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CTR Due Diligence

We are completing our annual due diligence review of customers exempt from CTR filing requirements and have discovered a customer who no longer meets all the criteria for exemption. Are we required to obtain a back filing determination for their activity in the preceding year?

During the annual review of a Phase II exempt customer, a bank may conclude that a customer is no longer eligible for exemption (for example, if an exempt non-listed business customer conducted only four reportable currency transactions during the year under review). At the time the customer's ineligibility is discovered, the bank should document the ineligibility determination and cease to treat the customer as exempt.

You are not required to back file CTRs with respect to a designated Phase II customer that had met the eligibility requirements in a preceding year, but was subsequently found to be ineligible during the bank's completion of its annual review. In the event the customer meets the eligibility requirements in the future, you must file a new Designation of Exempt Person to begin treating the customer as exempt.

First published on 08/13/2012

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