Do you know WHAT FinCEN is? …

Should my business follow and be in compliance with FinCEN regulations? …

Those are quite some of the primary questions that MSBs or Financial Institution must affront each time that they begin operations or are preparing their BSA/AML handbook, policies, and procedures.

The US Code 2010 title 31 establishes under its statute FinCEN as a bureau within the Treasury Department and describes FinCEN’s duties and powers which include:

  • Maintaining a government-wide data access service with a range of financial transactions information
  • Analysis and dissemination of information in support of law enforcement investigatory professionals at the Federal, State, Local, and International levels
  • Determine emerging trends and methods in money laundering and other financial crimes
  • Serve as the Financial Intelligence Unit of the United States
  • Carry out other delegated regulatory responsibilities

The authority Delegated to FinCEN pursuant to The Treasury Department Order which describes FinCEN’s responsibilities to implement, administer, and enforce compliance with the authorities contained in what is commonly known as the “Bank Secrecy Act.”

So, FinCEN it is the Unit of Financial Intelligence in USA and all financial institutions, including banks must report through the BSA E-Filing.

If your company is a MSB or is doing business under a delegated or appointed Financial Institution you must comply with the FinCEN frame of rules. Then, who are MSB and or delegated or appointed financial institutions?

Under FinCEN there are included the following as Financial Institutions:  (remember your State regulator may has a different definition of MSB and financial institutions)

Financial Institution includes any person doing business in one or more of the following capacities:

  • Casinos
  • Depository Institutions
  • Insurance
  • Money Services Businesses / MSB
  • Mortgage Co / Broker
  • Precious Metals / Jewelry
  • Securities / Futures

The  term a  “person” is referring to:  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 (as that term is defined in the Indian Gaming Regulatory Act), and all entities cognizable as legal personalities.. 31 CFR 1010.100(mm) (formerly 31 CFR 103.11 (z))

Now that we identify who is FinCEN and what type of companies governed by them, you can identify if your company is a Financial Institution and the type of rules and regulations applicable in accordance with your line of business.

Take also into consideration that rules and regulation may apply in accordance with:

  • The State where the company provided services;
    • By example The Florida State has some detailed and specific requirements than FinCEN and MSB must be in compliance with those set of rules even when those are not part of the FinCEN frame of regulations.
  • Country where the services is render or provided
    • By example if The Company is providing services to a country under a special designation from OFAC (as Cuba, Nicaragua, Venezuela) your must included the regulation applicable in accordance with the OFAC sanction program applicable
  • Type of services provided
    • By example requirements for remittances/wire transfers included some requirements that differ from Check Cashing transactions or dealers of precious metals.
  • Among other

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Source: FinCEN