[Code of Federal Regulations]
[Title 31, Volume 1]
[Revised as of July 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR103.20]

[Page 328-329]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
                      CHAPTER I--MONETARY OFFICES,
                       DEPARTMENT OF THE TREASURY
 
PART 103--FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGN TRANSACTIONS--Table of Contents
 
                 Subpart B--Reports Required To Be Made
 
Sec. 103.20  Reports by money services businesses of suspicious transactions.

    (a) General. (1) Every money services business, described in 
Sec. 103.11(uu) (3), (4), (5), or (6), shall file with the Treasury 
Department, to the extent and in the manner required by this section, a 
report of any suspicious transaction relevant to a possible violation of 
law or regulation. Any money services business may also file with the 
Treasury Department, by using the form specified in paragraph (b)(1) of 
this section, or otherwise, a report of any suspicious transaction that 
it believes is relevant to the possible violation of any law or 
regulation but whose reporting is not required by this section.
    (2) A transaction requires reporting under the terms of this section 
if it is conducted or attempted by, at, or through a money services 
business, involves or aggregates funds or other assets of at least 
$2,000 (except as provided in paragraph (a)(3) of this section), and the 
money services business knows, suspects, or has reason to suspect that 
the transaction (or a pattern of transactions of which the transaction 
is a part):
    (i) Involves funds derived from illegal activity or is intended or 
conducted in order to hide or disguise funds or assets derived from 
illegal activity (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) Is designed, whether through structuring or other means, to 
evade any requirements of this part or of any other regulations 
promulgated under the Bank Secrecy Act, Public Law 91-508, as amended, 
codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-
5330; or
    (iii) Serves no business or apparent lawful purpose, and the 
reporting money services business knows of no reasonable explanation for 
the transaction after examining the available facts, including the 
background and possible purpose of the transaction.
    (3) To the extent that the identification of transactions required 
to be reported is derived from a review of clearance records or other 
similar records of money orders or traveler's checks that have been sold 
or processed, an issuer of money orders or traveler's checks shall only 
be required to report a transaction or pattern of transactions that 
involves or aggregates funds or other assets of at least $5,000.
    (4) The obligation to identify and properly and timely to report a 
suspicious transaction rests with each money services business involved 
in the transaction, provided that no more than one report is required to 
be filed

[[Page 329]]

by the money services businesses involved in a particular transaction 
(so long as the report filed contains all relevant facts). Whether, in 
addition to any liability on its own for failure to report, a money 
services business that issues the instrument or provides the funds 
transfer service involved in the transaction may be liable for the 
failure of another money services business involved in the transaction 
to report that transaction depends upon the nature of the contractual or 
other relationship between the businesses, and the legal effect of the 
facts and circumstances of the relationship and transaction involved, 
under general principles of the law of agency.
    (5) Notwithstanding the provisions of this section, a transaction 
that involves solely the issuance, or facilitation of the transfer of 
stored value, or the issuance, sale, or redemption of stored value, 
shall not be subject to reporting under this paragraph (a), until the 
promulgation of rules specifically relating to such reporting.
    (b) Filing procedures--(1) What to file. A suspicious transaction 
shall be reported by completing a Suspicious Activity Report-MSB (``SAR-
MSB''), and collecting and maintaining supporting documentation as 
required by paragraph (c) of this section.
    (2) Where to file. The SAR-MSB shall be filed in a central location 
to be determined by FinCEN, as indicated in the instructions to the SAR-
MSB.
    (3) When to file. A money services business subject to this section 
is required to file each SAR-MSB no later than 30 calendar days after 
the date of the initial detection by the money services business of 
facts that may constitute a basis for filing a SAR-MSB under this 
section. In situations involving violations that require immediate 
attention, such as ongoing money laundering schemes, the money services 
business shall immediately notify by telephone an appropriate law 
enforcement authority in addition to filing a SAR-MSB.
    (c) Retention of records. A money services business shall maintain a 
copy of any SAR-MSB filed and the original or business record equivalent 
of any supporting documentation for a period of five years from the date 
of filing the SAR-MSB. Supporting documentation shall be identified as 
such and maintained by the money services business, and shall be deemed 
to have been filed with the SAR-MSB. A money services business shall 
make all supporting documentation available to FinCEN and any other 
appropriate law enforcement agencies or supervisory agencies upon 
request.
    (d) Confidentiality of reports; limitation of liability. No 
financial institution, and no director, officer, employee, or agent of 
any financial institution, who reports a suspicious transaction under 
this part, may notify any person involved in the transaction that the 
transaction has been reported. Thus, any person subpoenaed or otherwise 
requested to disclose a SAR-MSB or the information contained in a SAR-
MSB, except where such disclosure is requested by FinCEN or an 
appropriate law enforcement or supervisory agency, shall decline to 
produce the SAR-MSB or to provide any information that would disclose 
that a SAR-MSB has been prepared or filed, citing this paragraph (d) and 
31 U.S.C. 5318(g)(2), and shall notify FinCEN of any such request and 
its response thereto. A reporting money services business, and any 
director, officer, employee, or agent of such reporting money services 
business, that makes a report pursuant to this section (whether such 
report is required by this section or made voluntarily) shall be 
protected from liability for any disclosure contained in, or for failure 
to disclose the fact of, such report, or both, to the extent provided by 
31 U.S.C. 5318(g)(3).
    (e) Compliance. Compliance with this section shall be audited by the 
Department of the Treasury, through FinCEN or its delegees under the 
terms of the Bank Secrecy Act. Failure to satisfy the requirements of 
this section may constitute a violation of the reporting rules of the 
Bank Secrecy Act and of this part.
    (f) Effective date. This section applies to transactions occurring 
after December 31, 2001.

[65 FR 13692, Mar. 14, 2000]

[[Page 330]]