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Recording "Purchased on behalf of" Information On MISLs and CTRs

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Question: 
Are we required to record the "Purchased on Behalf of" information on a MISL under BSA? <a href="http://www.bankersonline.com/regs/103/103-29.html">103.29</a> doesn't mention it, but <a href="http://www.bankersonline.com/regs/103/103-28.html">103.28</a> requires it if a CTR is required. Are we allowed to leave it off of a CTR if we filed the CTR due to multiple MISLs totaling more than $10M?
Answer: 

It took awhile to track down the answer to this. I'm going to rephrase the question slightly, in order to better explain the answer. To illustrate: Let's say I keep a Monetary Instruments Sales Log for every time I sell an official check for between $3,000 and $10,000. Do I have to ask the purchaser if he/she is purchasing the check for themselves or on behalf of someone else? If I DON'T have to ask that, and at the end of the day I find that I've sold over $10,000 to one person in multiple transactions, can I disregard the "on behalf of" and assume the transactions to be for the person I sold the checks to?

After my contact with the "powers that be" in Washington, DC, I learned that the answer really depends upon what the bank knows at the time it is ready to file a CTR arising from the multiple sales of thosemonetary instruments. If the bank had knowledge that the purchases were on behalf of the same individual, once the amount exceeds $10,000, the person on whose behalf the monetary instruments were purchased must be included on the CTR.

The simple answer is that there is no obligation to go backwards in time and that if there was a beneficial owner different from the person who actually purchased the monetary instruments but the bank was NOT aware of this, there is no obligation to go back to the customer and obtain this information. Nor is there an obligation to go back if the bank is uncertain whether or not the multiple purchases may or may not have been on behalf of a different person. The rules pertaining to the purchase of monetary instruments by cash between the amount of $3,000 to $10,000 (See 31 CFR 103.29) do not require the bank to determine and identify the person on whose behalf the purchase is made.

This gets a little tricky for hard and fast rules. The bank will always need to reflect beneficial ownership when the purchase of monetary instruments exceeds $10,000 at one time. In addition, if the bank is aware, at the time the customer is making a multiple transaction that now exceeds $10,000, it should make an effort to obtain beneficial ownership once it is aware that the purchase - even though under $10,000, is going to trigger a CTR because of earlier purchases the same day that, in the aggregate would exceed $10,000.

As always, if there are repeated purchases of monetary instruments in cash, the bank should be wary of potential structuring. If the bank suspects this is going on (and the frequent purchase of money orders, cashiers checks, travelers checks, etc. with cash under $10,000 is a common form of structuring), it will also be required to file a SAR.

First published on BankersOnline.com 3/4/02

First published on 03/04/2002

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