Compliance Blog

Written by Michael Coleman, Regulatory Compliance Counsel

Yesterday we blogged about the Financial Crimes Enforcement Network's (FinCEN) recently issued frequently asked questions (FAQs) regarding SARs, and FAQs regarding CTRs. Today we'd like to take a closer look at the CTR  FAQs. Specifically, a couple of the FAQs which address issues that we have received questions about concerning the filing of the new CTR forms.

The CTR FAQs are very detailed and provide valuable insight and examples into the process of filing the new CTR form. Many of the FAQs deal with the technical process of filing the CTR, but there are also many FAQs that concern the substance of the form and provide examples of how to fill out sections of the new form. Here are a couple CTR FAQs that you might find useful: 

"12. What is the timeframe for filing the FinCEN CTR? I have seen both 15 and 25 days referenced.

FinCEN regulations have consistently maintained a regulatory requirement that CTRs be filed within 15 days. The 25-day period was implemented, in connection with receipt of magnetic media files (ended December 2008), to account for physically transporting (shipping) the magnetic media to the processing center in Detroit, Michigan. FinCEN understands that this business practice had continued with respect to batch e-filing, particularly considering previous public guidance referencing the 25-day period.

In light of the comments received and acknowledging that some financial institutions may have needed to change their business processes to become compliant with the rules, FinCEN determined that it would temporarily maintain the 25-day compliance period referenced in its earlier specifications until March 31, 2013, for those filers that needed to update their systems in order to be in compliance with the established regulatory requirements. This temporary extension to the filing requirements was to allow sufficient time for filers to adjust submission schedules to meet established regulatory requirements.

As of April 1, 2013, all FinCEN CTRs must be filed within 15 calendar days of the reported transaction(s)."

 [...]

15. I am filing the FinCEN CTR on an entity; however, the selections in Item 2a-2c all reference a person. What selection would I choose when filing on an entity?

Under the BSA regulations, the definition of “person” found at 31 CFR 1010.100(mm) is “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 recognizable as legal personalities.” Since an entity cannot physically conduct a transaction, the only selection that would apply is 2c “Person on whose behalf transaction was conducted.” In addition, if filing on an entity, a filer must select the checkbox (Item 4b) for “If entity” in Part I.

If more than one Item 2 option applies to a person involved in the transaction(s), filers should complete only one Part I on that person with only one entry in Item 2 pursuant to the following construct:

When to select Option 2a: In addition to when only Option 2a applies, filers should select Option 2a “Person conducting transaction on own behalf” if 1) Options 2a, 2b, and 2c apply; 2) Options 2a and 2b apply; or 3) Options 2a and 2c apply.

When to select Option 2b: In addition to when only Option 2b applies, filers should select Option 2b “Person conducting transaction for another” if both Options 2b and 2c apply and Option 2a does not apply.

When to select Option 2c: Filers should select Option 2c “Person on whose behalf transaction was conducted” only on the person for whom the transaction is conducted. This person cannot have other roles within the transaction or the options would apply.

When to select Option 2d: In addition to when only Option 2d applies, filers should select “Courier Service (private)” if multiple options that include 2d “Courier service (private)” apply."

 As JiJi mentioned yesterday, these FAQ documents are must read materials if you are responsible for BSA compliance at your credit union.