Under the Bank Secrecy Act, financial institutions must maintain appropriate records and file reports involving certain currency transactions. The Act prescribes regulations that mandate the reporting of specific activities, including using wire transfers to send and receive money. Financial institutions use the Currency Transaction Reports and Suspicious Activity Reports as the primary means to meet the requirements of the Act.
General Requirements
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Sending and receiving money via wire transfers falls under currency transaction. Thus, banks must record information about its customers when they process wire transfers. Information they record includes the customer's name, physical address, birthdate and Social Security number. If the customer is a non-resident, the bank must record a taxpayer identification number.
The bank also needs to make note of the documentation used to verify the customer's identity. A mere mention that the bank knows the individual is insufficient. The report must include the sender's account number and the amount and type of transaction. It also must include the country of origin and the U.S. Dollar equivalent of the foreign currency on the transaction date.
Transaction Aggregation
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Banks must file currency transaction reports for wire transfers greater than $10,000. If several wire transfers are processed for the same person, the bank must treat these as a single transaction, and must report the transfers if their sum exceeds $10,000. However, if these transactions are for multiple businesses owned by one person, the transactions aren't aggregated. This is because of the presumption that incorporated businesses are independent persons, so each business is treated separately.
Phase I Exemptions
Some organizations may quality for exemption from currency transaction reporting. These entities fall under either the Phase I or Phase II exemption categories. Phase I exemptions are granted to banks to the extent of their domestic operations. Government agencies and entities that exercise governmental authority within the U.S. also qualify.
Banks must file a report on the Bank Secrecy Act e-filing system to exempt eligible companies. This report is due within 30 days of the bank's first transaction with the exempt company.
Phase II Exemptions
Even if a company doesn’t meet the criteria for Phase I exemptions, it might still be eligible for CTR exemptions. These companies include payroll customers and non-listed businesses. Eligible non-listed businesses include companies that conduct large dollar transaction with an exempt bank. Only the domestic operations of these companies qualify for exemption. Also, they must be U.S. companies or registered to conduct business in the United States. Payroll customers are companies that withdraw money to pay U.S. employees. They also must be U.S. corporations.
Currency Transaction Report, March 2011 revision
A currency transaction report (CTR) is a report that U.S. financial institutions are required to file with FinCEN 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.[1][2] Used in this context, currency means the coin and/or paper money of any country that is designated as legal tender by the country of issuance. Currency also includes U.S. silver certificates, U.S. notes, Federal Reserve notes, and official foreign bank notes.[3]
History[edit]
When the first version of the CTR was introduced, the only way a suspicious transaction less than $10,000 was reported to the government was if a bank teller called law enforcement. This was primarily due to the financial industry's concern about the right to financial privacy. The Bank Secrecy Act requires financial institutions to report currency transaction amounts of over $10,000.
Procedure[edit]
When a transaction involving more than $10,000 in cash is processed, most banks have a system that automatically creates a CTR electronically. Tax and other information about the customer is usually pre-filled by the bank software. CTRs since 1996 include an optional checkbox at the top if the bank employee believes the transaction to be suspicious or fraudulent, commonly called a SAR, or Suspicious Activity Referral. A customer is not directly told about the $10,000 threshold unless they initiate the inquiry. A customer may decline to continue the transaction upon being informed about the CTR, but this would require the bank employee to file a SAR. Once a customer presents or asks to withdraw more than $10,000 in currency, the decision to continue the transaction must continue as originally requested and may not be reduced to avoid the filing of a CTR. For instance, if a customer reneges on their initial request to deposit or withdraw more than $10,000 in cash, and instead requests the same transaction for $9,999, the bank employee should deny such a request and continue the transaction as originally requested by filing a CTR. This sort of attempt is known as structuring, and is punishable by federal law against both the customer and the bank employee.[4][5] Those who habitually run transactions just under the $10,000 threshold will likely subject themselves to scrutiny and/or the filing of a SAR.
References[edit]
^31 C.F.R.1010.311.
^'Frequently Asked Questions Regarding the FinCEN Currency Transaction Report (CTR)'. fincen.gov. United States Department of the Treasury. Retrieved 2018-04-12.
Retrieved from 'https://en.wikipedia.org/w/index.php?title=Currency_transaction_report&oldid=895629851'
Updated September 26, 2017
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Updated September 26, 2017
The Bank Secrecy Act of 1970 requires financial institutions to file a Currency Transaction Report for any transaction that involves more than $10,000 in currency. Transactions may include deposits, withdrawals, currency exchanges, and wire transfers. The transaction must involve U.S. paper money or coins; the CTR does not apply to transactions financed by checks, money orders, or other instruments.
Do You Have To File Ctr On Wires Line
Determine if the customer qualifies for an exemption. Cash transactions by banks, government entities, publicly traded companies and any subsidiaries are exempted from CTR requirements. Banks may also file a Designation of Exempt Person form for most commercial banking customers that maintain a regular account and conduct a business that would reasonably involve large currency transactions.
Determine if the transaction is reportable. If the customer is not exempt and the transaction involves more than $10,000 in currency, it must be reported. If the bank has knowledge of multiple transactions for one customer in one business day that exceed this limit, they should be considered a single transaction and reported.
Obtain the Currency Transaction Report, Form 104, from the Financial Crimes Enforcement Network website at fincen.gov.
Complete the requested information. Part I of the CTR identifies the person conducting the transaction. Part II of the CTR details the type of transactions and the amounts involved. Part III outlines information about the reporting financial institution.
File the completed Form 104. Most financial institutions should file online at bsaefiling.fincen.treas.gov. The form may also be filed by mailing to:
In addition to banks, financial institutions also include casinos, pawn shops, check cashers, issuers and sellers of money orders and travelers checks, and currency exchangers.
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The completed CTR must be filed within 15 days of the reportable transaction, if filed manually, or within 25 days of the reportable transaction, if filed electronically. The financial institution must retain a copy of the completed form for five years from the reporting date. Failure to file a CTR is punishable by civil and criminal penalties.