July 15, 2013 –
FinCEN issues ruling on Armored Car Service Transactions

In an effort to provide law enforcement authorities with needed information, while also providing relief to financial institutions, the Financial Crimes Enforcement Network (“FinCEN”) on July 12, 2013 issued an administrative ruling concerning the treatment of certain armored car service (“ACS”) transactions for Currency Transaction Report purposes (the “Ruling”).

The Ruling, prompted by practical issues raised by financial institutions concerning compliance with FinCEN’s prior ruling (“FIN-2009-R002”), “Treatment of Deposits by Armored Cars for Currency Transaction Report (CTR) Purposes,” attempts to mitigate some of the problems the institutions were having in filing complete and timely CTRs.

Most notably, the Ruling specifies the following:

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 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.

The Ruling, which supersedes FIN-2009-R002, is accompanied by an appendix containing sample transactions as well as specific examples which show the proper completion of CTRs for certain basic ACS transactions acting under instructions of different parties.

Financial institutions that are ready to submit CTRs in accordance with the Ruling may start taking advantage of this relief immediately. Those financial institutions that may need to modify systems to file CTRs appropriately will be expected to do so no later than September 30, 2013.

Furthermore, financial institutions should review policies and procedures to ensure that such internal controls incorporate, and are consistent with, the Ruling.

If you have any questions with regard to the Ruling or the filing of CTRs pursuant thereto, please contact Andres (Andy) Fernandez, Gabriel Caballero or Stephanie Quiñones.

To access the Ruling, please click here. To access the Ruling’s examples for proper completion of the CTRs for transactions involving armored car services, please click here.