Module IIIWhat to Look For

Reporting Procedures

Cashier: Immediately report any incident of suspicious

activity to your supervisor. Gather and present to your supervisor all the

information and documentation that made the transaction “suspicious”.

It is prohibited to notify any person involved in the transaction that the transaction has been reported.

Supervisor: Review the transaction for accuracy, completeness,

and concurrence that the activity falls under the definition of “suspicious”.

Notify the compliance department of possible need to file a Suspicious Activity Report.

The name of the agent, including any trade names or doing-business-as names

Address Type of services Gross Transaction Amount Depository Institution The year in which the agent first became an agent The number of branches and sub-agents the agent

hasThere must be supporting documentation including a

copy of the filed registration form, an estimate of business volume, information regarding ownership or control, and the agent list must be retained by the MSB for a period of five years.

◦ Money Transmitters◦ Currency Dealers or ExchangersThe following are not REQUIRED but can voluntarily

file SARS◦ Money order issuers, sellers or redeemers◦ Traveler’s check issuers, sellers, or redeemers

Review the transaction and supporting documents for concurrence that the activity is indeed suspicious under the BSA definition:

File a SAR-MSB (FinCEN form 109) no later than 30 days after the date of the initial detection of facts that constitute a basis for filing the report. Send the completed report to the address noted on the form:

If the transaction involves currency in excess of $10,000, a CTR (FinCEN Form 104) must also be filed.

On the SAR Form 109, any field marked with an asterisk (*) must be filled in. If the information is not known or not applicable, mark the box with “XX”.

Don’t forget to send copies of the SAR and all supporting documentation to the appropriate company location for record retention!!

Each week the appropriate manager should review the Customer Transaction Reports of $2,000 or greater to: Determine if any customer has attempted to evade the

CTR reporting requirement by conducting a pattern of transactions just under the $10,000 (e.g., $9800 on Monday, $9600 on Tuesday, $9900 on Wednesday, etc…

If a suspicious pattern of transactions is detected, then the SAR-MSB (FinCEN Form 109) should be completed.

The FinCEN Form 109 (Suspicious Activity Report for Money Services Business) can be found at: www.fincen.gov.

Click on Regulatory/BSA Guidance on the left side then….

Scroll down to BSA Forms & Filing… Scroll down again to the Forms section and

under Most Frequently Requested Forms there is a link that will bring up an electronic copy of the Form 109 that can be filled in on the screen then printed out…or, print the form and fill out manually.

◦ Customer’s transactions total more than $2,000* AND the customer is acting suspiciously.

◦ If you suspect that a customer’s transactions may be linked to terrorist activity, your firm should immediately call the Financial Institutions Hotline at (800) 556-3974.

◦ For Travelers checks and money orders, a $5,000 limit may apply

When accepting an instruction to send transfer $3,000 or more you must◦ Verify the identity of the sending customer◦ Create and maintain a record

When accepting and instruction to pay a money transfer of $3,000 or more you must◦ Verify the identity of the receiving customer◦ Create and maintain a record regardless of

payment method

Cash-In and Cash-Out of Large Transactions Reports◦ these reports include transactions that exceed a certain

threshold Kiting Reports

◦ Kiting is depositing and drawing checks between accounts at two or more banks and thereby taking advantage of the time it takes the bank of deposit to collect from the paying bank.

◦ These reports may disclose other unusual patterns of activity possibly associated with money laundering.

Money Transfer Reports◦ Money transfer companies prepare, or have systems that

generate, daily transaction reports and other reports that identify different groupings of transfer activity processed through their systems

$3,000 Instrument “log”◦ Reports of cash sales of instruments between $3,000 -

$10,000 Must record the amount of the transaction, the serial numbers

of the instruments, and the date of the transaction. Clearance Records

◦ Issuers of money orders and traveler’s checks prepare, or have systems that generate, daily records of items that have been presented for payment against the issuer’s bank account.

$3,000 Funds Transfer Reports◦ Required by BSA regulations, can help money

transmitters identify possible structuring patterns. Customer Activity Reports

◦ Reports generated to monitor individual customer responses or general customer activity

A suspicious transaction is one or more of the following:◦ Involves funds derived from illegal activity, or is intended or

conducted in order to hide or disguise funds or assets derived from illegal activity-the monetary proceeds of a criminal act.

◦ Is designed to evade BSA requirements, whether through structuring or other means-attempting to bribe the MSB employee not to file a CTR

◦ Appears to serve no business or apparent lawful purpose, and the MSB can determine no reasonable explanation for the transaction after examining all available facts.

◦ Involves use of the money services business to facilitate criminal activity such as; an MSB suspects that a customer is sending a money transfer in order to fund a terrorist organization.

All MSBs should have a system or procedure to ensure that SARs are filed when appropriate.

Attempts to Evade BSA Reporting or Recordkeeping Requirements◦ Customers may try to keep their transactions just

below the reporting or recordkeeping thresholds Customers Who Provide Insufficient and/or

Suspicious Information◦ Individual and business customers may try to

evade providing required identification

Activity Not Consistent With the Customer’s Business or Occupation

Unusual Characteristics or Activities Changes in Transactions or Patterns of

Transactions-be alert for changes in activity Employee behavior

A customer who uses fake, altered, or multiple ID’s or alters the spelling or order of his/her full name.

A customer changes a transaction after being told he needs to present ID.

A customer conducts transactions so that they fall just below the reporting or record keeping limit.

A customer uses two or more MSB locations to break up transactions into smaller amounts.

Keep Records◦ The requirement to record currency exchanges

includes the following — the currency exchanger must: Record customer ID and information, Record transaction information, Retain the record for five years from the date of the

transaction. File Currency Transaction Reports (CTRs)

◦ The CTR requirement requires an MSB to: Verify and record customer ID, Obtain transaction information, Complete and file the CTR, Retain a copy of the CTR for five years from the date of

filing the report.