Sweepstakes & Contest Laws

FINCEN | MSB

REGISTERING AS A MONEY SERVICE BUSINESS WITH FINCEN

TO REGISTER AS A MONEY SERVICE BUSINESS

https://www.fincen.gov/index.php/node/7501

The Bank Secrecy Act (BSA) requires many financial institutions, including money services businesses (MSB), to keep records and file reports on certain transactions to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

Money Services Business

An MSB is generally any person offering check cashing; foreign currency exchange services; or selling money orders, travelers’ checks or pre-paid access (formerly stored value) products; for an amount greater than $1,000 per person, per day, in one or more transactions. A person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.

Registering with the Federal Government

Every MSB must register with FinCEN by electronically filing FinCEN Form 107, Registration of Money Services Business, unless a person or business is only an MSB because they serve as an agent of another MSB. The MSB’s owner or controlling person must register by the end of a 180-day period, which begins the day after the date they established the MSB. They are also required to renew their MSB registration each two-calendar-year period following the initial registration by filing another Form 107.

Developing an Effective AML Program

All MSBs are required to develop and implement an anti-money laundering (AML) compliance program. The program should reasonably prevent individuals from using the MSB to facilitate money laundering or to finance terrorist activities. Each program must be written and take into account the inherent risks, as well as:

1. Designate a person to assure day-to-day compliance with the BSA;
2. Incorporate policies, procedures and internal controls reasonably designed to assure compliance with the BSA;
3. Provide education and training to appropriate personnel; and
4. Provide for an independent review to monitor and maintain an adequate program.

Reporting Cash Transactions

MSBs must electronically file FinCEN Form 112, Currency Transaction Report, when they have a cash-in or cash-out currency transaction, or multiple transactions, totaling more than $10,000 during one business day for any one person, or on behalf of any one person.

Reporting Suspicious Activities

Generally, MSBs that know, suspect or have reason to suspect that the transaction or pattern of transactions is suspicious and involves $2,000 or more, must electronically file a FinCEN Form 111, Suspicious Activity Report on the activity.

BSA E-Filing

The BSA E-Filing System supports the electronic filing of BSA forms (either individually or in batches) through a FinCEN secure network. Financial institutions, including MSBs, must electronically file all required BSA reports using FinCEN’s BSA E-Filing System. FinCEN may reject any required reports filed in paper format.

Additional Resources Other BSA Reporting Requirements

1. Form 114, Report of Foreign Bank and Financial Accounts
2. Form 105, Report of International Transportation of Currency or Monetary Instruments

Online Information

1. FinCEN.gov

Publications

1. Bank Secrecy Act Requirements A Quick Reference Guide for MSBs PDF (PDF)
2. Examination Manual for Money Services Businesses PDF (PDF)
3. Reporting Suspicious Activity A Quick Reference Guide for MSBs PDF (PDF)
4. Money Laundering Prevention An MSB Guide PDF (PDF)

Helplines

1. Title 31 Helpline: 866-270-0733 (toll-free inside the U.S.) or 313-234-6146 (not toll-free, for callers outside the U.S.)
2. FinCEN Regulatory Helpline: 800-949-2732
3. BSA E-Filing Help Desk (technical assistance): 1-866-346-9478 (toll-free), Email BSAEFilingHelp@fincen.gov

Follow Federal & State Legal Requirements and Regulations. Please always consult with a real legal advisor and/or licensed attorney. This is simply a guideline to get you started in the right direction.