The US Framework I — The Bank Secrecy Act *(OUTLINE + BULLET BODY)*

A customer walks up to the teller and deposits eleven thousand dollars in cash. Routine? Maybe. But the moment that cash crossed ten thousand dollars, a federal reporting obligation switched on — one that's been the backbone of US anti-money-laundering law since 1970. That's the Bank Secrecy Act. Despite the name, the BSA isn't about keeping secrets — it's the opposite. It forces financial institutions to keep records and report certain transactions so that money laundering can't hide in the gaps. This is the single most testable national framework on the CAMS® exam, so let's get the numbers exactly right.

- Enacted **1970**; formally the Currency and Foreign Transactions Reporting Act. Codified primarily at **31 USC §5311 et seq.**, with implementing regulations at **31 CFR Chapter X**. - Purpose stated in the statute: require records and reports that have a **high degree of usefulness in criminal, tax, and regulatory investigations**, and in counter-terrorism. - It is the foundational US AML statute; later laws (USA PATRIOT Act, AMLA 2020) **amend and expand** the BSA rather than replace it. - Administered by **FinCEN** (a bureau of the US Treasury), which delegates examination to functional regulators (e.g., the federal banking agencies, IRS for some MSBs). - Applies to a broad set of "financial institutions" — banks, MSBs, casinos, broker-dealers, insurers, and more.

- Filed for **cash (currency) transactions exceeding $10,000 in a single business day** — deposits, withdrawals, exchanges of currency, or other payments/transfers. Note: it's "more than $10,000," so exactly $10,000 alone does not trigger it; over does. - **Aggregation rule:** multiple cash transactions by or on behalf of the **same person** on the **same business day** are aggregated — if the total exceeds $10,000, a CTR is required. You cannot avoid it by splitting one $15,000 deposit into a $8,000 and a $7,000 on the same day. - Filed on FinCEN Form 112 (the CTR), generally **within 15 days** of the transaction. - CTRs are **not** suspicious-activity reports — a CTR is an objective, threshold-based filing; no suspicion required. The customer is not tipped off in any prohibited way because CTRs are routine and known to exist. - **Structuring** — deliberately breaking cash into amounts under $10,000 to evade the CTR — is itself a federal crime (31 USC §5324), regardless of whether the underlying funds are clean.

- Filed when an institution knows, suspects, or has reason to suspect a transaction involves funds from illegal activity, is designed to evade BSA requirements, has no apparent lawful purpose, or involves use of the institution to facilitate criminal activity. - For banks, the general **monetary threshold for mandatory SAR filing is $5,000** or more where a suspect can be identified (and certain lower/aggregate thresholds apply by institution type); but suspicion — not a dollar amount — is the trigger concept. - Filed on FinCEN Form 111, generally **within 30 calendar days** of detecting facts that may constitute a basis for filing; up to **60 days** if no suspect is identified at day 30. - **Confidentiality / tipping-off:** it is prohibited to notify the subject that a SAR has been filed. SAR confidentiality is mandatory; unauthorized disclosure carries penalties. - **Safe harbor:** institutions and their employees that file SARs in good faith are protected from civil liability for the disclosure (31 USC §5318(g)(3)).

- The BSA requires institutions to **retain records** for generally **five years**, including CTRs, SARs and supporting documentation, and customer/transaction records. - **Funds-transfer recordkeeping:** for transmittals of funds of **$3,000 or more**, institutions must collect and retain specified information about the originator and beneficiary. - The **"Travel Rule"** (BSA, 31 CFR 1010.410(f)) requires that for transmittals of **$3,000 or more**, certain originator and beneficiary information **travel with the transfer** to the next financial institution in the payment chain. (Note: this is the US BSA Travel Rule for funds transfers — distinct from FATF Recommendation 16's Travel Rule, which extends the same idea to virtual-asset transfers.) - The **Monetary Instrument recordkeeping** rule requires records for sales of bank checks, money orders, cashier's checks, and traveler's checks for cash in amounts of **$3,000–$10,000** inclusive.

- **Money Services Businesses** — money transmitters, currency dealers/exchangers, check cashers, issuers/sellers of money orders or traveler's checks, and providers/sellers of prepaid access — must **register with FinCEN** (renew every two years) and maintain a list of agents. - MSBs must also implement an AML program, file CTRs and SARs, and comply with recordkeeping — they are full BSA "financial institutions," not exempt because they're non-banks. - Failure to register is itself a violation; unlicensed money transmission is also a federal crime.

- The **Financial Crimes Enforcement Network** is the US **Financial Intelligence Unit (FIU)** and the administrator of the BSA, within the US Department of the Treasury. - Roles: issues BSA regulations and advisories, **receives and analyzes** BSA filings (CTRs/SARs), disseminates intelligence to law enforcement, and operates the **314(a)/314(b)** information-sharing programs (covered in a later lecture). - FinCEN delegates **examination** authority to functional regulators but retains rulemaking and enforcement authority. - Exam cue: when a question says "to whom are SARs/CTRs filed?" the answer is **FinCEN**.

Let's lock in the numbers, because the exam loves them. CTR: cash over ten thousand dollars in a single business day, same-day same-person transactions aggregate, filed within fifteen days, no suspicion needed. SAR: triggered by suspicion, generally five thousand dollars for banks, filed within thirty days, and you may never tip off the subject. Funds-transfer recordkeeping and the Travel Rule both kick in at three thousand dollars. MSBs register with FinCEN, and FinCEN — the US FIU — administers the whole thing. Next, we build on this foundation with the law that expanded it sharply after September 11th: the USA PATRIOT Act. We'll walk sections 311 through 319 — special measures, correspondent and private-banking enhanced due diligence, the shell-bank ban, and the two flavors of information sharing.