Dear [ ]:
This letter responds to your letter dated June 4, 2001, on behalf of [ ] (the “Bank”),requesting a determination whether the Bank is required under 31 U.S.C. § 5313, and itsimplementing regulations found at 31 C.F.R. § 103.22, to aggregate multiple currencytransactions for purposes of filing a Currency Transaction Report (“CTR”) based on thefacts outlined below.
Mr. Smith is the primary owner of several businesses (Business 1, Business 2, andBusiness 3) that are engaged in the activities of selling and servicing ATMs. Eachbusiness has a separate tax identification number, and maintains a bank account (Account1, Account 2, and Account 3) at the Bank. Various employees of these businesses makewithdrawals throughout the day as follows: Employee 1 makes a withdrawal fromAccount 1 for Business 1; Employee 2 makes a withdrawal out of Account 2 for Business2; Employee 3 makes a withdrawal out of Account 3 for Business 3. However, if any ofthe accounts do not have sufficient funds to cover the withdrawal amount, funds are takenfrom any one, or a combination of the three accounts, to cover the amount of thewithdrawal regardless of what business or employee will actually receive the funds. Thepayroll for the employees from all three businesses is paid out of Account 2. The Bankknows that Mr. Smith is the primary owner of all of the businesses, and that Mr. Smithhas primary signature authority with respect to each account.
A financial institution must treat multiple transactions in currency as a single transactionif the financial institution "has knowledge that [the multiple transactions] are by or onbehalf of any person and result in either cash in or cash out totaling more than $10,000during any one business day." See 31 CFR § 103.22(c)(2). Whether separatetransactions should be deemed to be conducted "by or on behalf of any person" dependsupon all of the facts and circumstances involved.
The mere fact that separately incorporated businesses are owned by the same person doesnot itself trigger the requirement to aggregate currency transactions involving multiplebusinesses for purposes of 31 CFR § 103.22. However, common ownership ofcorporations or other types of businesses may be relevant to a determination thataggregation is required if combined with other factors indicating that the corporations orbusinesses are not operated separately and independently. The conclusion that multiplebusinesses are not operated separately and independently may be based on suchindications, for example, that the corporations or businesses are staffed by the same employees, the bank accounts of one corporation or business are used to pay the expensesof another corporation or business, or the corporation/business bank accounts are used topay the personal expenses of the owner. A determination that multiple corporations orbusinesses are not operated separately and independently may lead to the conclusion thattheir transactions in currency should be aggregated.
Based on the facts presented in your letter and subsequent telephone conversations,which are summarized above, FinCEN believes the businesses are operated in a mannerother than as separate and independent businesses and that the multiple transactionsconducted in the accounts should be deemed to be conducted by or on behalf of oneperson. (31 CFR § 103.22(c)(2)). Consequently, the cash transactions should beaggregated. This determination is limited to the facts you provided. Should any of thefacts as described above change, a different conclusion may result.
We remind the Bank that our advice in this letter does not affect the Bank's continuingobligation to file a suspicious activity report, under 31 CFR §103.18, when it knows,suspects, or has reason to suspect that, among other things, a transaction is intended tocircumvent any requirement under the Bank Secrecy Act, or any reporting requirementunder federal law or regulation, or has no lawful or apparent business purpose.
Should you have any questions, please contact Dawn Adams of my staff at (202) 354-6417.
Christine E. Carnavos
Executive Associate Director
Office of Compliance and Regulatory Enforcement