We have a customer who deposited over $30,000 in travelers checks which we believe were purchased outside of the U.S.
and were carried into the country on their person.

We have not been able to confirm that the checks were declared through customs, is the bank obligated to file the Internationl Transportation of Currency or Monetary Instruments (FinCEN 105)?

I believe that you are expected to file Form 105 if you "have knowledge" that the monies/negotiable instruments came into the U.S. or are leaving the U.S.
You do not have to know whether the customer declared them to Customs or not.

This is long, but I think it fits your situation. It is an administrative ruling found in the BSA regulations.

Filing CMIR
88--2 (June 22, 1988)

Issue

When, if ever, should a bank file a CMIR on behalf of its customer, when the customer is importing or exporting more than $10,000 in currency or monetary instruments?

Facts

A customer walks into B National Bank ("B") with $15,000 in cash for deposit into her account. As is required, the bank teller begins to fill out a Currency Transaction Report ("CTR", IRS Form 4789) in order to report a transaction in currency of more than $10,000. While the teller is filling out the CTR, the customer mentions to the teller that she has just received the money in a letter from a relative in France. Should the teller also file a CMIR, either on the customer's behalf or on the bank's behalf?

Law and Analysis

B National Bank should not file a CMIR when a customer deposits currency in excess of $10,000 into her account, even if the bank has knowledge that the customer received the currency from a place outside the United States. 31 CFR 103.23 requires that a CMIR be filed by anyone who transports, mails, ships or receives, or attempts, causes or attempts to cause the transportation, mailing, shipping or receiving of currency or monetary instruments in excess of $10,000, from or to a place outside the United States. The term "monetary instruments" includes currency and instruments such as negotiable instruments endorsed without restriction. See 31 CFR 103.11(k).

The obligation to file the CMIR is solely on the person who transports, mails, ships or receives, or causes or attempts to transport, mail, ship or receive. No other person is under any obligation to file a CMIR. Thus, if a customer walks into the bank and declares that he or she has received or transported currency in an aggregate amount exceeding $10,000 from a place outside the United States and wishes to deposit the currency into his or her account, the bank is under no obligation to file a CMIR on the customer's behalf. Likewise, because the bank itself did not receive the money from a customer outside the United States, it has no obligation to file a CMIR on its own behalf. The same holds true if a customer declares his intent to transport currency or monetary instruments in excess of $10,000 to a place outside the United States.

However, the bank is strongly encouraged to inform the customer of the CMIR reporting requirement. If the bank has knowledge that the customer is aware of the CMIR reporting requirement, but is nevertheless disregarding the requirement or if information about the transaction is otherwise suspicious, the bank should contact the local office of the U.S. Customs Service or 1--800--BE ALERT. The United States Customs Service has been delegated authority by the Assistant Secretary (Enforcement) to investigate criminal violations of 31 CFR 103.23. See 31 CFR 103.36(c)(1).

Any information provided to Customs should be given within the confines of section 1103(c) of the Right to Financial Privacy Act, 12 U.S.C. 3401--3422. Section 1103(c) permits a financial institution to notify a government authority of information relevant to a possible violation of any statute or regulation. Such information may consist of the name (including those of corporate entities) of any individual involved in the suspicious transaction; account numbers; home and business addresses; social security numbers; type of account; interest paid on account; location of branch where the suspicious transaction occurred; a specification of the offense that the financial institution believes has been committed; and a description of the activities giving rise to the bank's suspicions. See S. Rep. 99--433, 99th Cong., 2nd Sess., pp. 15--16. Therefore, under the facts above, the teller need only file a CTR for the deposit of the customer's $15,000 in currency.


A previous interpretation of § 103.23(b) by Treasury held that if a bank received currency or monetary instruments over the counter from a person who may have transported them into the United States, and knows that such items have been transported into the country, it must file a report on Form 4790 if a complete and truthful report has not been filed by the customer. See 31 CFR 103 appendix, § 103.23, interpretation 2, at 364 (1987). This ruling hereby supersedes that interpretation.


Holding

A bank should not file a CMIR when a customer deposits currency or monetary instruments in excess of $10,000 into her account even if the bank has knowledge that the currency or monetary instruments were received or transported from a place outside the United States. 31 CFR 103.23. The same is true if the bank has knowledge that the customer intends to transport the currency or monetary instruments to a place outside the United States. However, the bank is required to file a CTR if it received in excess of $10,000 in cash from its customer, and is strongly encouraged to inform the customer of the CMIR requirements. In addition, if the bank has knowledge that the customer is aware of the CMIR reporting requirement and is nevertheless planning to disregard it or if the transaction is otherwise suspicious, the bank should notify the local office of the United States Customs Service (or 1--800--Be Alert) of the suspicious transaction. Such notice should be made within the confines of the Right to Financial Privacy Act, 12 U.S.C. 3403(c).

Just to avoid any confusion, the CMIR referred to in Retread's post was the predecssor to the Form 105. An administrative ruling from Treasury (now FinCEN) has the same force as a BSA regulation and I believe it is fully applicable to the current form.

Thanks Ken. I should have clarified that. They still call it a CMIR, but the form number has changed.

Yikes, I am still referring to it as a 4790 !
LOL!
Retread and Ken, I so appreciate your responses to all the CIP/BSA questions!
We all learn so much from you two gurus !
Thanks for taking the time !

What about if a customer requests a wire transfer from his domestic account to another account in a foreign country.

What has to be done and what the advise to the customer should be ?

Thanks......

Form 105 has nothing to do with a wire transfer.

Anon #378333,
All BSA would require in the situation you describe is record retention; Devs Fan is correct, there is nothing to report. Can you clarify your question a little?