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FinCen Releases Guidance on Currency Transaction Report for Aggregation of Businesses with Common Ownership

On March 19, 2012, FinCEN released guidance on how institutions should report currency transactions regarding the aggregation of multiple transactions conducted by businesses with common ownership.

Although businesses may share a common ownership, there is a presumption that separate corporations are independent entities. Therefore, the currency transactions of separately incorporated businesses should not automatically be aggregated as being on behalf of any one person simply because those businesses are owned by the same person.

If a financial institution determines that these businesses (or one or more of the businesses and the private accounts of the owner) are not operating separately or independently of one another or their common owner - e.g., the businesses are staffed by the same employees and are located at the same address, the bank accounts of one business are repeatedly used to pay the expenses of another business, or the business bank accounts are repeatedly used to pay the personal expenses of the owner - the financial institution may determine that aggregating the businesses' transactions is appropriate because the transactions were made on behalf of a single person.

When determining whether to aggregate transactions as being on behalf of the same person, a financial institution must use its knowledge of relevant facts and circumstances. There are no universal rules applicable to any situation.⁶ Once a financial institution determines that the businesses are independent, then it should not aggregate the separate transactions of these businesses. Alternatively, once a financial institution determines that the businesses are not independent of each other or their common owner, then the transactions of these businesses should be aggregated going forward.

FIN-2012-G001 for more information and examples.