On March 16, 2012, the Financial Crimes Enforcement Network (“FinCEN”) issued guidance (the “Guidance”) to clarify, for currency transaction reporting purposes, the aggregation of multiple transactions conducted by businesses with common ownership. FinCEN’s regulations implementing the Bank Secrecy Act require that a financial institution file a currency transaction report (“CTR”) when it has knowledge that the same person has conducted multiple transactions that total more than $10,000 in currency in one business day or when it has knowledge that multiple transactions that total more than $10,000 in currency in one business day are on behalf of the same person. If the financial institution is aware that a person conducted multiple transactions that total more than $10,000 in currency in one business day, it must file a CTR, completing two sections identifying the persons on whose behalf the transactions were conducted. Regarding the determination of on whose behalf a transaction was conducted, the Guidance states that, separately-incorporated entities sharing a common owner are presumed to be independent persons. However, that presumption is rebuttable, and if, based on information obtained in the ordinary course of business and using its knowledge of relevant facts and circumstances, the financial institution determines that the entities are not operating separately or independently of one another or their common owner, transactions conducted on their behalves should be aggregated. A financial institution should use its determination of the separateness of entities in evaluating whether or not to aggregate future transactions of such entities. If a financial institution determines that two entities are not independent of each other, and transactions are conducted on their behalves exceeding $10,000 in one business day, the financial institution should file a CTR listing each entity in separate sections indentifying the person(s) on whose behalf the transaction was conducted and listing the total cash deposit.
Alert March 20, 2012