Bank Secrecy Act/Currency and Foreign Transaction Reporting Act

Question 1

Sector

Answer 1

Financial

Question 2

Year passed/amended

Answer 2

1970; modified by USA PATRIOT Act (2001)

Question 3

Original purpose

Answer 3

Prevent money laundering

Question 4

Primary requirements

Answer 4

Banks must keep extensive records and report certain types of transactions which may be relevant to criminal, tax or regulatory proceedings

Question 5

Entities subject to the law

Answer 5

“Financial institutions” (different from GLBA): banks; securities brokers and dealers; money services businesses; telegraph companies; casinos; card clubs; and other entities subject to state or federal bank supervisory authority.

Applies to currency transactions, transportation of monetary instruments and the purchase of currency-like instruments.

Question 6

Term for relevant PII or regulated data

Answer 6

Not defined in a single term

Question 7

Definition of relevant PII or regulated data

Answer 7

Name, address, SSN of purchaser, date of purchase, type of instrument, dollar amount, serial number of instrument if applicable

Question 8

Civil or criminal?

Answer 8

Both

Question 9

Enforcing authority - civil

Answer 9

IRS, Treasury

Question 10

Penalties - civil

Answer 10

Greater of $25,000 or the amount of the transaction, up to $100,000; plus $500 per negligent violation, plus $5,000 per day for failure to comply with regulations, plus $25,000 per day for failing to comply with PATRIOT Act information-sharing requirements.

Up to $1 million for financial institutions that fail to comply with due diligence requirements.

Question 11

Enforcing authority - criminal

Answer 11

Treasury?

Question 12

Penalties - criminal

Answer 12

Up to $100,000 fine and/or one year imprisonment, or up to $10,000 and five years imprisonment

Question 13

Preemption?

Answer 13

N/A (federal crimes only)

Question 14

FIP individual rights provided

Answer 14

None

Question 15

FIP control practices addressed

Answer 15

None

Question 16

FIP information lifecycle practices addressed

Answer 16

Use and retention, disclosure (not collection/disposal)

Question 17

Use and retention requirements

Answer 17

For extensions of credit greater than $10,000, except credit secured by real property, must keep records ““with a high degree of usefulness.”” Must include name, address, credit amount, purpose and date of credit. Must keep record for 5 years.

For deposit accounts, must keep record of depositor’s TIN, signature cards, and checks >$100.

For CDs, must keep name, address, description of CD and date of transaction

For wire transfers and direct deposits, must keep all deposit slips or credit slips for transactions >$100.

Note: transactions through ATMs, automated clearinghouses, and point-of-sale systems exempted.

Question 18

Disclosure requirements

Answer 18

Have to provide all of the retained info to aid in an investigation.

Must file a Suspicious Activity Report with Treasury when FI suspects a crime involving:

(1) an insider, regardless of amount;
(2) >=$5000 and has a basis for IDing a suspect;
(3) >=$25,000;
(4) currency transactions aggregating >=$5,000 that involve potential money laundering

PATRIOT Act: Information-sharing requirements

Question 19

Right to list of disclosures?

Answer 19

No

Question 20

FIP management principles addressed

Answer 20

Administration, monitoring and enforcement (i.e. both)

Question 21

Administration requirements

Answer 21

PATRIOT Act: must develop and implement anti-money laundering programs

Question 22

Monitoring and enforcement requirements

Answer 22

Suspicious activity reports required:
Must file a Suspicious Activity Report with Treasury when FI suspects a crime involving:
(1) an insider, regardless of amount;
(2) >=$5000 and has a basis for IDing a suspect;
(3) >=$25,000;
(4) currency transactions aggregating >=$5,000 that involve potential money laundering