Monetary Offices, Treasury § 103.

22

by this section or made voluntarily) (C) Safekeeping deposits;

shall be protected from liability for (D) Payments on any form of credit,
any disclosure contained in, or for fail- including markers and counter checks;
ure to disclose the fact of, such report, (E) Bets of currency;
or both, to the extent provided by 31 (F) Currency received by a casino for
U.S.C. 5318(g)(3). transmittal of funds through wire
(f) Compliance. Compliance with this transfer for a customer;
section shall be audited by the Depart- (G) Purchases of a casino’s check;
ment of the Treasury, through FinCEN and
or its delegees, under the terms of the (H) Exchanges of currency for cur-
Bank Secrecy Act. Failure to satisfy rency, including foreign currency.
the requirements of this section may
(ii) Transactions in currency involv-
constitute a violation of the reporting
ing cash out include, but are not lim-
rules of the Bank Secrecy Act and of
ited to:
this part.
(g) Effective date. This section applies (A) Redemptions of chips, tokens,
to transactions occurring after March and plaques;
25, 2003. (B) Front money withdrawals;
(C) Safekeeping withdrawals;
[67 FR 60729, Sept. 26, 2002] (D) Advances on any form of credit,
§ 103.22 Reports of transactions in cur- including markers and counter checks;
rency. (E) Payments on bets, including slot
jackpots;
(a) General. This section sets forth
(F) Payments by a casino to a cus-
the rules for the reporting by financial
tomer based on receipt of funds
institutions of transactions in cur-
through wire transfer for credit to a
rency. The reporting obligations them-
customer;
selves are stated in paragraph (b) of
this section. The reporting rules relat- (G) Cashing of checks or other nego-
ing to aggregation are stated in para- tiable instruments;
graph (c) of this section. Rules permit- (H) Exchanges of currency for cur-
ting banks to exempt certain trans- rency, including foreign currency; and
actions from the reporting obligations (I) Reimbursements for customers’
appear in paragraph (d) of this section. travel and entertainment expenses by
(b) Filing obligations—(1) Financial in- the casino.
stitutions other than casinos. Each finan- (c) Aggregation—(1) Multiple branches.
cial institution other than a casino A financial institution includes all of
shall file a report of each deposit, with- its domestic branch offices, and any
drawal, exchange of currency or other recordkeeping facility, wherever lo-
payment or transfer, by, through, or to cated, that contains records relating to
such financial institution which in- the transactions of the institution’s
volves a transaction in currency of domestic offices, for purposes of this
more than $10,000, except as otherwise section’s reporting requirements.
provided in this section. In the case of (2) Multiple transactions—general. In
the Postal Service, the obligation con- the case of financial institutions other
tained in the preceding sentence shall than casinos, for purposes of this sec-
not apply to payments or transfers tion, multiple currency transactions
made solely in connection with the shall be treated as a single transaction
purchase of postage or philatelic prod- if the financial institution has knowl-
ucts. edge that they are by or on behalf of
(2) Casinos. Each casino shall file a any person and result in either cash in
report of each transaction in currency, or cash out totaling more than $10,000
involving either cash in or cash out, of during any one business day (or in the
more than $10,000. case of the Postal Service, any one
(i) Transactions in currency involv- day). Deposits made at night or over a
ing cash in include, but are not limited weekend or holiday shall be treated as
to: if received on the next business day fol-
(A) Purchases of chips, tokens, and lowing the deposit.
plaques; (3) Multiple transactions—casinos. In
(B) Front money deposits; the case of a casino, multiple currency

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 § 103.22 31 CFR Ch. I (7–1–06 Edition)

transactions shall be treated as a sin- (iv) Any entity, other than a bank,
gle transaction if the casino has knowl- whose common stock or analogous eq-
edge that they are by or on behalf of uity interests are listed on the New
any person and result in either cash in York Stock Exchange or the American
or cash out totaling more than $10,000 Stock Exchange or whose common
during any gaming day. For purposes stock or analogous equity interests
of this paragraph (c)(3), a casino shall have been designated as a Nasdaq Na-
be deemed to have the knowledge de- tional Market Security listed on the
scribed in the preceding sentence, if: Nasdaq Stock Market (except stock or
any sole proprietor, partner, officer, di- interests listed under the separate
rector, or employee of the casino, act- ‘‘Nasdaq Small-Cap Issues’’ heading),
ing within the scope of his or her em- provided that, for purposes of this
ployment, has knowledge that such paragraph (d)(2)(iv), a person that is a
multiple currency transactions have financial institution, other than a
occurred, including knowledge from ex- bank, is an exempt person only to the
amining the books, records, logs, infor- extent of its domestic operations;
mation retained on magnetic disk, tape (v) Any subsidiary, other than a
or other machine-readable media, or in bank, of any entity described in para-
any manual system, and similar docu- graph (d)(2)(iv) of this section (a ‘‘list-
ments and information, which the ca- ed entity’’) that is organized under the
sino maintains pursuant to any law or laws of the United States or of any
regulation or within the ordinary State and at least 51 percent of whose
course of its business, and which con- common stock or analogous equity in-
tain information that such multiple terest is owned by the listed entity,
currency transactions have occurred. provided that, for purposes of this
(d) Transactions of exempt persons—(1) paragraph (d)(2)(v), a person that is a
General. No bank is required to file a financial institution, other than a
report otherwise required by paragraph bank, is an exempt person only to the
(b) of this section with respect to any extent of its domestic operations;
transaction in currency between an ex- (vi) To the extent of its domestic op-
empt person and such bank, or, to the erations and only with respect to
extent provided in paragraph (d)(6)(vi) transactions conducted through its ex-
of this section, between such exempt emptible accounts, any other commer-
person and other banks affiliated with cial enterprise (for purposes of this
such bank. In addition, a non-bank fi- paragraph (d), a ‘‘non-listed business’’),
nancial institution is not required to other than an enterprise specified in
file a report otherwise required by paragraph (d)(6)(viii) of this section,
paragraph (b) of this section with re- that:
spect to a transaction in currency be- (A) Has maintained a transaction ac-
tween the institution and a commer- count, as defined in paragraph (d)(6)(ix)
cial bank. (A limitation on the exemp- of this section, at the bank for at least
tion described in this paragraph (d)(1) 12 months;
is set forth in paragraph (d)(7) of this (B) Frequently engages in trans-
section.) actions in currency with the bank in
(2) Exempt person. For purposes of excess of $10,000; and
this section, an exempt person is: (C) Is incorporated or organized
(i) A bank, to the extent of such under the laws of the United States or
bank’s domestic operations; a State, or is registered as and eligible
(ii) A department or agency of the to do business within the United States
United States, of any State, or of any or a State; or
political subdivision of any State; (vii) With respect solely to with-
(iii) Any entity established under the drawals for payroll purposes from ex-
laws of the United States, of any State, isting exemptible accounts, any other
or of any political subdivision of any person (for purposes of this paragraph
State, or under an interstate compact (d), a ‘‘payroll customer’’) that:
between two or more States, that exer- (A) Has maintained a transaction ac-
cises governmental authority on behalf count, as defined in paragraph (d)(6)(ix)
of the United States or any such State of this section, at the bank for at least
or political subdivision; 12 months;

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 Monetary Offices, Treasury § 103.22

(B) Operates a firm that regularly customer and for which an exemption
withdraws more than $10,000 in order to is sought under this paragraph (d).
pay its United States employees in cur- (4) Annual review. The information
rency; and supporting each designation of an ex-
(C) Is incorporated or organized empt person, and the application to
under the laws of the United States or each account of an exempt person de-
a State, or is registered as and eligible scribed in paragraphs (d)(2)(vi) or
to do business within the United States (d)(2)(vii) of this section of the moni-
or a State. toring system required to be main-
(3) Initial designation of exempt per- tained by paragraph (d)(9)(ii) of this
sons—(i) General. A bank must des- section, must be reviewed and verified
ignate each exempt person with which at least once each year.
it engages in transactions in currency (5) Biennial filing with respect to cer-
by the close of the 30-day period begin- tain exempt persons—(i) General. A bien-
ning after the day of the first report- nial filing, as described in paragraph
able transaction in currency with that (d)(5)(ii) of this section, is required for
person sought to be exempted from re- continuation of the treatment as an ex-
porting under the terms of this para- empt person of a customer described in
graph (d). Except as provided in para- paragraph (d)(2)(vi) or (vii) of this sec-
graph (d)(3)(ii) of this section, designa- tion. No biennial filing is required for
tion by a bank of an exempt person continuation of the treatment as an ex-
shall be made by a single filing of empt person of a customer described in
Treasury Form TD F 90–22.53. (A bank
paragraphs (d)(2)(i) through (v) of this
is not required to file a Treasury Form
section.
TD F 90–22.53 with respect to the trans-
(ii) Non-listed businesses and payroll
fer of currency to or from any of the
twelve Federal Reserve Banks.) The customers. The designation of a non-
designation must be made separately listed business or a payroll customer as
by each bank that treats the person in an exempt person must be renewed bi-
question as an exempt person, except ennially, beginning on March 15 of the
as provided in paragraph (d)(6)(vi) of second calendar year following the
this section. The designation require- year in which the first designation of
ments of this paragraph (d)(3) apply such customer as an exempt person is
whether or not the particular exempt made, and every other March 15 there-
person to be designated has previously after, on Treasury Form TD F 90–22.53.
been treated as exempt from the re- Biennial renewals must include a state-
porting requirements of prior § 103.22(a) ment certifying that the bank’s system
under the rules contained in 31 CFR of monitoring the transactions in cur-
103.22(a) through (g), as in effect on Oc- rency of an exempt person for sus-
tober 20, 1998 (see 31 CFR Parts 0 to 199 picious activity, required to be main-
revised as of July 1, 1998). A special tained by paragraph (d)(9)(ii) of this
transitional rule, which extends the section, has been applied as necessary,
time for initial designation for cus- but at least annually, to the account of
tomers that have been previously the exempt person to whom the bien-
treated as exempt under such prior nial renewal applies. Biennial renewals
rules, is contained in paragraph (d)(11) also must include information about
of this section. any change in control of the exempt
(ii) Special rules for banks. When des- person involved of which the bank
ignating another bank as an exempt knows (or should know on the basis of
person, a bank must either make the its records).
filing required by paragraph (d)(3)(i) of (6) Operating rules—(i) General rule.
this section or file, in such a format Subject to the specific rules of this
and manner as FinCEN may specify, a paragraph (d), a bank must take such
current list of its domestic bank cus- steps to assure itself that a person is
tomers. In the event that a bank files an exempt person (within the meaning
its current list of domestic bank cus- of the applicable provision of para-
tomers, the bank must make the filing graph (d)(2) of this section), to docu-
as described in paragraph (d)(3)(i) of ment the basis for its conclusions, and
this section for each bank that is a new document its compliance, with the

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 § 103.22 31 CFR Ch. I (7–1–06 Edition)

terms of this paragraph (d), that a rea- scribed in paragraph (d)(2)(v) of this
sonable and prudent bank would take section, a bank may rely upon:
and document to protect itself from (A) Any reasonably authenticated
loan or other fraud or loss based on corporate officer’s certificate;
misidentification of a person’s status, (B) Any reasonably authenticated
and in the case of the monitoring sys- photocopy of Internal Revenue Service
tem requirement set forth in paragraph Form 851 (Affiliation Schedule) or the
(d)(9)(ii) of this section, such steps that equivalent thereof for the appropriate
a reasonable and prudent bank would tax year; or
take and document to identify sus- (C) A person’s Annual Report or
picious transactions as required by Form 10-K, as filed in each case with
paragraph (d)(9)(ii) of this section. the Securities and Exchange Commis-
(ii) Governmental departments and sion.
agencies. A bank may treat a person as
(v) Aggregated accounts. In deter-
a governmental department, agency, or
mining the qualification of a customer
entity if the name of such person rea-
as a non-listed business or a payroll
sonably indicates that it is described in
customer, a bank may treat all ex-
paragraph (d)(2)(ii) or (d)(2)(iii) of this
emptible accounts of the customer as a
section, or if such person is known gen-
single account. If a bank elects to treat
erally in the community to be a State,
all exemptible accounts of a customer
the District of Columbia, a tribal gov-
as a single account, the bank must con-
ernment, a Territory or Insular Posses-
tinue to treat such accounts consist-
sion of the United States, or a political
ently as a single account for purposes
subdivision or a wholly-owned agency
or instrumentality of any of the fore- of determining the qualification of the
going. An entity generally exercises customer as a non-listed business or
governmental authority on behalf of payroll customer.
the United States, a State, or a polit- (vi) Affiliated banks. The designation
ical subdivision, for purposes of para- required by paragraph (d)(3) of this sec-
graph (d)(2)(iii) of this section, only if tion may be made by a parent bank
its authorities include one or more of holding company or one of its bank
the powers to tax, to exercise the au- subsidiaries on behalf of all bank sub-
thority of eminent domain, or to exer- sidiaries of the holding company, so
cise police powers with respect to mat- long as the designation lists each bank
ters within its jurisdiction. Examples subsidiary to which the designation
of entities that exercise governmental shall apply.
authority include, but are not limited (vii) Sole proprietorships. A sole pro-
to, the New Jersey Turnpike Authority prietorship may be treated as a non-
and the Port Authority of New York listed business if it otherwise meets
and New Jersey. the requirements of paragraph (d)(2)(vi)
(iii) Stock exchange listings. In deter- of this section, as applicable. In addi-
mining whether a person is described in tion, a sole proprietorship may be
paragraph (d)(2)(iv) of this section, a treated as a payroll customer if it oth-
bank may rely on any New York, erwise meets the requirements of para-
American or Nasdaq Stock Market list- graph (d)(2)(vii) of this section, as ap-
ing published in a newspaper of general plicable.
circulation, on any commonly accepted (viii) Ineligible businesses. A business
or published stock symbol guide, on engaged primarily in one or more of
any information contained in the Secu- the following activities may not be
rities and Exchange Commission treated as a non-listed business for pur-
‘‘Edgar’’ System, or on any informa- poses of this paragraph (d): serving as
tion contained on an Internet World- financial institutions or agents of fi-
Wide Web site or sites maintained by nancial institutions of any type; pur-
the New York Stock Exchange, the chase or sale to customers of motor ve-
American Stock Exchange, or the Na- hicles of any kind, vessels, aircraft,
tional Association of Securities Deal- farm equipment or mobile homes; the
ers. practice of law, accountancy, or medi-
(iv) Listed company subsidiaries. In de- cine; auctioning of goods; chartering or
termining whether a person is de- operation of ships, buses, or aircraft;

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 Monetary Offices, Treasury § 103.22

gaming of any kind (other than li- transaction or the customer engaging
censed parimutuel betting at race in the transaction; or
tracks); investment advisory services (B) Has reason to believe that the
or investment banking services; real customer does not meet the criteria es-
estate brokerage; pawn brokerage; title tablished by this paragraph (d) for
insurance and real estate closing; trade treatment of the transactor as an ex-
union activities; and any other activi- empt person or that the transaction is
ties that may be specified by FinCEN. not a transaction of the exempt person.
A business that engages in multiple (ii) Subject to the specific terms of
business activities may be treated as a this paragraph (d), and absent any spe-
non-listed business so long as no more cific knowledge of information indi-
than 50% of its gross revenues is de- cating that a customer no longer meets
rived from one or more of the ineligible the requirements of an exempt person,
business activities listed in this para- a bank satisfies the requirements of
graph (d)(6)(viii). this paragraph (d) to the extent it con-
(ix) Exemptible accounts of a non-listed tinues to treat that customer as an ex-
business or payroll customer. The ex- empt person until the date of that cus-
emptible accounts of a non-listed busi- tomer’s next periodic review, which, as
ness or payroll customer include trans- required by paragraph (d)(4) of this sec-
action accounts and money market de- tion, shall occur no less than once each
posit accounts. However, money mar- year.
ket deposit accounts maintained other (iii) A bank that files a report with
than in connection with a commercial respect to a currency transaction by an
enterprise are not exemptible accounts. exempt person rather than treating
A transaction account, for purposes of such person as exempt shall remain
this paragraph (d), is any account de- subject, with respect to each such re-
scribed in section 19(b)(1)(C) of the Fed- port, to the rules for filing reports, and
eral Reserve Act, 12 U.S.C. 461(b)(1)(C), the penalties for filing false or incom-
and its implementing regulations (12 plete reports that are applicable to re-
CFR part 204). A money market deposit porting of transactions in currency by
account, for purposes of this paragraph persons other than exempt persons.
(d), is any interest-bearing account (9) Obligations to file suspicious activity
that is described as a money market reports and maintain system for moni-
deposit account in 12 CFR 204.2(d)(2). toring transactions in currency. (i) Noth-
(x) Documentation. The records main- ing in this paragraph (d) relieves a
tained by a bank to document its com- bank of the obligation, or reduces in
pliance with and administration of the any way such bank’s obligation, to file
rules of this paragraph (d) shall be a report required by § 103.21 with re-
maintained in accordance with the pro- spect to any transaction, including any
visions of § 103.38. transaction in currency that a bank
(7) Limitation on exemption. A trans- knows, suspects, or has reason to sus-
action carried out by an exempt person pect is a transaction or attempted
as an agent for another person who is transaction that is described in
the beneficial owner of the funds that § 103.21(a)(2)(i), (ii), or (iii), or relieves a
are the subject of a transaction in cur- bank of any reporting or recordkeeping
rency is not subject to the exemption obligation imposed by this part (except
from reporting contained in paragraph the obligation to report transactions in
(d)(1) of this section. currency pursuant to this section to
(8) Limitation on liability. (i) No bank the extent provided in this paragraph
shall be subject to penalty under this (d)). Thus, for example, a sharp in-
part for failure to file a report required crease from one year to the next in the
by paragraph (b) of this section with gross total of currency transactions
respect to a transaction in currency by made by an exempt customer, or simi-
an exempt person with respect to larly anomalous transaction trends or
which the requirements of this para- patterns, may trigger the obligations
graph (d) have been satisfied, unless of a bank under § 103.21.
the bank: (ii) Consistent with its annual review
(A) Knowingly files false or incom- obligations under paragraph (d)(4)of
plete information with respect to the this section, a bank shall establish and

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 § 103.23 31 CFR Ch. I (7–1–06 Edition)

maintain a monitoring system that is June 30, 2000, and the date on which the
reasonably designed to detect, for each bank makes the designation or the de-
account of a non-listed business or pay- termination described in paragraph
roll customer, those transactions in (d)(11)(iii) of this section. A bank that
currency involving such account that continues to treat a previously exempt-
would require a bank to file a sus- ed account as exempt under the prior
picious transaction report. The state- rules, and for the period, specified in
ment in the preceding sentence with the preceding sentence, shall remain
respect to accounts of non-listed and subject to such prior rules, and to the
payroll customers does not limit the penalties for failing to comply there-
obligation of banks generally to take with, with respect to transactions in
the steps necessary to satisfy the currency occurring during such period.
terms of paragraph (d)(9)(i) of this sec- (iii) A bank must, on or before July 1,
tion and § 103.21 with respect to all ex- 2000, either designate the holder of a
empt persons. previously exempted account as an ex-
(10) Revocation. The status of any per- empt person under paragraph (d)(2) of
son as an exempt person under this this section or determine that it may
paragraph (d) may be revoked by not or will not treat such holder as an
FinCEN by written notice, which may exempt person under paragraph (d)(2)
be provided by publication in the FED- of this section (so that it will be re-
ERAL REGISTER in appropriate situa- quired to make reports under para-
tions, on such terms as are specified in graph (a) of this section with respect to
such notice. Without any action on the transactions in currency by such per-
part of the Treasury Department and son occurring on or after the date of
subject to the limitation on liability determination, but no later than July
contained in paragraph (d)(8)(ii) of this 1, 2000). A bank that initially does not
section: designate the holder of a previously ex-
(i) The status of an entity as an ex- empted account as an exempt person
empt person under paragraph (d)(2)(iv) for periods beginning after June 30,
of this section ceases once such entity 2000, may later make such a designa-
ceases to be listed on the applicable tion, to the extent otherwise permitted
stock exchange; and to do so by this paragraph (d), for peri-
(ii) The status of a subsidiary as an ods after the effective date of such des-
exempt person under paragraph ignation.
(d)(2)(v) of this section ceases once
such subsidiary ceases to have at least (Approved by the Office of Management and
Budget under control number 1506–0009)
51 per cent of its common stock or
analogous equity interest owned by a [63 FR 50156, Sept. 21, 1998, as amended at 65
listed entity. FR 46360, July 28, 2000]
(11) Transitional rule. (i) No accounts
may be newly granted an exemption or § 103.23 Reports of transportation of
placed on an exempt list on or after Oc- currency or monetary instruments.
tober 21, 1998, under the rules con- (a) Each person who physically trans-
tained in 31 CFR 103.22(b) through (g), ports, mails, or ships, or causes to be
as in effect on October 20, 1998 (see 31 physically transported, mailed, or
CFR Parts 0 to 199 revised as of July 1, shipped, or attempts to physically
1998). transport, mail or ship, or attempts to
(ii) If a bank properly treated an ac- cause to be physically transported,
count (a ‘‘previously exempted ac- mailed or shipped, currency or other
count’’) as exempt on October 20, 1998 monetary instruments in an aggregate
under the rules contained in 31 CFR amount exceeding $10,000 at one time
103.22(b) through (g), as in effect on Oc- from the United States to any place
tober 20, 1998 (see 31 CFR Parts 0 to 199 outside the United States, or into the
revised as of July 1, 1998), it may con- United States from any place outside
tinue to treat such account as exempt the United States, shall make a report
under such prior rules with respect to thereof. A person is deemed to have
transactions in currency occurring on caused such transportation, mailing or
or before June 30, 2000, provided that it shipping when he aids, abets, counsels,
does so consistently until the earlier of commands, procures, or requests it to

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