April 19, 2012

FinCEN Issues Guidance on the new Currency Transaction Report and Suspicious Activity Report

The Financial Crimes Enforcement Network (“FinCEN”) has issued Guidance (FIN-2012-G002) regarding the new Currency Transaction Report (“CTR”) and Suspicious Activity Report (“SAR”) (collectively, “the new reports”). The new reports will replace the previous CTR Form 104 and all industry-specific SARs, which will now be referred to as “legacy reports.” FinCEN states that the new reports do not change the responsibilities of financial institutions or create any new obligations. However, the filing methods and requirements have changed substantially.

Until the transition date, financial institutions will have the option to utilize either the legacy reports or the new reports; however, effective July 1, 2012, FinCEN will only accept submissions of the new reports or the legacy reports through the electronic filing system. Financial institutions are not required to transition to the new reports until April 1, 2013, when FinCEN will only accept the new reports. In response to concerns expressed by financial institutions, FinCEN stated that institutions are permitted to revert back to the legacy reports after transitioning to the new reports, or any combination of legacy reports and new reports, until the transition date of April 1, 2013. Furthermore, as of April 1, 2013, all FinCEN CTRs must be filed within 15 calendar days of the reported transaction(s).

There are significant changes in the new reports compared to legacy reports. For example, the new CTR and SAR have certain fields marked as “critical” and they are marked with an asterisk (*) on the new reports. The electronic filing system will not accept filings if the critical fields are left blank. In addition, the new SAR report will give financial institutions the option to attach a spreadsheet compatible document. This is intended to enable financial institutions to include specific details of data, such as financial transactions and fund transfers.

To discuss the new CTR and SAR filing changes contact the expert listed below at PYA, (800) 270-9629.