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New CTR and CRF Announced
October 1, 1995 - D-Day
We recently got an update on the status of the new Currency Transaction Report (CTR- Form #4789) and the new Criminal Referral Form (CRF) from Pamela Johnson, Assistant Director, Office of Financial Institutions Policy, Treasury's Financial Crimes Enforcement Network (FinCEN), and Richard Small, Special Counsel, Division of Banking, Supervision and Regulation Board of Governors, Federal Reserve System. The announcements, which were made at two sessions of the Bank Administration Institute's Security, Audit and Compliance Conference in New Orleans on March 15, were received with relief- and a little righteous skepticism-by the bankers in attendance.
FinCEN Project
FinCEN, working with the government and regulatory agencies, and with the Bank Secrecy Act Advisory Group, has taken all the suggestions, comments and changes possible into consideration to meet the obligation of reducing regulatory burden in developing the new Currency Transaction Report. The number of pieces of information required has been reduced from 98 to 64 fields, and items that were difficult to complete, redundant, and/or of limited value to law enforcement have been eliminated from the form.
Changes
The new CTR, according to FinCEN's Pamela Johnson, reduces the amount of information more than the 30% required by Congress. It was her opinion, however, that there would be some training necessary to familiarize employees with the new form. For instance, the sequence of account owner and the "on behalf of" person has been reversed. The indication of multiple branches, transactions, or accounts has been combined. And the box for suspicious transactions has been removed.
Painless "No-Fault" Exemptions
Also as part of the regulatory relief, exemptions would be overhauled. Treasury will issue (before fall of 1995, according to Pamela) a list of those customers that can be exempt from filing requirements. There will be no limits, so monitoring of these accounts for exceeding limits will not be necessary. Requested exemptions will still be permitted, but will have dollar limits as in the past.
CTR-Suspicious Transactions-History
Pamela said one of the reasons for the removal of the "suspicious transactions" box was to eliminate the confusion between the filing of the Currency Transaction Report (4789) for a suspicious transaction, and the filling out of a Criminal Referral Form for suspected criminal activity. She illustrated by saying that if a person came in with scads of cash and stuffed it into a safe deposit box in a clearly visible manner, there would be no CTR requirement per se, as there was no transaction-but it could be considered to be suspicious activity.
Rick Small elaborated on the explanation. "The Criminal Referral Form," he said, "is to be used in all cases of suspected criminal activity, whether or not there is a reportable cash transaction involved."
New Criminal Referral Form
In explaining the changes to the Criminal Referral Form, Rick said their aim was to make the form as user-friendly as possible. There were 70,000 Criminal Referral Forms filed last year, (and 60,000 suspicious transaction Currency Transaction Reports), indicating a great many hours involved in just preparing, duplicating, and mailing. In a test run, using imaginary "facts", Rick found it possible to fill out the new form and mail it to its one required destination in just ten minutes.
He elaborated some other areas of the form for the bankers present. Filing on an "insider" has not changed. The CRF is to be filed no matter what the potential or actual amount of the loss may be.
Changes
The other three occasions which would trigger filling out and filing the CRF have been changed.
$1,000 to $5,000
The dollar amount on the second required filing, on a potential loss where a suspect can be identified, has been raised from $1,000 to $5,000. Rick pointed out that you may still file on a lesser amount, should you choose to, but it is not a requirement.
$5,000 to $25,000
The dollar amount of the third required filing, on a potential loss where there is no identified suspect, has been raised from $5,000 to $25,000. This change alone is expected to reduce the number of CRFs by 20%.
BSA Violations
The most broad reason for filing is the last, which is for money laundering and Bank Secrecy Act violations. Suspicious activity would be reported under this requirement. Both Pamela and Rick discussed suspicious activity, and shared the opinion that while there will be guidelines, it would be impossible to create a list of all circumstances defining suspicious activity. It was agreed that suspicious activity is that sort of thing that can't be described-but you know it when you see it. And when you see it and know it, it needs to be reported!
Alias reporting
If there is an alias used, all information, on actual name or alias, is to be included on the form.
PC or Pen
Software that can be adapted to a financial institution's system will be made available. For those that choose, hard copy will also be available. There is no requirement that the hard copy be filled out with a typewriter. Rick said you can use a pen, if you wish-the data will be then be keypunched and entered into FinCEN's computer.
File ONE
Only one CRF will be filed-and that will be with FinCEN. All government agencies that now get the form from financial institutions will have access to FinCEN's data.
No documentation is to be filed with the CRF, but the records must be available for ten years. One banker asked if it would be necessary to get a subpoena before turning over the records involved in the CRF case. Rick responded that a subpoena would not be necessary for the specific records indicated, but if the government agency wanted to expand on the case (for instance, if they asked if the customer had accounts in other names) at that point a subpoena would be in order. He also offered the opinion that a subpoena was not difficult for the agents to obtain, and if, in any case, the financial institution felt more comfortable having one in hand, they should simply ask to have one served.
October 1, 1995-D-Day
The Currency Transaction Report (4789) is to be released in the spring of 1995. The financial institutions will have until October to have it in place.
At press time, it had not yet been decided on whether the official title of the CRF will be the tag most bankers have put on it-"ISCARF"-which stands for Interagency Suspicious/Criminal Activity Referral Form. The new Criminal Referral Form, whatever its name, is to be out prior to the October 1 up-and-running date.
Copyright © 1995 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 5, No. 7, 3/95
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