Bank Secrecy Act

BANK SECRECY ACT TEXT

The Full Facts on the Bank Secrecy Act of 1970

The Bank Secrecy Act of 1970, also called the Currency and Foreign Transactions Reporting Act or just the BSA, is an act that requires all financial institutions within the United States to assist all United States government agencies in detecting and preventing money laundering that may occur.

The primary purpose of the Bank Secrecy Act, besides making money laundering a more difficult task to propagate, is to act as a preventative measure against banks somehow becoming intermediaries unknowingly in illicit activity. The Bank Secrecy Act, anti-money laundering sections requires businesses to maintain records while also filing reports that have a high degree of practicality in when dealing with tax, regulatory, and criminal matters. The requested documents which are filed by institutions under the Bank Secrecy Act compliance requirements are strongly used by both international and domestic law enforcement agencies to detect, deter, and identify money laundering from occurring whether the activity is in continuance of terrorism, tax evasion, criminal enterprise, or other illegal activity.

The Bank Secrecy Act was passed originally in 1970 by the United States Congress. Since then it has been amended many times, for example to include the provisions found in title III which is found in the USA Patriot Act.

The Provisions of the Bank Secrecy Act of 1970

In order for the Bank Secrecy Act regulations and the Bank Secrecy Act training to help prevent money laundering in the financial industry, the Act requires all financial institution to maintain detailed records regarding cash purchases as well as file reports regarding cash purchase of negotiable instruments that are no less than $10,000. Any purchases or transactions that are $10,000 or more from one customer must be reported to the Financial Crimes Enforcement Network Department of the Treasury. More specifically, these transactions are reported if one is above the minimum limit, or multiple related transactions are greater than or equal to $10,000 and happen within a 24-hour period.

These transactions must also be done in cash, meaning they are in a currency (both bills and coins) made from either the United States or other countries, or if they are a monetary instrument defined in the Bank Secrecy Act, such as bank drafts, cashier’s checks, money orders, or traveler’s checks. Personal checks do not apply to this definition of cash.

Furthermore, under the Bank Secrecy Act, these companies are also obligated to report any suspicious activity that may imply tax evasion, money laundering, or any other criminal activities on the part of a company. Because of the Bank Secrecy Act, many banks have ceased selling negotiable instruments the instruments are bought with cash, and instead require the purchase to be taken out from an account at the given institution.

An activity is thought to be suspicious if the transaction involves $5,000 or more in assets or funds that the financial institution thinks may possibly indicate a profit derived from an illegal activity or transacted with the intent of hiding an illegal activity. Besides traditional financial institutions like brokers or banks, there are many other institutions that are required to report any activity that is suspicious under the Bank Secrecy Act of 1970, such as casinos, businesses that redeem or issue money orders, and dealers who deal gemstones or precious metals.

Affected Transactions under the Bank Secrecy Act of 1970

There are three major transactions that are affected under the Bank Secrecy Act regulations and the Bank Secrecy Act training.

Currency Transaction Report

A currency transaction report, or CTR, is a report that must show all cash transactions that exceeded $10,000 within the same business day. The value or amount that exceeds $10,000 should be either in one single transaction or in a combination of related cash transactions. These currency transaction reports are filed with the records of the Internal Revenue Service.

Monetary Instrument Log

The monetary instrument log must explicitly state the cash purchases involved for monetary instruments, for example cashier's checks, travelers checks, and money orders, that have a value totaling inclusively between $3,000 to $10,000. A Monetary instrument log form is needed to be maintained on the record at the financial institution, and should be produced at the request of an examiner or audit to verify the institution’s compliance with the Bank Secrecy Act regulations and the Bank Secrecy Act training. A financial institution must also maintain this log for at least 5 years.

Suspicious Activity Report

The suspicious activity report must report any transaction made with cash where the customer appears to be trying to make an active effort to avoid the reporting requirements placed by the Bank Secrecy Act regulations and the Bank Secrecy Act training by not filing any currency transaction reports or monetary instrument logs. An example of when a suspicious activity report must be used if the actions of a customer suggest that he or she is laundering money or in some other way violating a federal criminal law while committing wire transfer fraud, check fraud or other mysterious disappearances. A bank must not let a customer know that a suspicious activity report is being filed against them. These suspicious activity reports are filed by the banks with the Financial Crimes Enforcement Network.

The Effect of Bank Secrecy Act of 1970 on United States Citizens

Currency transaction reports include the bank account number, name, social security number, and address of the individual. The suspicious activity reports, which are required by the Bank Secrecy Act regulations and the Bank Secrecy Act training when transactions suggest suspicious behavior that try to elude currency transaction reports (or other types of suspicious behavior), include a bit more detailed information and typically contain efforts of covert investigation on behalf of the financial institution in order to gauge the nature or validity of the transactions.

One single currency transaction report filed for the account of a client is usually not concerning to the law enforcement authorities, but multiple currency transaction reports that come from different institutions or a suspicious activity report can suggest that the activity might be suspicious.

Under the Bank Secrecy Act regulations and the Bank Secrecy Act training, a financial institution cannot inform a consumer or business that a suspicious activity report is being filed against them. In addition, all the reports that are mandated by the Bank Secrecy Act are exempt from having to be disclosed according to the provisions found in the Freedom of Information Act.

Businesses that primarily deal in cash, such as restaurants or bars, can be exempted from the Bank Secrecy Act regulations and the Bank Secrecy Act training’s policy of having their withdrawals and deposits reported on currency transaction reports, although the exemption is hardly ever granted. Instead, many banks have computer systems that can retain information on currency transaction reports and allow duplicate currency transaction reports to be easily created.

Individual filing requirements under the Bank Secrecy Act of 1970

Under the Bank Secrecy Act regulations and the Bank Secrecy Act training, a United States citizen must file a FBAR if the individual has had a financial authority over, or interest in a foreign bank account that at any point in a year has an aggregate value of $10,000. Furthermore, a citizen must report this account on the Schedule B portion of the Internal Revenue Service’s Form 1040. The required FBAR should be separately filed with the United States Treasury before June 30.


The Bank Secrecy Act of 1970, also called the Currency and Foreign Transactions Reporting Act or just the BSA, is an act that requires all financial institutions within the United States to assist all United States government agencies in detecting and preventing money laundering that may occur.

The primary purpose of the Bank Secrecy Act, besides making money laundering a more difficult task to propagate, is to act as a preventative measure against banks somehow becoming intermediaries unknowingly in illicit activity. The Bank Secrecy Act, anti-money laundering sections requires businesses to maintain records while also filing reports that have a high degree of practicality in when dealing with tax, regulatory, and criminal matters. The requested documents which are filed by institutions under the Bank Secrecy Act compliance requirements are strongly used by both international and domestic law enforcement agencies to detect, deter, and identify money laundering from occurring whether the activity is in continuance of terrorism, tax evasion, criminal enterprise, or other illegal activity.

The Bank Secrecy Act was passed originally in 1970 by the United States Congress. Since then it has been amended many times, for example to include the provisions found in title III which is found in the USA Patriot Act.

The Provisions of the Bank Secrecy Act of 1970

In order for the Bank Secrecy Act regulations and the Bank Secrecy Act training to help prevent money laundering in the financial industry, the Act requires all financial institution to maintain detailed records regarding cash purchases as well as file reports regarding cash purchase of negotiable instruments that are no less than $10,000. Any purchases or transactions that are $10,000 or more from one customer must be reported to the Financial Crimes Enforcement Network Department of the Treasury. More specifically, these transactions are reported if one is above the minimum limit, or multiple related transactions are greater than or equal to $10,000 and happen within a 24-hour period.

These transactions must also be done in cash, meaning they are in a currency (both bills and coins) made from either the United States or other countries, or if they are a monetary instrument defined in the Bank Secrecy Act, such as bank drafts, cashier’s checks, money orders, or traveler’s checks. Personal checks do not apply to this definition of cash.

Furthermore, under the Bank Secrecy Act, these companies are also obligated to report any suspicious activity that may imply tax evasion, money laundering, or any other criminal activities on the part of a company. Because of the Bank Secrecy Act, many banks have ceased selling negotiable instruments the instruments are bought with cash, and instead require the purchase to be taken out from an account at the given institution.

An activity is thought to be suspicious if the transaction involves $5,000 or more in assets or funds that the financial institution thinks may possibly indicate a profit derived from an illegal activity or transacted with the intent of hiding an illegal activity. Besides traditional financial institutions like brokers or banks, there are many other institutions that are required to report any activity that is suspicious under the Bank Secrecy Act of 1970, such as casinos, businesses that redeem or issue money orders, and dealers who deal gemstones or precious metals.

Affected Transactions under the Bank Secrecy Act of 1970

There are three major transactions that are affected under the Bank Secrecy Act regulations and the Bank Secrecy Act training.

Currency Transaction Report

A currency transaction report, or CTR, is a report that must show all cash transactions that exceeded $10,000 within the same business day. The value or amount that exceeds $10,000 should be either in one single transaction or in a combination of related cash transactions. These currency transaction reports are filed with the records of the Internal Revenue Service.

Monetary Instrument Log

The monetary instrument log must explicitly state the cash purchases involved for monetary instruments, for example cashier's checks, travelers checks, and money orders, that have a value totaling inclusively between $3,000 to $10,000. A Monetary instrument log form is needed to be maintained on the record at the financial institution, and should be produced at the request of an examiner or audit to verify the institution’s compliance with the Bank Secrecy Act regulations and the Bank Secrecy Act training. A financial institution must also maintain this log for at least 5 years.

Suspicious Activity Report

The suspicious activity report must report any transaction made with cash where the customer appears to be trying to make an active effort to avoid the reporting requirements placed by the Bank Secrecy Act regulations and the Bank Secrecy Act training by not filing any currency transaction reports or monetary instrument logs. An example of when a suspicious activity report must be used if the actions of a customer suggest that he or she is laundering money or in some other way violating a federal criminal law while committing wire transfer fraud, check fraud or other mysterious disappearances. A bank must not let a customer know that a suspicious activity report is being filed against them. These suspicious activity reports are filed by the banks with the Financial Crimes Enforcement Network.

The Effect of Bank Secrecy Act of 1970 on United States Citizens

Currency transaction reports include the bank account number, name, social security number, and address of the individual. The suspicious activity reports, which are required by the Bank Secrecy Act regulations and the Bank Secrecy Act training when transactions suggest suspicious behavior that try to elude currency transaction reports (or other types of suspicious behavior), include a bit more detailed information and typically contain efforts of covert investigation on behalf of the financial institution in order to gauge the nature or validity of the transactions.

One single currency transaction report filed for the account of a client is usually not concerning to the law enforcement authorities, but multiple currency transaction reports that come from different institutions or a suspicious activity report can suggest that the activity might be suspicious.

Under the Bank Secrecy Act regulations and the Bank Secrecy Act training, a financial institution cannot inform a consumer or business that a suspicious activity report is being filed against them. In addition, all the reports that are mandated by the Bank Secrecy Act are exempt from having to be disclosed according to the provisions found in the Freedom of Information Act.

Businesses that primarily deal in cash, such as restaurants or bars, can be exempted from the Bank Secrecy Act regulations and the Bank Secrecy Act training’s policy of having their withdrawals and deposits reported on currency transaction reports, although the exemption is hardly ever granted. Instead, many banks have computer systems that can retain information on currency transaction reports and allow duplicate currency transaction reports to be easily created.

Individual filing requirements under the Bank Secrecy Act of 1970

Under the Bank Secrecy Act regulations and the Bank Secrecy Act training, a United States citizen must file a FBAR if the individual has had a financial authority over, or interest in a foreign bank account that at any point in a year has an aggregate value of $10,000. Furthermore, a citizen must report this account on the Schedule B portion of the Internal Revenue Service’s Form 1040. The required FBAR should be separately filed with the United States Treasury before June 30.

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