# Transfer and Reorganization of Bank Secrecy Act Regulations > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2010-25914 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** October 26, 2010 - **Citation:** 75 FR 65806 ## Text DEPARTMENT OF THE TREASURY Financial Crimes Enforcement Network 31 CFR Part 103 31 CFR Chapter X RIN 1506-AA92 Transfer and Reorganization of Bank Secrecy Act Regulations AGENCY: Financial Crimes Enforcement Network (FinCEN), Department of the Treasury. ACTION: Final rule. SUMMARY: FinCEN is issuing this final rule to move the Bank Secrecy Act (BSA) regulations to a new chapter in the Code of Federal Regulations (CFR). The new chapter contains the BSA regulations, which are generally reorganized by financial industry. Moving the BSA regulations to a new chapter and organizing the chapter by financial industry creates a user-friendly way to find regulations applicable to a particular financial industry. This new organization within the new chapter also allows for the renumbering of the BSA regulations in a manner that makes it easier to find regulatory requirements than under the numbering system currently used in the existing regulations. FinCEN also makes minor technical changes to the BSA regulations such as updating mailing addresses and points of contact. DATES: Effective Date: March 1, 2011. FOR FURTHER INFORMATION CONTACT: Regulatory Policy and Programs Division, FinCEN (800) 949-2732 and select option 6. SUPPLEMENTARY INFORMATION: I. Background On November 7, 2008, FinCEN published a proposal to transfer and reorganize its regulations as part of an ongoing effort to increase the efficiency and effectiveness of its regulatory oversight. 1 Moving the regulations to a new chapter within Title 31 provides FinCEN with the opportunity to restructure its regulations so that they can readily be identified as being specific to a particular regulated industry or as being generally applicable to all regulated industries or covered persons. FinCEN received eight public comments on the Chapter X NPRM, which will be discussed below in the Section-by-Section Analysis. 1 See 73 FR 66414 (November 7, 2008) (Transfer and Reorganization of Bank Secrecy Act Regulations) (referred to herein as the “Chapter X NPRM”). Making the regulatory obligations more clear in their structure and more readily accessible to regulated institutions facilitates compliance and thereby advances the purposes of the BSA. Additionally, the transfer of FinCEN's regulations allows for better integration with the government-wide eRulemaking program. Since publication of the Chapter X NPRM, FinCEN has further improved public access to its rulemaking and non-rulemaking documents. On November 17, 2009, FinCEN issued a Final Rule amending the procedures for publicly issuing an administrative ruling relating to the BSA. 2 Since the effective date of that Final Rule (December 17, 2009), FinCEN posts administrative rulings with precedential value on its Web site, rather than publishing them in the Federal Register . FinCEN believes that posting administrative rulings with precedential value on FinCEN's Web site will make those rulings easier to find. All administrative rulings with precedential value will be available by mail to any person who makes a written request that specifically identifies the administrative ruling that is sought. 2 See 74 FR 59096 (November 17, 2009) (Final Rule for amending the Bank Secrecy Act Regulations Administrative Ruling System) (hereinafter, the “Administrative Ruling Final Rule”). Subsequent to the publication of the Chapter X NPRM, FinCEN published several final rules, e.g., the Administrative Ruling Final Rule. All final rules that were published in the timeframe between the Chapter X NPRM and this Final Rule have been incorporated into FinCEN's regulations in the Chapter X format. II. Effective Date The effective date of this Final Rule will be March 1, 2011. III. Section-by-Section Analysis A. Technical Corrections In the Chapter X NPRM, FinCEN proposed to make non-substantive technical corrections to the BSA implementing regulations. These corrections included updating titles and offices to represent organizational changes within the Treasury Department and FinCEN, changing mailing addresses, and updating names of Federal government agencies. The comments that FinCEN received relating to the technical corrections were comments or suggestions that would substantively alter the BSA. Because such comments are outside the scope of this rulemaking, FinCEN did not make any changes on the basis of those comments. On April 14, 2010, FinCEN issued a final rule to include mutual funds within the general definition of “financial institution” in the BSA regulations. 3 In that rule, FinCEN finalized two definitions of the term “mutual fund,” one for the general definition section and the other for the anti-money laundering program rules for mutual funds. 4 Although the two definitions contain minor textual differences, they were not intended to and do not have substantive distinctions. Similarly, there are textual differences between those two definitions and the definition of mutual fund used for the regulations implementing the Customer Identification Program requirements for mutual funds. Again, the textual differences were not intended to and do not signify substantive distinctions. Therefore, in order to be consistent and eliminate the textual anomalies within the various definitions for mutual fund that are currently within Part 103, the text of the definition of mutual fund from the Part 103 Customer Identification Programs for Mutual Funds will now be used as the definition of mutual fund in Chapter X for all purposes, except as provided in the regulatory text for the special measures provisions of Subpart F of the General Provisions Part. 3 See 75 FR 19241 (April 14, 2010) (Final Rule defining Mutual Funds as Financial Institutions). 4 See Id. B. Restructuring and Numbering Logic As discussed in the Chapter X NPRM, FinCEN is restructuring its regulations to make them more accessible for covered individuals and financial institutions. Chapter X is comprised of a General Provisions Part and separate financial institution specific Parts for those financial institutions subject to FinCEN regulations. The General Provisions Part (Part 1010) contains regulatory requirements that apply to more than one type of financial institution, and in some cases, individuals. The financial institution specific Parts contain regulatory requirements specific to a particular type of financial institution. Each Part, whether general or specific, contains similarly titled and ordered Subparts. For consistency across all Parts and to facilitate ease of reference, FinCEN has renumbered its regulations so that the same numbering format is used for the regulations in each Subpart. The comments received by FinCEN were generally supportive of FinCEN's effort to organize the BSA implementing regulations into an easier to follow format. Some commenters noted that the renumbering format could serve to minimize any misunderstanding regarding whether a particular industry has a specific regulatory requirement. One commenter noted the structure of Chapter X is problematic because users would be required to refer to both the industry-specific Part, as well as the General Provisions Part to determine regulatory requirements. Some commenters noted that a potential problem with the structure of Chapter X and the location of the definitions is that it would require users to flip back and forth between Parts to confirm both the definitions and requirements. While there will be some cross-referencing between Parts for financial institutions, FinCEN concluded that the structure of Chapter X is best for identifying the current regulatory requirements for each type of financial institution and any future regulatory changes. Some commenters requested that all definitions be placed in the General Provisions Part, thus limiting the need for cross-referencing. FinCEN considered this suggestion while drafting this Final Rule but ultimately found the approach unworkable because it created large sub-categories of definitions that diluted the contextual distinction that applies to certain defined terms. For example, the definition for “account,” as one commenter noted, has several different meanings. The reason for these definitional differences lies not only with the products and services the covered institution offers, but also with the specific regulatory obligations involved. Placing all definitions of “account” in the General Definitions Subpart of Part 1010, as requested by the commenter, would require several sub-definitions to reference the applicable regulations. So in the case of the term “account,” by removing “account” from the definition section in the rules implementing Section 312 of the USA PATRIOT Act and placing them in the General Definitions Subpart of Part 1010, the needed context as to why the definition is different is lost. While there may be some cross-referencing of definitions with the implementation of Chapter X, keeping the definitional structure as proposed helps provide context as to why words are defined differently. Many of the comments FinCEN received on the Chapter X NPRM were substantive in nature or suggested changes that would alter industry regulatory requirements. One commenter suggested removing dates in the regulations that were perceived as no longer relevant, such as the dates in the Civil Penalties provisions of the previous 31 CFR 103.57. While some dates in the regulations appear to be so long-standing as to be obsolete, they still represent substantive differences in compliance obligations and corresponding penalties. All comments to the Chapter X NPRM that requested a substantive change, or would result in a substantive change, are considered outside the scope of this rulemaking and have not been incorporated into this Final Rule. C. Removal of Appendices to 31 CFR Part 103 In the Chapter X NPRM, FinCEN did not publish the Appendices in 31 CFR Part 103. In the preamble to the Chapter X NPRM, FinCEN proposed to publish those Appendices that would be transferred to Chapter X in a subsequent notice of proposed rulemaking. After a further review of the Appendices, FinCEN determined that it was not necessary to issue a second notice of proposed rulemaking for the Appendices located in 31 CFR Part 103. This is because, as described in more detail below, FinCEN has determined that none of the Appendices will need to be included in Chapter X; instead, the material contained in the Appendices that is still required by the regulations will be made available on FinCEN's Web site. The following is a description of the disposition of each 31 CFR Part 103 Appendix: Appendix A to 31 CFR Part 103 As part of the Administrative Ruling Final Rule, certain administrative rulings contained in Appendix A to 31 CFR Part 103 (proposed as Appendix D to Chapter X) have been posted on FinCEN's Web site and others were formally rescinded. 5 As stated in the preamble to the Administrative Ruling Final Rule, some of the administrative rulings included in Appendix A to 31 CFR Part 103 remain FinCEN's interpretation of the applicable rules and maintain their precedential value; therefore, those rulings have been posted to the FinCEN Web site. Because FinCEN has chosen to post administrative rulings on its public Web site, FinCEN will not be publishing the proposed Appendix D to Chapter X in this Final Rule. In the Administrative Ruling Final Rule, FinCEN did not indicate whether Administrative Ruling 88-2 would be posted on the FinCEN public Web site or rescinded. Administrative Ruling 88-2 has been posted on the FinCEN public Web site. The disposition of this particular ruling was inadvertently omitted from the Administrative Ruling Final Rule. 5 See 74 FR 59096, 59097 (November 17, 2009). See also http://www.fincen.gov/statutes_regs/rulings/. Appendix B to 31 CFR Part 103 The requirement for a financial institution to provide FinCEN with the certification currently found in Appendix B to 31 CFR Part 103 (Certification for Purposes of Section 314(b) of the USA PATRIOT Act and 31 CFR 103.110) prior to sharing information under 31 CFR 103.110 (new 31 CFR 1010.540) was replaced in September 2002 with a requirement to provide notice to FinCEN prior to such information sharing. 6 Although the certification requirement was replaced with a notice requirement, the Certification contained at Appendix B to 31 CFR Part 103 was not removed from the CFR. FinCEN's removal of the Certification in this Final Rule is a technical correction, rather than a substantive change. The Certification contained at Appendix B to 31 CFR Part 103 will not be transferred to Chapter X and the Certification will not be made available on FinCEN's public Web site. As indicated above, financial institutions providing notice to FinCEN prior to sharing information under new 31 CFR 1010.540 shall continue to do so using the notice that is currently provided on FinCEN's public Web site. 7 6 See 67 FR 60579, 60580 (September 26, 2002) (Final Rule for Special Information Sharing Procedures to Deter Money Laundering and Terrorist Activity). 7 See http://www.fincen.gov/statutes_regs/patriot/section314b.html. Appendix C to 31 CFR Part 103 For similar reasons, FinCEN is removing Appendix C to 31 CFR Part 103 (proposed Appendix E to Chapter X). The interpretative guidance contained within Appendix C to 31 CFR Part 103 are posted on FinCEN's public Web site and will not be published in the CFR. 8 8 See http://www.fincen.gov/statutes_regs/guidance/2000_2004.html. Appendix A to Subpart H of 31 CFR Part 103 Appendix A to Subpart H of 31 CFR Part 103 contains the Notice for Purposes of Subsection 314(b) of the USA Patriot Act and 31 CFR 103.110. This Notice is currently available on the FinCEN public Web site and will not be published in the Code of Federal Regulations as part of Chapter X. Financial institutions that are required to provide notice to FinCEN for purposes of the new 31 CFR 1010.540 can access the notice via the FinCEN Web site. This notice will be made available by mail to any financial institution that specifically requests a paper copy of the notice. Appendix A and Appendix B to Subpart I of 31 CFR Part 103 FinCEN is also removing Appendix A to Subpart I of 31 CFR Part 103 and Appendix B to Subpart I of 31 CFR Part 103. 9 The forms contained in Appendix A to Subpart I of 31 CFR Part 103 and Appendix B to Subpart I of 31 CFR Part 103 will be provided to the public via FinCEN's Web site in a manner that will be more easily accessible and usable than being printed in the CFR. 9 Appendix A to Subpart I of 31 CFR Part 103 (proposed as Appendix B to Chapter X) is the Certification Regarding Correspondent Accounts. Appendix B to Subpart I of 31 CFR Part 103 (proposed as Appendix C to Chapter X) is the Recertification Regarding Correspondent Accounts for Foreign Banks. These Appendices will not appear in Chapter X. D. Chapter X Distribution Table For convenience, FinCEN is providing a table summarizing the distribution of the 31 CFR Part 103 provisions to the final layout of Chapter X as follows: Distribution Table 31 CFR Part 103 Section 31 CFR Parts 1000-1099 (Chapter X) Section 103.11 1010.100. 103.12 1010.301. 103.15(a)-(g) 1024.320(a)-(g). 103.16(a) Deleted. 103.16(b)-(i) 1025.320(a)-(h). 103.17(a)-(h) 1026.320(a)-(h). 103.18(a)-(f) 1020.320(a)-(f). 103.19(a)-(h) 1023.320(a)-(h). 103.20(a)-(f) 1022.320(a)-(f). 103.21(a)-(g) 1021.320(a)-(g). 103.22(a) Deleted. 103.22(b)(1) 1010.311. 103.22(b)(2)(i)-(iii) 1021.311(a)-(c). 103.22(c)(1)&(2) 1010.313(a)&(b). 103.22(c)(3) 1021.313. 103.22(d)(1) Sentences 1 and 3 1020.315(a). 103.22(d)(1) Sentence 2 1010.315. 103.22(d)(2)-(9) 1020.315(b)-(i). 103.23(a)-(d) 1010.340(a)-(d). 103.24 1010.350. 103.25(a)-(e) 1010.360(a)-(e). 103.26(a)-(d) 1010.370(a)-(d). 103.27(a)(1) 1010.306(a)(1). 103.27(a)(2) Deleted. 103.27(a)(3)&(4) 1010.306(a)(2)&(3). 103.27(b)-(e) 1010.306(b)-(e). 103.28 1010.312. 103.29(a)-(c) 1010.415(a)-(c). 103.30(a)-(c) 1010.330(a)-(c). 103.30(d)(1)(i)-(iv) 1021.330(a)-(d). 103.30(d)(2) 1010.330(d)(2). 103.30(d)(3) 1010.330(d)(1). 103.30(e) 1010.330(e). 103.31 1010.401. 103.32 1010.420. 103.33(a)-(d) 1010.410(a)-(d). 103.33(e) 1020.410(a). 103.33(f)&(g) 1010.410(e)&(f). 103.34(a)&(b) 1020.410(b)&(c). 103.35(a)&(b) 1023.410(a)&(b). 103.36(a)-(c) 1021.410(a)-(c). 103.37(a)-(c) 1022.410(a)-(c). 103.38(a)-(d) 1010.430(a)-(d). 103.39 1010.440. 103.41(a)-(f) 1022.380(a)-(f). 103.51 1010.980. 103.52(a)&(b) 1010.940(a)&(b). 103.53(a)-(f) 1010.950(a)-(f). 103.54 1010.960. 103.55(a)-(c) 1010.970(a)-(c). 103.56(a)-(g) 1010.810(a)-(g). 103.57(a)-(h) 1010.820(a)-(h). 103.58 1010.830. 103.59(a)-(d) 1010.840(a)-(d). 103.60(a)-(c) 1010.850(a)-(c). 103.61 1010.920. 103.62(a)-(c) 1010.930(a)-(c). 103.63(a)-(c) 1010.314(a)-(c). 103.64(a) 1021.210(b). 103.64(b)(1) 1021.100(a). 103.64(b)(2) 1021.100(b). 103.64(b)(3) 1021.100(c). 103.64(b)(4) 1021.100(d). 103.64(b)(5) 1021.100(e). 103.71 1010.911. 103.72(a)-(c) 1010.912(a)-(c). 103.73(a)&(b) 1010.913(a)&(b). 103.74(a)-(c) 1010.914(a)-(c). 103.75(a)-(c) 1010.915(a)-(c). 103.76 1010.916. 103.77 1010.917. 103.80 1010.710. 103.81(a)-(e) 1010.711(a)-(e). 103.82 1010.712. 103.83(a)&(b) 1010.713(a)&(b). 103.84 1010.714. 103.85 1010.715. 103.86(a)-(d) 1010.716(a)-(d). 103.87(a)&(b) 1010.717(a)&(b). 103.90(a) 1010.505(b). 103.90(b) 1010.505(c). 103.90(c) 1010.505(a). 103.90(d) 1010.505(d). 103.100(a)(1) Deleted. 103.100(a)(2) 1010.520(a)(1). 103.100(a)(3) Deleted. 103.100(a)(4) 1010.520(a)(2). 103.100(b) 1010.520(b). 103.110(a)(1) Deleted. 103.110(a)(2)&(3) 1010.540(a)(1)&(2). 103.110(b)-(d) 1010.540(b)-(d). 103.120(a)(1) 1020.100(d)(1). 1023.100(e)(1). 103.120(a)(2) 1010.100(r). 103.120(a)(3) 1010.100(tt). 103.120(a)(4) Deleted. 103.120(b) 1020.210. 103.120(c)(1)&(2) 1023.210(a)&(b). 1026.210(b)(1)&(2). 103.120(d) 1021.210(a). 103.121(a)(1) 1020.100(a). 103.121(a)(2) 1020.100(b). 103.121(a)(3) 1020.100(c). 103.121(a)(4) Deleted. 103.121(a)(5) 1020.100(d)(2). 103.121(a)(6) 1010.100(yy). 103.121(a)(7) 1010.100(iii). 103.121(a)(8) 1010.100(iii). 103.121(b)-(d) 1020.220(a)-(c). 103.122(a)(1) 1023.100(a). 103.122(a)(2) 1023.100(b). 103.122(a)(3) 1023.100(c). 103.122(a)(4) 1023.100(d). 103.122(a)(5) Deleted. 103.122(a)(6) 1023.100(e). 103.122(a)(7) Deleted. 103.122(a)(8) Deleted. 103.122(a)(9) Deleted. 103.122(b)-(d) 1023.220(a)-(c). 103.123(a)(1) 1026.100(a). 103.123(a)(2) Deleted. 103.123(a)(3) 1026.100(b). 103.123(a)(4) 1026.100(c). 103.123(a)(5) 1026.100(d). 103.123(a)(6) Deleted. 103.123(a)(7) 1026.100(e). 103.123(a)(8) 1026.100(f). 103.123(a)(9) 1026.100(g). 103.123(a)(10) 1026.100(h). 103.123(a)(11) Deleted. 103.123(a)(12) Deleted. 103.123(a)(13) Deleted. 103.123(b)-(d) 1026.220(a)-(c). 103.125(a)-(e) 1022.210(a)-(e). 103.130(a) Deleted. 103.130(b)&(c) 1024.210(a)&(b). 103.131(a)(1) 1024.100(a). 103.131(a)(2) 1024.100(c). 103.131(a)(3) 1010.100(r). 103.131(a)(4) 1024.100(d). 103.131(a)(5) 1010.100(gg). 103.131(a)(6) 1010.100(iii). 103.131(a)(7) 1010.100(yy). 103.131(a)(8) 1010.100(iii). 103.131(b)-(d) 1024.220(a)-(c). 103.135(a)(1) 1028.100(e). 103.135(a)(2) 1028.100(d). 103.135(a)(3) 1028.100(a). 103.135(a)(4) 1028.100(f). 103.135(a)(5) 1028.100(b). 103.135(a)(6) 1028.100(c). 103.135(b)&(c) 1028.210(a)&(b). 103.137(a)(1) 1025.100(a). 103.137(a)(2) Deleted. 103.137(a)(3) Deleted. 103.137(a)(4) 1025.100(b). 103.137(a)(5) 1025.100(c). 103.137(a)(6) 1025.100(d). 103.137(a)(7) 1025.100(e). 103.137(a)(8) 1025.100(f). 103.137(a)(9) 1025.100(g). 103.137(a)(10) 1025.100(h). 103.137(a)(11) Deleted. 103.137(a)(12) Deleted. 103.137(b)-(e) 1025.210(a)-(d). 103.140(a)(1) 1027.100(a). 103.140(a)(2) 1027.100(b). 103.140(a)(3) 1027.100(c). 103.140(a)(4) 1027.100(d). 103.140(a)(5) 1027.100(e). 103.140(a)(6) Deleted. 103.140(a)(7) 1027.100(f). 103.140(b)-(d) 1027.210(a)-(c). 103.170(a)-(d) 1010.205(a)-(d). 103.175(a) 1010.100(c). 103.175(b) 1010.605(a). 103.175(c) 1010.605(b). 103.175(d) 1010.605(c). 103.175(e) 1010.605(d). 103.175(f) 1010.605(e). 103.175(g) Deleted. 103.175(h) 1010.605(f). 103.175(i) 1010.605(g). 103.175(j) 1010.605(h). 103.175(k) 1010.605(i). 103.175(l) 1010.605(j). 103.175(m) 1010.605(k). 103.175(n) 1010.605(l). 103.175(o) 1010.605(m). 103.175(p) 1010.605(n). 103.175(q) 1010.605(o). 103.175(r) 1010.605(p). 103.175(s) Deleted. 103.175(t) Deleted. 103.176(a)-(g) 1010.610(a)-(g). 103.177(a)-(f) 1010.630(a)-(f). 103.178(a)-(e) 1010.620(a)-(e). 103.185(a)-(f) 1010.670(a)-(f). 103.186(a)(1) 1010.651(a)(2). 103.186(a)(2) 1010.651(a)(3). 103.186(a)(3) 1010.651(a)(1). 103.186(b) 1010.651(b). 103.187(a)(1) 1010.652(a)(2). 103.187(a)(2) 1010.652(a)(3). 103.187(a)(3) 1010.652(a)(4). 103.187(a)(4) 1010.652(a)(1). 103.187(b) 1010.652(b). 103.188(a)(1) 1010.653(a)(1). 103.188(a)(2) 1010.653(a)(2). 103.188(a)(3) 1010.653(a)(3). 103.188(a)(4) 1010.653(a)(4). 103.188(b) 1010.653(b). 103.192(a)(1) 1010.654(a)(1). 103.192(a)(2) 1010.654(a)(2). 103.192(a)(3) 1010.654(a)(3). 103.192(a)(4) 1010.654(a)(4). 103.192(b) 1010.654(b). 103.193(a)(1) 1010.655(a)(1). 103.193(a)(2) 1010.655(a)(2). 103.193(a)(3) 1010.655(a)(3). 103.193(a)(4) 1010.655(a)(4). 103.193(b) 1010.655(b). Appendix A to Subpart H Deleted. Notice is available on FinCEN's public Web site. Appendix A to Subpart I Deleted. Certification will be available on the FinCEN public Web site. Appendix B to Subpart I Deleted. Re-certification will be available on the FinCEN public Web site. Appendix A to Part 103 Deleted. Administrative Rulings with precedential value have been posted on the FinCEN public Web site. Appendix B to Part 103 Deleted. Certification will no longer be available. Appendix C to Part 103 Deleted. Interpretive guidance will be posted on the FinCEN public Web site. IV. Regulatory Matters A. Executive Order 12866 It has been determined that this rulemaking is not a significant regulatory action for purposes of Executive Order 12866. Accordingly, a regulatory impact analysis is not required. B. Unfunded Mandates Reform Act of 1995 Section 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), Public Law 104-4 (March 22, 1995), requires that an agency prepare a budgetary impact statement before promulgating a rule that may result in expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 202 of the Unfunded Mandates Act also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. FinCEN has determined that it is not required to prepare a written statement under Section 202 and has concluded that on balance the rule provides the most cost-effective and least burdensome alternative to achieve the objectives of the rule. C. Regulatory Flexibility Act Pursuant to the Regulatory Flexibility Act (RFA) (5 U.S.C. 602 et seq. ), FinCEN certifies that this final regulation likely will not have a significant economic impact on a substantial number of small entities. The regulatory changes in this final rule merely restructure and re-codify existing regulations and do not alter current regulatory obligations. FinCEN believes the costs that may arise as a result of restructuring these regulations will be confined to training, publication and computer programming. The new regulatory structure will require financial institution compliance personnel to be retrained to assure familiarity with the new numbering format but does not require changes to program, recordkeeping, or reporting requirements. FinCEN has attempted to mitigate any substantial costs of retraining by providing a Distribution Table. Publication costs incurred to reproduce informational materials supplied by financial institutions to customers and the public should be minimized by the time interval afforded between the proposed rule, analysis and publication of this final rule. FinCEN's analysis of the small entities that are subject to this regulation indicates that the vast majority of such entities file paper reports with FinCEN. These entities should incur no additional filing costs because they will continue to obtain the most current copy of the form available on the FinCEN Web site to file a report. For financial institutions that file electronically using computer programs, the citation to Chapter X should not have an effect on completion of the required fields contained in FinCEN forms. As an example, FinCEN's Form 104, the Currency Transaction Report, will require the same completion of each field in the same order. While the underlying regulatory citations may be changing, the completion of FinCEN forms will not. D. Paperwork Reduction Act This regulation contains no new information collection requirements subject to review and approval by the Office of Management and Budget under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d) et seq. ). The information collection requirements for the Bank Secrecy Act, currently codified at 31 CFR Part 103, were previously approved by the Office of Management and Budget under OMB Control numbers 1506-0001 through 1506-0046. Under the Paperwork Reduction Act, an agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a valid OMB control number. List of Subjects in 31 CFR Part 103 and 31 CFR Parts 1010 and 1020 Through 1028 Administrative practice and procedure, Banks, banking, Brokers, Currency, Foreign banking, Foreign currencies, Gambling, Investigations, Penalties, Reporting and recordkeeping requirements, Securities, Terrorism. Department of the Treasury 31 CFR Chapter I Authority and Issuance For the reasons set forth above, under the authority of 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314, 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307, Part 103 of Title 31 of the Code of Federal Regulations is removed. Department of the Treasury Financial Crimes Enforcement Network 31 CFR Chapter X Authority and Issuance For the reasons set forth above, Chapter X, consisting of parts 1000 through 1099, is added to Title 31 to read as follows: CHAPTER X—FINANCIAL CRIMES ENFORCEMENT NETWORK, DEPARTMENT OF THE TREASURY PARTS 1000-1009 [RESERVED] PART 1010—GENERAL PROVISIONS Subpart A—General Definitions Sec. 1010.100 General definitions. Subpart B—Programs 1010.200 General. 1010.205 Exempted anti-money laundering programs for certain financial institutions. 1010.210 Anti-money laundering programs. 1010.220 Customer identification program requirements. Subpart C—Reports Required To Be Made 1010.300 General. 1010.301 Determination by the Secretary. 1010.305 [Reserved] 1010.306 Filing of reports. 1010.310 Reports of transactions in currency. 1010.311 Filing obligations for reports of transactions in currency. 1010.312 Identification required. 1010.313 Aggregation. 1010.314 Structured transactions. 1010.315 Exemptions for non-bank financial institutions. 1010.320 Reports of suspicious transactions. 1010.330 Reports relating to currency in excess of $10,000 received in a trade or business. 1010.340 Reports of transportation of currency or monetary instruments. 1010.350 Reports of foreign financial accounts. 1010.360 Reports of transactions with foreign financial agencies. 1010.370 Reports of certain domestic coin and currency transactions. Subpart D—Records Required To Be Maintained 1010.400 General. 1010.401 Determination by the Secretary. 1010.405 [Reserved] 1010.410 Records to be made and retained by financial institutions. 1010.415 Purchases of bank checks and drafts, cashier's checks, money orders and traveler's checks. 1010.420 Records to be made and retained by persons having financial interests in foreign financial accounts. 1010.430 Nature of records and retention period. 1010.440 Person outside the United States. Subpart E—Special Information Sharing Procedures To Deter Money Laundering and Terrorist Activity 1010.500 General. 1010.505 Definitions. 1010.520 Information sharing between government agencies and financial institutions. 1010.530 [Reserved] 1010.540 Voluntary information sharing among financial institutions. Subpart F—Special Standards of Diligence; Prohibitions; and Special Measures 1010.600 General. Special Due Diligence for Correspondent Accounts and Private Banking Accounts 1010.605 Definitions. 1010.610 Due diligence programs for correspondent accounts for foreign financial institutions. 1010.620 Due diligence programs for private banking accounts. 1010.630 Prohibition on correspondent accounts for foreign shell banks; records concerning owners of foreign banks and agents for service of legal process. 1010.640 [Reserved] Special Measures Under Section 311 of the USA Patriot Act and Law Enforcement Access to Foreign Bank Records 1010.651 Special measures against Burma. 1010.652 Special measures against Myanmar Mayflower Bank and Asia Wealth Bank. 1010.653 Special measures against Commercial Bank of Syria. 1010.654 Special measures against VEF Bank. 1010.655 Special measures against Banco Delta Asia. 1010.670 Summons or subpoena of foreign bank records; Termination of correspondent relationship. Subpart G—Administrative Rulings 1010.710 Scope. 1010.711 Submitting requests. 1010.712 Nonconforming requests. 1010.713 Oral communications. 1010.714 Withdrawing requests. 1010.715 Issuing rulings. 1010.716 Modifying or rescinding rulings. 1010.717 Disclosing information. Subpart H—Enforcement; Penalties; and Forfeiture 1010.810 Enforcement. 1010.820 Civil penalty. 1010.830 Forfeiture of currency or monetary instruments. 1010.840 Criminal penalty. 1010.850 Enforcement authority with respect to transportation of currency or monetary instruments. Subpart I—Summons 1010.911 General. 1010.912 Persons who may issue summons. 1010.913 Contents of summons. 1010.914 Service of summons. 1010.915 Examination of witnesses and records. 1010.916 Enforcement of summons. 1010.917 Payment of expenses. Subpart J—Miscellaneous 1010.920 Access to records. 1010.930 Rewards for informants. 1010.940 Photographic or other reproductions of Government obligations. 1010.950 Availability of information. 1010.960 Disclosure. 1010.970 Exceptions, exemptions, and reports. 1010.980 Dollars as including foreign currency. Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314, 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307. Subpart A—General Definitions § 1010.100 General definitions. When used in this chapter and in forms prescribed under this chapter, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meanings ascribed in this subpart. Terms applicable to a particular type of financial institution or specific part or subpart of this chapter are located in that part or subpart. Terms may have different meanings in different parts or subparts. (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 § 1010.340 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 § 1010.340, on one or more days. (c) Attorney General. The Attorney General of the United States. (d) 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). (e) Bank Secrecy Act. The Currency and Foreign Transactions Reporting Act, its amendments, and the other statutes relating to the subject matter of that Act, have come to be referred to as the Bank Secrecy Act. These statutes are codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, 18 U.S.C. 1956, 18 U.S.C. 1957, 18 U.S.C. 1960, and 31 U.S.C. 5311-5314 and 5316-5332 and notes thereto. (f) Beneficiary. The person to be paid by the beneficiary's bank. (g) 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. (h) 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, except persons who register pursuant to section 15(b)(11) of the Securities Exchange Act of 1934. (i) Business day. As used in this chapter with respect to banks, business day means that day, as normally communicated to its depository customers, on which a bank routinely posts a particular transaction to its customer's account. (j) Commodity. Any good, article, service, right, or interest described in section 1a(4) of the Commodity Exchange Act (“CEA”), 7 U.S.C. 1a(4). (k) 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 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. (l) Contract of sale. Any sale, agreement of sale, or agreement to sell as described in section 1a(7) of the CEA, 7 U.S.C. 1a(7). (m) 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. (n) Deposit account. Deposit accounts include transaction accounts described in paragraph (ccc) of this section, savings accounts, and other time deposits. (o) 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. (p) 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. (q) 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. (r) Federal functional regulator. (1) The Board of Governors of the Federal Reserve System; (2) The Office of the Comptroller of the Currency; (3) The Board of Directors of the Federal Deposit Insurance Corporation; (4) The Office of Thrift Supervision; (5) The National Credit Union Administration; (6) The Securities and Exchange Commission; or (7) The Commodity Futures Trading Commission. (s) FinCEN. FinCEN means the Financial Crimes Enforcement Network, a bureau of the Department of the Treasury. (t) 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 (ff) 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 (t)(5), “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 chapter 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 chapter prior to the time in its current business year that its gross annual gaming revenue exceeds $1,000,000. (iii) Any reference in this chapter, other than in this paragraph (t)(5) and in paragraph (t)(6) 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 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 chapter shall include a reference to “card club” to the extent provided in paragraph (t)(5)(iii) of this section. (ii) For purposes of this paragraph (t)(6), “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 chapter 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 chapter 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; (8) A futures commission merchant; (9) An introducing broker in commodities; or (10) A mutual fund. (u) 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. (v) 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. (w) 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. (x) Futures commission merchant. Any person registered or required to be registered as a futures commission merchant with the Commodity Futures Trading Commission (“CFTC”) under the CEA, except persons who register pursuant to section 4f(a)(2) of the CEA, 7 U.S.C. 6f(a)(2). (y) 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. (z) Intermediary bank. A receiving bank other than the originator's bank or the beneficiary's bank. (aa) 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. (bb) Introducing broker-commodities. Any person registered or required to be registered as an introducing broker with the CFTC under the CEA, except persons who register pursuant to section 4f(a)(2) of the CEA, 7 U.S.C. 6f(a)(2). (cc) 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. (dd) 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 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 § 1010.340), 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. (ee) [Reserved] (ff) 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 (ff)(1) through (ff)(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 circumstance: Limitation. Whether a person “engages as a business” in the activities described in paragraph (ff)(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 the meaning of paragraph (ff)(5)(i) of this section. (6) U.S. Postal Service. The United States Postal Service, except with respect to the sale of postage or philatelic products. (gg) Mutual fund. An “investment company” (as the term is defined in section 3 of the Investment Company Act (15 U.S.C. 80a-3)) that is an “open-end company” (as that term is defined in section 5 of the Investment Company Act (15 U.S.C. 80a-5)) that is registered or is required to register with the Commission under section 8 of the Investment Company Act (15 U.S.C. 80a-8). (hh) Option on a commodity. Any agreement, contract, or transaction described in section 1a(26) of the CEA, 7 U.S.C. 1a(26). (ii) Originator. The sender of the first payment order in a funds transfer. (jj) 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. (kk) 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. (ll) 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. (mm) 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. (nn) Receiving bank. The bank or foreign bank to which the sender's instruction is addressed. (oo) 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. (pp) 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. (qq) 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. (rr) Secretary. The Secretary of the Treasury or any person duly authorized by the Secretary to perform the function mentioned. (ss) 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). (tt) Self-regulatory organization: (1) 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 (2) 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). (uu) Sender. The person giving the instruction to the receiving financial institution. (vv) State. The States of the United States and, wherever necessary to carry out the provisions of this chapter, the District of Columbia. (ww) 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. (xx) Structure (structuring). For purposes of § 1010.314, 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 §§ 1010.311, 1010.313, 1020.315, 1021.311 and 1021.313 of this chapter. “In any manner” includes, but is not limited to, the breaking 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 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. (yy) Taxpayer Identification Number. Taxpayer Identification Number (“TIN”) is defined by section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 6109) and the Internal Revenue Service regulations implementing that section ( e.g., social security number or employer identification number). (zz) 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. (aaa) [Reserved] (bbb) Transaction. (1) Except as provided in paragraph (bbb)(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, security, contract of sale of a commodity for future delivery, option on any contract of sale of a commodity for future delivery, option on a commodity, purchase or redemption of any money order, payment or order for any money remittance or transfer, purchase or redemption of casino chips or tokens, or other gaming instruments or any other payment, transfer, or delivery by, through, or to a financial institution, by whatever means effected. (2) For purposes of §§ 1010.311, 1010.313, 1020.315, 1021.311, 1021.313, and other provisions of this chapter relating solely to the report required by those sections, 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. (ccc) 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. (ddd) 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. (eee) 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. (fff) 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. (ggg) 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. (hhh) 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. (iii) U.S. person. (1) A United States citizen; or (2) A person other than an individual (such as a corporation, partnership or trust), that is established or organized under the laws of a State or the United States. Non-U.S. person means a person that is not a U.S. person. (jjj) U.S. Postal Service. The United States Postal Service, except with respect to the sale of postage or philatelic products. Subpart B—Programs § 1010.200 General. Each financial institution (as defined in 31 U.S.C. 5312(a)(2) or (c)(1)) should refer to Subpart B of its Chapter X Part for any additional program requirements. Unless otherwise indicated, the program requirements contained in this Subpart B apply to all financial institutions (as defined in 31 U.S.C. 5312(a)(2) or (c)(1)). § 1010.205 Exempted anti-money laundering programs for certain financial institutions. (a) Exempt financial institutions. Subject to the provisions of paragraphs (c) and (d) 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) [Reserved] (b) Temporary exemption for certain financial institutions. (1) Subject to the provisions of paragraphs (c) and (d) 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: (i) Pawnbroker; (ii) Loan or finance company; (iii) Travel agency; (iv) Telegraph company; (v) Seller of vehicles, including automobiles, airplanes, and boats; (vi) Person involved in real estate closings and settlements; (vii) Private banker; (viii) Commodity pool operator; (ix) Commodity trading advisor; or (x) Investment company. (2) Subject to the provisions of paragraphs (c) and (d) of this section, a bank (as defined in § 1010.100(d)) that is not subject to regulation by a Federal functional regulator (as defined in § 1010.100(r)) is exempt from the requirement in 31 U.S.C. 5318(h)(1) concerning the establishment of anti-money laundering programs. (3) Subject to the provisions of paragraphs (c) and (d) of this section, a person described in § 1010.100(t)(7) is exempt from the requirement in 31 U.S.C. 5318(h)(1) concerning the establishment of anti-money laundering programs. (c) Limitation on exemption. The exemptions described in paragraph (b) of this section shall not apply to any financial institution that is otherwise required to establish an anti-money laundering program by this chapter. (d) 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 any other applicable requirement of law or regulation, including title 31 of the U.S.C. and this chapter. § 1010.210 Anti-money laundering programs. Each financial institution (as defined in 31 U.S.C. 5312(a)(2) or (c)(1)) should refer to Subpart B of its Chapter X Part for any additional anti-money laundering program requirements. § 1010.220 Customer identification program requirements. Each financial institution (as defined in 31 U.S.C. 5312(a)(2) or (c)(1)) should refer to Subpart B of its Chapter X Part for any additional customer identification program requirements. Subpart C—Reports Required To Be Made § 1010.300 General. Each financial institution (as defined in 31 U.S.C. 5312(a)(2) or (c)(1)) should refer to its Chapter X Part for any additional reporting requirements. Unless otherwise indicated, the reporting requirements contained in this Subpart C apply to all financial institutions. § 1010.301 Determination by the Secretary. The Secretary hereby determines that the reports required by this chapter have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings. § 1010.305 [Reserved] § 1010.306 Filing of reports. (a)(1) A report required by § 1010.311 or § 1021.311, shall be filed by the financial institution within 15 days following the day on which the reportable transaction occurred. (2) A copy of each report filed pursuant to §§ 1010.311, 1010.313, 1020.315, 1021.311 and 1021.313, shall be retained by the financial institution for a period of five years from the date of the report. (3) All reports required to be filed by §§ 1010.311, 1010.313, 1020.315, 1021.311 and 1021.313, shall be filed with the Commissioner of Internal Revenue, unless otherwise specified. (b)(1) A report required by § 1010.340(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 and Border Protection. (2) A report required by § 1010.340(b) shall be filed within 15 days after receipt of the currency or other monetary instruments. (3) All reports required by § 1010.340 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 and Border Protection. Reports required by § 1010.340(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 § 1010.340(b) may also be filed by mail. Reports filed by mail shall be addressed to the Commissioner of Customs and Border Protection, Attention: Currency Transportation Reports, Washington, DC 20229. (c) Reports required to be filed by § 1010.350 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. (d) Reports required by § 1010.311, § 1010.313, § 1010.340, § 1010.350, § 1020.315, § 1021.311 or § 1021.313 of this chapter 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 § 1010.311, § 1010.313, § 1010.350, § 1020.315, § 1021.311 or § 1021.313 of this chapter may be obtained from the Internal Revenue Service. Forms to be used in making the reports required by § 1010.340 may be obtained from the U.S. Customs and Border Protection. § 1010.310 Reports of transactions in currency. Sections 1010.310 through 1010.314 set forth the rules for the reporting by financial institutions of transactions in currency. Unless otherwise indicated, the transactions in currency reporting requirements in §§ 1010.310 through 1010.314 apply to all financial institutions. Each financial institution should refer to Subpart C of its Chapter X Part for any additional transactions in currency reporting requirements. § 1010.311 Filing obligations for reports of transactions in currency. 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 U.S. 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. § 1010.312 Identification required. Before concluding any transaction with respect to which a report is required under § 1010.311, § 1010.313, § 1020.315, § 1021.311 or § 1021.313 of this chapter, 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 driver's 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. § 1010.313 Aggregation. (a) 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 the transactions in currency reporting requirements in this chapter. (b) Multiple transactions. In the case of financial institutions other than casinos, for purposes of the transactions in currency reporting requirements in this chapter, 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 U.S. 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. § 1010.314 Structured transactions. No person shall for the purpose of evading the transactions in currency reporting requirements of this chapter with respect to such transaction: (a) Cause or attempt to cause a domestic financial institution to fail to file a report required under the transactions in currency reporting requirements of this chapter; (b) Cause or attempt to cause a domestic financial institution to file a report required under the transactions in currency reporting requirements of this chapter that contains a material omission or misstatement of fact; or (c) Structure (as that term is defined in § 1010.100(xx)) or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions. § 1010.315 Exemptions for non-bank financial institutions. A non-bank financial institution is not required to file a report otherwise required by § 1010.311 with respect to a transaction in currency between the institution and a commercial bank. § 1010.320 Reports of suspicious transactions. Each financial institution (as defined in 31 U.S.C. 5312(a)(2) or (c)(1)) should refer to subpart C of its financial institution part in this Chapter for any additional suspicious transaction reporting requirements. § 1010.330 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 §§ 1010.311, 1010.313, 1020.315, 1021.311 or 1021.313 of this chapter. (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 FinCEN. 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 TIN of the principal to the recipient in the second 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, 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. 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. (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 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)(1)(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)(1)(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. (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. (e) Time, manner, and form of reporting —(1) In general. The reports required by paragraph (a) of this section must 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. § 1010.340 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 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. § 1010.350 Reports of foreign financial accounts. 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. § 1010.360 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 §§ 1010.410 and 1020.410. (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 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 chapter. (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 the requirements of this chapter, or any other provision of state or Federal law, or otherwise maintained in the regular course of business. § 1010.370 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 chapter and to prevent persons from evading the reporting/recordkeeping requirements of this chapter, 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 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 § 1020.315 of this chapter 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. Subpart D—Records Required To Be Maintained § 1010.400 General. Each financial institution (as defined in 31 U.S.C. 5312(a)(2) or (c)(1)) should refer to its Chapter X Part for any additional recordkeeping requirements. Unless otherwise indicated, the recordkeeping requirements contained in this Subpart D apply to all financial institutions. § 1010.401 Determination by the Secretary. The Secretary hereby determines that the records required to be kept by this chapter have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings. § 1010.405 [Reserved] § 1010.410 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. (d) A record of such information for such period of time as the Secretary may require in an order issued under § 1010.370(a), not to exceed five years. (e) Nonbank financial institutions. Each agent, agency, branch, or office located within the United States of a financial institution other than a bank is subject to the requirements of this paragraph (e) 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: 1 1 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 (e)(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 of 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 of 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 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 of 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 (e)(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 (e)(1)(i) and (e)(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 (e)(1)(iii) and (e)(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 (e)(2) and (e)(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 res [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2010-25914. Public record. Not legal advice.