After watching the Top Gun conference pertaining to CTR completion updates, my collegues and I were discussing how we are doing CTR’s with multiple dba’s. Today the system adds both of the entities under one Part 1 of the CTR with a semi colon separating them. Now we understand if we say we have already implemented the ruling then we need to a separate Part 1 for each of the dba’s? This will be a lot of manual work and just want to make sure we understand the update correctly.
We are trying to determine whether or not a customer qualifies as a dealer of precious metal, precious stones or jewels and if so, what is required with regard to AML and OFAC.
The customer sells jewelry on Etsy to the general public including rings, earrings and necklaces. Most of the rings come with a gemstone. The metal of the ring is made with sterling silver, 10K gold and 14k gold. Gemstones include aquamarine, cubic zirconia, alexandrite, lab (man-made) sapphire, lab created ruby, lab created emerald, amethyst, moonstone, blue topaz, garnet, quartz, period and morganite.
The customer purchases approximately $150,000 from foreign vendors in Hong Kong.
- Does this customer qualify as a dealer in precious metals, stones and jewels?
- And if the customer does qualify, what documentation does the customer need to have in place with regard to an AML program, OFAC, risk assessment, etc.?
- How are dealers in precious metals, gemstones and jewels advised that they are required to have this documentation?
- Are they regulated, and if so by who?
Any insight you could provide would be greatly appreciated.
This question primarily refers to the guidance published by FINCEN on 10/01/19, particularly the line "If more than one Item 2 options applies to a Part 1 person, a separate Part 1 section will be prepared on that person for each Item 2 option." In addition to reading the publication, I watched a BOL Webinar by John Burnett on this topic and was hoping he may be available to answer this question.
I am aware that this ruling has postponed and is not currently effective, but our institution has been filing CTRs in accordance to this guidance since it came out in order to prepare. If this guidance were in place and I was trying to follow it correctly would the following scenario be filed as explained, or is my understanding incorrect.
Jane Doe is the sole owner of a checking account for her Sole Proprietorship, Doe Inc. Jane Doe makes an $7,000 withdrawal from the Doe Inc checking account on behalf of the business. John Smith is a signer on the Doe Inc checking account and makes a $5,000 withdrawal on behalf on the business.
Based on my understanding of the 10/01/20 guidance three part 1's would be filed on this CTR as follows:
The first Part 1 for Jane Doe would have box 2a marked for the $7,000 she withdrew on her own behalf/on behalf of the business because she and the business are the same entity. This part 1 would include the trade name Doe Inc and contain Jane's DOB, SSN, etc. and would have $7,000 in section 22.
An additional Part 1 for John Smith would have box 2b marked for the $5,000 he withdrew on behalf of the business. The Part 1 would contain John's personal information and would show $5,000 in section 22.
The second Part 1 for Jane Doe would have box 2c marked for the $5,000 that was withdrawn on behalf of the business, but not by Jane herself, therefore not qualifying for the previous 2a we filed for Jane. This part one would include the trade name Doe Inc and contain Jane's DOB, SSN, etc. and would have $5,000 in section 22.
Because Jane fulfills a 2a and 2c role for this set of transactions it is my understanding that a separate part 1 would be filed for each role based on the guidance I quoted at the beginning of this message. Please advise as to the correct way to file for a transaction of this nature (based on the 10/01/20 guidance) and If my understanding is incorrect, please explain what the issue was.
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