maintain a record of the name, permanent
address, and social security number of the person involved. Where the
deposit, account or credit is in the names of two or more persons, the
casino shall secure the name, permanent address, and social security
number of each person having a financial interest in the deposit,
account or line of credit. The name and address of such person shall be
verified by the casino at the time the deposit is made, account opened,
or credit extended. The verification shall be made by examination of a
document of the type described in Sec. 103.28, and the specific
identifying information shall be recorded in the manner described in
Sec. 103.28. In the event that a casino has been unable to secure the
required social security number, it shall not be deemed to be in
violation of this section if (1) it has made a reasonable effort to
secure such number and (2) it maintains a list containing the names and
permanent addresses of those persons from who it has been unable to
obtain social security numbers and makes the names and addresses of
[[Page 369]]
those persons available to the Secretary upon request. Where a person is
a nonresident alien, the casino shall also record the person's passport
number or a description of some other government document used to verify
his identity.
(b) In addition, each casino shall retain either the original or a
microfilm or other copy or reproduction of each of the following:
(1) A record of each receipt (including but not limited to funds for
safekeeping or front money) of funds by the casino for the account
(credit or deposit) of any person. The record shall include the name,
permanent address and social security number of the person from whom the
funds were received, as well as the date and amount of the funds
received. If the person from whom the funds were received is a non-
resident alien, the person's passport number or a description of some
other government document used to verify the person's identity shall be
obtained and recorded;
(2) A record of each bookkeeping entry comprising a debit or credit
to a customer's deposit account or credit account with the casino;
(3) Each statement, ledger card or other record of each deposit
account or credit account with the casino, showing each transaction
(including deposits, receipts, withdrawals, disbursements or transfers)
in or with respect to, a customer's deposit account or credit account
with the casino;
(4) A record of each extension of credit in excess of $2,500, the
terms and conditions of such extension of credit, and repayments. The
record shall include the customer's name, permanent address, social
security number, and the date and amount of the transaction (including
repayments). If the customer or person for whom the credit extended is a
non-resident alien, his passport number or description of some other
government document used to verify his identity shall be obtained and
recorded;
(5) A record of each advice, request or instruction received or
given by the casino for itself or another person with respect to a
transaction involving a person, account or place outside the United
States (including but not limited to communications by wire, letter, or
telephone). If the transfer outside the United States is on behalf of a
third party, the record shall include the third party's name, permanent
address, social security number, signature, and the date and amount of
the transaction. If the transfer is received from outside the United
States on behalf of a third party, the record shall include the third
party's name, permanent address, social security number, signature, and
the date and amount of the transaction. If the person for whom the
transaction is being made is a non-resident alien the record shall also
include the person's name, his passport number or a description of some
other government document used to verify his identity;
(6) Records prepared or received by the casino in the ordinary
course of business which would be needed to reconstruct a person's
deposit account or credit account with the casino or to trace a check
deposited with the casino through the casino's records to the bank of
deposit;
(7) All records, documents or manuals required to be maintained by a
casino under state and local laws or regulations, regulations of any
governing Indian tribe or tribal government, or terms of (or any
regulations issued under) any Tribal-State compacts entered into
pursuant to the Indian Gaming Regulatory Act, with respect to the casino
in question.
(8) All records which are prepared or used by a casino to monitor a
customer's gaming activity.
(9)(i) A separate record containing a list of each transaction
between the casino and its customers involving the following types of
instruments having a face value of $3,000 or more:
(A) Personal checks (excluding instruments which evidence credit
granted by a casino strictly for gaming, such as markers);
(B) Business checks (including casino checks);
(C) Official bank checks;
(D) Cashier's checks;
(E) Third-party checks;
(F) Promissory notes;
(G) Traveler's checks; and
(H) Money orders.
[[Page 370]]
(ii) The list will contain the time, date, and amount of the
transaction; the name and permanent address of the customer; the type of
instrument; the name of the drawee or issuer of the instrument; all
reference numbers (e.g., casino account number, personal check number,
etc.); and the name or casino license number of the casino employee who
conducted the transaction. Applicable transactions will be placed on the
list in the chronological order in which they occur.
(10) A copy of the compliance program described in Sec. 103.64(a).
(11) In the case of card clubs only, records of all currency
transactions by customers, including without limitation, records in the
form of currency transaction logs and multiple currency transaction
logs, and records of all activity at cages or similar facilities,
including, without limitation, cage control logs.
(c)(1) Casinos which input, store, or retain, in whole or in part,
for any period of time, any record required to be maintained by
Sec. 103.33 or this section on computer disk, tape, or other machine-
readable media shall retain the same on computer disk, tape, or machine-
readable media.
(2) All indexes, books, programs, record layouts, manuals, formats,
instructions, file descriptions, and similar materials which would
enable a person readily to access and review the records that are
described in Sec. 103.33 and this section and that are input, stored, or
retained on computer disk, tape, or other machine-readable media shall
be retained for the period of time such records are required to be
retained.
(Approved by the Office of Management and Budget under control numbers
1505-0087 and 1505-0063)
[50 FR 5068, Feb. 6, 1985, as amended at 52 FR 11444, Apr. 8, 1987; 54
FR 1167, Jan. 12, 1989; 58 FR 13547, Mar. 12, 1993; 59 FR 61662, Dec. 1,
1994; 61 FR 7056, Feb. 23, 1996; 63 FR 1924, Jan. 13, 1998; 64 FR 45453,
Aug. 20, 1999]
Sec. 103.37 Additional records to be made and retained by currency dealers or exchangers.
(a)(1) After July 7, 1987, each currency dealer or exchanger shall
secure and maintain a record of the taxpayer identification number of
each person for whom a transaction account is opened or a line of credit
is extended within 30 days after such account is opened or credit line
extended. Where a person is a non-resident alien, the currency dealer or
exchanger shall also record the person's passport number or a
description of some other government document used to verify his
identity. Where the account or credit line is in the names of two or
more persons, the currency dealer or exchanger shall secure the taxpayer
identification number of a person having a financial interest in the
account or credit line. In the event that a currency dealer or exchanger
has been unable to secure the identification required within the 30-day
period specified, it shall nevertheless not be deemed to be in violation
of this section if:
(i) It has made a reasonable effort to secure such identification,
and
(ii) It maintains a list containing the names, addresses, and
account or credit line numbers of those persons from whom it has been
unable to secure such identification, and makes the names, addresses,
and account or credit line numbers of those persons available to the
Secretary as directed by him.
(2) The 30-day period provided for in paragraph (a)(1) of this
section shall be extended where the person opening the account or credit
line has applied for a taxpayer identification or social security number
on Form SS-4 or SS-5, until such time as the person maintaining the
account or credit line has had a reasonable opportunity to secure such
number and furnish it to the currency dealer or exchanger.
(3) A taxpayer identification number for an account or credit line
required under paragraph (a)(1) of this section need not be secured in
the following instances:
(i) Accounts for public funds opened by agencies and
instrumentalities of Federal, state, local or foreign governments,
(ii) Accounts for aliens who are--
(A) Ambassadors, ministers, career diplomatic or consular officers,
or
(B) Naval, military or other attaches of foreign embassies, and
legations, and for members of their immediate families,
[[Page 371]]
(iii) Accounts for aliens who are accredited representatives to
international organizations which are entitled to enjoy privileges,
exemptions, and immunities as an international organization under the
International Organizations Immunities Act of December 29, 1945 (22
U.S.C. 288), and for the members of their immediate families,
(iv) Aliens temporarily residing in the United States for a period
not to exceed 180 days,
(v) Aliens not engaged in a trade or business in the United States
who are attending a recognized college or any training program,
supervised or conducted by any agency of the Federal Government, and
(vi) Unincorporated subordinate units of a tax exempt central
organization which are covered by a group exemption letter.
(b) Each currency dealer or exchanger shall retain either the
original or a microfilm or other copy or reproduction of each of the
following:
(1) Statements of accounts from banks, including paid checks,
charges or other debit entry memoranda, deposit slips and other credit
memoranda representing the entries reflected on such statements;
(2) Daily work records, including purchase and sales slips or other
memoranda needed to identify and reconstruct currency transactions with
customers and foreign banks;
(3) A record of each exchange of currency involving transactions in
excess of $1000, including the name and address of the customer (and
passport number or taxpayer identification number unless received by
mail or common carrier) date and amount of the transaction and currency
name, country, and total amount of each foreign currency;
(4) Signature cards or other documents evidencing signature
authority over each deposit or security account, containing the name of
the depositor, street address, taxpayer identification number (TIN) or
employer identification number (EIN) and the signature of the depositor
or of a person authorized to sign on the account (if customer accounts
are maintained in a code name, a record of the actual owner of the
account);
(5) Each item, including checks, drafts, or transfers of credit, of
more than $10,000 remitted or transferred to a person, account or place
outside the United States;
(6) A record of each receipt of currency, other monetary
instruments, investment securities and checks, and of each transfer of
funds or credit, or more than $10,000 received on any one occasion
directly and not through a domestic financial institution, from any
person, account or place outside the United States;
(7) Records prepared or received by a dealer in the ordinary course
of business, that would be needed to reconstruct an account and trace a
check in excess of $100 deposited in such account through its internal
recordkeeping system to its depository institution, or to supply a
description of a deposited check in excess of $100;
(8) A record maintaining the name, address and taxpayer
identification number, if available, of any person presenting a
certificate of deposit for payment, as well as a description of the
instrument and date of transaction;
(9) A system of books and records that will enable the currency
dealer or exchanger to prepare an accurate balance sheet and income
statement.
(c) This section does not apply to banks that offer services in
dealing or changing currency to their customers as an adjunct to their
regular service.
(Approved by the Office of Management and Budget under control number
1505-0063)
[52 FR 11444, Apr. 8, 1987, as amended at 64 FR 45453, Aug. 20, 1999]
Sec. 103.38 Nature of records and retention period.
(a) Wherever it is required that there be retained either the
original or a microfilm or other copy or reproduction of a check, draft,
monetary instrument, investment security, or other similar instrument,
there shall be retained a copy of both front and back of each such
instrument or document, except that no copy need be retained of the back
of any instrument or document which is entirely blank or which contains
only standardized printed information, a copy of which is on file.
(b) Records required by this subpart to be retained by financial
institutions
[[Page 372]]
may be those made in the ordinary course of business by a financial
institution. If no record is made in the ordinary course of business of
any transaction with respect to which records are required to be
retained by this subpart, then such a record shall be prepared in
writing by the financial institution.
(c) The rules and regulations issued by the Internal Revenue Service
under 26 U.S.C. 6109 determine what constitutes a taxpayer
identification number and whose number shall be obtained in the case of
an account maintained by one or more persons.
(d) All records that are required to be retained by this part shall
be retained for a period of five years. Records or reports required to
be kept pursuant to an order issued under Sec. 103.26 of this part shall
be retained for the period of time specified in such order, not to
exceed five years. All such records shall be filed or stored in such a
way as to be accessible within a reasonable period of time, taking into
consideration the nature of the record, and the amount of time expired
since the record was made.
(Approved by the Office of Management and Budget under control number
1505-0063)
[37 FR 6912, Apr. 5, 1972. Redesignated at 50 FR 5068, Feb. 6, 1985, and
further redesignated and amended at 52 FR 11444, 11445, Apr. 8, 1987; 54
FR 33679, Aug. 16, 1989]
Sec. 103.39 Person outside the United States.
For the purposes of this subpart, a remittance or transfer of funds,
or of currency, other monetary instruments, checks, investment
securities, or credit to the domestic account of a person whose address
is known by the person making the remittance or transfer, to be outside
the United States, shall be deemed to be a remittance or transfer to a
person outside the United States, except that, unless otherwise directed
by the Secretary, this section shall not apply to a transaction on the
books of a domestic financial institution involving the account of a
customer of such institution whose address is within approximately 50
miles of the location of the institution, or who is known to be
temporarily outside the United States.
[37 FR 6912, Apr. 5, 1972. Redesignated at 50 FR 5068, Feb. 6, 1985 and
52 FR 11444, Apr. 8, 1987]
Subpart D--Special Rules for Money Services Businesses
Source: 64 FR 45451, Aug. 20, 1999, unless otherwise noted.
Sec. 103.41 Registration of money services businesses.
(a) Registration requirement--(1) In general. Except as provided in
paragraph (a)(2) of this section, relating to agents, each money
services business (whether or not licensed as a money services business
by any State) must register with the Department of the Treasury and, as
part of that registration, maintain a list of its agents as required by
31 U.S.C. 5330 and this section. This section does not apply to the
United States Postal Service, to agencies of the United States, of any
State, or of any political subdivision of a State, or to a person to the
extent that the person is an issuer, seller, or redeemer of stored
value.
(2) Agents. A person that is a money services business solely
because that person serves as an agent of another money services
business, see Sec. 103.11(uu), is not required to register under this
section, but a money services business that engages in activities
described in Sec. 103.11(uu) both on its own behalf and as an agent for
others must register under this section. For example, a supermarket
corporation that acts as an agent for an issuer of money orders and
performs no other services of a nature and value that would cause the
corporation to be a money services business, is not required to
register; the answer would be the same if the supermarket corporation
served as an agent both of a money order issuer and of a money
transmitter. However, registration would be required if the supermarket
corporation, in addition to acting as an agent of an issuer of money
orders, cashed checks or exchanged currencies (other than as an agent
for another business) in an amount greater than $1,000 in currency or
monetary or other instruments for
[[Page 373]]
any person on any day, in one or more transactions.
(3) Agency status. The determination whether a person is an agent
depends on all the facts and circumstances.
(b) Registration procedures--(1) In general. (i) A money services
business must be registered by filing such form as FinCEN may specify
with the Detroit Computing Center of the Internal Revenue Service (or
such other location as the form may specify). The information required
by 31 U.S.C. 5330(b) and any other information required by the form must
be reported in the manner and to the extent required by the form.
(ii) A branch office of a money services business is not required to
file its own registration form. A money services business must, however,
report information about its branch locations or offices as provided by
the instructions to the registration form.
(iii) A money services business must retain a copy of any
registration form filed under this section and any registration number
that may be assigned to the business at a location in the United States
and for the period specified in Sec. 103.38(d).
(2) Registration period. A money services business must be
registered for the initial registration period and each renewal period.
The initial registration period is the two-calendar-year period
beginning with the calendar year in which the money services business is
first required to be registered. However, the initial registration
period for a money services business required to register by December
31, 2001 (see paragraph (b)(3) of this section) is the two-calendar year
period beginning 2002. Each two-calendar-year period following the
initial registration period is a renewal period.
(3) Due date. The registration form for the initial registration
period must be filed on or before the later of December 31, 2001, and
the end of the 180-day period beginning on the day following the date
the business is established. The registration form for a renewal period
must be filed on or before the last day of the calendar year preceding
the renewal period.
(4) Events requiring re-registration. If a money services business
registered as such under the laws of any State experiences a change in
ownership or control that requires the business to be re-registered
under State law, the money services business must also be re-registered
under this section. In addition, if there is a transfer of more than 10
percent of the voting power or equity interests of a money services
business (other than a money services business that must report such
transfer to the Securities and Exchange Commission), the money services
business must be re-registered under this section. Finally, if a money
services business experiences a more than 50-per cent increase in the
number of its agents during any registration period, the money services
business must be re-registered under this section. The registration form
must be filed not later than 180 days after such change in ownership,
transfer of voting power or equity interests, or increase in agents. The
calendar year in which the change, transfer, or increase occurs is
treated as the first year of a new two-year registration period.
(c) Persons required to file the registration form. Under 31 U.S.C.
5330(a), any person who owns or controls a money services business is
responsible for registering the business; however, only one registration
form is required to be filed for each registration period. A person is
treated as owning or controlling a money services business for purposes
of filing the registration form only to the extent provided by the form.
If more than one person owns or controls a money services business, the
owning or controlling persons may enter into an agreement designating
one of them to register the business. The failure of the designated
person to register the money services business does not, however,
relieve any of the other persons who own or control the business of
liability for the failure to register the business. See paragraph (e) of
this section, relating to consequences of the failure to comply with 31
U.S.C. 5330 or this section.
(d) List of agents--(1) In general. A money services business must
prepare and maintain a list of its agents. The initial list of agents
must be prepared by January 1, 2002, and must be revised each January 1,
for the immediately
[[Page 374]]
preceding 12 month period; for money services businesses established
after December 31, 2001, the initial agent list must be prepared by the
due date of the initial registration form and must be revised each
January 1 for the immediately preceding 12-month period. The list is not
filed with the registration form but must be maintained at the location
in the United States reported on the registration form under paragraph
(b)(1) of this section. Upon request, a money services business must
make its list of agents available to FinCEN and any other appropriate
law enforcement agency (including, without limitation, the examination
function of the Internal Revenue Service in its capacity as delegee of
Bank Secrecy Act examination authority). Requests for information made
pursuant to the preceding sentence shall be coordinated through FinCEN
in the manner and to the extent determined by FinCEN. The original list
of agents and any revised list must be retained for the period specified
in Sec. 103.38(d).
(2) Information included on the list of agents--(i) In general.
Except as provided in paragraph (d)(2)(ii) of this section, a money
services business must include the following information with respect to
each agent on the list (including any revised list) of its agents--
(A) The name of the agent, including any trade names or doing-
business-as names;
(B) The address of the agent, including street address, city, state,
and ZIP code;
(C) The telephone number of the agent;
(D) The type of service or services (money orders, traveler's
checks, check sales, check cashing, currency exchange, and money
transmitting) the agent provides;
(E) A listing of the months in the 12 months immediately preceding
the date of the most recent agent list in which the gross transaction
amount of the agent with respect to financial products or services
issued by the money services business maintaining the agent list
exceeded $100,000. For this purpose, the money services gross
transaction amount is the agent's gross amount (excluding fees and
commissions) received from transactions of one or more businesses
described in Sec. 103.11(uu);
(F) The name and address of any depository institution at which the
agent maintains a transaction account (as defined in 12 U.S.C.
461(b)(1)(C)) for all or part of the funds received in or for the
financial products or services issued by the money services business
maintaining the list, whether in the agent's or the business principal's
name;
(G) The year in which the agent first became an agent of the money
services business; and
(H) The number of branches or subagents the agent has.
(ii) Special rules. Information about agent volume must be current
within 45 days of the due date of the agent list. The information
described by paragraphs (d)(2)(i)(G) and (d)(2)(i)(H) of this section is
not required to be included in an agent list with respect to any person
that is an agent of the money services business maintaining the list
before the first day of the month beginning after February 16, 2000 so
long as the information described by paragraphs (d)(2)(i)(G) and
(d)(2)(i)(H) of this section is made available upon the request of
FinCEN and any other appropriate law enforcement agency (including,
without limitation, the examination function of the Internal Revenue
Service in its capacity as delegee of Bank Secrecy Act examination
authority).
(e) Consequences of failing to comply with 31 U.S.C. 5330 or the
regulations thereunder. It is unlawful to do business without complying
with 31 U.S.C. 5330 and this section. A failure to comply with the
requirements of 31 U.S.C 5330 or this section includes the filing of
false or materially incomplete information in connection with the
registration of a money services business. Any person who fails to
comply with any requirement of 31 U.S.C. 5330 or this section shall be
liable for a civil penalty of $5,000 for each violation. Each day a
violation of 31 U.S.C. 5330 or this section continues constitutes a
separate violation. In addition, under 31 U.S.C. 5320, the Secretary of
the Treasury may bring a civil action to enjoin the violation. See 18
U.S.C. 1960 for a criminal penalty for failure to
[[Page 375]]
comply with the registration requirements of 31 U.S.C. 5330 or this
section.
(f) Effective date. This section is effective September 20, 1999.
Registration of money services businesses under this section will not be
required prior to December 31, 2001.
Subpart E--General Provisions
Source: 37 FR 6912, Apr. 5, 1972, unless otherwise noted.
Redesignated at 64 FR 45451, Aug. 20, 1999.
Sec. 103.51 Dollars as including foreign currency.
Wherever in this part an amount is stated in dollars, it shall be
deemed to mean also the equivalent amount in any foreign currency.
Sec. 103.52 Photographic or other reproductions of Government obligations.
Nothing herein contained shall require or authorize the microfilming
or other reproduction of
(a) Currency or other obligation or security of the United States as
defined in 18 U.S.C. 8, or
(b) Any obligation or other security of any foreign government, the
reproduction of which is prohibited by law.
Sec. 103.53 Availability of information.
(a) The Secretary may within his discretion disclose information
reported under this part for any reason consistent with the purposes of
the Bank Secrecy Act, including those set forth in paragraphs (b)
through (d) of this section.
(b) The Secretary may make any information set forth in any report
received pursuant to this part available to another agency of the United
States, to an agency of a state or local government or to an agency of a
foreign government, upon the request of the head of such department or
agency made in writing and stating the particular information desired,
the criminal, tax or regulatory purpose for which the information is
sought, and the official need for the information.
(c) The Secretary may make any information set forth in any report
received pursuant to this part available to the Congress, or any
committee or subcommittee thereof, upon a written request stating the
particular information desired, the criminal, tax or regulatory purpose
for which the information is sought, and the official need for the
information.
(d) The Secretary may make any information set forth in any report
received pursuant to this part available to any other department or
agency of the United States that is a member of the Intelligence
Community, as defined by Executive Order 12333 or any succeeding
executive order, upon the request of the head of such department or
agency made in writing and stating the particular information desired,
the national security matter with which the information is sought and
the official need therefor.
(e) Any information made available under this section to other
department or agencies of the United States, any state or local
government, or any foreign government shall be received by them in
confidence, and shall not be disclosed to any person except for official
purposes relating to the investigation, proceeding or matter in
connection with which the information is sought.
(f) The Secretary may require that a state or local government
department or agency requesting information under paragraph (b) of this
section pay fees to reimburse the Department of the Treasury for costs
incidental to such disclosure. The amount of such fees will be set in
accordance with the statute on fees for government services, 31 U.S.C.
9701.
(Approved by the Office of Management and Budget under control number
1505-0104)
[50 FR 42693, Oct. 22, 1985, as amended at 50 FR 46283, Nov. 7, 1985; 52
FR 35545, Sept. 22, 1987]
Sec. 103.54 Disclosure.
All reports required under this part and all records of such reports
are specifically exempted from disclosure under section 552 of Title 5,
United States Code.
[[Page 376]]
Sec. 103.55 Exceptions, exemptions, and reports.
(a) The Secretary, in his sole discretion, may by written order or
authorization make exceptions to or grant exemptions from the
requirements of this part. Such exceptions or exemptions may be
conditional or unconditional, may apply to particular persons or to
classes of persons, and may apply to particular transactions or classes
of transactions. They shall, however, be applicable only as expressly
stated in the order of authorization, and they shall be revocable in the
sole discretion of the Secretary.
(b) The Secretary shall have authority to further define all terms
used herein.
(c)(1) The Secretary may, as an alternative to the reporting and
recordkeeping requirements for casinos in Secs. 103.22(a)(2) and
103.25(a)(2), and 103.36, grant exemptions to the casinos in any state
whose regulatory system substantially meets the reporting and
recordkeeping requirements of this part.
(2) In order for a state regulatory system to qualify for an
exemption on behalf of its casinos, the state must provide:
(i) That the Treasury Department be allowed to evaluate the
effectiveness of the state's regulatory system by periodic oversight
review of that system;
(ii) That the reports required under the state's regulatory system
be submitted to the Treasury Department within 15 days of receipt by the
state;
(iii) That any records required to be maintained by the casinos
relevant to any matter under this part and to which the state has access
or maintains under its regulatory system be made available to the
Treasury Department within 30 days of request;
(iv) That the Treasury Department be provided with periodic status
reports on the state's compliance efforts and findings;
(v) That all but minor violations of the state requirements be
reported to Treasury within 15 days of discovery; and
(vi) That the state will initiate compliance examinations of
specific institutions at the request of Treasury within a reasonable
time, not to exceed 90 days where appropriate, and will provide reports
of these examinations to Treasury within 15 days of completion or
periodically during the course of the examination upon the request of
the Secretary. If for any reason the state were not able to conduct an
investigation within a reasonable time, the state will permit Treasury
to conduct the investigation.
(3) Revocation of any exemption under this subsection shall be in
the sole discretion of the Secretary.
[38 FR 2176, Jan. 22, 1973, as amended at 50 FR 5069, Feb. 6, 1985; 50
FR 36875, Sept. 10, 1985]
Sec. 103.56 Enforcement.
(a) Overall authority for enforcement and compliance, including
coordination and direction of procedures and activities of all other
agencies exercising delegated authority under this part, is delegated to
the Assistant Secretary (Enforcement).
(b) Authority to examine institutions to determine compliance with
the requirements of this part is delegated as follows:
(1) To the Comptroller of the Currency with respect to those
financial institutions regularly examined for safety and soundness by
national bank examiners;
(2) To the Board of Governors of the Federal Reserve System with
respect to those financial institutions regularly examined for safety
and soundness by Federal Reserve bank examiners;
(3) To the Federal Deposit Insurance Corporation with respect to
those financial institutions regularly examined for safety and soundness
by FDIC bank examiners;
(4) To the Federal Home Loan Bank Board with respect to those
financial institutions regularly examined for safety and soundness by
FHLBB bank examiners;
(5) To the Chairman of the Board of the National Credit Union
Administration with respect to those financial institutions regularly
examined for safety and soundness by NCUA examiners.
(6) To the Securities and Exchange Commission with respect to
brokers and dealers in securities and investment companies as that term
is defined
[[Page 377]]
in the Investment Company Act of 1940 (15 U.S.C. 80-1 et seq.);
(7) To the Commissioner of Customs with respect to Secs. 103.23 and
103.58;
(8) To the Commissioner of Internal Revenue with respect to all
financial institutions, except brokers or dealers in securities, not
currently examined by Federal bank supervisory agencies for soundness
and safety.
(c) Authority for investigating criminal violations of this part is
delegated as follows:
(1) To the Commissioner of Customs with respect to Sec. 103.23;
(2) To the Commissioner of Internal Revenue except with respect to
Sec. 103.23.
(d) Authority for the imposition of civil penalties for violations
of this part lies with the Assistant Secretary, and in the Assistant
Secretary's absence, the Deputy Assistant Secretary (Law Enforcement).
(e) Periodic reports shall be made to the Assistant Secretary by
each agency to which compliance authority has been delegated under
paragraph (b) of this section. These reports shall be in such a form and
submitted at such intervals as the Assistant Secretary may direct.
Evidence of specific violations of any of the requirements of this part
may be submitted to the Assistant Secretary at any time.
(f) The Assistant Secretary or his delegate, and any agency to which
compliance has been delegated under paragraph (b) of this section, may
examine any books, papers, records, or other data of domestic financial
institutions relevant to the recordkeeping or reporting requirements of
this part.
(Sec. 21, Federal Deposit Insurance Act, 84 Stat. 1114, 12 U.S.C. 1829b;
84 Stat. 1116, 12 U.S.C. 1951-1959; and the Currency and Foreign
Transactions Reporting Act, 84 Stat. 1118, 31 U.S.C. 1051-1122)
[37 FR 6912, Apr. 5, 1972, as amended at 50 FR 42693, Oct. 22, 1985; 52
FR 11445, Apr. 8, 1987. Redesignated and amended at 64 FR 45451, 45453,
Aug. 20, 1999; 67 FR 21121, Apr. 29, 2002]
Sec. 103.57 Civil penalty.
(a) For any willful violation, committed on or before October 12,
1984, of any reporting requirement for financial institutions under this
part or of any recordkeeping requirements of Sec. 103.22, the Secretary
may assess upon any domestic financial institution, and upon any
partner, director, officer, or employee thereof who willfully
participates in the violation, a civil penalty not to exceed $1,000.
(b) For any willful violation committed after October 12, 1984 and
before October 28, 1986, of any reporting requirement for financial
institutions under this part or of the recordkeeping requirements of
Sec. 103.32, the Secretary may assess upon any domestic financial
institution, and upon any partner, director, officer, or employee
thereof who willfully participates in the violation, a civil penalty not
to exceed $10,000.
(c) For any willful violation of any recordkeeping requirement for
financial institutions, except violations of Sec. 103.32, under this
part, the Secretary may assess upon any domestic financial institution,
and upon any partner, director, officer, or employee thereof who
willfully participates in the violation, a civil penalty not to exceed
$1,000.
(d) For any failure to file a report required under Sec. 103.23 or
for filing such a report containing any material omission or
misstatement, the Secretary may assess a civil penalty up to the amount
of the currency or monetary instruments transported, mailed or shipped,
less any amount forfeited under Sec. 103.58.
(e) For any willful violation of Sec. 103.63 committed after January
26, 1987, the Secretary may assess upon any person a civil penalty not
to exceed the amount of coins and currency involved in the transaction
with respect to which such penalty is imposed. The amount of any civil
penalty assessed under this paragraph shall be reduced by the amount of
any forfeiture to the United States in connection with the transaction
for which the penalty was imposed.
(f) For any willful violation committed after October 27, 1986, of
any reporting requirement for financial institutions under this part
(except Sec. 103.24, Sec. 103.25 or Sec. 103.32), the Secretary may
assess upon any domestic financial institution, and upon any partner,
director, officer, or employee thereof who willfully participates in the
violation,
[[Page 378]]
a civil penalty not to exceed the greater of the amount (not to exceed
$100,000) involved in the transaction or $25,000.
(g) For any willful violation committed after October 27, 1986, of
any requirement of Sec. 103.24, Sec. 103.25, or Sec. 103.32, the
Secretary may assess upon any person, a civil penalty:
(1) In the case of a violation of Sec. 103.25 involving a
transaction, a civil penalty not to exceed the greater of the amount
(not to exceed $100,000) of the transaction, or $25,000; and
(2) In the case of a violation of Sec. 103.24 or Sec. 103.32
involving a failure to report the existence of an account or any
identifying information required to be provided with respect to such
account, a civil penalty not to exceed the greater of the amount (not to
exceed $100,000) equal to the balance in the account at the time of the
violation, or $25,000.
(h) For each negligent violation of any requirement of this part,
committed after October 27, 1986, the Secretary may assess upon any
financial institution a civil penalty not to exceed $500.
[37 FR 6912, Apr. 5, 1972, as amended at 52 FR 11445, Apr. 8, 1987; 52
FR 12641, Apr. 17, 1987. Redesignated and amended at 64 FR 45451, 45453,
Aug. 20, 1999]
Sec. 103.58 Forfeiture of currency or monetary instruments.
Any currency or other monetary instruments which are in the process
of any transportation with respect to which a report is required under
Sec. 103.23 are subject to seizure and forfeiture to the United States
if such report has not been filed as required in Sec. 103.25, or
contains material omissions or misstatements. The Secretary may, in his
sole discretion, remit or mitigate any such forfeiture in whole or in
part upon such terms and conditions as he deems reasonable.
Sec. 103.59 Criminal penalty.
(a) Any person who willfully violates any provision of Title I of
Pub. L. 91-508, or of this part authorized thereby may, upon conviction
thereof, be fined not more than $1,000 or be imprisoned not more than 1
year, or both. Such person may in addition, if the violation is of any
provision authorized by Title I of Pub. L. 91-508 and if the violation
is committed in furtherance of the commission of any violation of
Federal law punishable by imprisonment for more than 1 year, be fined
not more than $10,000 or be imprisoned not more than 5 years, or both.
(b) Any person who willfully violates any provision of Title II of
Pub. L. 91-508, or of this part authorized thereby, may, upon conviction
thereof, be fined not more than $250,000 or be imprisoned not more than
5 years, or both.
(c) Any person who willfully violates any provision of Title II of
Pub. L. 91-508, or of this part authorized thereby, where the violation
is either
(1) Committed while violating another law of the United States, or
(2) Committed as part of a pattern of any illegal activity involving
more than $100,000 in any 12-month period, may, upon conviction thereof,
be fined not more than $500,000 or be imprisoned not more than 10 years,
or both.
(d) Any person who knowingly makes any false, fictitious or
fraudulent statement or representation in any report required by this
part may, upon conviction thereof, be fined not more than $10,000 or be
imprisoned not more than 5 years, or both.
[37 FR 6912, Apr. 5, 1972, as amended at 50 FR 18479, May 1, 1985; 53 FR
4138, Feb. 12, 1988]
Sec. 103.60 Enforcement authority with respect to transportation of currency or monetary instruments.
(a) If a customs officer has reasonable cause to believe that there
is a monetary instrument being transported without the filing of the
report required by Secs. 103.23 and 103.25 of this chapter, he may stop
and search, without a search warrant, a vehicle, vessel, aircraft, or
other conveyance, envelope or other container, or person entering or
departing from the United States with respect to which or whom the
officer reasonably believes is transporting such instrument.
(b) If the Secretary has reason to believe that currency or monetary
instruments are in the process of transportation and with respect to
which a report required under Sec. 103.23 has not been filed or contains
material omissions or misstatements, he may apply
[[Page 379]]
to any court of competent jurisdiction for a search warrant. Upon a
showing of probable cause, the court may issue a warrant authorizing the
search of any or all of the following:
(1) One or more designated persons.
(2) One or more designated or described places or premises.
(3) One or more designated or described letters, parcels, packages,
or other physical objects.
(4) One or more designated or described vehicles. Any application
for a search warrant pursuant to this section shall be accompanied by
allegations of fact supporting the application.
(c) This section is not in derogation of the authority of the
Secretary under any other law or regulation.
[37 FR 6912, Apr. 5, 1972, as amended at 50 FR 18479, May 1, 1985]
Sec. 103.61 Access to records.
Except as provided in Secs. 103.34(a)(1), 103.35(a)(1), and
103.36(a) and except for the purpose of assuring compliance with the
recordkeeping and reporting requirements of this part, this part does
not authorize the Secretary or any other person to inspect or review the
records required to be maintained by subpart C of this part. Other
inspection, review or access to such records is governed by other
applicable law.
[50 FR 5069, Feb. 6, 1985]
Sec. 103.62 Rewards for informants.
(a) If an individual provides original information which leads to a
recovery of a criminal fine, civil penalty, or forfeiture, which exceeds
$50,000, for a violation of the provisions of the Act or of this part,
the Secretary may pay a reward to that individual.
(b) The Secretary shall determine the amount of the reward to be
paid under this section; however, any reward paid may not be more than
25 percent of the net amount of the fine, penalty or forfeiture
collected, or $150,000, whichever is less.
(c) An officer or employee of the United States, a State, or a local
government who provides original information described in paragraph (a)
in the performance of official duties is not eligible for a reward under
this section.
[50 FR 18479, May 1, 1985]
Sec. 103.63 Structured transactions.
No person shall for the purpose of evading the reporting
requirements of Sec. 103.22 with respect to such transaction:
(a) Cause or attempt to cause a domestic financial institution to
fail to file a report required under Sec. 103.22;
(b) Cause or attempt to cause a domestic financial institution to
file a report required under Sec. 103.22 that contains a material
omission or misstatement of fact; or
(c) Structure (as that term is defined in Sec. 103.11(n) of this
part) or assist in structuring, or attempt to structure or assist in
structuring, any transaction with one or more domestic financial
institutions.
[52 FR 11446, Apr. 8, 1987, as amended at 54 FR 3027, Jan. 23, 1989]
Sec. 103.64 Special rules for casinos.
(a) Compliance programs. (1) Each casino shall develop and implement
a written program reasonably designed to assure and monitor compliance
with the requirements set forth in 31 U.S.C. chapter 53, subchapter II
and the regulations contained in this part.
(2) At a minimum, each compliance program shall provide for:
(i) A system of internal controls to assure ongoing compliance;
(ii) Internal and/or external independent testing for compliance;
(iii) Training of casino personnel, including training in the
identification of unusual or suspicious transactions, to the extent that
the reporting of such transactions is hereafter required by this part,
by other applicable law or regulation, or by the casino's own
administrative and compliance policies;
(iv) An individual or individuals to assure day-to-day compliance;
(v) Procedures for using all available information to determine:
(A) When required by this part, the name, address, social security
number, and other information, and verification of the same, of a
person;
[[Page 380]]
(B) When required by this part, the occurrence of unusual or
suspicious transactions; and
(C) Whether any record as described in subpart C of this part must
be made and retained; and
(vi) For casinos that have automated data processing systems, the
use of automated programs to aid in assuring compliance.
(b) Special terms. As used in this part, as applied to casinos:
(1) Business year means the annual accounting period, such as a
calendar or fiscal year, by which a casino maintains its books and
records for purposes of subtitle A of title 26 of the United States
Code.
(2) Casino account number means any and all numbers by which a
casino identifies a customer.
(3) Customer includes every person which is involved in a
transaction to which this part applies with a casino, whether or not
that person participates, or intends to participate, in the gaming
activities offered by that casino.
(4) Gaming day means the normal business day of a casino. For a
casino that offers 24 hour gaming, the term means that 24 hour period by
which the casino keeps its books and records for business, accounting,
and tax purposes. For purposes of the regulations contained in this
part, each casino may have only one gaming day, common to all of its
divisions.
(5) Machine-readable means capable of being read by an automated
data processing system.
[58 FR 13549, Mar. 12, 1993, as amended at 59 FR 61662, Dec. 1, 1994; 60
FR 33725, June 29, 1995]
Subpart F--Summons
Source: 52 FR 23979, June 26, 1987, unless otherwise noted.
Redesignated at 64 FR 45451, Aug. 20, 1999.
Sec. 103.71 General.
For any investigation for the purpose of civil enforcement of
violations of the Currency and Foreign Transactions Reporting Act, as
amended (31 U.S.C. 5311 through 5324), section 21 of the Federal Deposit
Insurance Act (12 U.S.C. 1829b), section 411 of the National Housing Act
(12 U.S.C. 1730d), or Chapter 2 of Pub. L. 91-508 (12 U.S.C. 1951 et
seq.), or any regulation under any such provision, the Secretary or
delegate of the Secretary may summon a financial institution or an
officer or employee of a financial institution (including a former
officer or employee), or any person having possession, custody, or care
of any of the records and reports required under the Currency and
Foreign Transactions Reporting Act or this part to appear before the
Secretary or his delegate, at a time and place named in the summons, and
to give testimony, under oath, and be examined, and to produce such
books, papers, records, or other data as may be relevant or material to
such investigation.
Sec. 103.72 Persons who may issue summons.
For purposes of this part, the following officials are hereby
designated as delegates of the Secretary who are authorized to issue a
summons under Sec. 103.71, solely for the purposes of civil enforcement
of this part:
(a) Office of the Secretary. The Assistant Secretary (Enforcement),
the Deputy Assistant Secretary (Law Enforcement), and the Director,
Office of Financial Enforcement.
(b) Internal Revenue Service. Except with respect to Sec. 103.23 of
this part, the Commissioner, the Deputy Commissioner, the Associate
Commissioner (Operations), the Assistant Commissioner (Examination),
Regional Commissioners, Assistant Regional Commissioners (Examination),
District Directors, District Examination Division Chiefs, and, for the
purposes of perfecting seizures and forfeitures related to civil
enforcement of this part, the Assistant Commissioner (Criminal
Investigation), Assistant Regional Commissioners (Criminal
Investigation), and District Criminal Investigation Division Chiefs.
(c) Customs Service. With respect to Sec. 103.23 of this part, the
Commissioner,
[[Page 381]]
the Deputy Commissioner, the Assistant Commissioner (Enforcement),
Regional Commissioners, Assistant Regional Commissioners (Enforcement),
and Special Agents in Charge.
[52 FR 23979, June 26, 1987. Redesignated and amended at 64 FR 45451,
45453, Aug. 20, 1999]
Sec. 103.73 Contents of summons.
(a) Summons for testimony. Any summons issued under Sec. 103.71 of
this part to compel the appearance and testimony of a person shall
state:
(1) The name, title, address, and telephone number of the person
before whom the appearance shall take place (who may be a person other
than the persons who are authorized to issue such a summons under
Sec. 103.72 of this part);
(2) The address to which the person summoned shall report for the
appearance;
(3) The date and time of the appearance; and
(4) The name, title, address, and telephone number of the person who
has issued the summons.
(b) Summons of books, papers, records, or data. Any summons issued
under Sec. 103.71 of this part to require the production of books,
papers, records, or other data shall describe the materials to be
produced with reasonable specificity, and shall state:
(1) The name, title, address, and telephone number of the person to
whom the materials shall be produced (who may be a person other than the
persons who are authorized to issue such a summons under Sec. 103.72 of
this part);
(2) The address at which the person summoned shall produce the
materials, not to exceed 500 miles from any place where the financial
institution operates or conducts business in the United States;
(3) The specific manner of production, whether by personal delivery,
by mail, or by messenger service;
(4) The date and time for production; and
(5) The name, title, address, and telephone number of the person who
has issued the summons.
[52 FR 23979, June 26, 1987. Redesignated and amended at 64 FR 45451,
45453, Aug. 20, 1999]
Sec. 103.74 Service of summons.
(a) Who may serve. Any delegate of the Secretary authorized under
Sec. 103.72 of this part to issue a summons, or any other person
authorized by law to serve summonses or other process, is hereby
authorized to serve a summons issued under this part.
(b) Manner of service. Service of a summons may be made--
(1) Upon any person, by registered mail, return receipt requested,
directed to the person summoned;
(2) Upon a natural person by personal delivery; or
(3) Upon any other person by delivery to an officer, managing or
general agent, or any other agent authorized to receive service of
process.
(c) Certificate of service. The summons shall contain a certificate
of service to be signed by the server of the summons. On the hearing of
an application for enforcement of the summons, the certificate of
service signed by the person serving the summons shall be evidence of
the facts it states.
[52 FR 23979, June 26, 1987. Redesignated and amended at 64 FR 45451,
45453, Aug. 20, 1999]
Sec. 103.75 Examination of witnesses and records.
(a) General. Any delegate of the Secretary authorized under
Sec. 103.72 of this part to issue a summons, or any officer or employee
of the Treasury Department or any component thereof who is designated by
that person (whether in the summons or otherwise), is hereby authorized
to receive evidence and to examine witnesses pursuant to the summons.
Any person authorized by law may administer any oaths and affirmations
that may be required under this subpart.
(b) Testimony taken under oath. Testimony of any person under this
part may be taken under oath, and shall be taken down in writing by the
person examining the person summoned or shall be otherwise transcribed.
After the testimony of a witness has been transcribed, a copy of that
transcript shall be made available to the witness upon request, unless
for good cause the person issuing the summons determines, under 5 U.S.C.
555, that a copy
[[Page 382]]
should not be provided. If such a determination has been made, the
witness shall be limited to inspection of the official transcript of the
testimony.
(c) Disclosure of summons, testimony, or records. Unless the
Secretary or a delegate of the Secretary listed under Sec. 103.72(a) of
this part so authorizes in writing, or it is otherwise required by law,
no delegate of the Secretary listed under Sec. 103.72 (b) or (c) of this
part or other officer or employee of the Treasury Department or any
component thereof shall--
(1) Make public the name of any person to whom a summons has been
issued under this part, or release any information to the public
concerning that person or the issuance of a summons to that person prior
to the time and date set for that person's appearance or production of
records; or
(2) Disclose any testimony taken (including the name of the witness)
or material presented pursuant to the summons, to any person other than
an officer or employee of the Treasury Department or of any component
thereof.
Nothing in the preceding sentence shall preclude a delegate of the
Secretary, or other officer or employee of the Treasury Department or
any component thereof, from disclosing testimony taken, or material
presented pursuant to a summons issued under this part, to any person in
order to obtain necessary information for investigative purposes
relating to the performance of official duties, or to any officer or
employee of the Department of Justice in connection with a possible
violation of Federal law.
[52 FR 23979, June 26, 1987. Redesignated and amended at 64 FR 45451,
45453, Aug. 20, 1999]
Sec. 103.76 Enforcement of summons.
In the case of contumacy by, or refusal to obey a summons issued to,
any person under this part, the Secretary or any delegate of the
Secretary listed under Sec. 103.72 of this part shall refer the matter
to the Attorney General or delegate of the Attorney General (including
any United States Attorney or Assistant United States Attorney, as
appropriate), who may bring an action to compel compliance with the
summons in any court of the United States within the jurisdiction of
which the investigation which gave rise to the summons being or has been
carried on, the jurisdiction in which the person summoned is a resident,
or the jurisdiction in which the person summoned carries on business or
may be found. When a referral is made by a delegate of the Secretary
other than a delegate named in Sec. 103.72(a) of this part, prompt
notification of the referral must be made to the Director, Office of
Financial Enforcement, Office of the Assistant Secretary (Enforcement).
The court may issue an order requiring the person summoned to appear
before the Secretary or delegate of the Secretary to produce books,
papers, records, or other data, to give testimony as may be necessary in
order to explain how such material was compiled and maintained, and to
pay the costs of the proceeding. Any failure to obey the order of the
court may be punished by the court as a contempt thereof. All process in
any case under this section may be served in any judicial district in
which such person may be found.
[52 FR 23979, June 26, 1987. Redesignated and amended at 64 FR 45451,
45453, Aug. 20, 1999]
Sec. 103.77 Payment of expenses.
Persons summoned under this part shall be paid the same fees and
mileage for travel in the United States that are paid witnesses in the
courts of the United States. The United States shall not be liable for
any other expense incurred in connection with the production of books,
papers, records, or other data under this part.
Subpart G--Administrative Rulings
Source: 52 FR 35546, Sept. 22, 1987, unless otherwise noted.
Redesignated at 64 FR 45451, Aug. 20, 1999.
Sec. 103.80 Scope.
This subpart provides that the Assistant Secretary (Enforcement), or
his designee, either unilaterally or upon request, may issue
administrative rulings interpreting the application of part 103.
[[Page 383]]
Sec. 103.81 Submitting requests.
(a) Each request for an administrative ruling must be in writing and
contain the following information:
(1) A complete description of the situation for which the ruling is
requested,
(2) A complete statement of all material facts related to the
subject transaction,
(3) A concise and unambiguous question to be answered,
(4) A statement certifying, to the best of the requestor's knowledge
and belief, that the question to be answered is not applicable to any
ongoing state or federal investigation, litigation, grand jury
proceeding, or proceeding before any other governmental body involving
either the requestor, any other party to the subject transaction, or any
other party with whom the requestor has an agency relationship,
(5) A statement identifying any information in the request that the
requestor considers to be exempt from disclosure under the Freedom of
Information Act, 5 U.S.C. 552, and the reason therefor,
(6) If the subject situation is hypothetical, a statement justifying
why the particular situation described warrants the issuance of a
ruling,
(7) The signature of the person making the request, or
(8) If an agent makes the request, the signature of the agent and a
statement certifying the authority under which the request is made.
(b) A request filed by a corporation shall be signed by a corporate
officer and a request filed by a partnership shall be signed by a
partner.
(c) A request may advocate a particular proposed interpretation and
may set forth the legal and factual basis for that interpretation.
(d) Requests shall be addressed to: Director, Office of Financial
Enforcement, Office of the Assistant Secretary (Enforcement), U.S.
Department of the Treasury, 1500 Pennsylvania Avenue NW., Room 4320,
Washington, DC 20220.
(e) The requester shall advise the Director, Office of Financial
Enforcement, immediately in writing of any subsequent change in any
material fact or statement submitted with a ruling request in conformity
with paragraph (a) of this section.
(Approved by the Office of Management and Budget under control number
1505-0105)
Sec. 103.82 Nonconforming requests.
The Director, Office of Financial Enforcement, shall notify the
requester if the ruling request does not conform with the requirements
of Sec. 103.81. The notice shall be in writing and shall describe the
requirements that have not been met. A request that is not brought into
conformity with such requirements within 30 days from the date of such
notice, unless extended for good cause by the Office of Financial
Enforcement, shall be treated as though it were withdrawn.
(Approved by the Office of Management and Budget under control number
1505-0105)
[52 FR 23979, June 26, 1987. Redesignated and amended at 64 FR 45451,
45453, Aug. 20, 1999]
Sec. 103.83 Oral communications.
(a) The Office of the Assistant Secretary (Enforcement) will not
issue administrative rulings in response to oral requests. Oral opinions
or advice by Treasury, the Customs Service, the Internal Revenue
Service, the Office of the Comptroller of the Currency, or any other
bank supervisory agency personnel, regarding the interpretation and
application of this part, do not bind the Treasury Department and carry
no precedential value.
(b) A person who has made a ruling request in conformity with
Sec. 103.81 may request an opportunity for oral discussion of the issues
presented in the request. The request should be made to the Director,
Office of Financial Enforcement, and any decision to grant such a
conference is wholly within the discretion of the Director. Personal
conferences or telephone conferences may be scheduled only for the
purpose of affording the requester an opportunity to discuss freely and
openly the matters set forth in the administrative ruling request.
Accordingly, the conferees will not be bound by any argument or position
advocated or agreed to, expressly or impliedly, during the conference.
Any new arguments or facts put forth by the requester at the meeting
must be reduced to writing by
[[Page 384]]
the requester and submitted in conformity with Sec. 103.81 before they
may be considered in connection with the request.
(Approved by the Office of Management and Budget under control number
1505-0105)
[52 FR 23979, June 26, 1987. Redesignated and amended at 64 FR 45451,
45453, Aug. 20, 1999]
Sec. 103.84 Withdrawing requests.
A person may withdraw a request for an administrative ruling at any
time before the ruling has been issued.
Sec. 103.85 Issuing rulings.
The Assistant Secretary (Enforcement), or his designee may issue a
written ruling interpreting the relationship between part 103 and each
situation for which such a ruling has been requested in conformity with
Sec. 103.81. A ruling issued under this section shall bind the Treasury
Department only in the event that the request describes a specifically
identified actual situation. A ruling issued under this section shall
have precedential value, and hence may be relied upon by others
similarly situated, only if it is published or will be published by the
Office of Financial Enforcement in the Federal Register. Rulings with
precedential value will be published periodically in the Federal
Register and yearly in the Appendix to this part. All rulings with
precedential value will be available by mail to any person upon written
request specifically identifying the ruling sought. Treasury will make
every effort to respond to each requestor within 90 days of receiving a
request.
(Approved by the Office of Management and Budget under control number
1505-0105)
[52 FR 23979, June 26, 1987. Redesignated and amended at 64 FR 45451,
45453, Aug. 20, 1999]
Sec. 103.86 Modifying or rescinding rulings.
(a) The Assistant Secretary (Enforcement), or his designee may
modify or rescind any ruling made pursuant to Sec. 103.85:
(1) When, in light of changes in the statute or regulations, the
ruling no longer sets forth the interpretation of the Assistant
Secretary (Enforcement) with respect to the described situation,
(2) When any fact or statement submitted in the original ruling
request is found to be materially inaccurate or incomplete, or
(3) For other good cause.
(b) Any person may submit to the Assistant Secretary (Enforcement) a
written request that an administrative ruling be modified or rescinded.
The request should conform to the requirements of Sec. 103.81, explain
why rescission or modification is warranted, and refer to any reasons in
paragraph (a) of this section that are relevant. The request may
advocate an alternative interpretation and may set forth the legal and
factual basis for that interpretation.
(c) Treasury shall modify an existing administrative ruling by
issuing a new ruling that rescinds the relevant prior ruling. Once
rescinded, an administrative ruling shall no longer have any
precedential value.
(d) An administrative ruling may be modified or rescinded
retroactively with respect to one or more parties to the original ruling
request if the Assistant Secretary determines that:
(1) A fact or statement in the original ruling request was
materially inaccurate or incomplete,
(2) The requestor failed to notify in writing the Office of
Enforcement of a material change to any fact or statement in the
original request, or
(3) A party to the original request acted in bad faith when relying
upon the ruling.
(Approved by the Office of Management and Budget under control number
1505-0105)
[52 FR 23979, June 26, 1987. Redesignated and amended at 64 FR 45451,
45453, Aug. 20, 1999]
Sec. 103.87 Disclosing information.
(a) Any part of any administrative ruling, including names,
addresses, or information related to the business transactions of
private parties, may be disclosed pursuant to a request under the
Freedom of Information Act, 5 U.S.C. 552. If the request for an
administrative ruling contains information which the requestor wishes to
be considered for exemption from disclosure under the Freedom of
Information Act, the requestor should clearly identify such portions of
the request and the reasons why such information should be exempt from
disclosure.
[[Page 385]]
(b) A requestor claiming an exemption from disclosure will be
notified, at least 10 days before the administrative ruling is issued,
of a decision not to exempt any of such information from disclosure so
that the underlying request for an administrative ruling can be
withdrawn if the requestor so chooses.
(Approved by the Office of Management and Budget under control number
1505-0105)
Subpart H--Special Information Sharing Procedures To Deter Money
Laundering and Terrorist Activity
Source: 67 FR 9876, Mar. 4, 2002, unless otherwise noted.
Sec. 103.90 Definitions.
For purposes of this subpart, the following definitions apply:
(a) Money laundering means an activity described in 18 U.S.C. 1956
or 1957.
(b) Terrorist activity means an act of domestic terrorism or
international terrorism as those terms are defined in 18 U.S.C. 2331.
Sec. 103.100 Information sharing with federal law enforcement agencies. [Reserved]
Sec. 103.110 Voluntary information sharing among financial institutions.
(a) Definitions. For purposes of this section:
(1) The definitions in Sec. 103.90 apply;
(2) The term financial institution means any financial institution
described in 31 U.S.C. 5312(a)(2) that:
(i) Is subject to a suspicious activity reporting requirement of
subpart B of this part and is not a money services business, as defined
in Sec. 103.11(uu);
(ii) Is a broker or dealer in securities, as defined in
Sec. 103.11(f);
(iii) Is an issuer of traveler's checks or money orders, as defined
in Sec. 103.11(uu)(3);
(iv) Is a money transmitter, as defined in Sec. 103.11(uu)(5), and
is required to register as such pursuant to Sec. 103.41; or
(v) Is an operator of a credit card system and is not a money
services business, as defined in Sec. 103.11(uu); and
(3) The term association of financial institutions means a group or
organization the membership of which is comprised entirely of financial
institutions as defined in paragraph (a)(2) of this section.
(b) Information sharing among financial institutions--(1) In
general. Subject to paragraphs (b)(2) and (g) of this section, a
financial institution or an association of financial institutions may
engage in the sharing of information with any other financial
institution (as defined in paragraph (a)(2) of this section) or
association of financial institutions (as defined in paragraph (a) (3)
of this section) regarding individuals, entities, organizations, and
countries for purposes of detecting, identifying, or reporting
activities that the financial institution or association suspects may
involve possible money laundering or terrorist activities.
(2) Notice requirement--(i) Certification. A financial institution
or association of financial institutions that intends to engage in the
sharing of information as described in paragraph (b)(1) of this section
shall submit to FinCEN a certification described in Appendix B of this
part.
(ii) Address. Completed certifications may be submitted to FinCEN:
(A) By accessing FinCEN's Internet website, http://www.treas.gov/
fincen, and entering the appropriate information as directed; or
(B) If a financial institution does not have Internet access, by
mail to: FinCEN, PO Box 39, Mail Stop 100, Vienna, VA 22183.
(iii) One year duration of certification. Each certification
provided pursuant to paragraph (b)(2)(i) of this section shall be
effective for the one year period beginning on the date of the
certification. In order to continue to engage in the sharing of
information after the end of the one year period, a financial
institution or association of financial institutions must submit a new
certification.
(c) Security and confidentiality of information--(1) Procedures
required. Each financial institution or association of financial
institutions that engages in the sharing of information pursuant to this
section shall maintain adequate procedures to protect the security and
confidentiality of such information.
[[Page 386]]
(2) Use of information. Information received by a financial
institution or association of financial institutions pursuant to this
section shall not be used for any purpose other than:
(i) Detecting, identifying and reporting on activities that may
involve terrorist or money laundering activities; or
(ii) Determining whether to establish or maintain an account, or to
engage in a transaction.
(d) Safe harbor from certain liability--(1) In general. A financial
institution or association of financial institutions that engages in the
sharing of information pursuant to this section shall not be liable to
any person under any law or regulation of the United States, under any
constitution, law, or regulation of any State or political subdivision
thereof, or under any contract or other legally enforceable agreement
(including any arbitration agreement), for such sharing, or for any
failure to provide notice of such sharing, to an individual, entity, or
organization that is identified in of such sharing.
(2) Limitation. Paragraph (d)(1) of this section shall not apply to
a financial institution or association of financial institutions to the
extent such institution or association fails to comply with paragraph
(b) or (c) of this section.
(e) Information sharing between financial institutions and the
federal government--(1) Terrorist activity. If, as a result of
information sharing pursuant to this section, a financial institution
suspects that an individual, entity, or organization is involved in, or
may be involved in terrorist activity, such information should be
reported to FinCEN:
(i) By calling the toll-free Financial Institutions Hotline (1-866-
556-3974); and
(ii) If appropriate, by filing a Suspicious Activity Report pursuant
to subpart B of this part or other applicable regulations.
(2) Money laundering. If as a result of information sharing pursuant
to this section, a financial institution suspects that an individual,
entity, or organization is involved in, or may be involved in money
laundering, such information should generally be reported by filing a
Suspicious Activity Report in accordance with subpart B of this part or
other applicable regulations. If circumstances indicate a need for the
expedited reporting of this information, a financial institution may use
the Financial Institutions Hotline (1-866-556-3974).
(f) No limitation on financial institution reporting obligations.
Nothing in this subpart affects the obligation of a financial
institution to file a Suspicious Activity Report pursuant to subpart B
of this part or any other applicable regulations, or to otherwise
directly contact a federal agency concerning individuals or entities
suspected of engaging in money laundering or terrorist activities.
(g) Revocation or suspension of certification--(1) Authority of
federal regulator or FinCEN. Notwithstanding any other provision of this
section, a federal regulator of a financial institution, or FinCEN in
the case of a financial institution that does not have a federal
regulator, may revoke or suspend a certification provided by a financial
institution pursuant to paragraph (b)(2) of this section if the
concerned federal regulator or FinCEN, as appropriate, determines that
the financial institution has failed to comply with the requirements of
paragraph (c) of this section. Nothing in this paragraph (g)(1) shall be
construed to affect the authority of any federal regulator with respect
to any financial institution.
(2) Effect of revocation or suspension. A financial institution with
respect to which a certification has been revoked or suspended may not
engage in information sharing under the authority of this section during
the period of such revocation or suspension.
Subpart I--Anti-Money Laundering Programs
Sec. 103.120 Anti-money laundering program requirements for financial institutions regulated by a Federal functional regulator or a self-regulatory
organization, and casinos.
(a) Definitions. For purposes of this section:
(1) Financial institution means a financial institution defined in
31 U.S.C.
[[Page 387]]
5312(a)(2) or (c)(1) that is subject to regulation by a Federal
functional regulator or a self-regulatory organization.
(2) Federal functional regulator means:
(i) The Board of Governors of the Federal Reserve System;
(ii) The Office of the Comptroller of the Currency;
(iii) The Board of Directors of the Federal Deposit Insurance
Corporation;
(iv) The Office of Thrift Supervision;
(v) The National Credit Union Administration;
(vi) The Securities and Exchange Commission; or
(vii) The Commodity Futures Trading Commission.
(3) Self-regulatory organization:
(i) Shall have the same meaning as provided in section 3(a)(26) of
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(26)); and
(ii) Means a ``registered entity'' or a ``registered futures
association'' as provided in section 1a(29) or 17, respectively, of the
Commodity Exchange Act (7 U.S.C. 1a(29), 21).
(4) Casino has the same meaning as provided in Sec. 103.11(n)(5).
(b) Requirements for financial institutions regulated only by a
Federal functional regulator, including banks, savings associations, and
credit unions. A financial institution regulated by a Federal functional
regulator that is not subject to the regulations of a self regulatory
organization shall be deemed to satisfy the requirements of 31 U.S.C.
5318(h)(1) if it implements and maintains an anti-money laundering
program that complies with the regulation of its Federal functional
regulator governing such programs.
(c) Requirements for financial institutions regulated by a self-
regulatory organization, including registered securities broker-dealers
and futures commission merchants. A financial institution regulated by a
self-regulatory organization shall be deemed to satisfy the requirements
of 31 U.S.C. 5318(h)(1) if:
(1) The financial institution complies with any applicable
regulation of its Federal functional regulator governing the
establishment and implementation of anti-money laundering programs; and
(2)(i) The financial institution implements and maintains an anti-
money laundering program that complies with the rules, regulations, or
requirements of its self-regulatory organization governing such
programs; and
(ii) The rules, regulations, or requirements of the self-regulatory
organization have been approved, if required, by the appropriate Federal
functional regulator.
(d) Requirements for casinos. A casino shall be deemed to satisfy
the requirements of 31 U.S.C. 5318(h)(1) if it implements and maintains
a compliance program described in Sec. 103.64.
[67 FR 21113, Apr. 29, 2002]
Sec. 103.125 Anti-money laundering programs for money services businesses.
(a) Each money services business, as defined by Sec. 103.11(uu),
shall develop, implement, and maintain an effective anti-money
laundering program. An effective anti-money laundering program is one
that is reasonably designed to prevent the money services business from
being used to facilitate money laundering and the financing of terrorist
activities.
(b) The program shall be commensurate with the risks posed by the
location and size of, and the nature and volume of the financial
services provided by, the money services business.
(c) The program shall be in writing, and a money services business
shall make copies of the anti-money laundering program available for
inspection to the Department of the Treasury upon request.
(d) At a minimum, the program shall:
(1) Incorporate policies, procedures, and internal controls
reasonably designed to assure compliance with this part.
(i) Policies, procedures, and internal controls developed and
implemented under this section shall include provisions for complying
with the requirements of this part including, to the extent applicable
to the money services business, requirements for:
(A) Verifying customer identification;
(B) Filing reports;
(C) Creating and retaining records; and
(D) Responding to law enforcement requests.
[[Page 388]]
(ii) Money services businesses that have automated data processing
systems should integrate their compliance procedures with such systems.
(iii) A person that is a money services business solely because it
is an agent for another money services business as set forth in
Sec. 103.41(a)(2), and the money services business for which it serves
as agent, may by agreement allocate between them responsibility for
development of policies, procedures, and internal controls required by
this paragraph (d)(1). Each money services business shall remain solely
responsible for implementation of the requirements set forth in this
section, and nothing in this paragraph (d)(1) relieves any money
services business from its obligation to establish and maintain an
effective anti-money laundering program.
(2) Designate a person to assure day to day compliance with the
program and this part. The responsibilities of such person shall include
assuring that:
(i) The money services business properly files reports, and creates
and retains records, in accordance with applicable requirements of this
part;
(ii) The compliance program is updated as necessary to reflect
current requirements of this part, and related guidance issued by the
Department of the Treasury; and
(iii) The money services business provides appropriate training and
education in accordance with paragraph (d)(3) of this section.
(3) Provide education and/or training of appropriate personnel
concerning their responsibilities under the program, including training
in the detection of suspicious transactions to the extent that the money
services business is required to report such transactions under this
part.
(4) Provide for independent review to monitor and maintain an
adequate program. The scope and frequency of the review shall be
commensurate with the risk of the financial services provided by the
money services business. Such review may be conducted by an officer or
employee of the money services business so long as the reviewer is not
the person designated in paragraph (d)(2) of this section.
(e) Effective date. A money services business must develop and
implement an anti-money laundering program that complies with the
requirements of this section on or before the later of July 24, 2002,
and the end of the 90-day period beginning on the day following the date
the business is established.
[67 FR 21116, Apr. 29, 2002]
Sec. 103.130 Anti-money laundering programs for mutual funds.
(a) For purposes of this section, ``mutual fund'' means an open-end
company as defined in section 5(a)(1) of the Investment Company act of
1940 (15 U.S.C. 80a-5(a)(1)).
(b) Effective July 24, 2002, each mutual fund shall develop and
implement a written anti-money laundering program reasonably designed to
prevent the mutual fund from being used for money laundering or the
financing of terrorist activities and to achieve and monitor compliance
with the applicable requirements of the Bank Secrecy Act (31 U.S.C.
5311, et seq.), and the implementing regulations promulgated thereunder
by the Department of the Treasury. Each mutual fund's anti-money
laundering program must be approved in writing by its board of directors
or trustees. A mutual fund shall make its anti-money laundering program
available for inspection by the Commission.
(c) The anti-money laundering program shall at a minimum:
(1) Establish and implement policies, procedures, and internal
controls reasonably designed to prevent the mutual fund from being used
for money laundering or the financing of terrorist activities and to
achieve compliance with the applicable provisions of the Bank Secrecy
Act and the implementing regulations thereunder;
(2) Provide for independent testing for compliance to be conducted
by the mutual fund's personnel or by a qualified outside party;
(3) Designate a person or persons responsible for implementing and
monitoring the operations and internal controls of the program; and
(4) Provide ongoing training for appropriate persons.
[67 FR 21121, Apr. 29, 2002]
[[Page 389]]
Sec. 103.135 Anti-money laundering programs for operators of credit card systems.
(a) Definitions. For purposes of this section:
(1) Operator of a credit card system means any person doing business
in the United States that operates a system for clearing and settling
transactions in which the operator's credit card, whether acting as a
credit or debit card, is used to purchase goods or services or to obtain
a cash advance. To fall within this definition, the operator must also
have authorized another person (whether located in the United States or
not) to be an issuing or acquiring institution for the operator's credit
card.
(2) Issuing institution means a person authorized by the operator of
a credit card system to issue the operator's credit card.
(3) Acquiring institution means a person authorized by the operator
of a credit card system to contract, directly or indirectly, with
merchants or other persons to process transactions, including cash
advances, involving the operator's credit card.
(4) Operator's credit card means a credit card capable of being used
in the United States that:
(i) Has been issued by an issuing institution; and
(ii) Can be used in the operator's credit card system.
(5) Credit card has the same meaning as in 15 U.S.C. 1602(k). It
includes charge cards as defined in 12 CFR 226.2(15).
(6) Foreign bank means any organization that is organized under the
laws of a foreign country; engages in the business of banking; is
recognized as a bank by the bank supervisory or monetary authority of
the country of its organization or the country of its principal banking
operations; and receives deposits in the regular course of its business.
For purposes of this definition:
(i) The term foreign bank includes a branch of a foreign bank in a
territory of the United States, Puerto Rico, Guam, American Samoa, or
the U.S. Virgin Islands.
(ii) The term foreign bank does not include:
(A) A U.S. agency or branch of a foreign bank; and
(B) An insured bank organized under the laws of a territory of the
United States, Puerto Rico, Guam, American Samoa, or the U.S. Virgin
Islands.
(b) Anti-money laundering program requirement. Effective July 24,
2002, each operator of a credit card system shall develop and implement
a written anti-money laundering program reasonably designed to prevent
the operator of a credit card system from being used to facilitate money
laundering and the financing of terrorist activities. The program must
be approved by senior management. Operators of credit card systems must
make their anti-money laundering programs available to the Department of
the Treasury or the appropriate Federal regulator for review.
(c) Minimum requirements. At a minimum, the program must:
(1) Incorporate policies, procedures, and internal controls designed
to ensure the following:
(i) That the operator does not authorize, or maintain authorization
for, any person to serve as an issuing or acquiring institution without
the operator taking appropriate steps, based upon the operator's money
laundering or terrorist financing risk assessment, to guard against that
person issuing the operator's credit card or acquiring merchants who
accept the operator's credit card in circumstances that facilitate money
laundering or the financing of terrorist activities;
(ii) For purposes of making the risk assessment required by
paragraph (c)(1)(i) of this section, the following persons are presumed
to pose a heightened risk of money laundering or terrorist financing
when evaluating whether and under what circumstances to authorize, or to
maintain authorization for, any such person to serve as an issuing or
acquiring institution:
(A) A foreign shell bank that is not a regulated affiliate, as those
terms are defined in 31 CFR 104.10(e) and (j);
(B) A person appearing on the Specially Designated Nationals List
issued by Treasury's Office of Foreign Assets Control;
(C) A person located in, or operating under a license issued by, a
jurisdiction whose government has been identified
[[Page 390]]
by the Department of State as a sponsor of international terrorism under
22 U.S.C. 2371;
(D) A foreign bank operating under an offshore banking license,
other than a branch of a foreign bank if such foreign bank has been
found by the Board of Governors of the Federal Reserve System under the
Bank Holding Company Act (12 U.S.C. 1841, et seq.) or the International
Banking Act (12 U.S.C. 3101, et seq.) to be subject to comprehensive
supervision or regulation on a consolidated basis by the relevant
supervisors in that jurisdiction;
(E) A person located in, or operating under a license issued by, a
jurisdiction that has been designated as noncooperative with
international anti-money laundering principles or procedures by an
intergovernmental group or organization of which the United States is a
member, with which designation the United States representative to the
group or organization concurs; and
(F) A person located in, or operating under a license issued by, a
jurisdiction that has been designated by the Secretary of the Treasury
pursuant to 31 U.S.C. 5318A as warranting special measures due to money
laundering concerns;
(iii) That the operator is in compliance with all applicable
provisions of subchapter II of chapter 53 of title 31, United States
Code and this part;
(2) Designate a compliance officer who will be responsible for
assuring that:
(i) The anti-money laundering program is implemented effectively;
(ii) The anti-money laundering program is updated as necessary to
reflect changes in risk factors or the risk assessment, current
requirements of part 103, and further guidance issued by the Department
of the Treasury; and
(iii) Appropriate personnel are trained in accordance with paragraph
(c)(3) of this section;
(3) Provide for education and training of appropriate personnel
concerning their responsibilities under the program; and
(4) Provide for an independent audit to monitor and maintain an
adequate program. The scope and frequency of the audit shall be
commensurate with the risks posed by the persons authorized to issue or
accept the operator's credit card. Such audit may be conducted by an
officer or employee of the operator, so long as the reviewer is not the
person designated in paragraph (c)(2) of this section or a person
involved in the operation of the program.
[67 FR 21126, Apr. 29, 2002]
Sec. 103.170 Deferred anti-money laundering programs for certain financial institutions.
(a) Exempt financial institutions. Subject to the provisions of
paragraph (b) of this section, the following financial institutions (as
defined in 31 U.S.C. 5312(a)(2) or (c)(1)) are exempt from the
requirement in 31 U.S.C. 5318(h)(1) concerning the establishment of
anti-money laundering programs:
(1) An agency of the United States Government, or of a State or
local government, carrying out a duty or power of a business described
in 31 U.S.C. 5312(a)(2); and
(2) Any of the following businesses or activities that is not
described in Sec. 103.120(b) or (c), or subject to the requirements of
Sec. 103.125 or Sec. 103.130:
(i) Dealer in precious metals, stones, or jewels;
(ii) Pawnbroker;
(iii) Loan or finance company;
(iv) Travel agency;
(v) Telegraph company;
(vi) Seller of vehicles, including automobiles, airplanes, and
boats;
(vii) Persons involved real estate closings and settlements;
(viii) Private banker;
(ix) Insurance company;
(x) Commodity pool operator;
(xi) Commodity trading advisor; or
(xii) Investment company.
(b) Termination of exemption. (1) In general. Subject to paragraph
(b)(2) of this section, a financial institution described in paragraph
(a)(2) of this section shall, effective October 24, 2002, establish and
maintain an anti-money laundering program as required by 31 U.S.C.
5318(h)(1).
(2) Exception. The provisions of paragraph (b)(1) of this section
shall not apply to any financial institution to the extent:
(i) Provided in guidance issued in a document published in the
Federal
[[Page 391]]
Register by the Department of the Treasury (including FinCEN) on or
before October 24, 2002, governing the application of 31 U.S.C.
5318(h)(1) to such financial institution; or
(ii) That the Secretary determines that the application of any or
all of the requirements of 31 U.S.C. 5318(h)(1) to such financial
institution is unnecessary or should continue to be deferred pending
further analysis and review.
(c) Compliance obligations of deferred financial institutions.
Nothing in this section shall be deemed to relieve an exempt financial
institution from its responsibility to comply with the applicable
requirements of law concerning the reporting of certain transactions in
cash, currency, or monetary instruments in accordance with Sec. 103.30
or 26 CFR 1.6050I.
[67 FR 21113, Apr. 29, 2002]
Appendix A to Part 103--Administrative Rulings
88-1 (June 22, 1988)
Issue
What action should a financial institution take when it believes
that it is being misused by persons who are intentionally structuring
transactions to evade the reporting requirement or engaging in
transactions that may involve illegal activity such as drug trafficking,
tax evasion or money laundering?
Facts
A teller at X State Bank notices that the same person comes into the
bank each day and purchases, with cash, between $9,000 and $9,900 in
cashier's checks. Even when aggregated, these purchases never exceed
$10,000 during any one business day. The teller also notices that this
person tries to go to different tellers for each transaction and is very
reluctant to provide information about his frequent transactions or
other information such as name, address, etc. Likewise, the payees on
these cashier's checks all have common names such as ``John Smith'' or
``Mary Jones.'' The teller informs the bank's compliance officer that
she believes that this person is structuring his transactions in order
to evade the reporting requirements under the Bank Secrecy Act. X State
Bank wants to know what actions it should take in this situation or in
any other situation where a transaction or a person conducting a
transaction appears suspicious.
Law and Analysis
As it appears that the person may be intentionally structuring the
transactions to evade the Bank Secrecy Act reporting requirements, X
State Bank should immediately telephone the local office of the Internal
Revenue Service (``IRS'') and speak to a Special Agent in the IRS
Criminal Investigation Division, or should call 1-800-BSA-CTRS, where
his call will be referred to a Special Agent.
Any information provided to the IRS should be given within the
confines of Sec. 1103(c) of the Right to Financial Privacy Act. 12
U.S.C. 3401-3422. Section 1103(c) of that Act permits a financial
instituiton to notify a government authority of information relevant to
a possible violation of any statute or regulation. Such information may
consist of the names of any individuals or corporate entities involved
in the suspicious transactions; account numbers; home and business
addresses; social security numbers; type of account; interest paid on
account; location of the branch or office where the suspicious
transaction occurred; a specification of the offense that the financial
institution believes has been committed; and a description of the
activities giving rise to the bank's suspicion. S. Rep. 99-433, 99th
Cong., 2d Sess., pp. 15-16.
Additionally, the bank may be required, by the Federal regulatory
agency which supervises it, to submit a criminal referral form. Thus,
the bank should check with its regulatory agency to determine whether a
referral form should be submitted.
Lastly, under the facts as described above, X State Bank is not
required to file a Currency Transaction Report (``CTR'') because the
currency transaction (i.e. purchase of cashier's checks) did not exceed
$10,000 during one business day. If the bank had found that on a
particular day the person had in fact used a total of more than $10,000
in currency to purchase cashier's checks, but had each individual
cashier's check made out in amounts of less than $10,000, the bank is
obligated to file a CTR, and should follow the other steps described
above.
Holding
If X State Bank notices that a person may be misusing it by
intentionally structuring transactions to evade the BSA reporting
requirements or engaging in transactions that may involve other illegal
activity, the bank should telephone the local office of the Internal
Revenue Service, Criminal Investigation Division, and report that
information to a Special Agent, or should call 1-800-BSA-CTRS. In
addition, the Federal regulatory agency which supervises X State Bank
may require the bank to submit a criminal referral form. All disclosures
to the Government
[[Page 392]]
should be made in accordance with the provisions of the Right to
Financial Privacy Act.
88-2 (June 22, 1988)
Issue
When, if ever, should a bank file a CMIR on behalf of its customer,
when the customer is importing or exporting more than $10,000 in
currency or monetary instruments?
Facts
A customer walks into B National Bank (``B'') with $15,000 in cash
for deposit into her account. As is required, the bank teller begins to
fill out a Currency Transaction Report (``CTR'', IRS Form 4789) in order
to report a transaction in currency of more than $10,000. While the
teller is filling out the CTR, the customer mentions to the teller that
she has just received the money in a letter from a relative in France.
Should the teller also file a CMIR, either on the customer's behalf or
on the bank's behalf?
Law and Analysis
B National Bank should not file a CMIR when a customer deposits
currency in excess of $10,000 into her account, even if the bank has
knowledge that the customer received the currency from a place outside
the United States. 31 CFR 103.23 requires that a CMIR be filed by anyone
who transports, mails, ships or receives, or attempts, causes or
attempts to cause the transportation, mailing, shipping or receiving of
currency or monetary instruments in excess of $10,000, from or to a
place outside the United States. The term ``monetary instruments''
includes currency and instruments such as negotiable instruments
endorsed without restriction. See 31 CFR 103.11(k).
The obligation to file the CMIR is solely on the person who
transports, mails, ships or receives, or causes or attempts to
transport, mail, ship or receive. No other person is under any
obligation to file a CMIR. Thus, if a customer walks into the bank and
declares that he or she has received or transported currency in an
aggregate amount exceeding $10,000 from a place outside the United
States and wishes to deposit the currency into his or her account, the
bank is under no obligation to file a CMIR on the customer's behalf.
Likewise, because the bank itself did not receive the money from a
customer outside the United States, it has no obligation to file a CMIR
on its own behalf. The same holds true if a customer declares his intent
to transport currency or monetary instruments in excess of $10,000 to a
place outside the United States.
However, the bank is strongly encouraged to inform the customer of
the CMIR reporting requirement. If the bank has knowledge that the
customer is aware of the CMIR reporting requirement, but is nevertheless
disregarding the requirement or if information about the transaction is
otherwise suspicious, the bank should contact the local office of the
U.S. Customs Service or 1-800-BE ALERT. The United States Customs
Service has been delegated authority by the Assistant Secretary
(Enforcement) to investigate criminal violations of 31 CFR 103.23. See
31 CFR 103.36(c)(1).
Any information provided to Customs should be given within the
confines of section 1103(c) of the Right to Financial Privacy Act, 12
U.S.C. 3401-3422. Section 1103(c) permits a financial institution to
notify a Government authority of information relevant to a possible
violation of any statute or regulation. Such information may consist of
the name (including those of corporate entities) of any individual
involved in the suspicious transaction; account numbers; home and
business addresses; social security numbers; type of account; interest
paid on account; location of branch where the suspicious transaction
occurred; a specification of the offense that the financial institution
believes has been committed; and a description of the activities giving
rise to the bank's suspicions. See S. Rep. 99-433, 99th Cong., 2nd
Sess., pp. 15-16. Therefore, under the facts above, the teller need only
file a CTR for the deposit of the customer's $15,000 in currency.
A previous interpretation of Sec. 103.23(b) by Treasury held that if
a bank received currency or monetary instruments over the counter from a
person who may have transported them into the United States, and knows
that such items have been transported into the country, it must file a
report on Form 4790 if a complete and truthful report has not been filed
by the customer. See 31 CFR 103 appendix, Sec. 103.23, interpretation 2,
at 364 (1987). This ruling hereby supersedes that interpretation.
Holding
A bank should not file a CMIR when a customer deposits currency or
monetary instruments in excess of $10,000 into her account even if the
bank has knowledge that the currency or monetary instruments were
received or transported from a place outside the United States. 31 CFR
103.23. The same is true if the bank has knowledge that the customer
intends to transport the currency or monetary instruments to a place
outside the United States. However, the bank is required to file a CTR
if it receives in excess of $10,000 in cash from its customer, and is
strongly encouraged to inform the customer of the CMIR requirements. In
addition, if the bank has knowledge that the customer is aware of the
CMIR reporting requirement and is nevertheless planning to disregard it
or if the transaction is otherwise suspicious, the bank should notify
the local office of the United
[[Page 393]]
States Customs Service (or 1-800-Be Alert) of the suspicious
transaction. Such notice should be made within the confines of the Right
to Financial Privacy Act, 12 U.S.C. 3403(c).
88-3 (June 22, 1988)
Issue
Whether a bank may exempt ``cash-back'' transactions of a customer
whose primary business is of a type that may be exempted either
unilaterally by the bank or pursuant to additional authority granted by
the IRS.
Facts
The ABC Grocery (``ABC''), a retail grocery store, has an account at
the X State Bank for its daily deposits of currency. Because ABC
regularly and frequently deposits amounts ranging from $20,000 to
$30,000, the bank has properly granted ABC an exemption for daily
deposits up to a limit of $30,000.
Recently, ABC began providing its customers with a check-cashing
service as an adjunct to its primary business of selling groceries.
ABC's primary business still consists of the sale of groceries. However,
the unexpectedly heavy demand for ABC's check-cashing service has
required ABC to maintain a substantially greater quantity of cash in the
store than was necessary for the grocery business in the past. To
facilitate the operations of its check-cashing service, ABC is
presenting the bank with large numbers of checks in ``cash-back''
transactions, rather than depositing the checks into its account and
withdrawing cash from that account. X State Bank has just been presented
with a ``cash-back'' transaction wherein an employee of ABC is
exchanging $15,000 worth of checks for cash. How should the bank treat
this transaction?
Law and Analysis
A cash back transaction is one where one or more checks or other
monetary instruments are presented in exchange for cash or a portion of
the checks or monetary instruments are deposited while the remainder is
exchanged for cash. ``Cash back'' transactions can never be exempted
from the Bank Secrecy Act reporting requirements. Thus, the bank must
file a Currency Transaction Report on IRS Form 4789 reporting this
$15,000 ``cash back'' transaction, even though the customer's account
has been granted an exemption for daily deposits of up to $30,000. This
is because Sec. 103.22(b)(i) permits a bank to exempt only ``(d)eposits
or withdrawals of currency from an existing account by an established
depositor who is a United States resident and operates a retail type of
business in the United States'' (emphasis added). As ``cash-back''
transactions do not constitute either a ``deposit or withdrawal of
currency'' within the meaning of the regulations, the bank must report
on a CTR any ``cash-back'' transaction that results in the transfer of
more than $10,000 in currency to a customer during a single banking day,
regardless of whether the customer has properly been granted an
exemption for its deposits or withdrawals.
Moreover, because ``cash back'' transactions are never exemptible,
the bank may not unilaterally exempt ``cash-back'' transactions by ABC,
or seek additional authority from the IRS to grant a special exemption
for ABC's ``cash-back'' transactions. Instead, the bank must report
ABC's ``cash back'' transaction on a CTR, listing it as a $15,000
``check cashed'' transaction.
Holding
A bank may never grant a unilateral exemption, or obtain additional
authority from the IRS to grant a special exemption to the ``cash-back''
transactions of a customer. A ``cash back'' transaction is one where one
or more checks or other monetary instruments are presented in exchange
for cash or a portion of the checks or monetary instruments are
deposited while the remainder is exchanged for cash. If a bank handles a
``cash-back'' transaction that results in the transfer of more than
$10,000 to a customer during a single banking day, it must report that
transaction on IRS Form 4789, the Currency Transaction Report, as a
``check cashed'' transaction, regardless of whether the customer has
been properly granted an exemption for daily deposits or withdrawals.
88-4 (August 2, 1988)
Issue
If a bank has exempted a single account of a customer into which
multiple establishments of that customer make deposits, must the bank
list all of the establishments on its exemption list or may the bank
list only the Sec. 103.22(f) information of the customer's headquarters
or its principal business establishment on its exemption list?
Facts
A fast food company operates a chain of fast-food restaurants in
several states. In New York, the company has established a single
deposit account at Bank A, into which all of the company's
establishments in that area make deposits. In Connecticut, the company
has established ten bank accounts at Bank B; each of the company's ten
establishments in Connecticut have been assigned a separate account into
which it makes deposits. Banks A and B have properly exempted the
company's accounts, but now seek guidance on the manner in which they
should add these accounts to their exemption lists. All
[[Page 394]]
of the company's establishments use the same taxpayer identification
number (``TIN'').
Law and Analysis
Under the regulations, the bank must keep ``in a centralized list,''
Sec. 103.22(f) information for ``each depositor that has engaged in
currency transactions which have not been reported because of (an)
exemption * * *'' However, where all of the company's establishments
deposit into one exempt account as at Bank A, above, the bank need only
maintain Sec. 103.22(f) information on its list for the customer's
corporate headquarters or the principal establishment that obtained the
exemption. The bank may, but is not required to, list identifying
information for all of the customers' establishments depositing into the
one account. If the bank chooses to list only the information for the
customer's headquarters or principal establishment, it should briefly
note that on the exemption list and should ensure that the individual
addresses for each establishment are readily available upon request.
Where each of the company's establishments deposit into separate exempt
accounts as at Bank B, the bank must maintain separate Sec. 103.22(f)
information on the exemption list for each establishment.
Under Sec. 103.22(b)(2) (i), (ii), and (iv) and Sec. 103.22(e) of
the regulation, a bank can only grant an exemption for ``an existing
account (of) an established depositor who is a United States resident.''
Under these provisions, therefore, the bank can only grant an exemption
for an existing individual account, not for an individual customer or
group of accounts. Thus, if a customer has a separate account for each
of its business establishments, the bank must consider each account for
a separate exemption. If the bank grants exemptions for more than one
account, it should prepare a separate exemption statement and establish
a separate dollar limit for each account.
Once an exemption has been granted for an account, Sec. 103.22(f)
requires the bank to maintain a centralized exemption list that includes
the name, address, business, types of transactions exempted, the dollar
limit of the exemption, taxpayer identification number, and account
number of the customers whose accounts have been exempted.
Holding
Under 31 CFR 103.22, when a bank has exempted a single account of a
customer into which more than one of the customer's establishments make
deposits, the bank may include the name, address, business, type of
transactions exempted, the dollar limit of the exemption, taxpayer
identification number, and account number (``Sec. 103.22(f)
information'') of either the customer's headquarters or the principal
business establishment, or it may separately list Sec. 103.22(f)
information for each of the establishments using that account. If the
bank chooses to list only the information for the customer's
headquarters or principal establishment, it should briefly note that
fact on the exemption list, and it should ensure that the individual
addresses of those establishments not on the list are readily available
upon request. If a bank has granted separate exemptions to several
accounts, each of which is used by a single establishment of the same
customer, the bank must include on its exemption list Sec. 103.22(f)
information for each of those establishments. Previous Treasury
correspondence or interpretations contrary to this policy are hereby
rescinded.
88-5 (August 2, 1988)
Issue
Does a financial institution have a duty to file a CTR on currency
transactions where the financial institution never physically receives
the cash because it uses an armored car service to collect, transport
and process its customer's cash receipts?
Facts
X State Bank (the ``Bank'') and Acme Armored Car Service (``Acme'')
have entered into a contract which provides for Acme to collect,
transport and process revenues received from Bank customers:
Each day, Acme picks up cash, checks, and deposit tickets from
Little Z, a non-exempt customer of the Bank. Recently, receipts of cash
from Little Z have exceeded $10,000. Acme delivers the checks and
deposit tickets to the Bank where they are processed and Little Z's
account is credited. All cash collected, however, is taken by Acme to
its central office where it is counted and processed. The cash is then
delivered by Acme to the Federal Reserve Bank for deposit into the
Bank's account. Must the Bank file a CTR to report a receipt of cash in
excess of $10,000 by Acme from Little Z?
Law and Anaylsis
Yes. Since Acme is receiving cash in excess of $10,000 on behalf of
the Bank, the Bank must file a CTR in order to report these
transactions.
Section 103.22(a)(1) requires ``(e)ach financial institution * * *
[to] file a report of each deposit, withdrawal, exchange of currency or
other payment or transfer, by, through or to such financial institution
which involves a transaction in currency of more than $10,000.'' Section
103.11 (a) and (g) defines ``Bank'' and ``Financial Institution'' to
include agents of those banks and financial institutions.
[[Page 395]]
Under the facts presented, Acme is acting as an agent of the Bank.
This is because Acme and the Bank have a contractual relationship
whereby the Bank has authorized Acme to pick up, transport and process
Little Z's receipts on behalf of the Bank. The Federal Reserve Bank's
acceptance of deposits from Acme into the Bank's account at the Fed, is
additional evidence of the agency relationship between the Bank and
Acme.
Therefore, when Acme receives currency in excess of $10,000 from
Little Z, the Bank must report that transaction on Form 4789. Likewise,
if Acme receives currency from Little Z in multiple transactions,
Sec. 103.22(a)(1) requires the Bank to aggregate these transactions and
file a single CTR for the total amount of currency received by Acme, if
the Bank has knowledge of these multiple transactions. Knowledge by the
Bank's agent, i.e., Acme, that the currency was received in multiple
transactions, is attributable to the Bank. The Bank must assure that
Acme, as its agent, obtains all the information and identification
necessary to complete the CTR.
Holding
Financial institutions must file a CTR for the currency received by
an armored car service from the financial institution's customer when
the armored car service physically receives the cash from the customer,
transports it and processes the receipts, even though the currency may
never physically be received by the financial institution. This is
because the armored car service is acting as an agent of the financial
institution.
89-1 (January 12, 1989)
Issue
Under Sec. 103.22 of the BSA regulations, may a bank unilaterally
grant one exemption or establish a single dollar exemption limit for a
group of existing accounts of the same customer? If not, may a bank
obtain additional authority from the IRS to grant a single exemption for
a group of exemptible accounts belonging to the same customer?
Facts
ABC Inc. (``ABC''), with TIN 12-3456789, owns five fast food
restaurants. Each restaurant has its own account at the X State Bank and
each restaurant routinely deposits less than $10,000 into its individual
account. However, when the deposits into these five accounts are
aggregated they regularly and frequently exceed $10,000. Accordingly,
the bank prepares and files one CTR for ABC Inc., on each business day
that ABC's aggregated currency transactions exceed $10,000. X State Bank
wants to know whether it can unilaterally exempt these five accounts
having the same TIN, and, if not, whether it can obtain additional
authority from the IRS to grant a single exemption to the group of five
accounts belonging to ABC.
Law and Analysis
Under Sec. 103.22(b)(2) (i) and (ii) of the Bank Secrecy Act
(``BSA'') regulations, 31 CFR part 103, only an individual account of a
customer may be unilaterally exempted from the currency transaction
reporting provisions. The bank may not unilaterally grant one exemption
or establish a single dollar exemption limit for multiple accounts of
the same customer. This is because Secs. 103.22(b)(2)(i) and
103.22(b)(2)(ii) of the BSA regulations only permit a bank to
unilaterally exempt ``[d]eposits or withdrawals of currency from an
existing account by an established depositor who is a United States
resident and operates a retail type of business in the United States.''
31 CFR 103.22(b)(2) (i) and (ii).
Section 103.22(e) of the BSA regulations provides, however, that
``[a] bank may apply to the * * * [IRS] for additional authority to
grant exemptions to the reporting requirements not otherwise permitted
under paragraph (b) of this section * * *'' 31 CFR 103.22(e). Therefore,
under this authority, and at the request of a bank, the IRS may, in its
discretion, grant the requesting bank additional authority to exempt a
group of accounts when the following conditions are met:
(1) Each of the accounts in the group is owned by the same person
and has the same taxpayer identification number.
(2) The deposits or withdrawals into each account are made by a
customer that operates a business that may be either unilaterally or
specially exemptible and each account meets the other exemption criteria
(except for the dollar amount).
(3) Currency transactions for each account individually do not
exceed $10,000 on a regular and frequent basis.
(4) Aggregated currency transactions for all accounts included in
the group regularly and frequently exceed $10,000.
If a bank determines that an exemption would be appropriate in a
situation involving a group of accounts belonging to a single customer,
it must apply to the IRS for authority to grant one special exemption
covering the accounts in question. As with all requests for special
exemptions, any request for additional authority to grant a special
exemption must be made in writing and accompanied by a statement of the
circumstances that warrant special exemption treatment and a copy of the
statement signed by the customer as required by Sec. 103.22(d). 31 CFR
103.22(d).
Additional authority to grant a special exemption for a group of
accounts must be obtained from the IRS regardless of whether the
businesses may be unilaterally exempted
[[Page 396]]
under Sec. 103.22(b)(2), because the exemption, if granted, would apply
to a group of existing accounts as opposed to an individual existing
account. 31 CFR 103.22(b)(2).
Also, if any one of a given customer's accounts has regular and
frequent currency transactions which exceed $10,000, that account may
not be included in the group exemption. This is because the bank may, as
provided by Sec. 103.22(b)(2), either unilaterally exempt that account
or obtain authority from the IRS to grant a special exemption for that
account if it meets the other criteria for exemption. Thus, only
accounts of exemptible businesses which do not have regular and frequent
(e.g., daily, weekly or twice a month) currency transactions in excess
of $10,000 may be eligible for a group exemption.
The intention of this special exemption is to permit banks to exempt
the accounts of established customers, such as the ABC Inc. restaurants
described above, which are owned by the same person and have the same
TIN but which individually do not have sufficient currency deposit or
withdrawal activity that regularly and frequently exceed $10,000.
Holding
If X State Bank determines that an exemption would be appropriate
for ABC Inc., it must apply to the IRS for authority to grant one
special exemption covering ABC's five separate accounts. As with all
requests for special exemptions, ABC's request for additional authority
to grant a special exemption must be made in writing and accompanied by
a statement of the circumstances that warrant special exemption
treatment and a copy of the statement signed by the customer as required
by Sec. 103.22(d). 31 CFR 103.22(d). The IRS may, in its discretion,
grant additional authority to exempt the ABC accounts if: (1) They have
the same taxpayer identification number; (2) they each are for customers
that operate a business that may be either unilaterally or specially
exemptible and each account meets the other exemption criteria (except
for dollar amount); (3) the currency transactions for each account
individually do not exceed $10,000 on a regular and frequent basis; but
(4) when aggregated the currency transactions for all the accounts
regularly and frequently do exceed $10,000.
89-2 (June 21, 1989)
Issue
When a customer has established bank accounts for each of several
establishments that it owns, and the bank has exempted one or more of
those accounts, how does the bank aggregate the customer's currency
transactions?
Facts
X Company (``X'') operates two fast-food restaurants and a wholesale
food business. X has opened separate bank accounts at the A National
Bank (the ``Bank'') for each of its two restaurants, account numbers 1
and 2 respectively. Each of these two accounts has been properly
exempted by the bank. Account number 1 has an exemption limit of $25,000
for deposits, and account number 2 has an exemption limit of $40,000 for
deposits. X also has a third account, account number 3, at the bank for
use in the operation of its wholesale food business. On occasion, cash
deposits of more than $10,000 are made into this third account. Because
these cash deposits are infrequent, the bank cannot obtain additional
authority to grant this account a special exemption.
During the same business day, two $15,000 cash deposits totalling
$30,000 are made into account number 1, a separate cash deposit of
$35,000 is made into account number 2 and a deposit of $9,000 in
currency is made into account number 3 (X's account for its wholesale
food business).
The bank must now determine how to aggregate and report all of these
transactions on a Form 4789, Currency Transaction Report, (``CTR'').
Must they aggregate all of the deposits made into account numbers 1, 2
and 3 and report them on a single CTR?
Law and Analysis
Section 103.22 of the Bank Secrecy Act (``BSA''), 31 CFR part 103,
requires a financial institution to treat multiple currency transactions
``as a single transaction if the financial institution has knowledge
that they are by or on behalf of any person and result in either cash-in
or cash-out totalling more than $10,000 during any one business day.''
This means that a financial institution must file a CTR if it knows that
multiple currency transactions involving two or more accounts have been
conducted by or on behalf of the same person and, those transactions,
when aggregated, exceed $10,000. Knowledge, in this context, means
knowledge on the part of a partner, director, officer or employee of the
institution or on the part of any existing computer or manual system at
the institution that permits it to aggregate transactions.
Thus, if the bank has knowledge of multiple transactions, the bank
should aggregate the transactions in the following manner.
First, the bank should separately review and total all cash-in and
cash-out transactions within each account. Cash-in transactions should
be aggregated with other cash-in transactions and cash-out transactions
should be aggregated with cash-out
[[Page 397]]
transactions. Cash-in and cash-out transactions should not be aggregated
together or offset against each other.
Second, the bank should determine whether the account has an
exemption limit. If the account has an exemption limit, the bank should
determine whether it has been exceeded. If the exemption limit has not
been exceeded, the transactions for the exempted account should not be
aggregated with other transactions.
If the total transactions during the same business day for a
particular account exceed the exemption limit, the total of all of the
transactions for that account should be aggregated with the total amount
of the transactions for other accounts that exceed their respective
exemption limits, with any accounts without exemption limits, and with
transactions conducted by or on behalf of the same person that do not
involve accounts (e.g., purchases of bank checks with cash) of which the
bank has knowledge.
In the example discussed above, all of the transactions have been
conducted ``on behalf of'' X, as X owns the restaurants and the
wholesale food business. The total $30,000 deposit for account 1 exceeds
the $25,000 exemption limit for that account. The $35,000 deposit into
account number 2 is less than the $40,000 exemption limit for that
account. Finally, the $9,000 deposit into account number 3, does not by
itself constitute a reportable transaction.
Therefore, under the facts above, the bank should aggregate the
entire $30,000 deposit into account number 1 (not just the amount that
exceeds the exemption limit), with the $9,000 deposit into account
number 3, for a total of $39,000. The bank should not include the
$35,000 deposit into account number 2, as that deposit does not exceed
the exemption limit for that account. Accordingly, the bank should
complete and file a single CTR for $39,000.
If the bank does not have knowledge that multiple currency
transactions have been conducted in these accounts on the same business
day (e.g., because it does not have a system that aggregates among
accounts and the deposits were made by three different individuals at
different times) the bank should file one CTR for $30,000 for account
number 1, as the activity into that account exceeds its exemption limit.
Holding
When a customer has more than one account and a bank employee has
knowledge that multiple currency transaction have been conducted in the
accounts or the bank has an existing computer or manual system that
permits it to aggregate transactions for multiple accounts, the bank
should aggregate the transactions in the following manner.
First, the bank should aggregate for each account all cash-in or
cash-out transactions conducted during one business day. If the account
has an exemption limit, the bank should determine whether the exemption
limit of that account has been exceeded. If the exemption limit has not
been exceeded, the total of the transactions for that particular account
does not have to be aggregated with other transactions. If the total
transactions during the same business day for a particular account
exceed the exemption limit, however, the total of all of the
transactions for that account should be aggregated with any total from
other accounts that exceed their respective exemption limits, with any
accounts without exemption limits, and with any reportable transactions
conducted by or on behalf of the customer not involving accounts (e.g.,
purchases of bank checks or ``cash back'' transactions) of which the
bank has knowledge. The bank should then file a CTR for the aggregated
amount.
89-5 (December 21, 1989)
Issue
How does a financial institution fulfill the requirement that it
furnish information about the person on whose behalf a reportable
currency transaction is being conducted?
Facts
No. 1. Linda Scott has had an account relationship with the Bank for
15 years. Ms. Scott enters the bank and deposits $15,000 in cash into
her personal checking account. The bank knows that Ms. Scott is an
artist who on occasions exhibits and sells her art work and that her art
work currently is on exhibit at the local gallery. The bank further
knows that cash deposits in the amount of $15,000 are commensurate with
Ms. Scott's art sales.
No. 2. Dick Wallace has recently opened a personal account at the
Bank. Although the bank verified his identity when the account was
opened, the bank has no additional information about Mr. Wallace. Mr.
Wallace enters the bank with $18,000 in currency and asks that it be
wire transferred to a bank in a foreign country.
No. 3. Dorothy Green, a partner at a law firm, makes a $50,000 cash
deposit into the firm's trust account.\1\ The bank knows that this is a
trust account. The $50,000 represents cash received from three clients.
---------------------------------------------------------------------------
\1\ This type of account is sometimes called a trust account,
attorney account or special account. It is an account established by an
attorney into which commingled funds of clients may be deposited. It is
not necessarily a ``trust'' in the legal sense of the term.
---------------------------------------------------------------------------
[[Page 398]]
No. 4. Carlos Gomez enters a Currency Dealer and asks to buy $12,000
in traveler's checks with cash.
No. 5. Gail Julian, a trusted employee of Q-mart, a large retail
chain, enters the bank three times during one business day and makes
three large cash deposits totalling $48,000 into Q-mart's account. The
Bank knows that Ms. Julian is responsible for making the deposits on
behalf of Q-mart. Q-mart has an exemption limit of $45,000.
Law and Analysis
Under Sec. 103.28 of the Bank Secrecy Act (``BSA'') regulations, 31
CFR part 103, a financial institution must report on a Currency
Transaction Report (``CTR'') the name and address of the individual
conducting the transaction, and the identity, account number, and the
social security or taxpayer identification number of any person on whose
behalf the transaction was conducted. See 31 U.S.C. 5313. ``A
participant acting for another person shall make the report as the agent
or bailee of the person and identify the person for whom the transaction
is being made.'' Identifying information about the person on whose
behalf the transaction is conducted must always be furnished if the
transaction is reportable under the BSA, regardless of whether the
transaction involves an account.
Because the BSA requires financial institutions to file complete and
accurate CTR's, it is the financial institution's responsibility to
ascertain the real party in interest. 31 U.S.C. 5313. One way that a
financial institution can obtain information about the identity of the
person on whose behalf the transaction is being conducted is to ask the
person conducting the transaction whether he is acting for himself or on
behalf of another person. Only if as a result of strong ``know your
customer'' or other internal control policies, the financial institution
is satisfied that its records contain information concerning the true
identity of the person on whose behalf the transaction is conducted, may
the financial institution rely on those records to complete the CTR.
No. 1. Linda Scott, an artist, is a known customer of the bank. The
bank is aware that she is exhibiting her work at a local gallery and
that cash deposits in the amount of $15,000 would not be unusual or
inconsistent with Ms. Scott's business practices. Therefore, if the bank
through its stringent ``know your customer'' policies is satisfied that
the money being deposited by Ms. Scott into her personal account is for
her benefit, the bank need not ask Ms. Scott whether she is acting on
behalf of someone else.
No. 2. Because Dick Wallace is a new customer of the bank and
because the bank has no additional information about him or his business
activity, the bank should ask Mr. Wallace whether he is acting on his
own behalf or on behalf of someone else. This is particularly true given
the nature of the transaction--a wire transfer with cash for an
individual to a foreign country.
No. 3. Dorothy Green's cash deposit of $50,000 into the law firm's
trust account clearly is being done on behalf of someone else. The bank
should ask Ms. Green to identify the clients on whose behalf the
transaction is being conducted. Because Ms. Green is acting both on
behalf of her employer and the clients, the names of the three clients
and the law firm should be included on the CTR filed by the bank.
No. 4. The currency dealer, having no account relationship with
Carlos Gomez, should ask Mr. Gomez if he is acting on behalf of someone
else.
No. 5. Gail Julian is known to the bank as a trusted employee of Q-
mart, who often deposits cash into Q-mart's account. If the bank,
through its strong ``know your customer'' policies is satisfied that Ms.
Julian makes these deposits on behalf of Q-mart, the bank need not ask
her if she is acting on behalf of someone other than Q-mart.
Holding
It is the responsibility of a financial institution to file complete
and accurate CTRs. This includes providing identifying information about
the person on whose behalf the transaction is conducted in Part II of
the CTR. One way that a financial institution can obtain information
about the true identity of the person on whose behalf the transaction is
being conducted is to ask the person conducting the transaction whether
he is acting for himself or on behalf of another person. Only if as a
result of strong ``know your customer'' or other internal control
policies, the financial institution is satisfied that its record contain
the necessary information concerning the true identity of the person on
whose behalf the transaction is being conducted, may the financial
institutions rely on those records in completing the CTR.
92-1 (November 16, 1992)
31 U.S.C. 5313--Reports on Domestic Coins and Currency Transactions
31 U.S.C. 5325--Identification Required to Purchase Certain Monetary
Instruments
31 CFR 103.28--Identification Required
31 CFR 103.29--Purchases of Bank Checks and Drafts, Cashier's Checks,
Money Orders and Traveler's Checks
Identification of elderly or disabled patrons conducting large
currency transactions. Financial institutions must file a form 4789,
Currency Transaction Report (CTR) on transactions in currency in excess
of $10,000, and must verify and record information about the identity of
the person(s) who conduct(s) the transaction in Part I of
[[Page 399]]
the CTR. Financial institutions also must record on a chronological log
sales of, and verify the identity of individuals who purchase, certain
monetary instruments with currency in amounts between $3,000 and
$10,000, inclusive. Many financial institutions have asked Treasury how
they can meet the requirement to examine an identifying document that
contains the person's name and address when s/he does not possess such a
document (e.g., a driver's license). Financial institutions have
indicated that this question arises almost exclusively with their
elderly and/or disabled patrons. This Administrative Ruling answers
those inquiries.
Issue
How does a financial institution fulfill the requirement to verify
and record the name and address of an elderly or disabled individual who
conducts a currency transaction in excess of $10,000 or who purchases
certain monetary instruments with currency valued between $3,000 and
$10,000 when he/she does not possess a passport, alien identification
card or other official document, or other document that is normally
acceptable within the banking community as a means of identification
when cashing checks for nondepositors?
Holding
It is the responsibility of a financial institution to file complete
and accurate CTRs and to maintain complete and accurate monetary
instrument logs pursuant to 31 CFR Secs. 103.27(d) and 103.29 of the BSA
regulations. It is also the responsibility of a financial institution to
verify and to record the identity of individuals conducting reportable
currency transactions and/or cash purchases of certain monetary
instruments as required by BSA regulations Secs. 103.28 and 103.29. Only
if the financial institution is confident that an elderly or disabled
patron is who s/he says s/he is may it complete these transactions. A
financial institution shall use whatever information it has available,
in accordance with its established policies and procedures, to determine
its patron's identity. This includes review of its internal records for
any information on file, and asking for other forms of identification,
including a social security or medicare/medicaid card along with another
document which contains both the patron's name and address such as an
organizational membership card, voter registration card, utility bill or
real estate tax bill. These forms of identification shall also be
identified as acceptable in the bank's formal written policy and
operating procedures as identification for transactions involving the
elderly or the disabled. Once implemented, the financial institution
should permit no exception to its policy and procedures. In these cases,
the financial institution should record the word ``Elderly'' or
``Disabled'' on the CTR and/or chronological log and the method used to
identify the elderly, or disabled patron such as ``Social Security and
(organization) Membership Card only ID.''
Law and Analysis
Before concluding a transaction for which a Currency Transaction
Report is required pursuant to 31 CFR 103.22, a financial institution
must verify and record the name and address of the individual conducting
the transaction. 31 CFR 103.28. Verification of the individual's
identity must be made by examination of a document, other than a bank
signature card, that is normally acceptable within the banking community
as a means of identification when cashing checks for nondepositors
(e.g., a driver's license). A bank signature card may be relied upon
only if it was issued after documents establishing the identity of the
individual were examined and a notation of the method and specific
information regarding identification (e.g., state of issuance and
driver's license number) was made on the signature card. In each
instance, the specific identifying information noted above and used to
verify the identity of the individual must be recorded on the CTR. The
notation of ``known customer'' or ``bank signature card on file'' on the
CTR is prohibited. 31 CFR 103.28.
Before issuing or selling bank checks or drafts, cashier's checks,
traveler's checks or money orders to an individual(s), for currency
between $3,000 and $10,000, a financial institution must verify whether
the individual has a deposit account or verify the individual's
identity. 31 CFR 103.29. Verification may be made by examination of a
signature card or other account record at the financial institution if
the deposit accountholder's name and address were verified at the time
the account was opened, or at any subsequent time, and that information
was recorded on the signature card or record being examined.
Verification may also be made by examination of a document that
contains the name and address of the purchaser and which is normally
acceptable within the banking community as a means of identification
when cashing checks for nondepositors. In the case of a deposit
accountholder whose identity has not been previously verified, the
financial institution shall record the specific identifying information
on its chronological log (e.g. state of issuance and driver's license
number). In all situations, the financial institution must record all
the appropriate information required by Sec. 103.29(a)(1)(i) for deposit
account holders or 103.29(a)(2)(i) for nondeposit account holders.
Certain elderly or disabled patrons do not possess identification
documents that would normally be considered acceptable within
[[Page 400]]
the banking community (e.g., driver's licenses, passports, or state-
issued identification cards). Accordingly, the procedure set forth below
should be followed to fulfill the identification verification
requirements of Secs. 103.28 and 103.29.
Financial institutions may accept as appropriate identification a
social security, medicare, medicaid or other insurance card presented
along with another document that contains both the name and address of
the patron (e.g. an organization membership or voter registration card,
utility or real estate tax bill). Such forms of identification shall be
specified in the bank's formal written policy and operating procedures
as acceptable identification for transactions involving elderly or
disabled patrons who do not possess identification documents normally
considered acceptable within the banking community for cashing checks
for nondepositors.
This procedure may only be applied if the following circumstances
exist. First, the financial institution must establish that the
identification the elderly or disabled patron has is limited to a social
security or medicare/medicaid card plus another document which contains
the patron's name and address. Second, the financial institution must
use whatever information it has available, or policies and procedures it
has in place, to determine the patron's identity. If the patron is a
deposit accountholder, the financial institution should review its
internal records to determine if there is information on file to verify
his/her identity. Only if the financial institution is confident that
the elderly or disabled patron is who s/he says s/he is, may the
transaction be concluded. Failure to identify an elderly or a disabled
customer's identity as required by 31 CFR Sec. 103.28 and as described
herein may result in the imposition of civil and or criminal penalties.
Finally, the financial institution shall establish a formal written
policy and implement operating procedures for processing reportable
currency transactions or recording cash sales of certain monetary
instruments to elderly or disabled patrons who do not have forms of
identification ordinarily considered ``acceptable.'' Once implemented,
the financial institution shall permit no exceptions to its policy and
procedures. In addition, financial institutions are encouraged to record
the elderly or disabled patron's identity and address as well as the
method of identification on a signature card or other record when it is
obtained and verified.
In completing a CTR, if all of the above conditions are satisfied,
the financial institution should enter the words ``Elderly'' or
``Disabled'' and the method used to verify the patron's identity, such
as ``Social Security and (organization) Membership Cards Only ID,'' in
Item 15a.
Similarly, when logging the cash purchase of a monetary
instrument(s), the financial institution shall enter on its
chronological log the words, ``Elderly'' or ``Disabled,'' and the method
used to verify such patron's identity.
Example
Jesse Fleming, a 75 year old retiree, has been saving $10 bills for
twenty years in order to help pay for his granddaughter's college
education. He enters the Trustworthy National Bank where he has no
account but his granddaughter has a savings account, and presents
$13,000 in $10 bills to the teller. He instructs the teller to deposit
$9,000 into his granddaughter's savings account, and requests a
cashier's check for $4,000 made payable to State University.
Because of poor eyesight, Mr. Fleming no longer drives and does not
possess a valid driver's license. When asked for identification by the
teller he presents a social security card and his retirement
organization membership card that contains his name and address.
Application of Law to Example
In this example, the Trustworthy National Bank must check to
determine if Mr. Fleming's social security and organizational membership
cards are acceptable forms of identification as defined in the bank's
policy and procedures. If so, and the bank is confident that Mr. Fleming
is who he says he is, it may complete the transaction. Because Mr.
Fleming conducted a transaction in currency which exceeded $10,000
(deposit of $9,000 and purchase of $4,000 monetary instrument), First
National Bank must complete a CTR. It should record information about
Mr. Fleming in Part I of the CTR and in Item 15a record the words
``Elderly--Social Security and (organization) Membership Cards Only
ID.'' The balance of the CTR must be appropriately completed as required
by Secs. 103.22 and 103.27(d). First National Bank must also record the
transaction in its monetary instrument sales log because it issued to
Mr. Fleming a cashier's check for $4,000 in currency. Mr. Fleming must
be listed as the purchaser and the bank should record on the log the
words ``Elderly--Social Security and (organization) Membership Cards
Only ID'' as the method used to verify his identity. In addition,
because Mr. Fleming is not a deposit accountholder at First National
Bank, the bank is required to record on the log all the information
required under Sec. 103.29(a)(2)(i) for cash purchases of monetary
instruments by nondeposit accountholders.
92-2 (November 16, 1992)
31 U.S.C. 5313--Reports on Domestic Coins and Currency Transactions
31 CFR 103.22--Reporting of Currency Transactions
[[Page 401]]
31 CFR 103.28--Identification Required
Proper completion of the Currency Transaction Report (CTR), IRS Form
4789, when reporting multiple transactions. Financial institutions must
report transactions in currency that exceed $10,000 or an exempted
account's established exemption limit and provide certain information
including verified identifying information about the individual
conducting the transaction. Multiple currency transactions must be
treated as a single transaction, aggregated, and reported on a single
Form 4789, if the financial institution has knowledge that the
transactions are by or on behalf of any person and result in either cash
in or cash out totalling more than $10,000, or the exemption limit,
during any one business day. All CTRs must be fully and accurately
completed. Some or all of the individual transactions which comprise an
aggregated CTR are frequently below the $10,000 reporting or applicable
exemption threshold and, as such, are not reportable and financial
institutions do not gather the information required to complete a CTR.
Issue
How should a financial institution complete a CTR when multiple
transactions are aggregated and reported on a single form and all or
part of the information called for in the form may not be known?
Holding
Multiple transactions that total in excess of $10,000, or an
established exemption limit, when aggregated must be reported on a CTR
if the financial institution has knowledge that the transactions have
occurred. In many cases, the individual transactions being reported are
each under $10,000, or the exemption limit, and the institution was not
aware at the time of any one of the transactions that a CTR would be
required. Therefore, the identifying information on the person
conducting the transaction was not required to be obtained at the time
the transaction was conducted.
If after a reasonable effort to obtain the information required to
complete items 4 through 15 of the CTR, all or part of such information
is not available, the institution must check item 3d to indicate that
the information is not being provided because the report involves
multiple transactions for which complete information is not available.
The institution must, however, provide as much of the information as is
reasonably available.
All subsections of item 48 on the CTR must be completed to report
the number of transactions involved and the number of locations of the
financial institution and zip codes of those locations where the
transactions were conducted.
Law and Analysis
Sections 103.22(a)(1) and (c) of the Bank Secrecy Act (BSA)
regulations, 31 CFR part 103, require a financial institution to file a
CTR for each deposit, withdrawal, exchange of currency, or other payment
or transfer, by, through, or to the financial institution, which
involves a transaction in currency of more than $10,000 or the
established exemption limit for an exempt account. Multiple transactions
must be treated as a single transaction if the financial institution has
knowledge that they are by, or on behalf of, any person and result in
either cash in or cash out of the financial institution totalling more
than $10,000 or the exemption limit during any one business day.
Knowledge, in this context, means knowledge on the part of a partner,
director, officer or employee of the financial institution or on the
part of any existing automated or manual system at the financial
institution that permits it to aggregate transactions.
The purpose of item 3 on the CTR is to indicate why all or part of
the information required in items 4 through 15 is not being provided on
the form. If the reason information is missing is solely because the
transaction(s) occurred through an armored car service, a mail deposit
or shipment, or a night deposit or Automated Teller Machine (ATM), the
financial institution must check either box a, b, or c, as appropriate,
in item 3. CTR instructions state that item 3d is to be checked for
multiple transactions where none of the individual transactions exceeds
$10,000 or the exemption limit and all of the required information might
not be available.
As described in Example No. 5 below, there may be situations where
one transaction among several exceeds the applicable threshold. Item 3d
should be checked whenever multiple transactions are being reported and
all or part of the information necessary to complete items 4 through 15
is not available because at the time of any one of the individual
transactions, a CTR was not required and the financial institution did
not obtain the appropriate information.
When reporting multiple transactions, the financial institution must
complete as many of items 4 through 15 as possible. In the event the
institution learns that more than one person conducted the multiple
transactions being reported, it must check item 2 on the CTR and is
encouraged to make reasonable efforts to obtain and report any
appropriate information on each of the persons in items 4 through 15 on
the front and back of the CTR form, and if necessary, on additional
sheets of paper attached to the report.
The purpose of item 48 is to indicate that multiple transactions are
involved in the CTR being filed. Items 48 a, b, and c require
information about the number of transactions being reported and the
number of
[[Page 402]]
bank branches and the zip code of each branch where the transactions
took place. If multiple transactions exceeding $10,000 or an account
exemption limit occur at the same time, the financial institution should
treat the transactions in a manner consistent with its internal
transaction posting procedures. For example, if a customer presents four
separate deposits, at the same time, totalling over $10,000, the
institution may report the transactions in item 48a to be one or four
separate transactions. If the transactions are posted as four separate
transactions the financial institution should enter the number 4 in item
48a and the number 1 in item 48b. If the transactions are posted as one
transaction the institution should enter the 1 in both 48a and 48b.
Reporting the transactions in this manner will guarantee the integrity
of the paper trail being created, that is, the number of transactions
reported on the CTR will be the same as the number of transactions
showing in the institution's records.
These situations should be differentiated from those cases where
separate transactions occur at different times during the same business
day, and which, when aggregated, exceed $10,000 or the exemption limit.
For instance, if the same or another individual conducts two of the same
type of transactions at different times during the same business day at
two different branches of the financial institution on behalf of the
same person, and the institution has knowledge that the transactions
occurred and exceed $10,000 or the exemption limit, then the financial
institution must enter the number 2 in items 48a and 48b.
Examples and Application of Law to Examples
Example No. 1
Dorothy Fishback presents a teller with three cash deposits to the
same account, at the same time, in amounts of $5,000, $6,000, and $8,500
requesting that the deposits be posted to the account separately. It is
the bank's procedure to post the transactions separately. A CTR is
completed while the customer is at the teller window.
Application of Law to Example No. 1
A CTR is completed based upon the information obtained at the time
Dorothy Fishback presents the multiple transactions. Item 3d would not
be checked on the CTR because all of the information in items 4 through
15 is being provided contemporaneously with the transaction. As it is
the bank's procedure to post the transactions separately, the number of
transactions reported in item 48a would be 3 and the number of branches
reported in item 48b would be 1. The zip code for the location where the
transactions were conducted would be entered in item 48c.
Example No. 2
Andrew Weiner makes a $7,000 cash deposit to his account at ABC
Federal Savings Bank. Later the same day, Mr. Weiner returns to the same
teller and deposits $5,000 in cash to a different account. At the time
Mr. Weiner makes the second deposit, the teller realizes that the two
deposits exceed $10,000 and prepares a CTR obtaining all of the
necessary identifying information directly from Mr. Weiner.
Application of Law to Example No. 2
Even though the two transactions were conducted at different times
during the same business day, Mr. Weiner conducted both transactions at
the same place and the appropriate identifying information was obtained
by the teller at the time of the second transaction. Item 3d would not
be checked on the CTR. The number of transactions reported in item 48a
must be 2 and the number of branches reported in item 48b would be 1.
The zip code for the location where the transactions took place would be
entered in item 48c.
Example No. 3
Internal auditor Mike Pelzer is reviewing the daily cash
transactions report for People's Bank and notices that five cash
deposits were made the previous day to account 12345. The total
of the deposits is $25,000 and they were made at three different offices
of the bank. Mike researches the account data base and finds that the
account belongs to a department store and that the account is exempted
for deposits up to $17,000 per day. Each of the five transactions was
under $17,000.
Application of Law to Example No. 3
Having reviewed the report of aggregated transactions, Mike Pelzer
has knowledge that transactions exceeding the account exemption limit
have occurred during a single business day. A CTR must be filed.
People's Bank is encouraged to make a reasonable effort to provide the
information for items 4 through 15 on the CTR. Such efforts could
include a search of the institution's records or a phone call to the
department store to identify the persons that conducted the
transactions. If all of the information is not contained in the
institution's records or otherwise obtained, item 3d must be checked.
The number of transactions reported in item 48a must be 5 and the number
of branches reported in 48b would be 3. The zip codes for the three
locations where the transactions occurred must be entered in item 48c.
[[Page 403]]
Example No. 4
Mrs. Saunders makes a cash withdrawal, for $4,000, from a joint
savings account she owns with her husband. That day her husband, Mr.
Saunders, withdraws $7,000 cash using the same teller. Realizing that
the withdrawals exceed $10,000, the teller obtains identifying
information on Mr. Saunders required to complete a CTR.
Application of Law to Example No. 4
In this case, item 2 on the CTR must be checked because the teller
knows that more than one person conducted the transactions. Information
on Mr. Saunders would appear in Part I and the bank is encouraged to ask
him for, or to check its records for the required identifying
information on Mrs. Saunders. If after taking reasonable efforts to
locate the desired information, all of the required information is not
found on file in the institution's records or is not otherwise obtained,
box 3d must be checked to indicate that all information is not being
provided because multiple transactions are being reported. Whatever
information on Mrs. Saunders is contained in the records of the
institution must be reported in the continuation of Part I on the back
of Form 4789. The number of transactions reported in item 48a must be 2
and the number of branches reported in item 48b would be 1. The zip code
for the branch where the transactions took place would be entered in
item 48c.
Example No. 5
On another day, Mrs. Saunders makes a deposit of $3,000 cash and no
information required for Part I of the CTR is requested of her. She is
followed later the same day by her husband, Mr. Saunders, who deposits
$12,000 in currency and who provides all data required to complete Part
I for himself.
Application of Law to Example No. 5
Item 2 on the CTR must be checked because the teller knows that more
than one person conducted the transactions. Information on Mr. Saunders
would appear in Part I and the bank is encouraged to ask him for, or to
check its records for the required identifying information on Mrs.
Saunders. If after taking reasonable efforts to locate the desired
information, all of the required information is not found on file in the
institution's records or is not otherwise obtained, box 3d must be
checked to indicate that all information is not being provided because
multiple transactions are being reported. Whatever information on Mrs.
Saunders is contained in the records of the institution must be reported
in the continuation of Part I on the back of Form 4789. The number of
transactions reported in item 48a must be 2 and the number of branches
reported in item 48b would be 1. The zip code for the branch where the
transactions took place would be entered in item 48c.
Example No. 6
A review of First Federal Bank's daily cash transactions report for
a given day indicates several cash deposits to a single account totaling
more than $10,000. Two separate deposits were made in the night
depository at the institution's main office, and two deposits were
conducted at the teller windows of two other branch locations. Each
deposit was under $10,000.
Application of Law to Example No. 6
Item 3c should be checked to indicate that identifying information
is not provided because transactions were received through the night
deposit box. If the tellers involved with the two face to face deposits
remember who conducted the transactions, institution records can be
checked for identifying information. If the records contain some of the
information required by items 4 through 15, that information must be
provided, and item 3d must be checked to indicate that some information
is missing because multiple transactions are being reported and the
information was not obtained at the time the transactions were
conducted. Item 48a must indicate 4 transactions and item 48b must
indicate 3 locations. The zip code of those locations would be provided
in item 48c.
[53 FR 40064, Oct. 13, 1988, as amended at 54 FR 21214, May 17, 1989; 54
FR 30543, July 21, 1989; 55 FR 1022, Jan. 11, 1990; 58 FR 7048, Feb. 4,
1993. Redesignated and amended at 67 FR 9877, Mar. 4, 2002]
[[Page 404]]
Appendix B to Part 103--Certification for Purposes of
Section 314(b) of the USA Patriot Act and 31 CFR 103.110
[GRAPHIC] [TIFF OMITTED] TR04MR02.026
[67 FR 9877, Mar. 4, 2002]
PART 123 [RESERVED]
[[Page 405]]