FinCEN CTR ruling on transactions conducted using armored car services
AML AND COMPLIANCE NEWS |
On July 12, 2013, the Financial Crimes Enforcement Network (FinCEN) issued a new ruling on armored car transaction reporting due to issues and concerns that arose from the original FinCEN ruling, FIN-2009-R002. The first ruling required financial institutions to file a Currency Transaction Report (CTR) on an armored car service that is contracted to conduct transactions on behalf of a customer of the institution as they would for a third-party conducting the transaction. However, FinCEN has revised the ruling by providing an exception to the "CTR data collection aggregation requirements" of armored car transactions.
The exception to the rule, along with its applications, is as follows:
- Reporting financial institutions are responsible to implement appropriate procedures to determine whether an armored car service is contracted by the institution's customer, a third party or the institution itself.
- If the armored car service is contracted by the reporting financial institution, the customer of the transaction would have to be identified in Section 1 of the CTR, and only box 24 of Section 11 would need to be checked to satisfy the reporting requirements.
- If the armored car service is contracted by the customer of the reporting financial institution or by a third party, the financial institution must complete the CTR as follows:
- The deliveries to and pickups from the reporting financial institution by the armored car service on behalf of the customer or a third party on any business day will be aggregated with any other transactions performed by the same customer on the same business day.
- If the reporting financial institution has knowledge of cash aggregation exceeding $10,000 from the customer or on behalf of the customer, the institution will file a CTR identifying the customer and any other parties conducting the transactions (including armored car service).
- If an armored car service conducts a transaction on behalf of a customer of the reporting financial institution or a third party that exceeds $10,000 on any business day, the institution must satisfy the reporting requirement to identify the party conducting the transaction by filling in the armored car service corporate information. The name of the armored car service employee conducting the transaction on behalf of the customer or a third party is not required.
- If the reporting financial institution is aware that the same armored car service is conducting several transactions under $10,000 on behalf of the institutions' customer on any business day, for a total amount exceeding $10,000, the transactions will be aggregated to file a CTR on the customer.
- The reporting obligations of a financial institution regarding transactions conducted by an armored car service on behalf of the institution's customer or a third party is satisfied by filing CTRs aggregated by customer only.
- If the reporting financial institution is unable to determine whether an armored car service is contracted by the customer, a third party or the institution itself within the appropriate time period for filing a CTR, the financial institution may satisfy reporting requirements by identifying the customer of the institution and the armored car service conducting the transaction. Identification requirements of the armored car service can be met by filling in the armored car service corporate information. The name of the employee of the armored car service conducting the transaction on behalf of the customer or a third party is not required.
FinCEN stresses that this exception only applies to transactions that are conducted by an armored car service employee on behalf of the financial institution's customer or from a third party. The new ruling issued in July 12, 2013, was taken into effect immediately. Financial institutions that need to modify their systems before filing CTRs under this exception must be able to do so by Sept. 30, 2013.