Hyden, Miron & Foster, PLLC Law Blog

Wednesday, December 11, 2019

What Is the Bank Secrecy Act?

In 1970, the U.S. Congress passed the Bank Secrecy Act (BSA). It is also referred to as the Currency and Foreign Transactions Reporting Act or the Anti-Money Laundering Law (AML). The central purpose of establishing the BSA was to aid in the prevention of money laundering. Incidentally, the law also works to prevent banks from unknowingly acting as intermediaries in this type of criminal activity. The BSA, among other things, requires financial institutions, such as banks, in the U.S. to work with the U.S. government in cases when there is suspicion of money laundering or fraud.

The Bank Secrecy Act

In order to serve the purpose of preventing money laundering, the BSA sets forth some very specific requirements. For instance, it requires banks to report transactions where more than $10,000 in cash is moving from one customer in either one or more transactions occurring within a 24-hour time frame. Cash includes any currency or coins, U.S. or foreign, and also some other monetary instruments that act similar to cash such as cashier’s checks, traveler’s checks, and money orders.

Banks are also required under the BSA, to report any activity that raises suspicions regarding potential money laundering or fraud. In fact, banks are not the only institutions required to report such suspicious activity. Businesses that issue or redeem money orders and casinos, among other businesses the Act identifies, are also obligated to report suspicious activity that may be related to money laundering or fraud

Individuals and businesses have annual responsibilities to comply with under the BSA. Under provisions of the BSA, you must report certain types of foreign financial accounts, including bank accounts and brokerage accounts, to the Treasury Department.

You must also keep certain records of these reportable accounts. To report these accounts, you must file a Report of Foreign Bank and Financial Accounts (FBAR) or FinCen 114. Anyone who is a U.S. citizen, resident, corporation, trust, or estate, must file an annual FBAR in order to report a financial interest or authority over at least one foreign financial account if the aggregate value of the foreign account or accounts exceeds $10,000 at any point in the calendar year reported.

You are required to keep records for every account that you must report on FBAR. These records must state the name on the account as well as the account number. The records must also include the name and address of the foreign bank associated with the account as well as stating what type of account it is. Your records must also include the maximum value the account reached that year.

Foreign Account Compliance Attorneys

Failure to comply with the BSA by failing to keep the proper records or filing FBAR reports expose you to the possibility of civil monetary penalties and criminal penalties. The dedicated attorneys at Hyden, Miron & Foster will help you comply with the BSA by ensuring your records are compliant and that you are properly completing and filing all requisite FBAR reports. Contact us today.

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