BSA/AML Examination Manual - ffiec

Annual Review
Currency Transaction Reporting Exemptions — Overview
The information supporting each designation of a Phase I exempt person must be
reviewed and verified by the bank at least once per year. Annual reports, stock quotes
from newspapers, or other information, such as electronic media could be used to
document the review.
Phase II CTR Exemptions (31 CFR 103.22(d)(2)
(vi)–(vii))
A business that does not fall into any of the Phase I categories may still be exempted
under the Phase II exemptions if it qualifies as either a “non-listed business” or as a
“payroll customer.”
Non-Listed Businesses
A “non-listed business” is defined as a commercial enterprise to the extent of its domestic
operations and only with respect to transactions conducted through its exemptible
accounts and that (i) has maintained a transaction account at the exempting bank for at
least 12 months, (ii) frequently 77 engages in transactions in currency with the bank in
excess of $10,000, and (iii) is incorporated or organized under the laws of the United
States or a state, or is registered as and eligible to do business within the United States or
a state.
Ineligible Businesses
Certain businesses are ineligible for treatment as an exempt non-listed business (31 CFR
103.22(d)(6)(viii)). An ineligible business is defined as a business engaged primarily in
one or more of the following specified activities:
• Serving as a financial institution or as agents for a financial institution of any type.
• Purchasing or selling motor vehicles of any kind, vessels, aircraft, farm equipment, or
mobile homes.
• Practicing law, accounting, or medicine.
• Auctioning of goods.
• Chartering or operation of ships, buses, or aircraft.
77 FinCEN has issued a directive Guidance on Interpreting ‘Frequently’ Found in the Criteria for
Exempting a ‘Non-Listed Business’ under 31 CFR 103.22(d)(2)(vi)(B), November 2002, www.fincen.gov,
which states, “In general, a customer that is being considered for exemption as a non-listed business should
be conducting at least eight large currency transactions throughout the year. In essence, this means the
customer conducts a large currency transaction approximately every six weeks. The fact a customer
conducts fewer than eight large currency transactions annually would generally indicate that any large
currency transactions conducted do not relate to a recurring or routine need.”
FFIEC BSA/AML Examination Manual 82 8/24/2007