Currency Transaction Report for Businesses with Common Owner

Inquiry/Issue

Banks receive currency transactions from businesses with a common owner. Should it aggregate the transactions for CTR purposes?

Response Summary

When businesses sharing a common owner are separately organized, the presumption is that they are independent of each other. This means that the currency transactions should not be automatically aggregated, just because the businesses have a common owner. If the bank determines, however, that the businesses are not operating separately or individually, then the currency transactions should be aggregated.

Response Analysis

FinCEN’s regulations implementing the Bank Secrecy Act require the bank to aggregate multiple currency transactions if the bank has knowledge that the transactions are by or on behalf of any person and result in cash or cash out totaling more than $10,000 during any one business day. 31 CFR §1010.313

Multiple businesses may share a common owner. If the businesses are separate legal entities, however, and have been separately organized and registered with the state of their organization, the presumption is that they are independent and operating separately. This means that the transactions should not be automatically aggregated as being on behalf of one person, simply because the businesses have common ownership.

This presumption is a rebuttable one. It is up to the bank to determine, based on information obtained in the ordinary course of business, whether businesses which share a common owner are, in fact, being operated independently. If the bank determines that the businesses are not operating independently or separately from one another, the bank may also determine that aggregating the transactions of the businesses is appropriate because they were made on behalf of a single person.

Factors indicating that the businesses are not operating independently of one another would include:

• The businesses are staffed by the same employees and located at the same address.
• The bank accounts of one business are repeatedly used to pay the expenses of another business.
• The funds of the businesses are continually commingled.
• The business bank accounts are repeatedly used to pay the personal expenses of the common owner.

If the bank determines that two businesses having a common owner are not independent of each other and that their currency transactions should be aggregated, and if the aggregating of the transactions results in the transactions totaling $10,000 or more, it should file a CTR listing the businesses in separate sections identifying the persons on whose behalf the transactions are conducted. The remaining sections of the CTR should be completed as per the instructions. FinCEN, Currency Transaction Report Aggregation for Businesses with Common Ownership, FIN-2012-G001.

Note: If the businesses are actually sole proprietorships owned by the same individual, but use separate EINs, the bank should aggregate because all of the transactions are actually on behalf of the individual owner.

This entry was posted on Friday, August 8th, 2014 at 4:01 pm.