A AML Rulebook

FinCEN MSB Registration: Who Files and What Follows

What FinCEN MSB registration under 31 CFR 1022.380 requires, and the agent list, AML program and SAR duties that apply to money services businesses.

Published

What the term covers

The first question is whether a business counts at all. FinCEN's guidance sets a test for MSB status. The test turns on what a person actually does. It does not turn on the formal business status it holds. The activities of the business settle the question. The sign out front does not.

If the activities fit, the business must register. § 1022.380 says each money services business, whether or not licensed by any State, must register with FinCEN. A state license does not replace the federal step. A business with no license at all still has to register.

Each step is on the money services business registration page.

One form per registration period

FinCEN's alert says a form is filed to register a money services business with FinCEN or to renew such a registration. The same form does both jobs.

The rule keeps the paperwork light. § 1022.380 says only one registration form is required to be filed for each registration period. A business with many locations still files just one form.

A branch does not file either. § 1022.380 says a branch office of a money services business is not required to file its own registration form. The head office covers it.

Agents are different. § 1022.380 says a money services business that serves only as an agent of another money services business is not required to register.

Who is responsible for filing

The duty lands on people, not just on the business. § 1022.380 says any person who owns or controls a money services business is responsible for registering the business.

One owner cannot pass the job to another and relax. § 1022.380 says the failure of a designated person to register does not relieve the other owners or controllers of liability. If the chosen filer drops the ball, everyone who owns or controls the business still answers for it.

The agent list that comes with registration

Registration also brings a recordkeeping duty. § 1022.380 says a money services business must prepare and maintain a list of its agents, revised each January 1.

The list is more than names. § 1022.380 says the agent list must show the months when the agent's gross transaction amount for the business's products or services exceeded $100,000. A busy agent stands out on the page.

The list has to travel when asked. § 1022.380 says a money services business must make its list of agents available to FinCEN and other law enforcement agencies upon request. And it cannot be thrown out after the update. § 1022.380 says the original list of agents and any revised list must be retained for the period specified in § 1010.430(d).

The AML program a registered MSB must maintain

Each money services business must also have a program. FinCEN's guidance says the BSA requires MSBs to develop, implement, and maintain an effective written anti-money laundering program. The rule behind it is § 1022.210. It requires each money services business to develop, implement, and maintain an effective anti-money laundering program.

The rule defines the goal. § 1022.210 says an effective program is reasonably designed to prevent the business from being used for money laundering and terrorist financing.

The program stands on named parts. § 1022.210 says the program must incorporate policies, procedures, and internal controls reasonably designed to assure compliance with the chapter. It says the program must designate a person to assure day to day compliance with the program and the chapter. It also says the program must provide education and training. This training goes to the right personnel. It includes training in detecting suspicious transactions.

Approval sits at the top. FinCEN's guidance says the AML program must be approved by the owner of the financial institution or the owner's representative.

The shape of the program should follow the risk. FinCEN's guidance says MSBs should structure their AML programs to be risk-based. The guidance says MSBs should assess their exposure to money laundering, terrorism finance, and financial crime risk. They should base this on customers, geographies, and products offered. It says MSBs must manage customer relationships and mitigate risks with controls commensurate with those risks. It also says a well-developed risk assessment helps MSBs. It helps them identify and analyze their individual risk profile. The wider guide to building one is the AML program page.

Suspicious activity reporting and recordkeeping

The reporting duty is the one the counter feels. § 1022.320 requires a money services business to report a suspicious transaction that involves or aggregates at least $2,000.

Some issuers face a different number. Some issuers of money orders or traveler's checks use clearance records. For them, § 1022.320 fixes the reporting threshold at $5,000.

The clock runs from the day the problem is seen. § 1022.320 requires a money services business to file each SAR no later than 30 calendar days after initial detection.

Filing is not the end of the story. § 1022.320 says money services businesses shall be examined by FinCEN or its delegatees for compliance with the section.

Records support the reports. § 1010.410 applies its transmittal of funds recordkeeping rules to nonbank financial institutions for transmittals of $3,000 or more. The wider set of duties sits on the FinCEN reporting requirements page.

Doing business unregistered

The rule ends with a flat statement. § 1022.380 says it is unlawful to do business without complying with 31 U.S.C. 5330 and this section.

A money services business has the duties above. These are the registration form, the agent list, the program, and the reports.

Sources

Also in Bank Secrecy Act and FinCEN
FinCEN's Convertible Virtual Currency Guidance
The FinCEN Travel Rule: What Travels With a Payment
FinCEN Advisories: What They Are and What They Ask
FinCEN Reporting Requirements: A Plain-Language Guide
FinCEN 314: What Section 314 Asks of a Bank
What FinCEN Means: The Treasury Bureau Behind the BSA
FinCEN Real Estate Reporting: What 31 CFR 1031.320 Asks
What the Bank Secrecy Act Is and What It Requires