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#1688261 - 04/12/12 03:34 PM Business ID Required on a SAR for a Business?!?
summergirl Offline
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I was hoping I could get some assistance. Internal Audit provided their "point" sheet of items for discussion. Noted was 3 instances where the ID section was not completed on the SAR. The SAR's in question were business customers. SAR instructions require business ID according to IA.

I reviewed the SAR instructions and don't see anything noting that ID for a business must be provided on the SAR. Can you please clarify. If this is the case, all the SAR's that I have ever completed in my BSA career are incomplete! Yike!

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#1688322 - 04/12/12 04:41 PM Re: Business ID Required on a SAR for a Business?!? summergirl
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I think I would ask them what kind of identification they would expect to get from a business other than a Tax ID number. I don't think businesses get driver's licenses or passports, etc.
As an alternative, ask them to show you where the rules say you have to have an ID for a business, other than a tax ID number. That's what I do if faced with something like that, and more often than not, they cannot produce the goods.
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#1688352 - 04/12/12 05:35 PM Re: Business ID Required on a SAR for a Business?!? summergirl
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I use the secretary of state registration number if they are incorporated. Their active certificate acts as a DL/birth certificate for the business entity. For partnerships, I leave it blank.

BUT subject information is not required on SARs unless you KNOW it. If you don't know the info they are requesting, it is entirely permissible to leave it blank (legacy form) or mark unknown (new form).
Last edited by Dani York; 04/12/12 05:36 PM.
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#1688445 - 04/12/12 08:38 PM Re: Business ID Required on a SAR for a Business?!? summergirl
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"ID"ing a business entity is a grey area and NOT required as per the FFIEC BSA/AML Manual. As an alternative, you could include their Certificate of Incorporation if incorporated. Other than that, a valid EIN is all you really need. If your auditor decides to make this an issue, tell them to prove their point by showing you a regulation issued by FinCEN. They should know that it's the people who conduct (illicit) transactions, not the business.
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#1688493 - 04/13/12 12:02 AM Re: Business ID Required on a SAR for a Business?!? summergirl
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I Agree with AquarMarine's comments.

Also, refer to your previous regulatory exam reports to see if there were any recommendations in regards to this topic....


SAR instructions as it relates to ID:

Item 29 - Forms of Identification for Suspect - Check appropriate box for the form of identification provided by the suspect and use the lines provided to give specific data such as driver’s license or passport number and issuing authority.
For box d, “other,” provide a brief explanation in the space provided. If more space is required, enter the information in Part V.

---
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#1688532 - 04/13/12 12:45 PM Re: Business ID Required on a SAR for a Business?!? summergirl
Elwood P. Dowd Offline
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An entity can be a SAR suspect/subject. From the instructions to the form 111; i.e. the new BSA - SAR:

Item *15 Form of identification: Enter in Item 15 the information used to identify the individual or entity. Select option 15b if the identification was a driver's license or state ID, 15c if the identification was a passport or 15c if the identification was an alien registration. Select option 15z if a different identification was provided and describe that identification in the "Other" text field. Their identification could include such things as an entity’s business license or incorporation documents, corporate ID cards, local government ID cards, etc. Enter the identification number in field 15e "Number." (Emphasis supplied.)

If that's the form you're completing, the criticism is legitimate. However, if you are completing a legacy or a paper SAR, I think your IA is overly zealous; there is no parallel instruction for the current forms. Point that out in your response.

P.S. Of much broader concern is the fact that the language is reiterated in the BSA - CTR (Form 112) instructions. For example if an entity is listed as a person on behalf of which a transaction is conducted, then you will indicate how the entity was identified as well. Presumably, if you conduct a transaction on behalf of an entity then you have already performed CIP on it and this is not a difficult task. The issue is simply whether banks will notice such a tiny shift in the instructions.

It will, however, be a delightful little "gotcha" for the examiners until banks adjust. blush
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#1689825 - 04/18/12 02:32 PM Re: Business ID Required on a SAR for a Business?!? summergirl
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As a follow-up question on this topic, do you think a Secretary of State file number will be acceptable as an identifying number for entities when completing the new CTRs and SARs ?

I am hoping so as it is easy to get the SOS file number from the state's public website.
Last edited by CindyS; 04/18/12 02:34 PM.
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#1689843 - 04/18/12 02:48 PM Re: Business ID Required on a SAR for a Business?!? CindyS
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They've left the door open for almost anything, so I think a public file number would be about the most precise identifier you could offer; e.g. IL SOS File# BR549. That should work for "creatures of statute" who must file with the state, but innovation will be required for general partnerships. Sole proprietorships need not be "identified;" they are not entities and it is the identification of the sole proprietor that would appear on the form.

The "other" box has more than 40 characters, so it may not be necessary to abbreviate.

Relying on their unique access to divine inspiration, field examiners may direct otherwise. grin
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#1689885 - 04/18/12 03:50 PM Re: Business ID Required on a SAR for a Business?!? Elwood P. Dowd
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I’m really panicking here because other than TIN, we do not enter any type of “identifying number” on our system for business customers. Our (state) SOS records do not display any type of identifying number, so we won’t be able to readily use that source for corporations and/or LLCs. I’m wondering what others, who don’t have this info handy, plan to do to accommodate this ridiculous (sorry, my commentary) requirement for CTRs. My first thought was to describe the ID as “bank records” and enter our internal record # that identifies the business record. But, I’m thinking I could really get slammed by examiners for doing that.

My deepest appreciate is extended to anyone who has any suggestions. Thanks.

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#1689896 - 04/18/12 04:04 PM Re: Business ID Required on a SAR for a Business?!? WGL of SC
Elwood P. Dowd Offline
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This is essentially a repurposing of the information you gained at account inception to comply with CIP. What you write down is what you have. That documentation may very well not have an identifying number; e.g.

[State] Certificate of Good Standing Issued XX/XX/XXXX
[State] Certified copy of articles of Incorporation Issued XX/XX/XXXX

These things do not have expiration dates.
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#1689897 - 04/18/12 04:05 PM Re: Business ID Required on a SAR for a Business?!? summergirl
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The original post was regarding SAR's, not CTR's. If an individual conducts a transaction on behalf of a business entity, you don't need to list the CIP documentation for the business entity itself on a CTR. If you look on Page 3, under General Instructions, number 14 it says "If an individual conducts the transaction(s)on his/her own behalf, his/her identity must be verified by examination of an acceptable document (see General Instructions). For example, check box a if a driver’s license is used to verify an individual’s identity, and enter the state that issued the license and the number in items e and f. If the transaction is conducted by an individual on behalf of another individual not present, or on behalf of an entity, check box “14d” “Other” and enter “NA” on the line provided."
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#1689901 - 04/18/12 04:06 PM Re: Business ID Required on a SAR for a Business?!? ACBbank
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The language is reiterated in the BSA - CTR (Form 112) instructions.
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#1690108 - 04/18/12 07:53 PM Re: Business ID Required on a SAR for a Business?!? summergirl
AFaquir Offline
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I'm not seeing that same language on the BSA- CTR Form Instructions... can you steer me?

I am seeing that if you have it, you should get it, even from an "other" source. If you don't have it you can check unknown... but that circles back up to some of the posts describing what you auditor/regulator may think.
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#1690128 - 04/18/12 08:05 PM Re: Business ID Required on a SAR for a Business?!? AFaquir
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Originally Posted By: AFaquir
I'm not seeing that same language on the BSA- CTR Form Instructions... can you steer me?


It's usually page three, but it could vary. However, look under the General Instructions, #14. I quoted the statement.
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#1690227 - 04/19/12 10:18 AM Re: Business ID Required on a SAR for a Business?!? ACBbank
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Item *20 Form of identification: Enter in Item 20 the information used to identify the individual or entity recorded in Item 4. Check box 20b if the identification was a driver's license or state ID, box 20c if the identification was a passport or box 20d if the identification was an alien registration. Check box 20z if a different identification was provided and describe that identification in the "Other" text field. ‚Other identification could include such things as an entity’s business license or incorporation documents, corporate ID cards, local government ID cards, etc. Enter the identification number in field 20g "Number." Do not include formatting such as spaces, hyphens, or periods in the number. Enter the appropriate two or three-letter abbreviation or code in field 20e "Issuing State" if the identification issuer was a U.S., Canadian, or Mexican state, territory, or province. Enter the appropriate two-letter code in field 20f ‚Country‛ if the issuer was a country. If field 20e ‚Issuing State‛ contains an entry, then 20f ‚Country‛ must contain ‚US,‛ ‚CA,‛ or ‚MX‛ as appropriate. See General Instruction 10 for information about the codes to be entered. If the identification issuer does not have a code in this document, enter the two letter code for the issuer's country in field 20f. For example, if the issuer was the London Police Department the code ‚GB‛ for United Kingdom would be entered in 20f. Enter all identification data that is available. Check box 20a ‚Unknown‛ only if the individual or entity is known and all identification information is unknown. See General Instruction 12 for further information on entering identifying numbers.

Page 59, (document, not pdf) FinCEN Currency Transaction Report (FinCEN CTR) Electronic Filing Requirements Release Date March 2012
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