Opinion ID: 109005
Heading Depth: 2
Heading Rank: 3

Heading: title iidomestic financial transaction reporting requirements

Text: In addition to the foreign transaction reporting requirements discussed above, Title II of the Act provides for certain reports of domestic transactions where such reports have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings. Prior to the enactment of the Act, financial institutions had been providing reports of their customers' large currency transactions pursuant to regulations promulgated by the Secretary of Treasury [11] which had required reports of all currency transactions that, in the judgment of the institution, exceeded those commensurate with the customary conduct of the business, industry or profession of the person or organization concerned. [12] In passing the Act, Congress recognized that the use of financial institutions, both domestic and foreign, in furtherance of activities designed to evade the regulatory mechanisms of the United States, had markedly increased. H. R. Rep. No. 91-975, supra, at 10; S. Rep. No. 91-1139, supra, at 2-3. Congress recognized the importance of reports of large and unusual currency transactions in ferreting out criminal activity and desired to strengthen the statutory basis for requiring such reports. H. R. Rep. No. 91-975, supra, at 11-12. In particular, Congress intended to authorize more definite standards for determining what constitutes the type of unusual transaction that should be reported. S. Rep. No. 91-1139, supra, at 6. Section 221 of the Act, 31 U. S. C. § 1081, therefore delegates to the Secretary the authority for specifying the currency transactions which should be reported, if they involve the payment, receipt, or transfer of United States currency, or such other monetary instruments as the Secretary may specify. Section 222 of the Act, 31 U. S. C. § 1082, provides that the Secretary may require such reports from the domestic financial institution involved or the parties to the transactions or both. [13] Section 223 of the Act, 31 U. S. C. § 1083, authorizes the Secretary to designate financial institutions to receive such reports. In the implementing regulations promulgated under this authority, the Secretary has required only that financial institutions file certain reports with the Commissioner of Internal Revenue. The regulations require that a report be made for each deposit, withdrawal, exchange of currency, [14] or other payment or transfer which involves a transaction in currency of more than $10,000. 31 CFR § 103.22. [15] The regulations exempt from the reporting requirement certain intrabank transactions and transactions with an established customer maintaining a deposit relationship [in amounts] commensurate with the customary conduct of the business, industry, or profession of the customer concerned. Ibid. [16] Provision is also made in the regulations whereby information obtained by the Secretary may in some instances and in confidence be available to other departments or agencies of the United States. 31 CFR § 103.43; see 31 U. S. C. § 1061. [17] There is also provision made in the regulations whereby the Secretary may in his sole discretion make exceptions to or grant exemptions from the requirements of the regulation. 31 CFR § 103.45 (a). [18] Failure to file the required report or the filing of a false report subjects the banks to criminal and civil penalties. 31 U. S. C. §§ 1056, 1058, 1059.