Skip to content
GeoDataVision
Thread Options
#774526 - 07/13/07 05:13 PM Phase II CTR Exemption on high risk customer
Banker Chick Offline
Junior Member
Joined: Jul 2006
Posts: 37
TN
Can you exempt a customer from CTR filing that falls within a FinCEN identified high risk category (i.e. liquor stores, tobacco wholesalers). This is assuming that the customer is not otherwise an ineligible business, has maintained a transaction account for at lease 12 mos, frequently engages in cash transactions > $10K and is properly organized under US Laws.

What do you generally require as proof that the customer is incorporated or organized under appropriate US or State laws? Articles of incorporation, business license, etc.

Thanks,

Return to Top
BSA/AML/CIP/OFAC Forum
#774586 - 07/13/07 05:40 PM Re: Phase II CTR Exemption on high risk customer Banker Chick
GMetz Offline
Member
Joined: May 2006
Posts: 60
Kentucky
Yes you can, however...we recently had a visit from the FDIC and our examiner told us that wouldn't be a problem as long as we did plenty of due diligence...although he wouldn't tell us what "plenty" was. His boss came around and we presented the same question and she said it would truly depend and she wouldn't recommend it. The amount of time and effort they expect you to put into a FULL ANNUAL REVIEW of the customer probably wouldn't outweigh the amount of time it takes you to complete their CTR's. She was right.

She said they would like to see annual financials, proof of good standing with the state, proof of account review to show there was no illegal activities, memo from the account officer stating that they don't know of any reason the customer couldn't remain exempt, etc. The list went on and on. By the time I fought my account officer and the business owner for all of the necessary info on an annual basis, we concluded that I would actually lose time.

So, you can absolutely do it, but the amount of time completing your annual due diligence wouldn't make it worth it. I recommend you just keep filing on them.

Return to Top
#774616 - 07/13/07 05:51 PM Re: Phase II CTR Exemption on high risk customer GMetz
MagicCity Offline

Power Poster
MagicCity
Joined: Apr 2003
Posts: 3,003
Fort Lauderdale, Florida
I agree with GMetz - just file.
It is always advised not to exempt anyone considered high risk.
You invite attention from examiners.

Return to Top
#775483 - 07/16/07 12:24 PM Re: Phase II CTR Exemption on high risk customer Banker Chick
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
FinCEN doesn't have any identified high risk categories. The closest you will get to regulatory labeling today is customers which are designated as being "subject to expanded examination overview." They are identified in the BSA/AML examination handbook, but not every customer so identified is high risk. Any "high risk" labeling comes directly from your bank.

Identifying a customer as high risk and then recognizing it as an exempt person seems a bit illogical, but I don't believe it would affect the amount of documentation or monitoring involved. If you designate a customer as high risk they are going to get your maximum efforts in any case.

For a creature of statute, LLC, limited partnership, corporation, etc. evidence of existence can be obtained from the Tennessee Secretary of State's office.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top

Moderator:  Andy_Z