Bank Secrecy Act

BSA stands for the Bank Secrecy Act.
It’s a US law that was enacted to prevent money laundering and terrorist financing activities. Here’s a breakdown of what BSA is about:

• Goal: To stop criminals from using financial institutions to hide or launder money.
• Applies to: Financial institutions like banks, money services businesses (MSB), and some other industries vulnerable to money laundering.
• Key requirements for financial institutions:
  • Keep records of cash purchases of certain financial instruments.
  • File reports of cash transactions (CTR) exceeding the daily amount of USD 10,000.
  • Implement Customer Identification Programs (CIP) to verify customer identities.
  • Conduct Customer Due Diligence (CDD) to assess the risks associated with customers and their transactions.
  • Report suspicious activity (SAR)to the Financial Crimes Enforcement Network (FinCEN).

FinCEN SAR

Stands for Financial Crimes Enforcement Network Suspicious Activity Report.
It’s a document filed by financial institutions with FinCEN, the US government agency responsible for combating money laundering and terrorist financing.

Here’s a breakdown of FinCEN SARs:

• Purpose: To report suspicious activity that might be related to money laundering or other financial crimes.
• Who files them: Banks, money services businesses (MSB), and other financial institutions regulated by the Bank Secrecy Act (BSA).
• What is reported: Any transaction or activity that seems suspicious, even if there’s no confirmation of criminal activity. Examples include:
  • Transactions that don’t make economic sense or are inconsistent with a customer’s profile.
  • Large cash deposits or withdrawals.
  • Structuring transactions (breaking down large sums into smaller amounts to avoid reporting thresholds).
  • Activity linked to known or suspected terrorists or criminals.
• Benefits: By filing SARs, financial institutions help FinCEN identify potential criminal activity and prevent it from happening.
• Timeframe for filing: Suspicious activity reports must be filed with FinCEN no later than 30 calendar days after the initial detection of suspicious activity.

FinCEN SARs are a crucial tool in the fight against financial crime.
They allow authorities to investigate suspicious activity and take appropriate action to stop money laundering and terrorist financing.

FinCEN CTR

Stands for Financial Crimes Enforcement Network Currency Transaction Report.
It’s a document filed by financial institutions with FinCEN to report certain cash transactions. Here’s a breakdown of FinCEN CTRs:

• Purpose: To track large cash movements and help identify potential money laundering activity.
• Who files them: Banks, money services businesses (MSB), and other financial institutions regulated by the Bank Secrecy Act (BSA).
• What is reported: Cash transactions exceeding a certain threshold amount. In the United States, the threshold is typically USD 10,000 or more in a single day, but it can also include multiple smaller transactions that add up to USD 10,000 or more within a day.
• Information reported: FinCEN CTRs typically include details like:
  • Amount of cash involved
  • Date of transaction
  • Customer information (name, address, ID, Passport)

When are CTRs not required?

• CTRs are not required for certain transactions, such as deposits into a customer’s own account or withdrawals from a customer’s existing account.
• They also are not required for transactions involving cashier’s checks, money orders, or traveler’s checks purchased with a check drawn on the customer’s account.

Benefits: FinCEN CTRs help authorities track large amounts of cash and identify suspicious patterns that might be indicative of money laundering. This helps to prevent criminals from using the financial system to hide or launder illegal profits.

Key takeaway: While FinCEN SARs report suspicious activity in general, FinCEN CTRs specifically focus on reporting large cash transactions exceeding a certain threshold. Both play a vital role in helping to prevent money laundering and other financial crimes.