ÿþ<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html lang="en-us"><!-- InstanceBegin template="/Templates/bsa-inner.dwt" codeOutsideHTMLIsLocked="false" --> <head> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> <link href="../include/global.css" rel="stylesheet" type="text/css" /> <script language="javascript" src="../include/global.js" type="text/javascript"></script> <!-- InstanceBeginEditable name="doctitle" --> <title>Online Manual - BSA InfoBase - FFIEC</title> <!-- InstanceEndEditable --> <script language="JavaScript" type="text/JavaScript"> <!-- function MM_preloadImages() { //v3.0 var d=document; if(d.images){ if(!d.MM_p) d.MM_p=new Array(); var i,j=d.MM_p.length,a=MM_preloadImages.arguments; for(i=0; i<a.length; i++) if (a[i].indexOf("#")!=0){ d.MM_p[j]=new Image; d.MM_p[j++].src=a[i];}} } function MM_swapImgRestore() { //v3.0 var i,x,a=document.MM_sr; for(i=0;a&&i<a.length&&(x=a[i])&&x.oSrc;i++) x.src=x.oSrc; } function MM_findObj(n, d) { //v4.01 var p,i,x; if(!d) d=document; if((p=n.indexOf("?"))>0&&parent.frames.length) { d=parent.frames[n.substring(p+1)].document; n=n.substring(0,p);} if(!(x=d[n])&&d.all) x=d.all[n]; for (i=0;!x&&i<d.forms.length;i++) x=d.forms[i][n]; for(i=0;!x&&d.layers&&i<d.layers.length;i++) x=MM_findObj(n,d.layers[i].document); if(!x && d.getElementById) x=d.getElementById(n); return x; } function MM_swapImage() { //v3.0 var i,j=0,x,a=MM_swapImage.arguments; document.MM_sr=new Array; for(i=0;i<(a.length-2);i+=3) if ((x=MM_findObj(a[i]))!=null){document.MM_sr[j++]=x; if(!x.oSrc) x.oSrc=x.src; x.src=a[i+2];} } function MM_openBrWindow(theURL,winName,features) { //v2.0 window.open(theURL,winName,features); } function MM_jumpMenu(targ,selObj,restore){ //v3.0 eval(targ+".location='"+selObj.options[selObj.selectedIndex].value+"'"); if (restore) selObj.selectedIndex=0; } function MM_jumpMenuGo(selName,targ,restore){ //v3.0 var selObj = MM_findObj(selName); if (selObj) MM_jumpMenu(targ,selObj,restore); } //--> </script> <!-- InstanceBeginEditable name="head" --> <style type="text/css"> <!-- .style2 {color: #000066} .style7 {font-size: x-large} --> </style> <!-- InstanceEndEditable --> <style type="text/css"> <!-- .style6 { font-size: x-large; color: #000066; } a:link { color: #000066; } a:active { color: #000066; } --> </style> </head> <body onLoad="MM_preloadImages('../media/int-inner-ov/int_regulations.jpg','../media/int-inner-ov/int_onlineproc.jpg','../media/int-inner-ov/int_procprint.jpg','../media/int-inner-ov/int_span.jpg','../media/int-inner-ov/int_gloss.jpg','../media/int-inner-ov/int_forms.jpg','../media/int-inner-ov/int_red.jpg','../media/int-inner-ov/int_faq.jpg', '../media/int-ov/int_pres.jpg')"> <a name="pagetop"></a> <table WIDTH="720" BORDER="0" align="center" CELLPADDING="0" CELLSPACING="0" bgcolor="#EFE5CB" summary="Main layout table"> <tr> <td colspan="9"><a href="../default.htm"><img src="../media/int-inner-up/int_01.jpg" ALT="Federal Financial Institutions Examination Council Bank Secrecy Act/Anti-Money Laundering InfoBase" WIDTH="720" HEIGHT="70" border="0"></a></td> </tr> <tr> <td COLSPAN="7"><img src="../media/int-inner-up/int_02.jpg" WIDTH=570 HEIGHT=26 ALT=""></td> <td COLSPAN="2"><a href="../pages_misc/regulations.htm" onMouseOver="MM_swapImage('but_reg','','../media/int-inner-ov/int_regulations.jpg',1)" onMouseOut="MM_swapImgRestore()"><img src="../media/int-inner-up/int_regulations.jpg" ALT="Regulations" name="but_reg" WIDTH=150 HEIGHT=26 border="0" id="but_reg"></a></td> </tr> <tr> <td colspan="9"> <table cellpadding="0" cellspacing="0" width="720"> <tr> <td><a href="manual_online.htm" onMouseOver="MM_swapImage('but_online','','../media/int-inner-ov/int_onlineproc.jpg',1)" onMouseOut="MM_swapImgRestore()"><img src="../media/int-inner-up/int_onlineproc.jpg" ALT="Online Manual" name="but_online" WIDTH=110 HEIGHT=29 border="0" id="but_online"></a></td> <td><a href="manual_print.htm" onMouseOver="MM_swapImage('but_procprint','','../media/int-inner-ov/int_procprint.jpg',1)" onMouseOut="MM_swapImgRestore()"><img src="../media/int-inner-up/int_procprint.jpg" ALT="Manual Print/Search" name="but_procprint" WIDTH=129 HEIGHT=29 border="0" id="but_procprint"></a></td> <td><a href="../pages_misc/spanish_translation.htm" onMouseOver="MM_swapImage('but_span','','../media/int-inner-ov/int_span.jpg',1)" onMouseOut="MM_swapImgRestore()"><img src="../media/int-inner-up/int_span.jpg" ALT="Spanish Translation" name="but_span" WIDTH=118 HEIGHT=29 border="0" id="but_span"></a></td> <td><a href="../pages_misc/definitions.htm" onMouseOver="MM_swapImage('but_gloss','','../media/int-inner-ov/int_gloss.jpg',1)" onMouseOut="MM_swapImgRestore()"><img src="../media/int-inner-up/int_gloss.jpg" ALT="Definitions" name="but_gloss" WIDTH=79 HEIGHT=29 border="0" id="but_gloss"></a></td> <td><a href="../pages_misc/forms.htm" onMouseOver="MM_swapImage('but_forms','','../media/int-inner-ov/int_forms.jpg',1)" onMouseOut="MM_swapImgRestore()"><img src="../media/int-inner-up/int_forms.jpg" ALT="Forms" name="but_forms" WIDTH=54 HEIGHT=29 border="0" id="but_forms"></a></td> <td><a href="OLM_106.htm" onMouseOver="MM_swapImage('but_red','','../media/int-inner-ov/int_red.jpg',1)" onMouseOut="MM_swapImgRestore()"><img src="../media/int-inner-up/int_red.jpg" ALT="Red Flags" name="but_red" WIDTH=74 HEIGHT=29 border="0" id="but_red"></a></td> <td><a href="../pages_misc/faq.htm" onMouseOver="MM_swapImage('but_faq','','../media/int-inner-ov/int_faq.jpg',1)" onMouseOut="MM_swapImgRestore()"><img src="../media/int-inner-up/int_faq.jpg" ALT="FAQs" name="but_faq" WIDTH=51 HEIGHT=29 border="0" id="but_faq"></a></td> <td COLSPAN="2"><img src="../media/int-inner-up/int_self.jpg" ALT="" name="but_self" WIDTH=105 HEIGHT=29 border="0" id="but_self"></td> </tr> </table> </td> </tr> <tr> <td colspan="9"><img src="../media/int-inner-up/int_13.jpg" WIDTH=720 HEIGHT="12" ALT=""></td> </tr> <tr> <td colspan="9"><table class="tableBorder1" width="100%" border="0" cellspacing="0" cellpadding="0" summary="layout table"> <tr> <td colspan="5">&nbsp;</td> </tr> <tr valign="top"> <td>&nbsp;</td> <td colspan="3"><div id="dropdownarea"> <form name="form1" action="javascript://"> <div> <label for="resDocsMenu">Resource Documents</label> <select name="resDocsMenu"> <option value="../pages_resource_docs/bg_frs.htm">Board of Governors of the Federal Reserve System</option> <option value="../pages_resource_docs/fdic.htm">Federal Deposit Insurance Corporation</option> <option value="../pages_resource_docs/ncua.htm">National Credit Union Administration</option> <option value="../pages_resource_docs/occ.htm">Office of the Comptroller of the Currency</option> <option value="../pages_resource_docs/ots.htm">Office of Thrift Supervision</option> <option value="../pages_resource_docs/fce.htm">Financial Crimes Enforcement Network</option> <option value="../pages_resource_docs/ofac.htm">Office of Foreign Assets Control</option> </select> <input type="button" class="button_go" value="Go" onClick="MM_jumpMenuGo('resDocsMenu','parent',0)"> </div> <div> <label for="presMenu">Examination Procedures</label> <select name="presMenu"> <option value="../procedures/core.doc">Core Procedures</option> <option value="../procedures/expanded.doc">Expanded Procedures</option> </select> <input type="button" class="button_go" value="Go" onClick="goPresentation('presMenu')"> </div> </form> </div></td> <td>&nbsp;</td> </tr> <tr valign="top"> <td>&nbsp;</td> <td colspan="3"><hr></td> <td>&nbsp;</td> </tr> <tr valign="top"> <td width="10">&nbsp;</td> <td><div id="mainContent"><!-- InstanceBeginEditable name="mainPgContent" --> <table width="100%" border="0" cellspacing="0" cellpadding="0"> <tr> <td class="style2"><h2>Bank Secrecy Act<br> Anti-Money Laundering <br> Examination Manual</h2></td> <td class="style2"><p align="right"><a href="OLM_019.htm">Backward</a> | <a href="manual_online.htm">Table of Contents</a> | <a href="OLM_021.htm">Forward</a></p></td> </tr> </table> <h1 align="center" class="style2"><strong><span class="style7">EXAMINATION</span> <span class="style7">PROCEDURES</span> </strong></h1> <h1 align="center" class="style2"><span class="style7">Currency Transaction <br> Reporting Exemptions</span></h1> <p class="style2">&nbsp;</p> <p class="style2"><strong>Objective</strong>. <em>Assess the bank&rsquo;s compliance with statutory and regulatory requirements for exemptions from the currency transaction reporting requirements. </em></p> <p class="style2">1. Determine whether the bank uses the Currency Transaction Report (CTR) exemption process. If yes, determine whether the policies, procedures, and processes for CTR exemptions are adequate. </p> <h2 class="style2">Phase I Exemptions (<a href="regulations/31CFR103.pdf" target="_blank">31 CFR 103.22(d)(2)(i)&ndash;(v)</a>) </h2> <p class="style2">2. Determine whether the bank files the Designation of Exempt Person form (<a href="http://www.fincen.gov/forms/fin110_dep.pdf" target="_blank">FinCEN Form 110)</a> with the IRS to exempt eligible listed public companies and their subsidiaries from CTR reporting as defined in <a href="regulations/31CFR103.pdf" target="_blank">31 CFR 103.22</a>. The form should be filed within 30 days of the first reportable transaction that was exempted. </p> <p class="style2">3. Assess whether ongoing and reasonable due diligence is performed, including required annual reviews to determine whether a listed public company or subsidiary remains eligible for designation as an exempt person under the regulatory requirements. Management should properly document exemption determinations (e.g., with stock quotes from newspapers and consolidated returns for the entity). </p> <h2 class="button_go">Phase II Exemptions (<a href="regulations/31CFR103.pdf" target="_blank">31 CFR 103.22(d)(2)(vi)&ndash;(vii)</a>) </h2> <p>Under the regulation, the definition of exempt persons includes &quot;non-listed businesses&quot; and &quot;payroll customers&quot; as defined in <a href="regulations/31CFR103.pdf" target="_blank">31 CFR 103.22(d)(2)(vi)&ndash;(vii)</a>. Nevertheless, several businesses remain ineligible for exemption purposes; refer to <a href="regulations/31CFR103.pdf" target="_blank">31 CFR 103.22(d)(5)(viii)</a> and the &quot;Currency Transaction Reporting Exemptions Overview&quot; section of this manual. </p> <p class="style2">4. Determine whether the bank files a Designation of Exempt Person form with the IRS to exempt a customer, as identified by management, from CTR reporting. </p> <p class="style2">5. Determine whether the bank maintains documentation to support that the &quot;non-listed businesses&quot; it has designated as exempt from CTR reporting do not receive more than 50 percent of gross revenue from ineligible business activities. </p> <p class="style2">6. Assess whether ongoing and reasonable due diligence is performed, including required annual reviews, to determine whether a customer is eligible for designation as exempt from CTR reporting. Customers must meet the following requirements to be eligible for exemption under the regulation: </p> <ul> <li>Have frequent<sup class="style2"><strong><a href="javascript:openFootnote('footnotes/FN_083_Valid.htm');">83</a></strong></sup> currency transactions in excess of $10,000 (regular withdrawals to pay domestic employees in currency in the case of a payroll customer). </li> <li>Be incorporated or organized under the laws of the United States or a state, or registered as and eligible to do business within the United States or a state. </li> <li>Maintain a transaction account at the bank for at least two months (or prior to the passing of two months time if the bank has conducted a risk-based analysis of a customer that allows it to form and document a reasonable belief that the customer has a legitimate business purpose for conducting frequent large currency transactions). </li> </ul> <h2 class="style2">Transaction Testing </h2> <p class="style2">7. On the basis of a risk assessment, prior examination reports, and a review of the bank&rsquo;s audit findings, select a sample of Designation of Exempt Person forms from the bank to test compliance with the regulatory requirements (e.g., only eligible businesses are exempted and adequate supporting documentation is maintained). </p> <p class="style2">8. On the basis of examination procedures completed, including transaction testing, form a conclusion about the ability of policies, procedures, and processes to meet regulatory requirements associated with currency transaction reporting exemptions. </p> <p align="right" class="style2"><a href="OLM_019.htm">Backward</a> | <a href="manual_online.htm"> Table of Contents</a> | <a href="OLM_021.htm">Forward</a></p> <!-- InstanceEndEditable --></div></td> <td width="10">&nbsp;</td> </tr> <tr> <td height="30" colspan="5">&nbsp;</td> </tr> </table></td> </tr> <tr> <td><img src="../media/int-up/spacer.gif" WIDTH="110" HEIGHT="1" ALT=""></td> <td><img src="../media/int-up/spacer.gif" WIDTH="129" HEIGHT="1" ALT=""></td> <td><img src="../media/int-up/spacer.gif" WIDTH="79" HEIGHT="1" ALT=""></td> <td><img src="../media/int-up/spacer.gif" WIDTH="54" HEIGHT="1" ALT=""></td> <td><img src="../media/int-up/spacer.gif" WIDTH="74" HEIGHT="1" ALT=""></td> <td><img src="../media/int-up/spacer.gif" WIDTH="51" HEIGHT="1" ALT=""></td> <td><img src="../media/int-up/spacer.gif" WIDTH="73" HEIGHT="1" ALT=""></td> <td><img src="../media/int-up/spacer.gif" WIDTH="33" HEIGHT="1" ALT=""></td> <td><img src="../media/int-up/spacer.gif" WIDTH="117" HEIGHT="1" ALT=""></td> </tr> </table> </body> <!-- InstanceEnd --></html>