FinCEN Clarifies Requirements of Reporting Financial Transactions
In an effort to enhance regulatory efficiency and capture complete, accurate Currency Transaction Report (CTR) data to law enforcement, FinCEN has issued an administrative ruling regarding CTRs (FinCEN Form 112). Financial institutions have new requirements for reporting transactions involving sole proprietorships and legal entities operating under a “doing business as” (DBA) name. Set to take effect April 6, 2020 (September 1, 2020 for batch filers), the ruling replaces two previous rulings, FIN-2006-R003 and FIN-2008-R001.
The following lists outline how financial institutions should prepare CTRs for sole proprietorships and legal entities, as stated in the FinCEN ruling.
CTRs for Sole Proprietorships
- When a sole proprietorship is involved, complete a single Part I “Person Involved in Transaction” section with the individual owner’s name in Items 4 through 7 and Item 17 (name, gender, and date of birth).
- If the individual owner is doing business in his or her own name, all of Part I should be completed reflecting the individual owner’s information.
- If the individual owner is operating the business under a DBA name, the DBA name should be used in Item 8 “Alternate name,” and the rest of Part I (other than Items 4-6, 7, and 17) should be completed with the DBA name.
- If the individual owner operates under multiple DBAs, then a separate Part I section should be completed for each different DBA involved in the transactions.
- The amount and account number(s) entered in Item 21or Item 22 will be the amount and account number(s) associated with the specific location involved.
CTRs for Legal Entities
- When a legal entity is involved, such as a partnership, incorporated business, or limited liability company, a Part I section should be prepared to contain the home office data (address, telephone number, identification number, etc.) of the entity.
- When multiple entity locations are involved, a separate Part I section should be prepared for each location involved.
- Each additional Part I should include the entity’s legal name in Item 4 and alternate name, if any, in Item 8.
- The initial Part I section on the entity home office will show the total amount and all account numbers involved in Item 21 or 22.
- The amount and account number(s) entered in Item 21 or Item 22 will be the amount and account number(s) associated with the specific location.
- When there are multiple DBAs involved, Item 8 “Alternate name” should be left blank in the entity home office Part I section.
- When the entity home office address is the same as the transaction location, only a home office Part I section should be prepared.
Terri Luttrell, CAMS-Audit
Terri Luttrell is a seasoned AML professional and former director and AML/OFAC officer with over 20 years in the banking industry, working both in medium and large community and commercial banks ranging from $2 billion to $330 billion in asset size. She has successfully worked with institutions in developing BSA/OFAC programs, optimizing various automated solutions, and streamlining processes while ensuring all regulatory requirements are met. As the Compliance and Engagement Director at Abrigo, Terri provides insights that contribute and support long-term banking strategies based on analysis of market and industry trends, competitor developments, and financial and regulatory technology changes. She is an audit-certified anti-money laundering specialist and a board member of the Central Texas chapter of the Association of Certified Anti-Money Laundering Specialists (ACAMS). Terri earned her bachelor’s degree in business administration, specializing in business and finance, from the University of North Texas.