Financial Crime World

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Non-Listed Businesses May Exempt Gross Revenue from CTR Reporting Requirements

A recent ruling by FinCEN has shed light on the exemption of gross revenue from Currency Transaction Report (CTR) reporting requirements for non-listed businesses that derive more than 50% of their revenue from cashing checks or other ineligible business activities. However, not all check cashers are exempt from CTR reporting.

Exemptions to CTR Reporting Requirements

  • Non-listed businesses that derive more than 50% of their gross revenue from cashing checks or other ineligible business activities may be exempt from CTR reporting requirements.
  • Check cashers that cash checks in excess of $1,000 in currency or monetary instruments for any one person on any one day and derive more than 50% of its gross revenue from cashing checks are not considered to be exempted from CTR reporting requirements as a non-listed business.

Exceptions to Exemptions

  • Government officials conducting transactions on behalf of their agency are exempt from CTR reporting requirements.
  • Banks must still obtain and record identifying information pertaining to the government agency involved, while non-bank financial institutions must file a CTR for such transactions.

Independent Reviews of Anti-Money Laundering Programs

  • FinCEN has issued guidance on how money services businesses should conduct independent reviews of their anti-money laundering programs.
  • These reviews should include:
    • Testing of internal controls and transactional systems and procedures to identify problems and weaknesses.
    • Recommendations for corrective actions.

Scope and Frequency of Reviews

  • The scope and frequency of these reviews will depend on the money services business’ risk assessment, which should take into account its products, services, customers, and geographic locations.
  • While a formal audit by a certified public accountant or third-party consultant is not required, the review may be conducted by an officer, employee, or group of employees who are not the designated compliance officer.

Conclusion

FinCEN’s guidance highlights the importance of accurate reporting and recordkeeping requirements for businesses involved in cash-intensive activities. By understanding these regulations, businesses can ensure compliance with BSA requirements and mitigate the risk of money laundering and terrorist financing.

Sources:

  • FinCEN Regulation 31 CFR 1030
  • FinCEN Guidance on Independent Reviews of Anti-Money Laundering Programs (9/2006)
  • FinCEN Guidance on Reporting Requirements for Check Cashers (9/2006)