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#779417 - 07/20/07 03:00 PM exemption question
Trees Offline
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Joined: Apr 2005
Posts: 4,013
One owner, two different dbas with different names, but same TIN for both. Can both dbas be expempted, on the basis of same TIN, or just the one where we have the required # of trans.?

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#779558 - 07/20/07 04:10 PM Re: exemption question Trees
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,651
Galveston, TX
While I believe you can exempt sole proprietorships under the regulations, I think they are tricky to do right and present an increased risk that most prudent banks should refrain from exposing themselves.

To exempt an eligible non-listed business, the business must meet four criteria:

1) Has had a transaction account at the bank for at least 12 months.

That is pretty standard.

2) Frequently engages in currency transactions greater than $10,000.

Your documentation should be able to support this.

3) Is incorporated, or organized under the laws of the United States or a State, or is registered as and eligible to do business in the United States.

Since sole proprietorships are not incorporated or organized it comes down to whether they are registered as a business in the United States. I have not seen the definition of the term "registered", but I would think it is a little more involved than filing for an "assumed name" at your county recorder's office. I believe in order to pull this off, you are going to have to have solid documentation regarding the legitimacy of the sole proprietorship. Some of this would include detailed financial statements and annual tax returns.

4) is not an ineligible business.

Your standard investigation should be able to prove this.

While it can be done, I would not normally recommend it without extreme care and due diligence.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#779722 - 07/20/07 05:20 PM Re: exemption question rlcarey
Trees Offline
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Joined: Apr 2005
Posts: 4,013
Lets assume we have reviewed the above noted 4 steps and can conclude that the bus. are legit. That being said, in the circumstances noted, can we exempt both, as we are dealing with the same EIN, or are we limited to only exempting the one that actually had the 8 x 10,000 trans. Many thanks

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#779855 - 07/20/07 05:57 PM Re: exemption question Trees
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,651
Galveston, TX
You cannot exempt an individual, so I would say that each "entity" (term used very loosely here) stands alone. With that said, I again would highly recommend that you don't exempt this customer. The commingling of funds between the entities and the individual is going to be a nightmare to monitor.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#781011 - 07/23/07 08:00 PM Re: exemption question rlcarey
Trees Offline
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Joined: Apr 2005
Posts: 4,013
Thanks for your insight.

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#781612 - 07/24/07 04:56 PM Re: exemption question Trees
cbinder63 Offline

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cbinder63
Joined: Dec 2001
Posts: 674
Colorado
Is the ownership a sole proprietorship, an LLC, partnership, or other business type? The ownership type can play a difference in how you review these accounts for possible exemption. Are the 8 transactions in a short period, or spread throughout the year. Will aggregation of the transactions between the accounts cause these to likely continue? If so, and your due diligence review shows valid registration and that the ownership and activity within the accounts are within regulatory guidelines - an Designation of Exemption may well be a option to consider.
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