Source: http://docplayer.net/19660065-Title-31-money-and-finance-treasury.html
Timestamp: 2018-10-18 04:16:16
Document Index: 657739082

Matched Legal Cases: ['art 1010', 'art 1010', 'art 1021', 'art 1010', 'art 1010', 'art 1010', 'art 1010', 'art 1010', 'art 1010', 'art 1010', 'art 1010']

TITLE Money and Finance: Treasury - PDF
TITLE Money and Finance: Treasury
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1 TITLE Money and Finance: Treasury Subtitle B- - Regulations Relating to Money and Finance Chapter X- - Financial Crimes Enforcement Network, Department of the Treasury PART RULES FOR CASINOS AND CARD CLUBS SUBPART A- - DEFINITIONS Definitions. Refer to of this chapter for general definitions not noted herein. To the extent there is a differing definition in of this chapter, the definition in this section is what applies to part Unless otherwise indicated, for purposes of this part: (a) Business year means the annual accounting period, such as a calendar or fiscal year, by which a casino maintains its books and records for purposes of subtitle A of title 26 of the United States Code. (b) Casino account number means any and all numbers by which a casino identifies a customer. (c) Customer includes every person which is involved in a transaction to which this chapter applies with a casino, whether or not that person participates, or intends to participate, in the gaming activities offered by that casino. (d) Gaming day means the normal business day of a casino. For a casino that offers 24 hour gaming, the term means that 24 hour period by which the casino keeps its books and records for business, accounting, and tax purposes. For purposes of the regulations contained in this chapter, each casino may have only one gaming day, common to all of its divisions. (e) Machine- readable means capable of being read by an automated data processing system. SUBPART B PROGRAMS General Casinos and card clubs are subject to the program requirements set forth and cross referenced in this subpart. Casinos and card clubs should also refer to subpart B of part 1010 of this chapter for program requirements contained in that subpart which apply to casinos and card clubs Anti- money laundering program requirements for casinos. (a) Requirements for casinos. A casino shall be deemed to satisfy the requirements of 31 U.S.C. 5318(h)(1) if it implements and maintains a compliance program described in paragraph (b) of this section. (b) Compliance programs. (1) Each casino shall develop and implement a written program reasonably designed to assure and monitor compliance with the requirements set forth in 31 U.S.C. chapter 53, subchapter II and the regulations contained in this chapter. (2) At a minimum, each compliance program shall provide for: (i) A system of internal controls to assure ongoing compliance; Page 1 of 73
2 (ii) Internal and/or external independent testing for compliance. The scope and frequency of the testing shall be commensurate with the money laundering and terrorist financing risks posed by the products and services provided by the casino; (iii) Training of casino personnel, including training in the identification of unusual or suspicious transactions, to the extent that the reporting of such transactions is required by this chapter, by other applicable law or regulation, or by the casino's own administrative and compliance policies; (iv) An individual or individuals to assure day- to- day compliance; (v) Procedures for using all available information to determine: (A) When required by this chapter, the name, address, social security number, and other information, and verification of the same, of a person; (B) The occurrence of any transactions or patterns of transactions required to be reported pursuant to ; (C) Whether any record as described in subpart D of part 1010 of this chapter or subpart D of this part 1021 must be made and retained; and (vi) For casinos that have automated data processing systems, the use of automated programs to aid in assuring compliance. SUBPART C- - REPORTS REQUIRED TO BE MADE BY CASINOS AND CARD CLUBS General. Casinos and card clubs are subject to the reporting requirements set forth and cross referenced in this subpart. Casinos and card clubs should also refer to subpart C of part 1010 of this chapter for reporting requirements contained in that subpart which apply to casinos and card clubs Reports of Transactions in Currency. The reports of transactions in currency requirements for casinos are located in subpart C of part 1010 of this chapter and this subpart Filing Obligations. Each casino shall file a report of each transaction in currency, involving either cash in or cash out, of more than $10,000. (a) Transactions in currency involving cash in include, but are not limited to: (1) Purchases of chips, tokens, and other gaming instruments; (2) Front money deposits; (3) Safekeeping deposits; (4) Payments on any form of credit, including markers and counter checks; (5) Bets of currency, including money plays; Page 2 of 73
3 (6) Currency received by a casino for transmittal of funds through wire transfer for a customer; (7) Purchases of a casino's check; (8) Exchanges of currency for currency, including foreign currency; and (9) Bills inserted into electronic gaming devices. (b) Transactions in currency involving cash out include, but are not limited to: (1) Redemptions of chips, tokens, tickets, and other gaming instruments; (2) Front money withdrawals; (3) Safekeeping withdrawals; (4) Advances on any form of credit, including markers and counter checks; (5) Payments on bets; (6) Payments by a casino to a customer based on receipt of funds through wire transfers; (7) Cashing of checks or other negotiable instruments; (8) Exchanges of currency for currency, including foreign currency; (9) Travel and complimentary expenses and gaming incentives; and (10) Payment for tournament, contests, and other promotions. (c) Other provisions of this chapter notwithstanding, casinos are exempted from the reporting obligations found in this section and for the following transactions in currency or currency transactions: (1) Transactions between a casino and a dealer in foreign exchange, or between a casino and a check casher, as those terms are defined in (ff) of this Chapter, so long as such transactions are conducted pursuant to a contractual or other arrangement with a casino covering the financial services in paragraphs (a)(8), (b)(7), and (b)(8) of this section; (2) Cash out transactions to the extent the currency is won in a money play and is the same currency the customer wagered in the money play, or cash in transactions to the extent the currency is the same currency the customer previously wagered in a money play on the same table game without leaving the table; (3) Bills inserted into electronic gaming devices in multiple transactions (unless a casino has knowledge pursuant to in which case this exemption would not apply); and (4) Jackpots from slot machines or video lottery terminals. [75 FR 65812, Oct. 26, 2010, as amended at 76 FR 43597, July 21, 2011] Identification required. Refer to of this chapter for identification requirements for reports of transaction in currency filed by casinos and card clubs. Page 3 of 73
4 Aggregation In the case of a casino, multiple currency transactions shall be treated as a single transaction if the casino 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 gaming day. For purposes of this section, a casino shall be deemed to have the knowledge described in the preceding sentence, if: Any sole proprietor, partner, officer, director, or employee of the casino, acting within the scope of his or her employment, has knowledge that such multiple currency transactions have occurred, including knowledge from examining the books, records, logs, information retained on magnetic disk, tape or other machine- readable media, or in any manual system, and similar documents and information, which the casino maintains pursuant to any law or regulation or within the ordinary course of its business, and which contain information that such multiple currency transactions have occurred Structured Transactions. Refer to of this chapter for rules regarding structured transactions for casinos Exemptions. Refer to of this chapter for exemptions from the obligation to file reports of transactions in currency for casinos Reports by casinos of suspicious transactions (a) General. (1) Every casino shall file with FinCEN, to the extent and in the manner required by this section, a report of any suspicious transaction relevant to a possible violation of law or regulation. A casino may also file with FinCEN, by using the form specified in paragraph (b)(1) of this section, or otherwise, a report of any suspicious transaction that it believes is relevant to the possible violation of any law or regulation but whose reporting is not required by this section. (2) A transaction requires reporting under the terms of this section if it is conducted or attempted by, at, or through a casino, and involves or aggregates at least $5,000 in funds or other assets, and the casino knows, suspects, or has reason to suspect that the transaction (or a pattern of transactions of which the transaction is a part): (i) Involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity (including, without limitation, the ownership, nature, source, location, or control of such funds or assets) as part of a plan to violate or evade any Federal law or regulation or to avoid any transaction reporting requirement under Federal law or regulation; (ii) Is designed, whether through structuring or other means, to evade any requirements of this chapter or of any other regulations promulgated under the Bank Secrecy Act; (iii) Has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the casino knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction; or (iv) Involves use of the casino to facilitate criminal activity. (b) Filing procedures (1) What to file. A suspicious transaction shall be reported by completing a Suspicious Activity Report by Casinos ( SARC ), and collecting and maintaining supporting documentation as required by paragraph (d) of this section. Page 4 of 73
5 (2) Where to file. The SARC shall be filed with FinCEN in a central location, to be determined by FinCEN, as indicated in the instructions to the SARC. (3) When to file. A SARC shall be filed no later than 30 calendar days after the date of the initial detection by the casino of facts that may constitute a basis for filing a SARC under this section. If no suspect is identified on the date of such initial detection, a casino may delay filing a SARC for an additional 30 calendar days to identify a suspect, but in no case shall reporting be delayed more than 60 calendar days after the date of such initial detection. In situations involving violations that require immediate attention, such as ongoing money laundering schemes, the casino shall immediately notify by telephone an appropriate law enforcement authority in addition to filing timely a SARC. Casinos wishing voluntarily to report suspicious transactions that may relate to terrorist activity may call FinCEN's Financial Institutions Hotline at in addition to filing timely a SARC if required by this section. (c) Exceptions. A casino is not required to file a SARC for a robbery or burglary committed or attempted that is reported to appropriate law enforcement authorities. (d) Retention of records. A casino shall maintain a copy of any SARC filed and the original or business record equivalent of any supporting documentation for a period of five years from the date of filing the SARC. Supporting documentation shall be identified as such and maintained by the casino, and shall be deemed to have been filed with the SARC. A casino shall make all supporting documentation available to FinCEN or any Federal, State, or local law enforcement agency, or any Federal regulatory authority that examines the casino for compliance with the Bank Secrecy Act, or any State regulatory authority administering a State law that requires the casino to comply with the Bank Secrecy Act or otherwise authorizes the State authority to ensure that the casino complies with the Bank Secrecy Act, or any tribal regulatory authority administering a tribal law that requires the casino to comply with the Bank Secrecy Act or otherwise authorizes the tribal regulatory authority to ensure that the casino complies with the Bank Secrecy Act, upon request. (e) Confidentiality of SARs. A SAR, and any information that would reveal the existence of a SAR, are confidential and shall not be disclosed except as authorized in this paragraph (e). For purposes of this paragraph (e) only, a SAR shall include any suspicious activity report filed with FinCEN pursuant to any regulation in this chapter. (1) Prohibition on disclosures by casinos (i) General rule. No casino, and no director, officer, employee, or agent of any casino, shall disclose a SAR or any information that would reveal the existence of a SAR. Any casino, and any director, officer, employee, or agent of any casino that is subpoenaed or otherwise requested to disclose a SAR or any information that would reveal the existence of a SAR, shall decline to produce the SAR or such information, citing this section and 31 U.S.C. 5318(g)(2)(A)(i), and shall notify FinCEN of any such request and the response thereto. (ii) Rules of Construction. Provided that no person involved in any reported suspicious transaction is notified that the transaction has been reported, this paragraph (e)(1) shall not be construed as prohibiting: (A) The disclosure by a casino, or any director, officer, employee, or agent of a casino, of: ( 1 ) A SAR, or any information that would reveal the existence of a SAR, to FinCEN or any Federal, State, or local law enforcement agency, or any Federal regulatory authority that examines the casino for compliance with the Bank Secrecy Act, or any State regulatory authority administering a State law that requires the casino to comply with the Bank Secrecy Act or otherwise authorizes the State authority to ensure that the casino complies with the Bank Secrecy Act, or any tribal regulatory authority administering a tribal law that requires the casino to comply with the Bank Secrecy Act or otherwise authorizes the tribal regulatory authority to ensure that casino complies with the Bank Secrecy Act; or ( 2 ) The underlying facts, transactions, and documents upon which a SAR is based, including but not limited to, disclosures to another financial institution, or any Page 5 of 73
6 director, officer, employee, or agent of a financial institution, for the preparation of a joint SAR. (B) The sharing by a casino, or any director, officer, employee, or agent of the casino, of a SAR, or any information that would reveal the existence of a SAR, within the casino's corporate organizational structure for purposes consistent with Title II of the Bank Secrecy Act as determined by regulation or in guidance. (2) Prohibition on disclosures by government authorities. A Federal, State, local, territorial, or Tribal government authority, or any director, officer, employee, or agent of any of the foregoing, shall not disclose a SAR, or any information that would reveal the existence of a SAR, except as necessary to fulfill official duties consistent with Title II of the Bank Secrecy Act (BSA). For purposes of this section, official duties shall not include the disclosure of a SAR, or any information that would reveal the existence of a SAR, in response to a request for disclosure of non- public information or a request for use in a private legal proceeding, including a request pursuant to 31 CFR (f) Limitation on liability. A casino, and any director, officer, employee, or agent of any casino, that makes a voluntary disclosure of any possible violation of law or regulation to a government agency or makes a disclosure pursuant to this section or any other authority, including a disclosure made jointly with another institution, shall be protected from liability to any person for any such disclosure, or for failure to provide notice of such disclosure to any person identified in the disclosure, or both, to the full extent provided by 31 U.S.C. 5318(g)(3). (g) Compliance. Casinos shall be examined by FinCEN or its delegatees for compliance with this section. Failure to satisfy the requirements of this section may be a violation of the Bank Secrecy Act and of this chapter. (h) Applicability date. This section applies to transactions occurring after March 25, [75 FR 65812, Oct. 26, 2010, as amended at 76 FR 10517, Feb. 25, 2011] Exceptions to the reporting requirements of 31 U.S.C (a) Receipt of currency by certain casinos having gross annual gaming revenue in excess of $1,000,000 In general. If a casino receives currency in excess of $10,000 and is required to report the receipt of such currency directly to the Treasury Department under , , or and is subject to the recordkeeping requirements of , then the casino is not required to make a report with respect to the receipt of such currency under 31 U.S.C and this section. (b) Casinos exempt under (c). Pursuant to , the Secretary may exempt from the reporting and recordkeeping requirements under , , or casinos in any state whose regulatory system substantially meets the reporting and recordkeeping requirements of this chapter. Such casinos shall not be required to report receipt of currency under 31 U.S.C and this section. (c) Reporting of currency received in a non- gaming business. Non- gaming businesses (such as shops, restaurants, entertainment, and hotels) at casino hotels and resorts are separate trades or businesses in which the receipt of currency in excess of $10,000 is reportable under section 5331 and these regulations. Thus, a casino exempt under paragraph (a) or (b) of this section must report with respect to currency in excess of $10,000 received in its non- gaming businesses. (d) Example. The following example illustrates the application of the rules in paragraphs (a) and (c) of this section: Example. A and B are casinos having gross annual gaming revenue in excess of $1,000,000. C is a casino with gross annual gaming revenue of less than $1,000,000. Casino A receives $15,000 in currency from a customer with respect to a gaming transaction which the casino reports to the Treasury Department under , , and Casino B receives $15,000 in currency from a customer in payment for accommodations provided to that customer at Casino B's hotel. Casino C receives $15,000 in currency from a customer with respect to a gaming transaction. Casino A is not required to report the transaction under 31 U.S.C or this section because the exception for certain casinos provided in paragraph (a) of this section ( the casino exception ) applies. Casino B is required to report under 31 U.S.C and this section because the casino exception does not apply to the receipt of currency from a nongaming activity. Casino C is Page 6 of 73
7 required to report under 31 U.S.C and this section because the casino exception does not apply to casinos having gross annual gaming revenue of $1,000,000 or less which do not have to report to the Treasury Department under , , and SUBPART D- - RECORDS REQUIRED TO BE MAINTAINED BY CASINOS AND CARD CLUBS General. Casinos and card clubs are subject to the recordkeeping requirements set forth and cross referenced in this subpart. Casinos and card clubs should also refer to subpart D of part 1010 of this chapter for recordkeeping requirements contained in that subpart which apply to casinos and card clubs Additional records to be made and retained by casinos. (a) With respect to each deposit of funds, account opened or line of credit extended after the effective date of these regulations, a casino shall, at the time the funds are deposited, the account is opened or credit is extended, secure and maintain a record of the name, permanent address, and social security number of the person involved. Where the deposit, account or credit is in the names of two or more persons, the casino shall secure the name, permanent address, and social security number of each person having a financial interest in the deposit, account or line of credit. The name and address of such person shall be verified by the casino at the time the deposit is made, account opened, or credit extended. The verification shall be made by examination of a document of the type described in of this chapter, and the specific identifying information shall be recorded in the manner described in of this chapter. In the event that a casino has been unable to secure the required social security number, it shall not be deemed to be in violation of this section if it has made a reasonable effort to secure such number and it maintains a list containing the names and permanent addresses of those persons from who it has been unable to obtain social security numbers and makes the names and addresses of those persons available to the Secretary upon request. Where a person is a nonresident alien, the casino shall also record the person's passport number or a description of some other government document used to verify his identity. (b) In addition, each casino shall retain either the original or a microfilm or other copy or reproduction of each of the following: (1) A record of each receipt (including but not limited to funds for safekeeping or front money) of funds by the casino for the account (credit or deposit) of any person. The record shall include the name, permanent address and social security number of the person from whom the funds were received, as well as the date and amount of the funds received. If the person from whom the funds were received is a non- resident alien, the person's passport number or a description of some other government document used to verify the person's identity shall be obtained and recorded; (2) A record of each bookkeeping entry comprising a debit or credit to a customer's deposit account or credit account with the casino; (3) Each statement, ledger card or other record of each deposit account or credit account with the casino, showing each transaction (including deposits, receipts, withdrawals, disbursements or transfers) in or with respect to, a customer's deposit account or credit account with the casino; (4) A record of each extension of credit in excess of $2,500, the terms and conditions of such extension of credit, and repayments. The record shall include the customer's name, permanent address, social security number, and the date and amount of the transaction (including repayments). If the customer or person for whom the credit extended is a non- resident alien, his passport number or description of some other government document used to verify his identity shall be obtained and recorded; (5) A record of each advice, request or instruction received or given by the casino for itself or another person with respect to a transaction involving a person, account or place outside the United States (including but not limited to communications by wire, letter, or telephone). If the transfer outside the United States is on behalf of a third party, the record shall include the third party's name, permanent address, social security number, Page 7 of 73
8 signature, and the date and amount of the transaction. If the transfer is received from outside the United States on behalf of a third party, the record shall include the third party's name, permanent address, social security number, signature, and the date and amount of the transaction. If the person for whom the transaction is being made is a non- resident alien the record shall also include the person's name, his passport number or a description of some other government document used to verify his identity; (6) Records prepared or received by the casino in the ordinary course of business which would be needed to reconstruct a person's deposit account or credit account with the casino or to trace a check deposited with the casino through the casino's records to the bank of deposit; (7) All records, documents or manuals required to be maintained by a casino under state and local laws or regulations, regulations of any governing Indian tribe or tribal government, or terms of (or any regulations issued under) any Tribal- State compacts entered into pursuant to the Indian Gaming Regulatory Act, with respect to the casino in question. (8) All records which are prepared or used by a casino to monitor a customer's gaming activity. (9) (i) A separate record containing a list of each transaction between the casino and its customers involving the following types of instruments having a face value of $3,000 or more: (A) Personal checks (excluding instruments which evidence credit granted by a casino strictly for gaming, such as markers); (B) Business checks (including casino checks); (C) Official bank checks; (D) Cashier's checks; (E) Third- party checks; (F) Promissory notes; (G) Traveler's checks; and (H) Money orders. (ii) The list will contain the time, date, and amount of the transaction; the name and permanent address of the customer; the type of instrument; the name of the drawee or issuer of the instrument; all reference numbers ( e.g., casino account number, personal check number, etc. ); and the name or casino license number of the casino employee who conducted the transaction. Applicable transactions will be placed on the list in the chronological order in which they occur. (10) A copy of the compliance program described in (b). (11) In the case of card clubs only, records of all currency transactions by customers, including without limitation, records in the form of currency transaction logs and multiple currency transaction logs, and records of all activity at cages or similar facilities, including, without limitation, cage control logs. (c) Page 8 of 73
9 (1) Casinos which input, store, or retain, in whole or in part, for any period of time, any record required to be maintained by of this chapter or this section on computer disk, tape, or other machine- readable media shall retain the same on computer disk, tape, or machine- readable media. (2) All indexes, books, programs, record layouts, manuals, formats, instructions, file descriptions, and similar materials which would enable a person readily to access and review the records that are described in of this chapter and this section and that are input, stored, or retained on computer disk, tape, or other machine- readable media shall be retained for the period of time such records are required to be retained. Subpart E- - SPECIAL INFORMATION SHARING PROCEDURES TO DETER MONEY LAUNDERING AND TERRORIST ACTIVITY FOR CASINOS AND CARD CLUBS General. Casinos and card clubs are subject to the special information sharing procedures to deter money laundering and terrorist activity requirements set forth and cross referenced in this subpart. Casinos and card clubs should also refer to subpart E of part 1010 of this Chapter for special information sharing procedures to deter money laundering and terrorist activity contained in that subpart which apply to casinos and card clubs Special information sharing procedures to deter money laundering and terrorist activity for casinos and card clubs. (a) Refer to of this chapter. (b) [Reserved] [Reserved] Voluntary information sharing among financial institutions. (a) Refer to of this Chapter. (b) [Reserved] SUBPART F- - SPECIAL STANDARDS OF DILIGENCE; PROHIBITIONS; AND SPECIAL MEASURES FOR CASINOS AND CARD CLUBS General. Casinos and card clubs are subject to the special standards of diligence; prohibitions; and special measures requirements set forth and cross referenced in this subpart. Casinos and card clubs should also refer to subpart F of part 1010 of this chapter for special standards of diligence; prohibitions; and special measures contained in that subpart which apply to casinos and card clubs Due diligence programs for correspondent accounts for foreign financial institutions. (a) Refer to of this chapter. (b) [Reserved] Page 9 of 73
10 Due diligence programs for private banking accounts. (a) Refer to of this chapter. (b) [Reserved] Prohibition on correspondent accounts for foreign shell banks; records concerning owners of foreign banks and agents for service of legal process. (a) Refer to of this chapter. (b) [Reserved] [Reserved.] Summons or subpoena of foreign bank records; termination of correspondent relationship. (a) Refer to of this chapter. (b) [Reserved] PART RULES FOR MONEY SERVICES BUSINESSES SUBPART A DEFINITIONS Definitions. Refer to of this chapter for general definitions not noted herein. SUBPART B PROGRAMS General. Money services businesses are subject to the program requirements set forth and cross referenced in this subpart. Money services businesses should also refer to subpart B of part 1010 of this chapter for program requirements contained in that subpart which apply to money services businesses Anti- money laundering programs for money services businesses. (a) Each money services business, as defined by (ff) of this chapter, shall develop, implement, and maintain an effective anti- money laundering program. An effective anti- money laundering program is one that is reasonably designed to prevent the money services business from being used to facilitate money laundering and the financing of terrorist activities. (b) The program shall be commensurate with the risks posed by the location and size of, and the nature and volume of the financial services provided by, the money services business. (c) The program shall be in writing, and a money services business shall make copies of the anti- money laundering program available for inspection to the Department of the Treasury upon request. Page 10 of 73
11 (d) At a minimum, the program shall: (1) Incorporate policies, procedures, and internal controls reasonably designed to assure compliance with this chapter. (i) Policies, procedures, and internal controls developed and implemented under this section shall include provisions for complying with the requirements of this chapter including, to the extent applicable to the money services business, requirements for: (A) Verifying customer identification, including as set forth in paragraph (d)(1)(iv) of this section; (B) Filing Reports; (C) Creating and retaining records; (D) Responding to law enforcement requests. (ii) Money services businesses that have automated data processing systems should integrate their compliance procedures with such systems. (iii) A person that is a money services business solely because it is an agent for another money services business as set forth in (a)(3), and the money services business for which it serves as agent, may by agreement allocate between them responsibility for development of policies, procedures, and internal controls required by this paragraph (d)(1). Each money services business shall remain solely responsible for implementation of the requirements set forth in this section, and nothing in this paragraph (d)(1) relieves any money services business from its obligation to establish and maintain an effective anti- money laundering program. (iv) A money services business that is a provider or seller of prepaid access must establish procedures to verify the identity of a person who obtains prepaid access under a prepaid program and obtain identifying information concerning such a person, including name, date of birth, address, and identification number. Sellers of prepaid access must also establish procedures to verify the identity of a person who obtains prepaid access to funds that exceed $10,000 during any one day and obtain identifying information concerning such a person, including name, date of birth, address, and identification number. Providers of prepaid access must retain access to such identifying information for five years after the last use of the prepaid access device or vehicle; such information obtained by sellers of prepaid access must be retained for five years from the date of the sale of the prepaid access device or vehicle. (2) Designate a person to assure day to day compliance with the program and this chapter. The responsibilities of such person shall include assuring that: (i) The money services business properly files reports, and creates and retains records, in accordance with applicable requirements of this chapter; (ii) The compliance program is updated as necessary to reflect current requirements of this chapter, and related guidance issued by the Department of the Treasury; and (iii) The money services business provides appropriate training and education in accordance with paragraph (d)(3) of this section. Page 11 of 73
12 (3) Provide education and/or training of appropriate personnel concerning their responsibilities under the program, including training in the detection of suspicious transactions to the extent that the money services business is required to report such transactions under this chapter. (4) Provide for independent review to monitor and maintain an adequate program. The scope and frequency of the review shall be commensurate with the risk of the financial services provided by the money services business. Such review may be conducted by an officer or employee of the money services business so long as the reviewer is not the person designated in paragraph (d)(2) of this section. (e) Compliance date. A money services business must develop and implement an anti- money laundering program that complies with the requirements of this section on or before the later of July 24, 2002, and the end of the 90- day period beginning on the day following the date the business is established. [75 FR 65812, Oct. 26, 2010, as amended at 76 FR 43597, July 21, 2011; 76 FR 45419, July 29, 2011] Subpart C Reports Required To Be Made By Money Services Businesses General. Money services businesses are subject to the reporting requirements set forth and cross referenced in this subpart. Money services businesses should also refer to subpart C of part 1010 of this chapter for reporting requirements contained in that subpart which apply to money services businesses Reports of transactions in currency. The reports of transactions in currency requirements for money services businesses are located in subpart C of part 1010 of this chapter and this subpart Filing obligations. Refer to of this chapter for reports of transactions in currency filing obligations for money services businesses Identification required. Refer to of this chapter for identification requirements for reports of transactions in currency filed by money services businesses Aggregation. Refer to of this chapter for reports of transactions in currency aggregation requirements for money services businesses Structured transactions. Refer to of this chapter for rules regarding structured transactions for money services businesses Exemptions. Refer to of this chapter for exemptions from the obligation to file reports of transactions in currency for money services businesses. Page 12 of 73
13 Reports by money services businesses of suspicious transactions. (a) General. (1) Every money services business described in (ff)(1), (3), (4), (5), (6), and (7) of this chapter, shall file with the Treasury Department, to the extent and in the manner required by this section, a report of any suspicious transaction relevant to a possible violation of law or regulation. Any money services business may also file with the Treasury Department, by using the form specified in paragraph (b)(1) of this section, or otherwise, a report of any suspicious transaction that it believes is relevant to the possible violation of any law or regulation but whose reporting is not required by this section. (2) A transaction requires reporting under the terms of this section if it is conducted or attempted by, at, or through a money services business, involves or aggregates funds or other assets of at least $2,000 (except as provided in paragraph (a)(3) of this section), and the money services business knows, suspects, or has reason to suspect that the transaction (or a pattern of transactions of which the transaction is a part): (i) Involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity (including, without limitation, the ownership, nature, source, location, or control of such funds or assets) as part of a plan to violate or evade any Federal law or regulation or to avoid any transaction reporting requirement under Federal law or regulation; (ii) Is designed, whether through structuring or other means, to evade any requirements of this chapter or of any other regulations promulgated under the Bank Secrecy Act; or (iii) Serves no business or apparent lawful purpose, and the reporting money services business knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction. (iv) Involves use of the money services business to facilitate criminal activity. (3) To the extent that the identification of transactions required to be reported is derived from a review of clearance records or other similar records of money orders or traveler's checks that have been sold or processed, an issuer of money orders or traveler's checks shall only be required to report a transaction or pattern of transactions that involves or aggregates funds or other assets of at least $5,000. (4) The obligation to identify and properly and timely to report a suspicious transaction rests with each money services business involved in the transaction, provided that no more than one report is required to be filed by the money services businesses involved in a particular transaction (so long as the report filed contains all relevant facts). Whether, in addition to any liability on its own for failure to report, a money services business that issues the instrument or provides the funds transfer service involved in the transaction may be liable for the failure of another money services business involved in the transaction to report that transaction depends upon the nature of the contractual or other relationship between the businesses, and the legal effect of the facts and circumstances of the relationship and transaction involved, under general principles of the law of agency. (b) Filing procedures (1) What to file. A suspicious transaction shall be reported by completing a Suspicious Activity Report- MSB ( SAR MSB ), and collecting and maintaining supporting documentation as required by paragraph (c) of this section. (2) Where to file. The SAR MSB shall be filed in a central location to be determined by FinCEN, as indicated in the instructions to the SAR MSB. (3) When to file. A money services business subject to this section is required to file each SAR MSB no later than 30 calendar days after the date of the initial detection by the money services business of facts that may constitute a basis for filing a SAR MSB under this section. In situations involving violations that require Page 13 of 73
14 immediate attention, such as ongoing money laundering schemes, the money services business shall immediately notify by telephone an appropriate law enforcement authority in addition to filing a SAR MSB. Money services businesses wishing voluntarily to report suspicious transactions that may relate to terrorist activity may call FinCEN's Financial Institutions Hotline at in addition to filing timely a SAR MSB if required by this section. (c) Retention of records. A money services business shall maintain a copy of any SAR MSB filed and the original or business record equivalent of any supporting documentation for a period of five years from the date of filing the SAR MSB. Supporting documentation shall be identified as such and maintained by the money services business, and shall be deemed to have been filed with the SAR MSB. A money services business shall make all supporting documentation available to FinCEN or any Federal, State, or local law enforcement agency, or any Federal regulatory authority that examines the money services business for compliance with the Bank Secrecy Act, or any State regulatory authority administering a State law that requires the money services business to comply with the Bank Secrecy Act or otherwise authorizes the State authority to ensure that the money services business complies with the Bank Secrecy Act. (d) Confidentiality of SARs. A SAR, and any information that would reveal the existence of a SAR, are confidential and shall not be disclosed except as authorized in this paragraph (d). For purposes of this paragraph (d) only, a SAR shall include any suspicious activity report filed with FinCEN pursuant to any regulation in this chapter. (1) Prohibition on disclosures by money services businesses (i) General rule. No money services business, and no director, officer, employee, or agent of any money services business, shall disclose a SAR or any information that would reveal the existence of a SAR. Any money services business, and any director, officer, employee, or agent of any money services business that is subpoenaed or otherwise requested to disclose a SAR or any information that would reveal the existence of a SAR, shall decline to produce the SAR or such information, citing this section and 31 U.S.C. 5318(g)(2)(A)(i), and shall notify FinCEN of any such request and the response thereto. (ii) Rules of Construction. Provided that no person involved in any reported suspicious transaction is notified that the transaction has been reported, this paragraph (d)(1) shall not be construed as prohibiting: (A) The disclosure by a money services business, or any director, officer, employee, or agent of a money services business, of: ( 1 ) A SAR, or any information that would reveal the existence of a SAR, to FinCEN or any Federal, State, or local law enforcement agency, or any Federal regulatory authority that examines the money services business for compliance with the Bank Secrecy Act, or any State regulatory authority administering a State law that requires the money services business to comply with the Bank Secrecy Act or otherwise authorizes the State authority to ensure that the money services business complies with the Bank Secrecy Act; or ( 2 ) The underlying facts, transactions, and documents upon which a SAR is based, including but not limited to, disclosures to another financial institution, or any director, officer, employee, or agent of a financial institution, for the preparation of a joint SAR. (B) The sharing by a money services business, or any director, officer, employee, or agent of the money services business, of a SAR, or any information that would reveal the existence of a SAR, within the money services business's corporate organizational structure for purposes consistent with Title II of the Bank Secrecy Act as determined by regulation or in guidance. (2) Prohibition on disclosures by government authorities. A Federal, State, local, territorial, or Tribal government authority, or any director, officer, employee, or agent of any of the foregoing, shall not disclose a SAR, or any information that would reveal the existence of a SAR, except as necessary to fulfill official duties consistent with Title II of the Bank Secrecy Act. For purposes of this section, official duties shall not include the disclosure of a SAR, or any information that would reveal the existence of a SAR, in response to a request for Page 14 of 73
15 disclosure of non- public information or a request for use in a private legal proceeding, including a request pursuant to 31 CFR (e) Limitation on liability. A money services business, and any director, officer, employee, or agent of any money services business, that makes a voluntary disclosure of any possible violation of law or regulation to a government agency or makes a disclosure pursuant to this section or any other authority, including a disclosure made jointly with another institution, shall be protected from liability to any person for any such disclosure, or for failure to provide notice of such disclosure to any person identified in the disclosure, or both, to the full extent provided by 31 U.S.C. 5318(g)(3). (f) Compliance. Money services businesses shall be examined by FinCEN or its delegatees for compliance with this section. Failure to satisfy the requirements of this section may be a violation of the Bank Secrecy Act and of this chapter. (g) Applicability date. This section applies to transactions occurring after December 31, [75 FR 65812, Oct. 26, 2010, as amended at 75 FR 10518, Feb. 25, 2011; 76 FR 45420, July 29, 2011] Registration of money services businesses. (a) Registration requirement (1) In general. Except as provided in paragraph (a)(3) of this section, relating to agents, and except for sellers of prepaid access as defined in (ff)(7) of this chapter to the extent that they are not already agents, each money services business (whether or not licensed as a money services business by any State) must register with FinCEN. Each provider of prepaid access must identify each prepaid program for which it is the provider of prepaid access. Each money services business must, as part of its registration, maintain a list of its agents as required by 31 U.S.C and this section. This section does not apply to the United States Postal Service, to agencies of the United States, of any State, or of any political subdivision of a State. (2) Foreign- located money services business. Each foreign- located person doing business, whether or not on a regular basis or as an organized or licensed business concern, in the United States as a money services business shall designate the name and address of a person who resides in the United States and is authorized, and has agreed, to be an agent to accept service of legal process with respect to compliance with this chapter, and shall identify the address of the location within the United States for records pertaining to paragraph (b)(1)(iii) of this section. (3) Agents. A person that is a money services business solely because that person serves as an agent of another money services business, see (ff) of this chapter, is not required to register under this section, but a money services business that engages in activities described in (ff) of this chapter both on its own behalf and as an agent for others must register under this section. For example, a supermarket corporation that acts as an agent for an issuer of money orders and performs no other services of a nature and value that would cause the corporation to be a money services business, is not required to register; the answer would be the same if the supermarket corporation served as an agent both of a money order issuer and of a money transmitter. However, registration would be required if the supermarket corporation, in addition to acting as an agent of an issuer of money orders, cashed checks or exchanged currencies (other than as an agent for another business) 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. (4) Agency status. The determination whether a person is an agent depends on all the facts and circumstances. (b) Registration procedures (1) In general. (i) A money services business must be registered by filing such form as FinCEN may specify with the Enterprise Computing Center in Detroit of the Internal Revenue Service (or such other location as the Page 15 of 73
16 form may specify). The information required by 31 U.S.C. 5330(b) and any other information required by the form must be reported in the manner and to the extent required by the form. (ii) A branch office of a money services business is not required to file its own registration form. A money services business must, however, report information about its branch locations or offices as provided by the instructions to the registration form. (iii) A money services business must retain a copy of any registration form filed under this section and any registration number that may be assigned to the business at a location in the United States and for the period specified in (d) of this Chapter. (2) Registration period. A money services business must be registered for the initial registration period and each renewal period. The initial registration period is the two- calendar- year period beginning with the calendar year in which the money services business is first required to be registered. However, the initial registration period for a money services business required to register by December 31, 2001 (see paragraph (b)(3) of this section) is the two- calendar year period beginning Each two- calendar- year period following the initial registration period is a renewal period. (3) Due date. The registration form for the initial registration period must be filed on or before the end of the 180- day period beginning on the day following the date the business is established. The registration form for a renewal period must be filed on or before the last day of the calendar year preceding the renewal period. (4) Events requiring re- registration. If a money services business registered as such under the laws of any State experiences a change in ownership or control that requires the business to be re- registered under State law, the money services business must also be re- registered under this section. In addition, if there is a transfer of more than 10 percent of the voting power or equity interests of a money services business (other than a money services business that must report such transfer to the Securities and Exchange Commission), the money services business must be re- registered under this section. Finally, if a money services business experiences a more than 50- per cent increase in the number of its agents during any registration period, the money services business must be re- registered under this section. The registration form must be filed not later than 180 days after such change in ownership, transfer of voting power or equity interests, or increase in agents. The calendar year in which the change, transfer, or increase occurs is treated as the first year of a new two- year registration period. (c) Persons required to file the registration form. Under 31 U.S.C. 5330(a), any person who owns or controls a money services business is responsible for registering the business; however, only one registration form is required to be filed for each registration period. A person is treated as owning or controlling a money services business for purposes of filing the registration form only to the extent provided by the form. If more than one person owns or controls a money services business, the owning or controlling persons may enter into an agreement designating one of them to register the business. The failure of the designated person to register the money services business does not, however, relieve any of the other persons who own or control the business of liability for the failure to register the business. See paragraph (e) of this section, relating to consequences of the failure to comply with 31 U.S.C or this section. (d) List of agents (1) In general. A money services business must prepare and maintain a list of its agents. The initial list of agents must be prepared by January 1, 2002, and must be revised each January 1, for the immediately preceding 12 month period; for money services businesses established after December 31, 2001, the initial agent list must be prepared by the due date of the initial registration form and must be revised each January 1 for the immediately preceding 12- month period. The list is not filed with the registration form but must be maintained at the location in the United States reported on the registration form under paragraph (b)(1) of this section. Upon request, a money services business must make its list of agents available to FinCEN and any other appropriate law enforcement agency (including, without limitation, the examination function of the Internal Revenue Service in its capacity as delegee of Bank Secrecy Act examination authority). Requests for information made pursuant to the preceding sentence shall be coordinated through FinCEN in the manner and to the extent determined by FinCEN. The original list of agents and any revised list must be retained for the period specified in (d) of this chapter. Page 16 of 73