The Financial Crimes Enforcement Network (“FinCEN”) has issued an administrative ruling to clarify the application of the FinCEN regulations to certain persons involved in transporting currency. The upshot of the Ruling is that “Currency Transporters” who engage in transactions that are not covered by an exemption from money transactions have the same regulatory obligations as other money transmitters.
In general terms, and subject to certain conditions and exceptions, the CT Ruling on the obligations of currency transporters under FinCEN regulations can be summarized as follows:
• Where a Federal Reserve Bank or a certain type of financial institution subject to a Federal function regulator contracts for and directs the physical transportation of value by the currency transporter, the currency transporter is exempted from money transmitter status under FinCEN’s regulations exclusively with respect to such physical transportation of value.
• Where a currency transporter, without the intervention of any third party such as a subcontractor and/or transhipper, picks up value from a person (or from a shipper acting at the direction of that person) and physically delivers the same value to the same person at another location, or to an account of that person at a Bank Secrecy Act (“BSA”) regulated financial institution, such activity alone will not result in the currency transporter being a money transmitter under FinCEN’s regulations.
• In all other scenarios (among them, where there exists transshipment – moving the same shipment form one currency transporter to another – or subcontracting; or where the currency transporter delivers value to a person different than the person from whom it picked up the value; or where the currency transporter takes more than custodial interests in the value transported), the currency transporter will be deemed a money transmitter under FinCEN’s regulations.
Any person or business that is involved in currency transportation or who makes bank deposits or who conducts currency transactions must be aware of their obligations under federal law with regard to filing currency transaction reports (CTRs). Money laundering and so-called “structuring offenses” are the by-product of failing to report otherwise lawful transactions that may generate a “suspicious activity report (SAR).
For individuals who are facing prosecution or sentencing in the United States District Courts of New Jersey, or appealing their matters before the United States Court of Appeals for the Third Circuit, it is critical to have an experienced federal criminal defense attorney represent you. The experienced federal criminal defense lawyers of Schwartz & Posnock appear in the United States District Courts in Newark, Trenton and Camden, and have convenient locations in Monmouth County (Eatontown), Essex County (Livingston), Union County (Linden), and Middlesex County (East Brunswick). Call us at 732-544-1460 or email us at info@schwartzposnock.com to schedule an appointment.