The Department of the Treasury on April 17, 1996, announced
an interim bank reporting rule designed to significantly reduce
unnecessary paperwork for banks and improve the quality of
information routinely provided to law enforcement. The rule
changes the previous requirement that banks file forms reporting
every currency transaction in excess of $10,000.
The interim rule took effect May 1, 1996. A copy of the Federal
Register notice announcing the interim rule is attached.
All interested parties are invited to comment on the rule
for 90 days following the May 1 effective date.
Under the new rule, currency transactions in excess of $10,000
no longer must be reported if they involve:
another bank in the United States;
any federal, state or local government (including the
District of Columbia, U.S. territories and possessions,
and various tribal government authorities);
any listed corporation whose stock is traded on the New
York Stock Exchange or the American Stock Exchange (excluding
stock listed on the Emerging Company Marketplace of the
American Stock Exchange);
any listed corporation whose stock is designated as a
Nasdaq National Market Security listed on the Nasdaq Stock
Market (excluding stock issued under the separate Nasdaq
Small-Cap Issues heading); or
any consolidated subsidiary of a listed corporation that
files combined federal income tax returns.
By exempting these entities from routine reporting, the Treasury
Department estimates that banks will be required to file two
million fewer forms in the first year alone, amounting to
a reduction of approximately 20 percent. The new rule still
requires that all apparently suspicious currency transactionseven
those of newly exempted entitiesbe reported according
to rules issued earlier this year. These reports are used
by law enforcement for criminal investigations.
While information provided by transaction reports is vital
to investigators, reporting requirements have been criticized
because they mandated repetitive paperwork for the routine
transactions of legitimate cash-intensive businesses and government
entities. Banks will now be able to make a one-time filing
of the standard transaction report form to designate an exempted
entity. Even under these new procedures, an exemption may
be revoked by the Treasury Department at any time with notice.
Following the 90-day comment period on the interim rule,
the Treasury Department's Financial Crimes Enforcement Network
(FinCEN) will prepare a final rule. For further information
about the new rule, please call FinCEN at (703) 905-3920.