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Can A MSB be Exempt Under Phase II? FinCEN

Answered by: 
Ken Golliher

Question: 
I am in the process of exempting a business as a Phase II Customer. It is a local grocery store that is a registered MSB (due to cashing checks over $1,000). Can an MSB be exempt under Phase II? I have been told by an examiner that yes they can, but then I have been told by a rep from FinCEN that no they can not. Also, if they can be exempt, what forms besides the BSA Exemption Review Form do I need to obtain? We only have one other Phase II Exemption who also provided their P&L's. This business, however, is not willing to provide this information. I have weighed out if it would just be easier to go ahead and continue filing CTR'son this business, but with at least 4 CTR's per week, it would be better to exempt.
Answer: 

Although many entries in the BSA FAQ's have been rendered inaccurate, nothing has changed the response to Question 17. Being an MSB does not render a customer ineligible until more than 50% of its revenues are derived from ineligible sources.

Regardless, you are already on notice that the decision will be subject to review and disagreement with every third party review. In my opinion, it's not worth it.

First published on 11/16/2017

Filed under: 
Operations
Filed under operations as: 
Currency Transaction Reporting
FinCEN

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