Currency Transaction Reporting
The Currency Transaction Report or CTR is one of the two primary means by which financial institutions comply with the Bank Secrecy Act and provide information to the government for analysis. The second is the suspicious activity report or SAR.
Money services businesses must file CTRs on transactions in currency involving more than $10,000, in either cash-in or cash-out, exchange of currency or other payment or transfer conducted by, through, or to the MSB on any one day by or on behalf of the same person.
While transactions of $10,000.00 or less cannot be reported as CTRs, they may potentially indicate suspicious activity to be reported on a SAR-MSB. For example, a customer cashing multiple checks over a period of days or weeks from $9,000 to $10,000.00 drawn against personal and business accounts at one or more banks could represent the illegal “structuring” of transactions. The person, alone or in conjunction with others, could be structuring transactions to evade CTR reporting and detection. In such cases, an MSB must file a SAR for the suspicious activity but would not file a CTR.
MSBs must also be aware of “Aggregation”
Multiple transactions conducted by or on behalf of the same person on the same day must be treated as a single transaction for CTR purposes if the MSB has knowledge that:
1. they are by or on behalf of the same person, and
2. they result in either currency received (Cash In) or currency disbursed (Cash Out) by the MSB totaling more than $10,000 during any one business day.
For an MSB a business day is a calendar day.
The basic requirements of an MSB performing CTR reportable transaction(s) are to:
- Verify and record customer ID,
- Obtain transaction information,
- Complete and file the CTR in a timely manner (within 15 days), and,
- Retain a copy of the CTR for five years from the date of filing the report.