The Bank Records and Foreign Transactions Act consists of two parts. Title I, codified at 12 U.S.C. § 1829(b) and §§ 1951 to 1959 (with effectuating regulations contained at 31 C.F.R. §§ 103.31 to 103.37), requires banks and other financial institutions to retain certain financial records for periods of up to five years. Title II which was entitled the Currency and Foreign Transactions Reporting Act--was originally codified at 31 U.S.C. §§ 1051-1122. In 1982, these sections were re-enacted without substantive change as 31 U.S.C. §§ 5311 to 5322 and are now entitled Records and Reports on Monetary Instruments Transactions, with applicable regulations at 31 C.F.R. § 103.11 et seq.
Provisions contained in these sections require private individuals, banks, and other financial institutions to file reports with the Federal government regarding certain of their foreign and domestic financial transactions. Failure to comply with the reporting requirements of the Bank Secrecy Act may lead to civil penalties, civil forfeiture, or criminal sanctions. Sections 5323 and 5324 were added in 1984 and 1986, respectively.
In order to aid law enforcement officials in the detection and investigation of criminal, tax, and regulatory violations, the Bank Secrecy Act requires reports which identify:
- 1. The source, volume, and movement of United States currency transported into or out of the country ("Report of International Transportation of Currency or Monetary Instruments");
2. Certain deposits made into domestic financial institutions ("Currency Transaction Report"); and
3. United States persons who engage in transactions or maintain a relationship with a foreign financial agency ("Foreign Bank Account Report").
The Bank Secrecy Act's reporting requirements have been held constitutional in a number of contexts: 31 U.S.C. § 5316 has been held not to be violative of the First Amendment, United States v. Fitzgibbon, 576 F.2d 279 (10th Cir. 1978), cert. denied, 439 U.S. 910 (1978); the reporting requirements of Title 31 were upheld by the Supreme Court against Fourth Amendment attack, California Bankers Association v. Schultz, 416 U.S. 21 (1974); and, applicable Fifth Amendment rights have been held to be sufficiently protected under the Act's reporting requirements, United States v. Dichne, 612 F.2d 632 (2d Cir. 1979), cert. denied, 445 U.S. 928 (1980), and United States v. Fitzgibbon, supra.
Possible civil penalties in a Bank Secrecy Act prosecution should not be compromised without contacting the Assistant Director, Financial Crimes Enforcement Network, United States Department of the Treasury, 15th and Pennsylvania Avenue, N.W., Washington, D.C. 20220, (202) 62-0400. That office should also be contacted in criminal cases which seem appropriate for civil remedies.
The penalty provisions for violations of §§ 5313, 5314 and 5316 are found in § 5322. The penalty provisions for violations of § 5324 are found within § 5324 (as of September 23, 1994). In determining the appropriate prohibitions to use in a prosecution for money laundering, serious consideration should be given to using this section as well as the appropriate subsection in Title 18, Sections 1956 and 1957 whenever any of these are applicable. See USAM 9-105.000 (Money Laundering).
[cited in USAM 9-79.200]