Specifically, the act requires
financial institutions to keep
records of cash purchases of
negotiable instruments, file reports
of cash transactions exceeding
$10,000 (daily aggregate amount),
and to report suspicious activity
that might signify money laundering,
tax evasion, or other criminal
activities. It was passed by the
Congress of the United States in
1970. The BSA is sometimes referred
to as an "anti-money laundering" law
("AML") or jointly as "BSA/AML".
Several anti-money laundering acts,
including provisions in title III of
the USA PATRIOT Act, have been
enacted up to the present to amend
the BSA.
Types of Reports
The BSA regulations require all
financial institutions to submit
five types of reports to the
government.
FinCEN Form 104 Currency Transaction
Report (CTR): A CTR must be filed
for each deposit, withdrawal,
exchange of currency, or other
payment or transfer, by, through or
to a financial institution, which
involves a transaction in currency
of more than $10,000. Multiple
currency transactions must be
treated as a single transaction if
the financial institution has
knowledge that: (a) they are
conducted by or on behalf of the
same person; and, (b) they result in
cash received or disbursed by the
financial institution of more than
$10,000. (31 CFR 103.22)
FinCEN Form 105 Report of
International Transportation of
Currency or Monetary Instruments
(CMIR): Each person (including a
bank) who physically transports,
mails or ships, or causes to be
physically transported, mailed,
shipped or received, currency,
traveler's checks, and certain other
monetary instruments in an aggregate
amount exceeding $10,000 into or out
of the United States must file a
CMIR
Department of the Treasury Form
90-22.1 Report of Foreign Bank and
Financial Accounts (FBAR): Each
person (including a bank) subject to
the jurisdiction of the United
States having an interest in,
signature or other authority over,
one or more bank, securities, or
other financial accounts in a
foreign country must file an FBAR if
the aggregate value of such accounts
at any point in a calendar year
exceeds $10,000. (31 CFR 103.24)
Treasury Department Form 90-22.47
and OCC Form 8010-9, 8010-1
Suspicious Activity Report (SAR):
Banks must file a SAR for any
suspicious transaction relevant to a
possible violation of law or
regulation. (31 CFR 103.18 −
formerly 31 CFR 103.21) (12 CFR
12.11)
"Designation of Exempt Person"
FinCEN Form 110: Banks must file
this form to designate an exempt
customer for the purpose of CTR
reporting under the BSA (31 CFR
103.22(d)(3)(i)). In addition, banks
use this form biennially (every two
years) to renew exemptions for
eligible non-listed business and
payroll customers. (31 CFR
103.22(d)(5)(i))
Affected Transactions
Currency Transaction Report (CTR)
Cash transactions in excess of
$10,000 during the same business
day. The amount over $10,000 can be
either from one transaction or a
combination of cash transactions.
Filed with the Internal Revenue
Service.
Monetary Instrument Log (MIL)
Cash purchases of monetary
instruments, such as money orders,
cashier's checks and travelers
checks, totaling from $3,000 to
$10,000, inclusive. Filed with the
Internal Revenue Service.
Suspicious Activity Report (SAR)
Any cash transaction where the
customer seems to be trying to avoid
BSA reporting requirements (e.g.,
CTR, MIL). A SAR must also be filed
if the customer's actions indicate
that s/he is laundering money or
otherwise violating federal criminal
law. The customer must not know that
a SAR is being filed. These reports
are filed with the Financial Crimes
Enforcement Network ("FinCEN").
Sanctions
There are stiff penalties for
individuals and institutions that
fail to file CTRs, MILs, or SARs.
There are also penalties for those
that disclose to its clients that it
has filed a SAR about a client.
Penalties include extremely high
fines and long prison sentences if
found guilty.
How it affects U.S. citizens
CTRs include the individual's bank
account number, name, address, and
Social Security Number. SAR reports,
required when transactions indicate
behavior designed to elude CTRs (or
many other types of suspicious
activities), include somewhat more
detailed information and usually
include investigation efforts on the
part of the financial institution to
assess the validity or nature of the
transactions.
A single CTR filed for
your account is usually of no
concern to the authorities, while
multiple CTRs from varying
institutions or a SAR indicates that
activity may be suspicious, as a
bank customer though they are
meaningless unless you are actually
doing something illegal.
A financial
institution is not allowed to inform
a business or consumer that a SAR is
being filed, and all the reports
mandated by the BSA are exempt from
disclosure under the Freedom of
Information Act.
Businesses that primarily deal in
cash, such as bars and restaurants
can be exempted from having their
deposits and withdrawals reported as
CTRs, although this exemption is
rarely granted. Instead, most banks
have computer systems which retains
the CTR information and allows
duplicate CTR's to be created
seamlessly.
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