IBA Compliance Connection

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We are aware of the recent FinCEN administrative ruling denying the IBA’s request for relief from currency transaction report (CTR) filing requirements for cash shipments executed by Thillens. We use Brinks to transport our cash shipments to and from our Federal Reserve account, and Brinks does not withdraw cash from its own bank accounts to fulfill our cash orders. Is Brinks a money services business (MSB), and do we need to file CTRs in relation to our cash orders fulfilled by Brinks?

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No, we do not believe Brinks would be considered an MSB based on the services you describe, and we do not believe you need to file CTRs in relation to your cash orders fulfilled to and from your bank’s Federal Reserve account by Brinks.

Under FinCEN’s regulations, MSBs include money transmitters that transport currency, funds, or other value from one person to another location or person by any means. However, FinCEN’s regulations also provide that money transmitters do not include armored cars that physically transport currency from one person to an account belonging to the same person at a financial institution, provided that the person engaged in the physical transportation (i.e. the armored car) has no more than a custodial interest in the currency at any point during the transportation.

Since Brinks has no more than a custodial interest in the currency it transports between your bank and your Federal Reserve account, we believe it is not a money transmitter under FinCEN regulations.

Additionally, we do not believe you are required to file CTRs in relation to your cash shipments fulfilled by Brinks. FinCEN’s regulations do not require CTR filings for transactions with exempt persons, and the twelve Federal Reserve Banks are automatically exempt persons (in other words, your bank is not required to file Form 110 to establish a Federal Reserve Bank as an exempt person).

Also, we note that your arrangement with Brinks is distinguishable from the Thillens services discussed in the IBA’s request for exemptive relief and FinCEN’s denial of the request, since Thillens is a registered MSB and its practices include fulfilling cash orders with funds from its own bank accounts or its correspondent bank’s accounts — not from a bank’s own account at a Federal Reserve Bank.

For resources related to our guidance, please see:

  • FinCEN Regulations, 31 CFR 1010.311 (“Each financial institution other than a casino shall file a report of each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution which involves a transaction in currency of more than $10,000, except as otherwise provided in this section. In the case of the U.S. Postal Service, the obligation contained in the preceding sentence shall not apply to payments or transfers made solely in connection with the purchase of postage or philatelic products.”)
  • FinCEN Regulations, 31 CFR 1010.100(ff)(5)(i) (“Money services business [includes a] . . . (5) Money transmitter. . . . (A) A person that provides money transmission services. The term ‘money transmission services’ means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means. ‘Any means’ includes, but is not limited to, through a financial agency or institution; a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both; an electronic funds transfer network; or an informal value transfer system; or (B) Any other person engaged in the transfer of funds.”)
  • FinCEN Regulations, 31 CFR 1010.100(ff)(5)(ii)(D) (“Whether a person is a money transmitter as described in this section is a matter of facts and circumstances. The term ‘money transmitter’ shall not include a person that only: . . . Physically transports currency . . . as a person primarily engaged in such business, such as an armored car, from one person to the same person at another location or to an account belonging to the same person at a financial institution, provided that the person engaged in physical transportation has no more than a custodial interest in the currency . . . at any point during the transportation.”)
  • FinCEN Ruling, FIN-2014-R010, Administrative Ruling on the Application of FinCEN Regulations to Currency Transporters, Including Armored Car Services, and Exceptive Relief (September 24, 2014) (“Where a Federal Reserve Bank or a certain type of financial institution subject to a Federal functional 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.”)
  • FinCEN Ruling, 2003-7, Definition of Money Transmitter (Armored Car Companies) (October 28, 2003) (“An armored car business would not be deemed a money transmitter for purposes of 31 CFR 103.11(uu)(5) by virtue of the transportation of funds for a person that meets the definition of financial institution for BSA regulatory purposes found at 31 CFR 103.11(n).”)
     
  • FinCEN, Answers to Frequently Asked Bank Secrecy Act (BSA) Questions (“Question 1: Is a depository institution required to file a Designation of Exempt Person form (FinCEN 110) in order to exempt transactions with a Federal Reserve Bank? Answer 1: Depository institutions are not required to file a Designation of Exempt Person form (FinCEN 110) with respect to the transfer of currency to or from any of the 12 Federal Reserve Banks in accordance with an Interim Rule published by FinCEN in the Federal Register (65 FR 46356-46361) on July 28, 2000. This Interim Rule, which amends the CTR exemption regulation at 31 CFR 1020.315, became effective on July 31, 2000. (12/2017).”)
  • FinCEN Regulations, 31 CFR 1010.315(a) (“No bank is required to file a report otherwise required by §1010.311 with respect to any transaction in currency between an exempt person and such bank, or, to the extent provided in paragraph (e)(6) of this section, between such exempt person and other banks affiliated with such bank. . . .”)
  • FinCEN Regulations, 31 CFR 1010.315(b) (“(b) Exempt person. For purposes of this section, an exempt person is:  (1) A bank, to the extent of such bank's domestic operations; (2) A department or agency of the United States, of any State, or of any political subdivision of any State;  (3) Any entity established under the laws of the United States, of any State, or of any political subdivision of any State, or under an interstate compact between two or more States, that exercises governmental authority on behalf of the United States or any such State or political subdivision; . . .”)
  • FinCEN Regulations, 31 CFR 1010.315(c)(2)(i) (“A bank is not required to file a FinCEN Form 110 with respect to the transfer of currency to or from:  (A) Any of the twelve Federal Reserve Banks; . . .”)
  • FinCEN Administrative Ruling (May 26, 2021) (“Pursuant to 31 CFR § 1010.311, depository institutions such as the Banks are required to file a report of each deposit, withdrawal, exchange of currency or other payment or transfer by, through, or to such financial institution, which involves transactions in currency of aggregate amounts in excess of $10,000. Exemptions from the requirement for banks to file CTRs are listed at 31 CFR § 1020.315. None of these exemptions appears to apply to the situation described in the Request. . . . Both the MSB’s (i) sale of currency to each Bank, and (ii) purchase of currency from each Bank, require the Bank to file a CTR when the aggregated amount of transactions of either type exceeds $10,000, regardless of any parallel CTR filing done by the MSB.”)