Currency Transaction Reporting: Completing a CTR and Aggregation

FinCEN Ruling 2001-1

July, 26 2001

Dear [ ]:

This responds to your letter dated February 25, 2000, on behalf [ ] (the “Bank”), to the

Financial Crimes Enforcement Network (“FinCEN”). In that letter, you requested a ruling on the

application of the rules relating to the filing of a currency transaction report (“CTR”), as

authorized under the Bank Secrecy Act and its implementing regulations, to the facts outlined

below.

FACTS

Bank A and Bank B are subsidiaries of the same bank holding company. A customer

maintains an account at Bank A, but not at Bank B. The customer makes a cash deposit of

$12,000 at Bank B for credit to his account at Bank A. Pursuant to an agency agreement

between the banks, Bank B processes the cash deposit and sends the appropriate transaction

information to Bank A. Bank A credits the customer’s account in the amount of the cash

deposit. The two banks settle through an internal account procedure without any physical

transfer of cash between the banks.

QUESTIONS

Your letter correctly acknowledges that the cash deposit of $12,000 by Customer X must

be reported on a CTR. You then ask the following two questions:

1. Which bank is responsible for filing the CTR, the bank receiving the cash, the bank that

maintains the account and receives the cash deposit slip, or both banks?

2. If the bank that holds the customer’s account is responsible for filing the CTR, must the bank

also aggregate the customer’s transactions made through its agent bank even though the

transactions made through the agent are done manually and not through the bank holding the

account electronic system in conformity with § 103.22(c)(2) aggregation rules?

ceives the cash deposit slip, or both banks?

2. If the bank that holds the customer’s account is responsible for filing the CTR, must the bank

also aggregate the customer’s transactions made through its agent bank even though the

transactions made through the agent are done manually and not through the bank holding the

account electronic system in conformity with § 103.22(c)(2) aggregation rules?

[ ]

Page 2

ANALYSIS

A financial institution’s obligation to file a CTR is described in 31 CFR 103.22(b), which

provides that:

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 . . . .

For purposes of the CTR requirement, a “financial institution” includes a bank, as well as any

agent of a bank. 31 CFR 103.11(n).

According to the facts outlined above, the customer’s cash deposit occurs “by, through,

or to” Bank B, because Bank B is the financial institution that physically receives the cash.

Thus, Bank B has an obligation to file a CTR. The customer’s cash deposit also can be said to

occur “by, through, or to” Bank A, because the cash deposit is conducted at one of its agents.

Thus, both Bank A and Bank B are technically required to file a CTR;1 however, to avoid

unnecessary duplicative reporting, FinCEN would require that only one report actually be filed

(in the manner set forth in the following paragraph) with respect to the same transaction. Thus,

for example, Bank A would not need to file a CTR with respect to the customer’s $12,000 cash

deposit so long as it knows for a fact that Bank B filed a CTR with respect to that transaction,

and vice-versa.2

If Bank A files a CTR with respect to the customer’s $12,000 deposit, then Bank A

should fill out Part III of the CTR form with its own information

with respect to the same transaction. Thus,

for example, Bank A would not need to file a CTR with respect to the customer’s $12,000 cash

deposit so long as it knows for a fact that Bank B filed a CTR with respect to that transaction,

and vice-versa.2

If Bank A files a CTR with respect to the customer’s $12,000 deposit, then Bank A

should fill out Part III of the CTR form with its own information. In addition, the accounts

affected by the deposit should be listed below Box 35 (“Account Number(s) Affected (if any):”)

and the phrase “Affiliate Transaction(s)” should be written in below Box 36 (“Other (specify):”).

Conversely, if Bank B chooses to file a CTR with respect to the $12,000 deposit, then Bank B

should fill out Part III of the CTR form with its own information. Further, the accounts affected

by the deposit (even if those accounts are not held at Bank B) should be listed below Box 35 and

the phrase “Affiliate transaction(s)” should be written in below Box 36. Completing the CTR in

this fashion will serve to notify law enforcement that the reported transaction may not have been

physically conducted at the filing financial institution and/or that the account affected by the

transaction is not held at the filing institution.

With respect to aggregation, Bank A would need to aggregate multiple cash transactions

conducted at Bank B, acting as Bank A’s agent with respect to those transactions, to the extent

that Bank A “has knowledge that [the transactions] 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 …” 31 CFR

103.22(c)(2). Knowledge, in this context, means knowledge on the part of a partner, director,

1 The terms of Administrative Ruling 88-5 (August 2, 1988), 31 CFR Part 103 Appendix, are not inapposite to this

conclusion

of any person and result

in either cash in or cash out totaling more than $10,000 during any one business day …” 31 CFR

103.22(c)(2). Knowledge, in this context, means knowledge on the part of a partner, director,

1 The terms of Administrative Ruling 88-5 (August 2, 1988), 31 CFR Part 103 Appendix, are not inapposite to this

conclusion. In that ruling, Treasury held that a financial institution has an obligation to file a CTR to the extent that

it uses an armored car service as its agent to collect, transport and process a customer’s cash deposits. The ruling

did not discuss whether, under those circumstances, the agent itself also has an obligation to file a CTR.

2 A bank that relies on its affiliate to file a CTR should retain in its own files a copy of the filed CTR for

examination purposes.

[ ]

Page 3

officer or employee of Bank A or on the part of any existing computer or manual system at Bank

A that permits it to aggregate transactions. If Bank A does not have knowledge that multiple

cash transactions have been conducted by or on behalf of the same person on the same business

day at Bank B, then Bank A is not required to aggregate those transactions. It should be noted

that Bank B also would have an obligation to aggregate multiple cash transactions conducted

through it (although only one report must be filed with respect to the same transactions), to the

extent that Bank B has knowledge that the transactions are conducted by or on behalf of the same

person on the same business day.

We appreciate your willingness to comply with the requirements of the Bank Secrecy Act

to the fullest extent, and apologize for the delay in responding to your request. Should you have

any questions about this letter, please contact David K. Gilles at (202) 354-6400.

Sincerely,

Christine E. Carnavos

Executive Associate Director

Office of Compliance and Regulatory Enforcement