FinCEN Updated CTR FAQ #16

I haven't seen this posted - we were notified by our vendor of this change. Anyone seen any communication from FinCEN on this yet?

16. What if more than one “role” (Item 2) applies to the person being listed in Part I?
If more than one Item 2 option applies to a Part I person, a separate Part I section will be prepared on that person for each Item 2 option. For example, if the Part I person conducted a $5,000 deposit into his/her personal account and a separate $7,000 deposit into the account of an incorporated business on the same business day, there will be a Part I on that person reporting option 2a on the personal deposit with that amount, $5,000, and account number in Item 21 “Cash in amount….” There will be a second Part I on that same person, reporting option 2b on the transaction they conducted on the business account, with that amount, $7,000, and account number in Item 21. Filers would proceed with creating a Part I for all other persons involved in the transactions, which in this example would be the incorporated business, reporting option 2c, with that amount, $7,000, and account number in Item 21 “Cash in amount….”

https://www.fincen.gov/frequently-asked-questions-regarding-fincen-currency-transaction-report-ctr

I don't recall seeing anything on this in the last year. That said, I could have missed it, but I try to keep tabs on changes like this.

FWIW - I didn't get any notice of this change (from FinCEN) either. And I subscribe to *all* of their updates and the Federal Register notice. If anyone has a public source that gave them advance notice - please share!

So much for being efficient. No advance notice, no compliance deadline, and apparently no clue how such a small change (from their perspective) could waste so much time...

I reached out to FinCEN with several questions, I'll share my response if/when I get one.

I spoke to the Helpline last week on the topic because the Electronic filing instructions have not been updated. They claim the notice was in an update article that was pushed out on the e-filing website. (But only accessible after you sign in.) Since I am a consultant I cannot verify.

The helpline also stated that enforcement of compliance with this update will not be enforced until the instructions are updated and more formal guidance provided.

I also noted that this change to 16 seems to contradict with FAQ 22 which has not been updated.

The only articles I could find after logging in were
- July 2019 WebSite Updates - Updated
- FinCEN E-Filing Survey 2019
- DOEP & 8300 XML Batch Processing Technical Webinar

which are the same ones listed under hot topics on the public site. None of them mention this change.

I posted your reply on the Verafin forum as well and no one there seems to have seen any articles about this on e-filing. I'm sure FinCEN will put a notification together now that they've gotten a hundred emails to helpdesk about it.

As a frequent BSA E-Filer, I can honestly say that I've never seen any mention of this update on that website. The only recent CTR update mentioned there is a reminder directing everyone to be certain that they're using the most recent version of the CTR - version 1.3 released 2/15/2018. Thank you to all for sharing the information as you receive it. I'm also following this on the VERAFIN site.

This is disappointing. Putting so much of the detailed instructions behind the e-Filing login prevents those of us who aren't filers from helping out with some of the minutia involved. And when the fact of an announcement to those who logged into the e-Filing site is in question, I get concerned about FinCEN's commitment to communicating with all its constituencies.

Thank you, jsim913, for bringing this to our attention. You'll see a mention of this in our Top Stories and Compliance Briefing on September 17, to spread the word a bit farther.

One of the other Verafin users received the following response from the FinCEN helpline today:

"The FAQ was updated recently. There will be a formal notice posted when the CTR instructions are updated to coincide. We are currently considering reverting the FAQ until the instructions are updated to coincide with the filing method outlined in the updated FAQ. At this time, either filing method is acceptable until further notice."

To be clear, none of the detailed instructions have been updated, and nothing appears to have been "pushed out" within the Efiling portal as previously indicated.

A agree this is significantly disappointing...and a major change to established approach to filing. With so many vendors needing to update programming, making a change like this via an announcement after the fact is truly a nightmare.

I received a response from FinCEN today indicating they may roll back the FAQ until formal instructions are updated.

This seems similar to what we experienced in July of last year, when they disallowed leading/trailing spaces, carriage return lines, etc. for batch filing. No emails, only notice was in a memo on the BSA e-filing site after logging in. We got word from our vendor, who had to scramble to make updates on their end. Harumph.

we just filed a CTR in august with a scenario which required me to look at the FAQ #16 and thank goodness I printed out the "old" answer to go with the way we filed the report. how frustrating when we are trying to be sure we have all the information and then the way it's getting disseminated out is less than steller.
document

Based on the updated information, what boxes get checked on what pages in this scenario:

John Smith, personal account #123
Smith's Market LLC, business account #456
John Smith is the transactor.

John comes in with $12,000 cash, $7,000 into his personal account and $5,000 into the business account.

Under the new rules, we would now have three Part I's instead of two.

Smith's Market: Box 2c, $5,000
John Smith: Box 2a, $7,000
John Smith: Box 2b, $5,000

Under the old rules it would be two Part 1's

Smith's Market: Box 2c, $5,000
John Smith: Box 2a, Box 3, $12,000

FYI, I just copied this from FinCEN's website:

16. What if more than one “role” (Item 2) applies to the person being listed in Part I?




If more than one Item 2 option applies to a person involved in the transaction(s), filers should complete only one Part I on that person with only one entry in Item 2 pursuant to the following construct:

When to select Option 2a: In addition to when only Option 2a applies, filers should select Option 2a "Person conducting transaction on own behalf" if 1) Options 2a, 2b, and 2c apply; 2) Options 2a and 2b apply; or 3) Options 2a and 2c apply.

When to select Option 2b: In addition to when only Option 2b applies, filers should select Option 2b "Person conducting transaction for another" if both Options 2b and 2c apply and Option 2a does not apply.

When to select Option 2c: Filers should select Option 2c "Person on whose behalf transaction was conducted" only on the person for whom the transaction is conducted. This person cannot have other roles within the transaction or the options would apply.w

When to select Option 2d: In addition to when only Option 2d applies, filers should select "Courier Service (private)" if multiple options that include 2d "Courier service (private)" apply.

Thanks. So FinCEN went ahead and changed the Q & A back to the original instructions...I'm getting dizzy.

Yes, they must've realized (after fielding many inquiries) that the new FAQ wasn't matching the current CTR instructions. Personally, I think that the proposed new method makes more sense, but I hope that they properly communicate the change once they decide to proceed with the new method.

I think the new method (now no longer mentioned in the FAQ) will help users better understand how the math works to show how much cash is attributed to which person, etc., and probably will make it easier for FinCEN to get that info, too. But when it's implemented in an updated CTR, I hope there is an option to copy the information from Part I-1 for the conductor into a new Part I-2 for the conductor. Please take note, FinCEN.

I completely agree, John, and great point. If there is an option to copy the information into the new Part I, it really shouldn't be an issue. If they don't have this option, it would be an unnecessary burden for CTR filers.

Yes, that would be a very helpful option, John!

We know that FinCEN checks out these discussions from time to time -- my suggestion was one I hope they see. I imagine, though, they've thought about that already.

This update just came in from the BSA E-Filing Notification System:

IMPORTANT NOTICE TO BSA DISCRETE AND XML BATCH E-FILERS FinCEN CTR Item 2 Instruction Updates & Minor XML User Guide Updates (FinCEN CTR | SAR | FBAR | DOEP | 8300)

October 1, 2019 – The FinCEN Data Quality team has identified an issue with the CTR instructions involving how to file a CTR when an individual subject has multiple Part I Item 2 roles. The instructions for this scenario currently state:


If more than one Item 2 option applies to a person involved in the transaction(s), complete only one Part I on that person with only one entry in Item 2. Select “Common Carrier” if multiple options that include 2d “Common Carrier” apply. Select 2a “Person conducting transaction on own behalf” if options 2a, 2b, and 2c or options 2a and 2b or options 2a and 2c apply. Select 2b “Person conducting transaction for another” if both 2b and 2c apply.

These instructions led to CTRs being rejected due to not having a 2c owner record, and CTRs being filed that do not allow users of the BSA data to fully understand the transactions that are being reported. Following a thorough review by the FinCEN Data Integrated Product Team a change to the line item instructions for Item 2 of the CTR will be implemented. There are no form changes to the CTR. This change will potentially require update to software used to create batch files to comply with this instruction change and in view of this FinCEN proposes a target date for updating batch filing of October 1, 2019, with a mandatory effective date of February 1st, 2020.

The revised instructions for completing Item 2 of the CTR are as follows:

*2. Person involved in transaction(s)

a. Person conducting transaction on own behalf
b. Person conducting transaction for another
c. Person on whose behalf transaction is conducted
d. Common Carrier

Item 2: Select option 2a if the person recorded in Part I conducted the transaction(s) on his or her own behalf. Select option 2b if the person recorded in Part I conducted the transaction(s) on behalf of another person. Options 2a and 2b cannot be selected if box 4b‚ “If entity” is checked. Select option 2c if the transaction was conducted by another for the person recorded in Part I. If option 2d is selected because an armored car service under contract with the customer is involved in the transaction(s), the information on the armored car service, not the individual agent of that armored car service, will be recorded in Part I (see FIN-2013-R001). If box 2d is checked to indicate an armored car service under contract with the customer then box 4b, “If 2 entity” must be checked. If more than one Item 2 option applies to a Part I person, a separate Part I section will be prepared on that person for each Item 2 option. For example, if the Part I person conducted a $5,000 deposit into their personal account and a separate $7,000 deposit into the account of another person/entity, there will be one Part I on that person reporting option 2a on the personal deposit with that amount and account number in Item 21 “Cash in amount”. There will be a second Part I on that person reporting option 2b on the person/entity account transaction with that amount and account number in Item 21.


The updated FinCEN CTR XML User Guide, which also includes additional miscellaneous updates (see Revision History for details)is available on the BSA E-Filing System for review.

Minor XML User Guides updates associated with the FinCEN SAR, FinCEN FBAR, FinCEN DOEP, and Form 8300 are also available for review (to download the latest XML User Guides, go to https://bsaefiling.fincen.treas.gov/main.html and see Batch Filers on the right-navigation menu under User Quick Links).

********************

If you have any questions or concerns regarding this notice, you may contact the BSA E-Filing
Help Desk for assistance by opening a support request ticket here. The Help Desk is available
Monday through Friday from 8 a.m. to 6 p.m. EST. Please note that the Help Desk is closed on Federal holidays.

When is this supposed to go into effect?

Looks like they haven't yet updated FAQ 16 though as it currently states the original answer on how to complete multiple roles.

The post itself states

Yes, yes it does. Not sure how I missed that.

From the notice, " This change will potentially require update to software used to create batch files to comply with this instruction change and in view of this FinCEN proposes a target date for updating batch filing of October 1, 2019, with a mandatory effective date of February 1st, 2020."

Looks like the answer to CTR FAQ 16 is now updated, though slightly different from the original version that was available a few weeks ago:

"If more than one Item 2 option applies to a Part I person, a separate Part I section will be prepared on that person for each Item 2 option. For example, if the Part I person conducted a $5,000 deposit into their personal account and a separate $7,000 deposit into the account of another person/entity, there will be one Part I on that person reporting option 2a on the personal deposit with that amount and account number in Item 21 “Cash in amount”. There will be a second Part I on that person reporting option 2b on the person/entity account transaction with that amount and account number in Item 21."

My question for this is if I deposit $11,000 into a joint account, do I need 2 part 1s for me? One as me conducting on my behalf and then one as me conducting on behalf of someone else? Sometimes I think FinCEN doesn't think through their own decisions.

I would hope not as I don't believe that having only one part one on you would cause the following problems they were trying to fix: "These instructions led to CTRs being rejected due to not having a 2c owner record, and CTRs being filed that do not allow users of the BSA data to fully understand the transactions that are being reported."

That said, you can always run this by FinCEN.

You'll make what happened clear when you provide the 2a and the 2c Part I records, both with the same account number and dollar amount, and the same dollar amount in the Part II record.

As I'm digesting the new instructions, I found that there is another revision that to me seems to be a complete change in reporting and may be significantly difficult to capture (underlining added by me for emphasis):

Item 3 Multiple transactions: Check box 3 if multiple cash in or cash out transactions of any amount were conducted in a single business day by or for the person recorded in Part I. Multiple transactions includes all transactions made whether reportable or not. If a customer makes a $12,000 deposit and a $300 withdrawal, box 3 will be checked even though only $12,000 is reportable. This applies when multiple Part I sections with different Item 2 person types are filed on the same person. Box 3 will be checked in all Part I sections on that person. “Multiple transactions” is not the same as the Item 24 option “Aggregated transactions,” which only involves aggregated transactions all of which are below the reporting requirements.

May I ask where you found the underlined part? It's not on the FAQ Item 18 or the instructions on the CTR.

It is in the message that FinCEN put on the e-filing site. One of the earlier posts in this thread copied the entire message.

I must really be missing it. I don't see it in the 10/1/19 notice from the e-filing site.

Never mind. It's in the User Guide, not the notice.

Yes, this is in the actual instructions, not in the notice or in the FAQ

Has anyone had any communication from your software vendor on these changes and if they are accommodating this?

Verafin has let us know that they are working on the change and it will be done by the expected date.

I would think that the vast majority of AML platforms would need to be updated. If you haven't heard anything from yours you should probably reach out and ask them.

We use Patriot Officer and it has already been updated.

Here's a follow up question. Now that we have multiple pages for multiple roles under item #2, would we still select multiple transactions for that role?

By that I mean, if an individual is 2a for depositing 5k into his personal and 2b for depositing 9k into his business and those are on separate pages, are we still selecting multiple transactions? How is your automated software doing it? We still have a manual process....

Well, the 10/1/19 user guide said this:

• Item 3 Multiple transactions
o Modified the text as follows (new text is underlined for emphasis):
Item 3 Multiple transactions: Check box 3 if multiple cash in or cash out transactions of any amount were conducted in a single business day by or for the person recorded in Part I. Multiple transactions includes all transactions made whether reportable or not. If a customer makes a $12,000 deposit and a $300 withdrawal, box 3 will be checked even though only $12,000 is reportable. This applies when multiple Part I sections with different Item 2 person types are filed on the same person. Box 3 will be checked in all Part I sections on that person. “Multiple transactions” is not the same as the Item 24 option “Aggregated transactions,” which only involves multiple aggregated transactions all of which are below the reporting requirements.

Then the 11/24/19 user guide said this:
Item 3 Multiple transactions
• 3.3 Element Requirements & Attachment C – Electronic Filing Instructions
o Modified the element definition (3.3 Element Requirements) and associated item instructions (Attachment C – Electronic Filing Instructions – Item Instructions) to clarify that the Multiple Transactions indicator should only be checked if multiple transactions of any amount totaling more than $10,000 as cash in or more than $10,000 as cash out (cash in or cash out transactions should not be combined) were conducted in a single business day by or on behalf of the same person.

praBSA: Okay, I had to reread the 10/1/19 and 11/22/19 changes a few times, as well as other parts of the user guide, to figure out what they seem to want, and I still don't think it is clear for your question. I had caught the 10/1/19 change, but hadn't seen the 11/22/19 change until today. It seems the 11/22/19 change corrected the 10/1/19 change that seemed bizarre in the first place.

This seems to be the 11/22/19 (most recent v1.4.1) instruction from the user guide:
3. Multiple transactions
Item 3 Multiple transactions: Check Item 3 if multiple cash transactions of any amount totaling more than $10,000 as cash in or more than $10,000 as cash out (cash in and cash out transactions should not be combined) were conducted in a single business day by or for the person recorded in Part I. For example, if a customer makes a $12,000 deposit and a $300 deposit on the same day, item 3 should be checked. However, if a customer makes a $12,000 deposit and a $300 withdrawal, item 3 should not be checked. Item 3 “Multiple transactions” is related to, but not the same as, the Item 24 “Aggregated transactions.” Whereas Item 3 should be checked each time multiple transactions are reported as a single transaction, the Item 24 option “Aggregated transaction” should only be checked when all the specific conditions underlying that option have been satisfied.

Now to answer your original question of


Based on the 11/22/19 changes, my first thought is that you would select the multiple transaction box for your example, since the amount by that person was more than $10,000 in. However, the 11/22/19 user guide says this: "Whereas Item 3 should be checked each time multiple transactions are reported as a single transaction..." In your question, you don't have a single transaction for the multiple transaction since we now report them separately in 2a and 2b. I don't see any other guidance for this, so I'm not sure how FinCEN intended this. My guess would be to select multiple transactions, but that might be worth a call to FinCEN.

The CTR update is one of many topics we will be covering at the Top Gun BSA Conference in sunny Scottsdale next March. I'm working with FinCEN to have a representative there as well so that we can try to get additional clarification on these types of issues.

Has anyone heard of this being delayed? Per our vendor they expect a delay until later in 2020

There is nothing formal published on FinCEN's e-filing site. Does you vendor have a source for their claim?

No, they aren't ready for the change so that is the response we are receiving. I haven't seen anything but was hoping I just missed it.

Verafin indicated in their blog today that FinCEN is pushing the deadline to September 1, 2020. Be on the lookout for updated guidance.

I was just on their site:
January 17th, 2020 –FinCEN is extending the mandatory effective date for complying with the instructions below. On October 1, 2019, FinCEN notified discrete and XML batch e-filers that an issue had been identified with the Currency Transaction Report (CTR) instructions involving how to file a CTR when an individual subject has multiple Part I Item 2 roles.
The mandatory effective date for complying with the update below is extended from February 1, 2020 to September 1, 2020.

https://bsaefiling.fincen.treas.gov...CTRMultipleTransactionsEffectiveDate.pdf

Well, mkp122, let's hope it's more than just a birthday wish for you. Happy Birthday, BTW! It will be interesting to learn whether there's anything posted or to be posted delaying the effective date for discrete filers, which I believe was October 1, 2019.

fincen as of January 17 2020 is extending the mandatory effective date to for complying with the instructions from February 1 2020 to September 1 2020