[Code of Federal Regulations]

[Title 31, Volume 1]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 31CFR103.20]



[Page 379-381]

 

                  TITLE 31--MONEY AND FINANCE: TREASURY

 

                       DEPARTMENT OF THE TREASURY

 

PART 103_FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGN 

TRANSACTIONS--Table of Contents

 

                  Subpart B_Reports Required To Be Made

 

Sec. 103.20  Reports by money services businesses of suspicious 

transactions.



    (a) General. (1) Every money services business, described in Sec. 

103.11(uu) (1), (3), (4), (5), or (6), shall file with the Treasury 

Department, to the extent and in the manner required by this section, a 

report of any suspicious transaction relevant to a possible violation of 

law or regulation. Any money services business may also file with the 

Treasury Department, by using the form specified in paragraph (b)(1) of 

this section, or otherwise, a report of any suspicious transaction that 

it believes is relevant to the possible violation of any law or 

regulation but whose reporting is not required by this section.

    (2) A transaction requires reporting under the terms of this section 

if it is conducted or attempted by, at, or through a money services 

business, involves or aggregates funds or other assets of at least 

$2,000 (except as provided in paragraph (a)(3) of this section), and the 

money services business knows, suspects, or has reason to suspect that 

the transaction (or a pattern of transactions of which the transaction 

is a part):

    (i) Involves funds derived from illegal activity or is intended or 

conducted in order to hide or disguise funds or assets derived from 

illegal activity (including, without limitation, the ownership, nature, 

source, location, or control of such funds or assets) as part of a plan 

to violate or evade any federal law or regulation or to avoid any 

transaction reporting requirement under federal law or regulation;

    (ii) Is designed, whether through structuring or other means, to 

evade any requirements of this part or of any other regulations 

promulgated under the Bank Secrecy Act, Public Law 91-508, as amended, 

codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-

5330; or



[[Page 380]]



    (iii) Serves no business or apparent lawful purpose, and the 

reporting money services business knows of no reasonable explanation for 

the transaction after examining the available facts, including the 

background and possible purpose of the transaction.

    (iv) Involves use of the money services business to facilitate 

criminal activity.

    (3) To the extent that the identification of transactions required 

to be reported is derived from a review of clearance records or other 

similar records of money orders or traveler's checks that have been sold 

or processed, an issuer of money orders or traveler's checks shall only 

be required to report a transaction or pattern of transactions that 

involves or aggregates funds or other assets of at least $5,000.

    (4) The obligation to identify and properly and timely to report a 

suspicious transaction rests with each money services business involved 

in the transaction, provided that no more than one report is required to 

be filed by the money services businesses involved in a particular 

transaction (so long as the report filed contains all relevant facts). 

Whether, in addition to any liability on its own for failure to report, 

a money services business that issues the instrument or provides the 

funds transfer service involved in the transaction may be liable for the 

failure of another money services business involved in the transaction 

to report that transaction depends upon the nature of the contractual or 

other relationship between the businesses, and the legal effect of the 

facts and circumstances of the relationship and transaction involved, 

under general principles of the law of agency.

    (5) Notwithstanding the provisions of this section, a transaction 

that involves solely the issuance, or facilitation of the transfer of 

stored value, or the issuance, sale, or redemption of stored value, 

shall not be subject to reporting under this paragraph (a), until the 

promulgation of rules specifically relating to such reporting.

    (b) Filing procedures--(1) What to file. A suspicious transaction 

shall be reported by completing a Suspicious Activity Report-MSB (``SAR-

MSB''), and collecting and maintaining supporting documentation as 

required by paragraph (c) of this section.

    (2) Where to file. The SAR-MSB shall be filed in a central location 

to be determined by FinCEN, as indicated in the instructions to the SAR-

MSB.

    (3) When to file. A money services business subject to this section 

is required to file each SAR-MSB no later than 30 calendar days after 

the date of the initial detection by the money services business of 

facts that may constitute a basis for filing a SAR-MSB under this 

section. In situations involving violations that require immediate 

attention, such as ongoing money laundering schemes, the money services 

business shall immediately notify by telephone an appropriate law 

enforcement authority in addition to filing a SAR-MSB. Money services 

businesses wishing voluntarily to report suspicious transactions that 

may relate to terrorist activity may call FinCEN's Financial 

Institutions Hotline at 1-866-556-3974 in addition to filing timely a 

SAR-MSB if required by this section.

    (c) Retention of records. A money services business shall maintain a 

copy of any SAR-MSB filed and the original or business record equivalent 

of any supporting documentation for a period of five years from the date 

of filing the SAR-MSB. Supporting documentation shall be identified as 

such and maintained by the money services business, and shall be deemed 

to have been filed with the SAR-MSB. A money services business shall 

make all supporting documentation available to FinCEN and any other 

appropriate law enforcement agencies or supervisory agencies upon 

request.

    (d) Confidentiality of reports; limitation of liability. No 

financial institution, and no director, officer, employee, or agent of 

any financial institution, who reports a suspicious transaction under 

this part, may notify any person involved in the transaction that the 

transaction has been reported. Thus, any person subpoenaed or otherwise 

requested to disclose a SAR-MSB or the information contained in a SAR-

MSB, except where such disclosure is requested by FinCEN or an 

appropriate



[[Page 381]]



law enforcement or supervisory agency, shall decline to produce the SAR-

MSB or to provide any information that would disclose that a SAR-MSB has 

been prepared or filed, citing this paragraph (d) and 31 U.S.C. 

5318(g)(2), and shall notify FinCEN of any such request and its response 

thereto. A reporting money services business, and any director, officer, 

employee, or agent of such reporting money services business, that makes 

a report pursuant to this section (whether such report is required by 

this section or made voluntarily) shall be protected from liability for 

any disclosure contained in, or for failure to disclose the fact of, 

such report, or both, to the extent provided by 31 U.S.C. 5318(g)(3).

    (e) Compliance. Compliance with this section shall be audited by the 

Department of the Treasury, through FinCEN or its delegees under the 

terms of the Bank Secrecy Act. Failure to satisfy the requirements of 

this section may constitute a violation of the reporting rules of the 

Bank Secrecy Act and of this part.

    (f) Effective date. This section applies to transactions occurring 

after December 31, 2001.



[65 FR 13692, Mar. 14, 2000, as amended at 68 FR 6617, Feb. 10, 2003]