Skip to content
BOL Conferences
Thread Options
#2129690 - 05/09/17 02:51 PM Beneficial Ownership
JennKK2 Offline
Gold Star
Joined: Nov 2006
Posts: 316
-
just want to confirm my understanding of the BO rule in regards to CTR filing. Jim is the owner of two entities, each having their own EIN number, both have regular cash deposits, but neither trigger a CTR - however both accounts show under Jim's SS number as a reportable CTR transaction. I would file a CTR correct?

for partnerships, there is 50/50 ownership - at account opening one of the two have to step up to say "I'm the control prong" which is nothing more than making a statement for the new accounts person to document on the Certificate of Beneficial Ownership.
_________________________
plan your Work and Work your Plan

Return to Top
BSA/AML/CIP/OFAC Forum
#2129748 - 05/09/17 06:55 PM Re: Beneficial Ownership JennKK2
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Beneficial Ownership and CTR reporting really have nothing in common, unless I am missing something.

The control prong, could be a totally separate individual from the owners of the partnership.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2129758 - 05/09/17 07:31 PM Re: Beneficial Ownership JennKK2
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
As for aggregating the cash deposits of the two entities, if they are truly legal entities (LLC, Corporation, partnership), and if they are operated independently of each other, you ignore their common ownership by "Jim." You would only combine their cash deposits in these circumstances if they are conducted by the same individual.

If there are indications (funds transferred between the entities, shared payroll and/or employees, etc.) that the entities are not operated independently of one another, you should aggregate their combined cash activity for CTR purposes (and monitoring for suspicious activity).
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#2129761 - 05/09/17 07:42 PM Re: Beneficial Ownership JennKK2
BrianC Online
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,694
Illinois
The final rule makes reference to FIN-2012-G001 which indicates that we "may" need to consider aggregating transactions for businesses that have common ownership if they are not operated independently. In FinCEN's mind, we may have greater knowledge of commonly owned businesses by inquiring about beneficial ownership at account opening and consequently, more CTRs that are filed as a result of businesses not being run independently.

Each institution must make its own determination regarding what is "independent" vs. "not independent." In your first question, the fact that Jim is a beneficial owner of each business does not automatically equal file CTRs for aggregated transactions. Look at the guidance again. Are these businesses sharing employees, have a common address, are comingling funds? If the answer is, "no" you would only aggregate transactions for these businesses if the same person made deposits to each that exceeded $10,000. I can't tell you whether a CTR is required if John makes a $6,000 deposit to business A and George makes a $5,000 deposit to business B. If they are operated independently, then we do not have transactions by or on behalf of one person exceeding $10,000. No CTR.

If, based on your due diligence, you determine that they are not operated independently, then aggregate and file.

Also in the final rule, it is noted that an owner prong person may double as the control prong. If you identify and verify both partners as beneficial owners since they own 50% of the business, then why should we be concerned about the control prong? If they are both signers on the business account, it doesn't really matter which is placed on your form for the control prong. You are not going to verify the same person twice.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

Return to Top
#2129988 - 05/10/17 08:46 PM Re: Beneficial Ownership JennKK2
JennKK2 Offline
Gold Star
Joined: Nov 2006
Posts: 316
-
the businesses do operate independently of each other. thank you for the panel of input! I appreciate your time.
_________________________
plan your Work and Work your Plan

Return to Top

Moderator:  Andy_Z