12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.
Refer to § 1010.100 of this Chapter for general definitions not noted herein. To the extent there is a differing definition in § 1010.100 of this chapter, the definition in this Section is what applies to part 1020. Unless otherwise indicated, for purposes of this part:
(a)
(1)
(2)
(i) A product or service where a formal banking relationship is not established with a person, such as check-cashing, wire transfer, or sale of a check or money order;
(ii) An account that the bank acquires through an acquisition, merger, purchase of assets, or assumption of liabilities; or
(iii) An account opened for the purpose of participating in an employee benefit plan established under the Employee Retirement Income Security Act of 1974.
(b)
(1) A bank, as that term is defined in § 1010.100(d), that is subject to regulation by a Federal functional regulator; and
(2) A credit union, private bank, and trust company, as set forth in § 1010.100(d) of this chapter, that does not have a Federal functional regulator.
(c)
(1)
(i) A person that opens a new account; and
(ii) An individual who opens a new account for:
(A) An individual who lacks legal capacity, such as a minor; or
(B) An entity that is not a legal person, such as a civic club.
(2)
(i) A financial institution regulated by a Federal functional regulator or a bank regulated by a State bank regulator;
(ii) A person described in § 1020.315(b)(2) through (b)(4); or
(iii) A person that has an existing account with the bank, provided that the bank has a reasonable belief that it knows the true identity of the person.
(d)
(1) For the purposes of § 1020.210, a financial institution defined in 31 U.S.C. 5312(a)(2) or (c)(1) that is subject to regulation by a Federal functional regulator or a self-regulatory organization.
(2) For the purposes of § 1020.220, financial institution is defined at 31 U.S.C. 5312(a)(2) and (c)(1).
Banks are subject to the program requirements set forth and cross referenced in this subpart. Banks should also refer to subpart B of part 1010 of this chapter for program requirements contained in that subpart which apply to banks.
A financial institution regulated by a Federal functional regulator that is not subject to the regulations of a self regulatory organization shall be deemed to satisfy the requirements of 31 U.S.C. 5318(h)(1) if it implements and maintains an anti-money laundering program that complies with the requirements of §§ 1010.610 and 1010.620 and the regulation of its Federal functional regulator governing such programs.
(a)
(2)
(i)
(
(
(
(
(
(
(
When opening an account for a foreign business or enterprise that does not have an identification number, the bank must request alternative government-issued documentation certifying the existence of the business or enterprise.
(B)
(C)
(ii)
(A)
(
(
(B)
(
(
(C)
(iii)
(A) When the bank should not open an account;
(B) The terms under which a customer may use an account while the bank attempts to verify the customer's identity;
(C) When the bank should close an account, after attempts to verify a customer's identity have failed; and
(D) When the bank should file a Suspicious Activity Report in accordance with applicable law and regulation.
(3)
(i)
(A) All identifying information about a customer obtained under paragraph (a)(2)(i) of this section;
(B) A description of any document that was relied on under paragraph (a)(2)(ii)(A) of this section noting the type of document, any identification number contained in the document, the place of issuance and, if any, the date of issuance and expiration date;
(C) A description of the methods and the results of any measures undertaken to verify the identity of the customer under paragraph (a)(2)(ii)(B) or (C) of this section; and
(D) A description of the resolution of any substantive discrepancy discovered when verifying the identifying information obtained.
(ii)
(4)
(5)(i)
(ii)
(iii)
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.
What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.
(6)
(i) Such reliance is reasonable under the circumstances;
(ii) The other financial institution is subject to a rule implementing 31 U.S.C. 5318(h) and is regulated by a Federal functional regulator; and
(iii) The other financial institution enters into a contract requiring it to certify annually to the bank that it has implemented its anti-money laundering program, and that it will perform (or its agent will perform) the specified requirements of the bank's CIP.
(b)
(c)
Banks are subject to the reporting requirements set forth and cross referenced in this subpart. Banks should also refer to Subpart C of Part 1010 of this chapter for reporting requirements contained in that subpart which apply to banks.
The reports of transactions in currency requirements for banks are located in subpart C of part 1010 of this chapter and this subpart.
Refer to § 1010.311 of this chapter for reports of transactions in currency filing obligations for banks.
Refer to § 1010.312 of this chapter for identification requirements for reports of transactions in currency filed by banks.
Refer to § 1010.313 of this chapter for reports of transactions in currency aggregation requirements for banks.
Refer to § 1010.314 of this chapter for rules regarding structured transactions for banks.
(a)
(b)
(1) A bank, to the extent of such bank's domestic operations;
(2) A department or agency of the United States, of any State, or of any political subdivision of any State;
(3) Any entity established under the laws of the United States, of any State, or of any political subdivision of any State, or under an interstate compact between two or more States, that exercises governmental authority on behalf of the United States or any such State or political subdivision;
(4) Any entity, other than a bank, whose common stock or analogous equity interests are listed on the New York Stock Exchange or the American Stock Exchange or whose common stock or analogous equity interests have been designated as a NASDAQ National Market Security listed on the NASDAQ Stock Market (except stock or interests listed under the separate “NASDAQ Capital Markets Companies” heading), provided that, for purposes of this paragraph (b)(4), a person that is a financial institution, other than a bank, is an exempt person only to the extent of its domestic operations;
(5) Any subsidiary, other than a bank, of any entity described in paragraph (b)(4) of this section (a “listed entity”) that is organized under the laws of the United States or of any State and at least 51 percent of whose common stock or analogous equity interest is owned by the listed entity, provided that, for purposes of this paragraph (b)(5), a person that is a financial institution, other than a bank, is an exempt person only to the extent of its domestic operations;
(6) To the extent of its domestic operations and only with respect to transactions conducted through its exemptible accounts, any other commercial enterprise (for purposes of this section, a “non-listed business”), other than an enterprise specified in paragraph (e)(8) of this section, that:
(i) Maintains a transaction account, as defined in paragraph (e)(9) of this section, at the bank for at least two months, except as provided in paragraph (c)(2)(ii) of this section;
(ii) Frequently engages in transactions in currency with the bank in excess of $10,000; and
(iii) Is incorporated or organized under the laws of the United States or
(7) With respect solely to withdrawals for payroll purposes from existing exemptible accounts, any other person (for purposes of this section, a “payroll customer”) that:
(i) Maintains a transaction account, as defined in paragraph (e)(9) of this section, at the bank for at least two months, except as provided in paragraph (c)(2)(ii) of this section;
(ii) Operates a firm that regularly withdraws more than $10,000 in order to pay its United States employees in currency; and
(iii) Is incorporated or organized under the laws of the United States or a State, or is registered as and eligible to do business within the United States or a State.
(c)
(2)
(A) Any of the twelve Federal Reserve Banks; or
(B) Any exempt person as described in paragraphs (b)(1) to (3) of this section.
(ii) Notwithstanding subparagraphs (b)(6)(i) and (b)(7)(i) of this section, and if the requirements under this section are otherwise satisfied, a bank may designate a non-listed business or a payroll customer, as described in paragraphs (b)(6) and (7) of this section, as an exempt person before the customer has maintained a transaction account at the bank for at least two months if the bank conducts and documents a risk-based assessment of the customer and forms a reasonable belief that the customer has a legitimate business purpose for conducting frequent transactions in currency.
(d)
(e)
(2)
(3)
(4)
(i) Any reasonably authenticated corporate officer's certificate;
(ii) Any reasonably authenticated photocopy of Internal Revenue Service Form 851 (Affiliation Schedule) or the equivalent thereof for the appropriate tax year; or
(iii) A person's Annual Report or Form 10-K, as filed in each case with the Securities and Exchange Commission.
(5)
(6)
(7)
(8)
(9)
(10)
(f)
(g)
(i) Knowingly files false or incomplete information with respect to the transaction or the customer engaging in the transaction; or
(ii) Has reason to believe that the customer does not meet the criteria established by this section for treatment of the transactor as an exempt person or that the transaction is not a transaction of the exempt person.
(2) Subject to the specific terms of this section, and absent any specific knowledge of information indicating that a customer no longer meets the requirements of an exempt person, a bank satisfies the requirements of this section to the extent it continues to treat that customer as an exempt person until the completion of that customer's next required periodic review, which as required by paragraph (d) of this section for an exempt person described in paragraph (b)(4) to (7) of this section, shall occur no less than once each year.
(3) A bank that files a report with respect to a currency transaction by an exempt person rather than treating such person as exempt shall remain subject, with respect to each such report, to the rules for filing reports, and the penalties for filing false or incomplete reports that are applicable to reporting of transactions in currency by persons other than exempt persons.
(h)
(2) Consistent with its annual review obligations under paragraph (d) of this section, a bank shall establish and maintain a monitoring system that is reasonably designed to detect, for each account of a non-listed business or payroll customer, those transactions in currency involving such account that would require a bank to file a suspicious transaction report. The statement in the preceding sentence with respect to accounts of non-listed business and payroll customers does not limit the obligation of banks generally to take the steps necessary to satisfy the terms of paragraph (h)(1) of this section and § 1020.320 with respect to all exempt persons.
(i)
(1) The status of an entity as an exempt person under paragraph (b)(4) of this section ceases once such entity ceases to be listed on the applicable stock exchange; and
(2) The status of a subsidiary as an exempt person under paragraph (b)(5) of this section ceases once such subsidiary ceases to have at least 51 per cent of its common stock or analogous equity interest owned by a listed entity.
(a)
(2) A transaction requires reporting under the terms of this section if it is conducted or attempted by, at, or through the bank, it involves or aggregates at least $5,000 in funds or other assets, and the bank knows, suspects, or has reason to suspect that:
(i) The transaction involves funds derived from illegal activities or is intended or conducted in order to hide or disguise funds or assets derived from illegal activities (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) The transaction is designed to evade any requirements of this chapter or of any other regulations promulgated under the Bank Secrecy Act; or
(iii) The transaction has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the bank knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction.
(b)
(2)
(3)
(c)
(d)
(e)
(1)
(ii)
(A) The disclosure by a bank, or any director, officer, employee, or agent of a bank, of:
(
(
(
(
(B) The sharing by a bank, or any director, officer, employee, or agent of the bank, of a SAR, or any information that would reveal the existence of a SAR, within the bank's corporate organizational structure for purposes consistent with Title II of the Bank Secrecy Act as determined by regulation or in guidance.
(2)
(f)
(g)
Banks are subject to the recordkeeping requirements set forth and cross referenced in this subpart. Banks should also refer to subpart D of part
(a) Each agent, agency, branch, or office located within the United States of a bank is subject to the requirements of this paragraph (a) with respect to a funds transfer in the amount of $3,000 or more, and is required to retain either the original or a microfilm or other copy or reproduction of each of the following:
(1)
(A) The name and address of the originator;
(B) The amount of the payment order;
(C) The execution date of the payment order;
(D) Any payment instructions received from the originator with the payment order;
(E) The identity of the beneficiary's bank; and
(F) As many of the following items as are received with the payment order:
(
(
(
(ii) For each payment order that it accepts as an intermediary bank, a bank shall retain either the original or a microfilm, other copy, or electronic record of the payment order.
(iii) For each payment order that it accepts as a beneficiary's bank, a bank shall retain either the original or a microfilm, other copy, or electronic record of the payment order.
(2)
(i) If the payment order is made in person, prior to acceptance the originator's bank shall verify the identity of the person placing the payment order. If it accepts the payment order, the originator's bank shall obtain and retain a record of the name and address, the type of identification reviewed, the number of the identification document (
(ii) If the payment order accepted by the originator's bank is not made in person, the originator's bank shall obtain and retain a record of name and address of the person placing the payment order, as well as the person's taxpayer identification number (
(3)
(i) If the proceeds are delivered in person to the beneficiary or its representative or agent, the beneficiary's bank shall verify the identity of the person receiving the proceeds and shall obtain and retain a record of the name and address, the type of identification reviewed, and the number of the identification document (
(ii) If the proceeds are delivered other than in person, the beneficiary's bank shall retain a copy of the check or other instrument used to effect payment, or the information contained thereon, as well as the name and address of the person to which it was sent.
(4)
(5)
(6)
(i) Funds transfers where the originator and beneficiary are any of the following:
(A) A bank;
(B) A wholly owned domestic subsidiary of a bank chartered in the United States;
(C) A broker or dealer in securities;
(D) A wholly owned domestic subsidiary of a broker or dealer in securities;
(E) A futures commission merchant or an introducing broker in commodities;
(F) A wholly owned domestic subsidiary of a futures commission merchant or an introducing broker in commodities;
(G) The United States;
(H) A state or local government;
(I) A Federal, State or local government agency or instrumentality; or
(J) A mutual fund; and
(ii) Funds transfers where both the originator and the beneficiary are the same person and the originator's bank and the beneficiary's bank are the same bank.
(b)(1) With respect to each certificate of deposit sold or redeemed after May 31, 1978, and before October 1, 2003, or each deposit or share account opened with a bank after June 30, 1972, and before October 1, 2003, a bank shall, within 30 days from the date such a transaction occurs or an account is opened, secure and maintain a record of the taxpayer identification number of the customer involved; or where the account or certificate is in the names of two or more persons, the bank shall secure the taxpayer identification number of a person having a financial interest in the certificate or account. In the event that a bank has been unable to secure, within the 30-day period specified, the required identification, it shall nevertheless not be deemed to be in violation of this section if it has made a reasonable effort to secure such identification, and it maintains a list containing the names, addresses, and account numbers of those persons from whom it has been unable to secure such identification, and makes the names, addresses, and account numbers of those persons available to the Secretary as directed by him. A bank acting as an agent for another person in the purchase or redemption of a certificate of deposit issued by another bank is responsible for obtaining and recording the required taxpayer identification, as well as for maintaining the records referred to in paragraphs (c)(11) and (12) of this section. The issuing bank can satisfy the recordkeeping requirement by recording the name and address of the agent together with a description of the instrument and the date of the transaction. Where a person is a non-resident alien, the bank shall also record the person's passport number or a description of some other government document used to verify his identity.
(2) The 30-day period provided for in paragraph (b)(1) of this section shall be extended where the person opening the account has applied for a taxpayer identification or social security number on Form SS-4 or SS-5, until such time as the person maintaining the account has had a reasonable opportunity to secure such number and furnish it to the bank.
(3) A taxpayer identification number required under paragraph (b)(1) of this section need not be secured for accounts or transactions with the following:
(i) Agencies and instrumentalities of Federal, State, local or foreign governments;
(ii) Judges, public officials, or clerks of courts of record as custodians of funds in controversy or under the control of the court;
(iii) Aliens who are ambassadors, ministers, career diplomatic or consular officers, or naval, military or other attachés of foreign embassies and legations, and for the members of their immediate families;
(iv) Aliens who are accredited representatives of international organizations which are entitled to enjoy privileges, exemptions and immunities as an international organization under the International Organization Immunities Act of December 29, 1945 (22 U.S.C. 288), and the members of their immediate families;
(v) Aliens temporarily residing in the United States for a period not to exceed 180 days;
(vi) Aliens not engaged in a trade or business in the United States who are attending a recognized college or university or any training program, supervised or conducted by any agency of the Federal Government;
(vii) Unincorporated subordinate units of a tax exempt central organization which are covered by a group exemption letter,
(viii) A person under 18 years of age with respect to an account opened as a part of a school thrift savings program, provided the annual interest is less than $10;
(ix) A person opening a Christmas club, vacation club and similar installment savings programs, provided the annual interest is less than $10; and
(x) Non-resident aliens who are not engaged in a trade or business in the United States.
(4) In instances described in paragraphs (b)(3)(viii) and (ix) of this section, the bank shall, within 15 days following the end of any calendar year in which the interest accrued in that year is $10 or more use its best effort to secure and maintain the appropriate taxpayer identification number or application form therefor.
(5) The rules and regulations issued by the Internal Revenue Service under section 6109 of the Internal Revenue Code of 1954 shall determine what constitutes a taxpayer identification number and whose number shall be obtained in the case of an account maintained by one or more persons.
(c) Each bank shall, in addition, retain either the original or a microfilm or other copy or reproduction of each of the following:
(1) Each document granting signature authority over each deposit or share account, including any notations, if such are normally made, of specific identifying information verifying the identity of the signer (such as a driver's license number or credit card number);
(2) Each statement, ledger card or other record on each deposit or share account, showing each transaction in, or with respect to, that account;
(3) Each check, clean draft, or money order drawn on the bank or issued and payable by it, except those drawn for $100 or less or those drawn on accounts which can be expected to have drawn on them an average of at least 100 checks per month over the calendar year or on each occasion on which such checks are issued, and which are:
(i) Dividend checks,
(ii) Payroll checks,
(iii) Employee benefit checks,
(iv) Insurance claim checks,
(v) Medical benefit checks,
(vi) Checks drawn on government agency accounts,
(vii) Checks drawn by brokers or dealers in securities,
(viii) Checks drawn on fiduciary accounts,
(ix) Checks drawn on other financial institutions, or
(x) Pension or annuity checks;
(4) Each item in excess of $100 (other than bank charges or periodic charges made pursuant to agreement with the customer), comprising a debit to a customer's deposit or share account, not required to be kept, and not specifically exempted, under paragraph (c)(3) of this section;
(5) Each item, including checks, drafts, or transfers of credit, of more than $10,000 remitted or transferred to a person, account or place outside the United States;
(6) A record of each remittance or transfer of funds, or of currency, other monetary instruments, checks, investment securities, or credit, of more than $10,000 to a person, account or place outside the United States;
(7) Each check or draft in an amount in excess of $10,000 drawn on or issued by a foreign bank which the domestic bank has paid or presented to a nonbank drawee for payment;
(8) Each item, including checks, drafts or transfers of credit, of more than $10,000 received directly and not through a domestic financial institution, by letter, cable or any other means, from a bank, broker or dealer in foreign exchange outside the United States;
(9) A record of each receipt of currency, other monetary instruments, investment securities or checks, and of each transfer of funds or credit, of more than $10,000 received on any one occasion directly and not through a domestic financial institution, from a bank, broker or dealer in foreign exchange outside the United States; and
(10) Records prepared or received by a bank in the ordinary course of business, which would be needed to reconstruct a transaction account and to trace a check in excess of $100 deposited in such account through its domestic processing system or to supply a description of a deposited check in excess of $100. This subparagraph shall be applicable only with respect to demand deposits.
(11) A record containing the name, address, and taxpayer identification number as determined under section 6109 of the Internal Revenue Code of 1986, if available, of the purchaser of each certificate of deposit, as well as a
(12) A record containing the name, address and taxpayer identification number as determined under section 6109 of the Internal Revenue Code of 1986, if available, of any person presenting a certificate of deposit for payment, as well as a description of the instrument and the date of the transaction.
(13) Each deposit slip or credit ticket reflecting a transaction in excess of $100 or the equivalent record for direct deposit or other wire transfer deposit transactions. The slip or ticket shall record the amount of any currency involved.
Banks are subject to the special information sharing procedures to deter money laundering and terrorist activity requirements set forth and cross referenced in this subpart. Banks should also refer to subpart E of part 1010 of this chapter for special information sharing procedures to deter money laundering and terrorist activity contained in that subpart which apply to banks.
(a) Refer to § 1010.520 of this chapter.
(b) [Reserved]
(a) Refer to § 1010.540 of this chapter.
(b) [Reserved]
Banks are subject to the special standards of diligence; prohibitions; and special measures requirements set forth and cross referenced in this subpart. Banks should also refer to subpart F of part 1010 of this chapter for special standards of diligence; prohibitions; and special measures contained in that subpart which apply to banks.
(a) Refer to § 1010.610 of this chapter.
(b) [Reserved]
(a) Refer to § 1010.620 of this chapter.
(b) [Reserved]
(a) Refer to § 1010.630 of this chapter.
(b) [Reserved]
(a) Refer to § 1010.670 of this chapter.
(b) [Reserved]