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#506753 - 03/01/06 08:17 PM CTR Exemptions
CrashDavis Offline
Gold Star
Joined: Jun 2005
Posts: 283
In performing the Annual Due Diligence Reivew, On Phase I excemptions, do you have to send to the customer who is a Phase 1 exemption a Review form that indicates they are a government agency or other qualifying businesses.

I know it says on Phase 1 exemptions you have to do a annual review so is a review of the activity sufficient.

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#506754 - 03/01/06 10:35 PM Re: CTR Exemptions
CalifDreamin Offline
Diamond Poster
Joined: Mar 2002
Posts: 2,240
Far from Calif
No, you do not need to have your customer complete a in order to document they qualify for an exemption. You can, but it's not required.

Itís always good on your exemptions to back up your decisions with documentation, but it's up to the bank how it wants to do that. You can treat the government agency as such if their name reasonably indicates that they are a government agency (see citation below). If itís a company on the NY Stock Exchange, you would want to keep a copy of what you used to determine the company was still listed.

From the BSA regulation: 12 CFR 103.22:

6) Operating rules--(i) General rule. Subject to the specific rules of this paragraph (d), a bank must take such steps to assure itself that a person is an exempt person (within the meaning of the applicable provision of paragraph (d)(2) of this section), to document the basis for its conclusions, and document its compliance, with the terms of this paragraph (d), that a reasonable and prudent bank would take and document to protect itself from loan or other fraud or loss based on misidentification of a person's status, and in the case of the monitoring system requirement set forth in paragraph (d)(9)(ii) of this section, such steps that a reasonable and prudent bank would take and document to identify suspicious transactions as required by paragraph (d)(9)(ii) of this section.

(ii) Governmental departments and agencies. A bank may treat a person as a governmental department, agency, or entity if the name of such person reasonably indicates that it is described in paragraph (d)(2)(ii) or (d)(2)(iii) of this section, or if such person is known generally in the community to be a State, the District of Columbia, a tribal government, a Territory or Insular Possession of the United States, or a political subdivision or a wholly- owned agency or instrumentality of any of the foregoing. An entity generally exercises governmental authority on behalf of the United States, a State, or a political subdivision, for purposes of paragraph (d)(2)(iii) of this section, only if its authorities include one or more of the powers to tax, to exercise the authority of eminent domain, or to exercise police powers with respect to matters within its jurisdiction. Examples of entities that exercise governmental authority include, but are not limited to, the New Jersey Turnpike Authority and the Port Authority of New York and New Jersey.
The opinions expressed are mine and do not necessarily reflect those of my employer

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