Is it a "violation" of any kind if a Bank (mistakenly) continues to file CTR's on a customer after the DOEP has been sent in and acknowledged? There has been a suggestion that it seems to go against the "must file the DOEP within 30 days of first exempted transaction" requirement. But my thinking is that the requirement was made to ensure that no CTR's were NOT reported that should have been. Continuing to file them suggests a breakdown in process, but not a big deal. I may have to argue this point.

I am not an expert on this but I would think that filing CTRs after designating the customer as exempt could be considered as revoking the exemption so if you do want them exempted you should probably file another DOEP. I would welcome other opinions.

Update to this: you were correct devsfan. Good job! I verified it with FinCEN's Reg helpline. According to the Rep, filing any CTR's after the DOEP has been filed automatically revokes the exemption.

Which really puts a fine point on it. You need to coordinate your filing of DOEPs with anyone in the organization responsible for filing CTRs, or control those CTR filings yourself.

According to the Rep, filing any CTR's after the DOEP has been filed automatically revokes the exemption.

Really?? I sure have never heard anything like this before. One accidental filing nullifies an exemption???? I find that hard to believe.

FIN-2012-G003

Question: If a bank ceases to treat a customer as exempt, and begins or intends to begin filing CTRs on that customer for the next reportable transaction, must the bank formally revoke the exemption by filing the DOEP report and selecting the "exemption revoked" box?

Answer: Banks have never been required to formally revoke an exemption using the DOEP report. Generally, examiners or other users of BSA data would be able to rely on a pattern of reporting to know that a customer is no longer being treated as exempt. For purposes of clarity or creating internal documentation, however, many banks voluntarily revoke exemptions using the DOEP report. For example, if during its annual review of an exempt non-listed business customer a bank discovers that the customer conducted no reportable transactions in the previous year, the bank could no longer treat that customer as exempt. If the exemption is not formally revoked using the DOEP report and the customer continues the pattern of not conducting reportable transactions, a law enforcement agent investigating the company would likely conclude incorrectly from the lack of CTR filings that the customer is still being treated as exempt. While revoking an exemption in such instances may benefit both the filing bank and users of BSA data, banks may choose to do so entirely on a voluntary basis.


You would think that if FinCEN thought that one filing of a CTR had the impact of revoking any previous exemption, they would have said so..........

1. ceases to treat a customer as exempt

and

2. begins or intends to begin filing CTRs

Sounds like a two prong test to me.

I'm sure that no citation supporting that statement was offered. It is not part of any regulation or published guidance. If it's correct at all, it's within some operating system that FinCEN might operate to maintain a current list of current exemptions for your bank.

Regardless, file another DOEP and consider it retroactive for 30 days. As John suggests, what a regulator could criticize here is the lack of internal controls.

Yeah, we've called FinCEN on this before as well, within the last couple of months, and they said one stray CTR wouldn't revoke the exemption...a pattern of CTRs would indicate that we have revoked the exemption though. Best practice is to revoke it formally.

So it appears there may have been one misinformed functionary at FinCEN.

One????

If I’m not mistaken, an exempted non-listed business may have reportable transactions (i.e. transactions NOT conducted through its exemptible accounts), so there is a possibility that ‘legitimate’ stray CTRs or a pattern of CTR filings could occur on an exempted business. Hopefully, FinCEN analyzes the CTRs before it reaches any conclusions about revocation…hopefully.

Good point, WGL! A currency exchange or cash purchase of a monetary instrument in excess of $10,000, or a cash loan payment by a "Phase 2" exempt person would not be excluded, and would require a CTR filing.