Exempt entities & Currency Exchanges

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Question:

The FFIEC BSA/AML Manual dated 8/24/07 states that "the exemption of a Phase I entity covers all transactions in currency with the exempted entity, not only transactions in currency conducted through an account." Phase II's are exempt with respect to transactions conducted through its exemptible accounts. From this, can we conclude that a straight $12,000 currency exchange by an exempt bank would be an exemptible transaction but that a $12,000 currency exchange by an exempt "non-listed business" would not be exempt from reporting?

Answer:

Answer by Randy Carey:That is correct. A straight currency exchange that is not run through the customer's account is covered under the exemption for a Phase I customer, but not a Phase II customer. A staight currency exchange for a Phase II customer for more than $10,000 would require a CTR.

Answer:

Answer by John Burnett:FinCEN explains in its Guidance 2009-G003 that running the currency exchange through the non-listed business's exemptible account is a legitimate way to avoid having to file a CTR. An exempt non-listed customer that takes that route should not be considered to be attempting to avoid a CTR filing (structuring).First published on BankersOnline.com 9/28/09