United States

The Bank Secrecy Act (BSA), formally known as the Financial Recordkeeping and Reporting of Currency and Foreign Transactions Act of 1970, requires US financial institutions to maintain records and report specific currency and foreign transactions. The purpose of the BSA is to provide law enforcement and regulatory bodies with tools to detect and deter money laundering, tax evasion, and terrorist financing.

The BSA consists of two principal titles. Title I mandates financial recordkeeping, while Title II governs the reporting of certain transactions exceeding $10,000. These requirements apply to a broad array of financial institutions and are supported by regulations under 31 CFR Part 103.

Reporting Obligations

The core reporting mechanisms established by the BSA are Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs). Financial institutions must file a CTR (Form 104) for any currency transaction exceeding $10,000. These can include deposits, withdrawals, exchanges, or other transfers involving physical currency. Institutions are required to aggregate multiple related transactions over the course of a business day.

In addition to CTRs, financial institutions are obligated to file SARs for any suspicious transaction involving $5,000 or more, or any amount if a bank insider is involved. SARs are used to report transactions that may involve money laundering, terrorist financing, or other criminal conduct.

Recordkeeping & Customer Identification

The BSA mandates comprehensive recordkeeping obligations to enable the reconstruction of transactions and the tracing of funds. Institutions must record and retain identifying information related to monetary instruments, deposit accounts, wire transfers, and funds transmittals, with thresholds beginning at $3,000. Particular attention is given to the Travel Rule requirements under 31 CFR § 103.33, which demand retention of originator and beneficiary information for funds transfers of $3,000 or more.

Additionally, under Section 326 of the USA PATRIOT Act and 31 CFR § 103.121, financial institutions must implement a Customer Identification Programme (CIP). This includes procedures for verifying the identity of customers opening accounts, retaining documentary or non-documentary evidence, and checking customers against government-issued terrorist watchlists.

Exemptions & Safe Harbours

The BSA provides for exemptions from CTR filing through "Phase I" and "Phase II" categories. Phase I applies to certain government entities, listed corporations, and their subsidiaries. Phase II allows exemptions for non-listed businesses and payroll customers, provided they meet rigorous qualification criteria. Institutions must document the basis for all exemptions and conduct annual reviews to confirm continued eligibility.

Safe harbour provisions also exist for banks relying on third-party institutions to fulfil CIP responsibilities, provided certain conditions are met, including contractual obligations and independent verification.

Enforcement, Penalties & Supervision

Compliance with the BSA is enforced through a combination of regulatory examinations and civil or criminal penalties. Apparent violations may result in referrals to the Financial Crimes Enforcement Network (FinCEN), which has the authority to impose civil money penalties and recommend criminal prosecution in cases of wilful non-compliance.

Violations may also trigger formal supervisory actions under Section 8 of the Federal Deposit Insurance Act, ranging from Board Resolutions to Cease and Desist Orders, and in some cases, removal or prohibition of institution-affiliated individuals.

Funds Transfer & Travel Rule Requirements

The document affirms the requirements under 31 CFR § 103.33 concerning funds transfers of $3,000 or more. Financial institutions must retain detailed records including the name, address, account numbers, and financial institution identifiers of both the originator and beneficiary. These rules are foundational to tracking the movement of funds and are a core part of the BSA’s strategy to deter illicit financial flows.

Institutions acting as intermediaries must retain the full payment order, ensuring continuity of the audit trail through all stages of the transaction. The regulation makes clear that these obligations apply equally to domestic and international wire transfers.

Conclusion: WTR Compliance Integration

The BSA, as outlined in the source document, embeds a strong framework for transaction traceability, anti-money laundering controls, and institutional accountability. By establishing recordkeeping and transmittal obligations for transactions beginning at $3,000, the BSA lays the operational groundwork for the Wire Transfer Rule in the United States.

While the regulation does not refer to FATF Recommendation 16 explicitly, it captures many of the same principles by mandating that originator and beneficiary data accompany high-value transactions. The inclusion of Customer Identification Programmes, exemption structures, and enforcement mechanisms further supports integration with a global AML framework. As such, the Bank Secrecy Act provides the statutory and procedural architecture through which WTR compliance is executed across the US financial system.