FinCEN issues final rule regarding Payroll Customer CTR exemptions
AML AND COMPLIANCE NEWS |
The Financial Crimes Enforcement Network (FinCEN) published a final rule on June 7, 2012 amending the Currency Transaction Reporting (CTR) exemption requirements of the Bank Secrecy Act. The change brings the payroll customer exemption in line with the terminology used in the exemption pertaining to non-listed businesses. Specific provisions of the final rule include replacing the term “regularly” with “frequently” for the payroll customer exemption.
As explained in the final rule, “Under the existing CTR exemption rules codified at 31 CFR 1020.315, two separate categories of exempt persons use nearly synonymous terms for definitional purposes—‘frequently’ for non-listed businesses and ‘regularly’ for payroll customers. To be an exempt non-listed business, a person must, among other things, ‘frequently engage in transactions in currency with the bank in excess of $10,000.’ To be an exempt payroll customer, a person must, among other things, ‘regularly withdraw more than $10,000 in order to pay its United States employees in currency’.” FinCEN expressed concern that institutions may have been prevented from taking advantage of the exemption for payroll customers due to the lack of a specific definition for the term “regularly.” By revising the terminology within this final rule, FinCEN now provides a clear threshold for determining eligibility for payroll customers. The existing regulation defines frequently for non-listed business as five or more reportable transactions occurring within one year. This final rule enables financial institutions to exempt payroll customer exemptions using that same definition. The frequently asked questions previously issued were updated to reflect the new terminology. Access the final rule.