Aggregating Currency Transactions for Organizations with Common Ownership

Issue/Inquiry

A married couple has two separate business accounts at the Bank.  Both of them are signers on the accounts. The accounts are real estate holding accounts and are for two separate properties. The wife came in early and deposited $3,000 in cash into one of the accounts and later the same day, the husband deposited $8,000 into the other business account. Would a CTR need to be filed, since both husband and wife are signers on both accounts?

Response Summary

If the properties are owned by the accountholders in a common enterprise, either in their names or in the name of a business organization for which they are principals, the deposits should be aggregated for CTR purposes. If the properties are each held by separate business organizations, however, the presumption is that the organizations are independent of each other even though they have common owners. This means that the currency transactions should not be automatically aggregated unless the presumption of independence is rebutted. If the Bank determines that the businesses are not operating separately or individually, then the currency transactions should be aggregated.

Response Detail

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.

If the two properties are owned by the accountholders in a common enterprise, either in their names or in the name of a single business organization for which they are the principals, then the currency transactions will have been “by or on behalf of any person” and should be aggregated.

If the two properties are each owned by a separate business organization, however, then whether the deposits should be aggregated will depend upon whether the organizations are operated separately and independently of each other.

Multiple businesses may share a common owner. If the businesses are separate business entities and have been separately organized and registered with the state of their organization, the presumption is that they are independent. This means that currency transactions by the organizations 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 or owners 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 the same person or persons.

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 comingled.
• 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 owners are not independent of each other and that their transactions should be aggregated, and if the aggregating of the transactions results in a total of $10,000 or more, the Bank should file a CTR listing the businesses in separate sections identifying the person(s) 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; FinCEN Ruling 2001-2.

This entry was posted on Monday, August 24th, 2015 at 2:00 pm.