VIDEO: Filing a CTR on an Entity
In this Compliance Clip (video), Adam explains how to properly file a Currency Transaction Report (CTR) for an entity, clarifying the definition of "person" in regulatory terms.
Video Transcript
The following is a transcript of this video.
This Compliance Clip is going to talk about filing a CTR on an entity. This, of course, is a BSA/AML topic.
The question we have is this: I'm filing a CTR on an entity; however, the selections in Item 2a through 2c all reference a person. What selection would I choose when filing on an entity?
That's a great question, and our answer is going to come from the FinCEN CTR FAQ No. 15.
First of all, we have to understand what is the definition of a person? BSA regulations define a person as an individual, a corporation, a partnership, a trust, or estate, a joint stock company, an association, a syndicate joint venture, or other unincorporated organization or group, an Indian Tribe, and all entities recognized as legal personalities. So it's not just an individual, it's anything and everything recognized as a legal entity. That's the definition of a person.
In regulatory compliance, typically when we talk about a human being, they use the term natural person. So when we see the definition “person”, it often does reference both natural persons and corporate and legal entities. And so what they're asking for is the name of the legal entity when they say person.
Now we can go on and get a little more information on how to complete the CTR based on this Frequently Asked Question. So from this FinCEN FAQ No. 15, you have to keep in mind that the selection on our CTR that would apply is 2C, which is the person on whose behalf the transaction was conducted. In addition, if filing on an entity, a filer must select the checkbox, which is Item 4b, for “If entity” in part I. So that's how we would complete the CTR.
But again, if you have a CTR for an entity, don't get confused by the term person because person, of course, refers to not only a natural person or a human being, but as well as a legal entity.
That's all I have. for this Compliance Clip.
BSA, of course, is a very deep, complex topic. If you're interested in taking a deeper dive into BSA/AML, we have a number of training products in our store, compliancecohort.com/store - things like BSA basics, BSA Bootcamp, and even BSA training for the board of directors.