Aka “The Currency and Foreign Transaction Reporting Act” authorizes the U.S treasury secretary to issue regulations that impose extensive record-keeping and reporting requirements on F.I’s

Anti-money laundering and fraud effort

F.I must keep records and file reports on certain financial transactions

• currency transactions in excess of $10,000 (does not include credit secured by real property)

• bank checks, drafts, cashier’s checks, money orders, travelers checks for $3000 or more in currency

Applies to:

• • any entities subject to supervision by state or federal bank supervisory authority (banks, securities brokers, card clubs, etc)

  • Certain funds transfer exempted from regulation including those governed by the Electronic

  • Funds Transfer Act and those made through automated clearinghouses, ATM or point of sales systems.

Record Retention:

• Only those with “high degree of usefulness”

• Must include:

  • • Borrower’s name and address

    • Credit amount

    • Purpose and date of credit

• Such records may be maintained for five years

• For deposit account records:

  • • ▪ Depositor’s taxpayer ID

    • ▪ Signature cards

    • ▪ Checks exceeding $100

Suspicious Activity Reports (SAR)

• FI must file in certain situations. Alerts gov to suspicious transactions

• Must be filed with the U.S Department of Treasury’s Financial Crimes Enforcement

• Network in the following circumstances:

  • • ▪ When an FI suspects an insider committing a crime regardless of dollar amount

    • ▪ When entity detects crime involving $5000 and has substantial basis for identifying suspect

    • ▪ When entity detects crime involving $25000 (no need for suspect)

    • ▪ When entity detects currency transactions aggregating $5000 or more that involve potential money laundering

• Violations: civil penalties including fines up $25000 or the amount of the transaction (up to $100,000 max) as well as penalties for negligence ($500/violation). Additional penalties up to

• $5000 per day for failure to comply.

• Penalties up to $25000 for failure to comply with info sharing requirements of the USA PATRIOT Act. Penalties up to $1mil for failure to comply with due diligence requirements. Criminal penalties include up to $100,000 fine and/or 1 year imprisonment and up to $10,000 fine and or 5 year imprisonment.

The International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001

• Part of the USA PATRIOT Act. Expanded the BSA reach. Gave U.S Treasury secretary the ability to

promulgate broad rules to implement modified Know Your Customer requirements.