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Bank Secrecy Act Reporting in Fiscal Year 2005
T
he Bank Secrecy Act is the nation's first and most comprehensive federal anti-money laundering statute. Since it was enacted in 1970, the Act has been amended several times, most recently by the USA PATRIOT Act. The Bank Secrecy Act authorizes the Secretary of the Treasury to issue regulations requiring banks and other financial institutions to take a number of precautions against financial crime, including filing reports that have been determined to have a high degree of usefulness in criminal, tax, regulatory investigations and proceedings, and certain intelligence and counter-terrorism matters. The Bank Secrecy Act's anti-money laundering program requirement helps financial institutions to protect themselves, and thus the U.S. financial system, from abuse by financial criminals, and helps those institutions identify and mitigate the risks inherent in their operations. The Bank Secrecy Act's record keeping and reporting requirements provide transparency in the financial system and help to create a financial trail that law enforcement and intelligence agencies can use to track criminals, their activities, and their assets. For an overview of the relationship between Bank Secrecy Act records and money laundering, terrorist financing, and other financial crimes, see Appendix A.
Twelve types of reports are required under the Bank Secrecy Act. The reports that are filed most often are:
•
Currency Transaction Reports,
which are filed in connection with
deposits, withdrawals, exchanges
of currency, or other payments
or transfers by, through, or to a
financial institution exceeding
$10,000. Currency transaction
reporting requirements are a key
impediment to criminal attempts to
legitimize the proceeds of crime.
•
Suspicious Activity Reports, which
describe financial transactions
of any amount and type that
financial institutions suspect may
be related to illicit activity. These
reports are especially valuable to
law enforcement and intelligence
agencies because they reflect
activity considered problematic or
unusual by financial institutions,
casinos, money services
businesses, and the securities
industry. Suspicious Activity Reports
contain sensitive information and,
consequently, may be disclosed
and disseminated only under strict
guidelines. Unauthorized disclosure
of Suspicious Activity Reports is a
violation of criminal law.Bank Secrecy Act Reports
•
Currency Transaction Report (CTR)
•
Currency Transaction Report by a Casino (CTR-C)
•
Currency Transaction Report by a Nevada Casino
•
Designation of Exempt Person
•
Report of Foreign Bank and Financial Accounts (FBAR)
•
Report of International Transportation of Currency or Monetary Instruments(CMIR - Collected by U.S. Customs and Border Protection)
•
Report of Cash Payments over $10,000 Received in a Trade or Business (8300)
•
Suspicious Activity Report (SAR)
•
Suspicious Activity Report by a Money Services Business ( SAR-MSB)
•
Suspicious Activity Report by Casinos & Card Clubs (SAR-C)
•
Suspicious Activity Report by Securities & Futures Industries (SAR-SF)
•
Registration of Money Services Business (RMSB) The latest versions of these forms are available at www.fincen.gov.
The number of Bank Secrecy Act reports filed in Fiscal Year 2005 was more than 5 percent higher than the number filed the previous year, rising from nearly 15 million in Fiscal Year 2004 to approximately 15.8 million in Fiscal Year 2005. Increases in the number of Suspicious Activity Reports and Currency Transaction Reports accounted for most of the rise during this period.
•
The number of Suspicious Activity
Reports jumped by about 32
percent, from 663,655 to 878,021.
•
The total number of Currency
Transaction Reports grew by nearly
6 percent, from 13.7 million to 14.2
million.
The only type of filing that declined was registration of money services businesses. Money services businesses registrations are effective for two years before re-registration is required. The Financial Crimes Enforcement Network encourages electronic filing of Bank Secrecy Act reports to accelerate the secure flow of information from financial institution filers to law enforcement and regulatory agencies. In Fiscal Year 2005, about 24 percent of Bank Secrecy Act reports were e-filed, more than twice the 11 percent e-filed in Fiscal Year 2004. In the last two months of the fiscal year, about 29 percent of all reports were electronically filed.
Testimony on Value of Bank Secrecy Act Data
"Financial information, lawfully acquired, significantly enhances the ability of U.S. law enforcement
and intelligence community members to overcome defects in financial transparency... BSA data
is of incalculable value in this important effort. When combined with other data collected by the
law enforcement and the intelligence community, investigators are better able to 'connect the dots'.
"More recently, BSA data has proven its utility relative to counterterrorism matters. For example,
BSA data is used to obtain additional information about subject(s) under investigation and their
methods of operation. Analysis of BSA data permits counterterrorism investigators to acquire
biographical and descriptive information, to identify previously unknown subject associates and/or
co-conspirators, and, in certain instances, to determine the location of subject(s) by time and place.
"The value of BSA data to counterterrorism efforts is reflected in the results of a recent review
of BSA data. In this instance, the FBI, using information technology, reviewed approximately
71 million BSA documents for their relevance to counterterrorism investigative and intelligence
matters. The review identified over 88,000 Suspicious Activity Reports (SARs) and Currency
Transaction Reports (CTRs) that bore some relationship to subjects of terrorism investigations."
--Michael F.A. Morehart, Section Chief, Terrorist Financing Operations Section, Counterterrorism
Division, Federal Bureau of Investigation, before the U.S. House of Representatives Committee on
Financial Services, May 26, 2005
The following chart lists the different types of Bank Secrecy Act reports and the numbers filed in Fiscal Years 2004 and 2005.
