We are in the processing of exempting an organization under Phase 1. In reading section 103.22(d)(3)(i) it appears that that we should do this by the 30-day period beginning after the date of the first reportable transaction in currency. Does this mean if we don't exempt them within 30 days of the first reportable transaction that we cannot exempt them at all? I may be reading too much in to this. Any interpretation would be helpful. Thanks.

I remember having the same question when I first read it. What it means is that as long as you exempt a customer within 30 days of a reportable transaction, you don't need to file a CTR for that transaction. For instance, on June 1, XYZ Co. deposits $11,000 in cash. Since XYZ Co. is qualified for a phase I exemption, I don't need to file a CTR as long as I complete a Designation of Exempt Person form and send it to FinCEN by July 1.

I encourage you to complete your exemptions and then rely on them, just in case you forgot to fill out the exemption form.

The customer is exempted by the regs, not your bank. Under Phase I, all you are required to do is announce to the govt. (via a DEP form) that you have an account of an exempt person.

The 30 day provision doesn't cause you to lose the right to treat the Phase I customer as exempt, and any failure to file CTRs for transactions older than 30 days will probably get you nothing more than a slap on the wrist.