FinCEN Issues New Ruling on the Treatment of Armored Car Service Transactions

FinCEN has issued a new ruling on the treatment of armored car service transactions. Our compliance report details the impact on credit unions.

The Financial Crimes Enforcement Network (FinCEN) has granted exceptive relief for the completion of Currency Transactions Reports (CTRs) on certain Armored Car Service (ACS) transactions.

The exception applies only to reportable transactions that are conducted by an ACS to debit or credit the account of a financial institution’s customer per instructions received from the customer or third party. The exception and its application are set forth below:

  1. Financial institutions are required to implement adequate procedures to determine whether an ACS is acting pursuant to instructions from the financial institution, from the financial institution’s customer, or from a third party.
  2. If the delivery to or pick-up from the financial institution (corresponding to a deposit to or withdrawal from a financial institution’s customer’s account) was performed by an ACS acting pursuant to instructions from the reporting financial institution, the customer would have to be identified in Section I of the CTR, but only box 24 of Section II (“Armored Car FI Contract”) would need to be checked to satisfy the CTR requirements regarding the ACS.
  3. If the delivery to or pick-up from the financial institution was performed by an ACS pursuant to instructions received from the financial institution’s customer or from a third party, the financial institution must complete the CTR as follows:
    • The deliveries to and pick-ups from the financial institution conducted by the ACS pursuant to instructions from the financial institution’s customer or from a third party on any one business day will be aggregated with any other currency transactions performed on behalf of the same customer on the same business day.
    • If the financial institution has knowledge that the aggregate of all currency deposits or withdrawals by or on behalf of a customer on any one business day exceeds $10,000, the financial institution will file a CTR identifying the customer and all persons conducting transactions (including the ACS and, if applicable, third parties on whose instructions the ACS conducted transactions) about whom the financial institution has obtained identifying information.
    • In the case of an ACS that, acting pursuant to instructions from a person other than the reporting financial institution itself, makes a delivery to or pick-up from a customer’s account in excess of $10,000 on any one business day, the financial institution will satisfy the requirement to identify the party conducting the transaction by filling in the ACS’s corporate information (corporate name, address, EIN, etc.). The name of the employee of the ACS will not be required.
  4. If the financial institution has knowledge that the same ACS makes several deliveries or pick-ups below $10,000 to or from the account of the same customer on any one business day (regardless of the person pursuant to whose instructions the ACS transactions were conducted), for a total exceeding $10,000, the transactions will be aggregated for purposes of filing a CTR with respect to the customer.
  5. The financial institution’s reporting obligation regarding transactions conducted by an ACS pursuant to instructions from the financial institution’s customer or from a third party is satisfied by filing CTRs aggregated by customer only.
  6. If, in spite of implementing adequate procedures, the financial institution is unable to determine on whose instruction a specific ACS reportable transaction was conducted within the period allowed for the filing of the corresponding CTR, the financial institution may satisfy its CTR requirements by identifying the financial institution’s customer and the ACS that conducted the transaction. The financial institution’s obligation to identify the ACS shall be satisfied by filling in the ACS’s corporate information (corporate name, address, EIN, etc.). The identifying information of the ACS employee is not required.

In addition, FinCEN has released an Appendix with several illustrative currency transaction scenarios involving ACS transactions as an example of how to properly complete a CTR.

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, [email protected].