Currency Transaction Report

Reading about the currency transaction report has to do with the nuts and bolts of moving money. Because of concern about money laundering the Bank Secrecy Act of 1970 was passed. This law requires financial institutions in the United States to assist U.S. government agencies in detecting and preventing money laundering. Specifically institutions need to keep records of cash purchases of negotiable instruments and file a currency transaction report for each instance of a purchase exceeding $10,000 or multiple purchases of $10,000 in aggregate for one day. This act and its successors are enforced by FINCEN, the Financial Crimes Enforcement Network of the Department of the Treasury. Since 1996 the formal documentation submitted by financial institutions is a Suspicious Activity Report which is, obviously, submitted on a Suspicious Activity Report Form. FINCEN requires a “Report of International Transportation of Currency or Monetary Instruments also called a CMIR for each person or institution who “physically transports, mails, or ships,” or causes the same in aggregate amount exceeding $10,000.

There are currency transaction report exemptions granted to institutions that routinely transfer very large amount of capital in and out of the United States. However, these institutions are always well known and compliant with all regulations. Anyone who tries to get around the currency transaction report ctr by making multiple transactions at multiple institutions is typically caught by the sophisticated software developed and used expressly for this purpose. Currency rates can figure into this equation but any amount close to $10,000 has a strong possibility of being reported even if lacking a few percent of the $10,000 cutoff.

If a Forex trader wishes to transfer funds for trading at an offshore jurisdiction he or she will have a currency transaction report filed for each instance of the transfer of funds in excess of $10,000. This will not only include transfer of funds out to trade but transfer of profits of profit distributions back into the USA. Experts in this matter note that a transfer or two accompanied by a currency transaction report or two is not something that raises suspicious within law enforcement. A suspicious activity report typically goes to authorities when individuals use cash in multiple locations and at multiple times in order to exceed the $10,000 limit. There are, in fact, criminal penalties for anyone proven to have attempted to avoid the filing of a currency transaction report when the aggregate of monies transferred exceeded $10,000.

The point of all this in not to avoid transferred money or even dealing in cash but to comply with regulations meant to prevent money laundering, support of terrorism, payment for illegal drugs and the like. As mentioned above a report or two does not raise red flags with FINCEN or any other law enforcement agency but the use of multiple transactions to avoid filing a report does. The simplest means of dealing with currency transactions that fall within the scope of the currency transaction report is to comply fully and apply one’s effort to the business of successful Forex trading.