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#955734 - 05/07/08 08:17 PM Cash deposits and Fincen Form 105
Rosebud123 Offline
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Joined: Oct 2003
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Florida
To my understanding we are required to ask foreign clients if they declared cash over $10,000 at customs. If they say that they did not, what do we do then? Do we file Form 105.

Also, I have a client who deposited $30,000 into his account. When we asked if he declared the money he stated that since he came with his wife and sister, they each brought $10,000. Besides filing a SAR, should I do anything else.

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#955861 - 05/08/08 10:51 AM Re: Cash deposits and Fincen Form 105 Rosebud123
rlcarey Online
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Galveston, TX
"To my understanding we are required to ask foreign clients if they declared cash over $10,000 at customs."

Where did you come accross this "understanding"?
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#955864 - 05/08/08 11:37 AM Re: Cash deposits and Fincen Form 105 rlcarey
Retread Offline
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Retread
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Southeast
It's old, but as far as I know, it is still valid.

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 receives 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).
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#955945 - 05/08/08 02:03 PM Re: Cash deposits and Fincen Form 105 Retread
Rosebud123 Offline
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Posts: 645
Florida
Well the reason I thought that is because whenever an auditor or examiner come, they ask me if the bank asked that.

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#956182 - 05/08/08 06:40 PM Re: Cash deposits and Fincen Form 105 Rosebud123
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,318
Galveston, TX
I would stick with a "don't ask, don't tell" policy as there is no regulatory basis for informing the customer of the requirements and asking them these questions, regardless of the twenty-year old opinion.
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#967110 - 05/30/08 07:37 PM Re: Cash deposits and Fincen Form 105 Retread
Will Golf 4 Food Offline
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Joined: Jan 2004
Posts: 30
Texas
It may be old, but as far as I know, this is still an expectation and has been incorporated into our BSA compliance program. I prefer to error on the conservative side.

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#967152 - 05/30/08 08:28 PM Re: Cash deposits and Fincen Form 105 Will Golf 4 Food
devsfan Offline
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Joined: Jun 2004
Posts: 1,927
NYC
We have customers who have made deposits of multiple travelers checks (and I mean multiple). We ask where they came from (good practice in my opinion) and if they tell us that they were brought in from their home country (the usual answer) we ask if they filed the CMIR. If they say no we file a SAR. If they say yes we take them at their word. In my opinion, to not ask about multiple monetary instruments, or large cash, would be negligence. 'Don't ask, don't tell' did not even work for Bill Clinton's policy about the military.

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#967666 - 06/02/08 07:14 PM Re: Cash deposits and Fincen Form 105 devsfan
Little Miss BSA Offline
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Miami
willfull blindness
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