3 NYCRR Part 300
3 NYCRR Part 406
April 21, 2003
Re: In the Matter of Western Union Financial Services, Inc. ("Western Union")
Your February 6, 2003 letter to the Legal Division of the New York State Banking Department has been referred to me for response. In connection with your request, I have reviewed those materials and spoken with those individuals that I have deemed appropriate.
Per your letter, it appears that you are in the process of reviewing _________________________________ existing laws and regulations relating to money laundering and related financial crimes. You have asked for specific information related to our recent action involving Western Union.
Specifically, you asked whether 3 NYCRR Part 300 requires the filing of Currency Transactions Reports ("CTRs") that are different and separate from those required under the Bank Secrecy Act. No, there is no obligation to file a CTR under Part 300 or any other banking regulation. Part 300 is more akin to the federal suspicious activity reporting obligation (though Part 300 is much narrower in scope). In some cases, activity which is reportable on an Suspicious Activity Report ("SAR") may also be reportable under Part 300 (usually in the case of misconduct or criminal conduct on the part of employees or agents). We do not require institutions to file a separate "Part 300 Form," rather we accept the SAR as fulfilment of the Part 300 requirement. Part 300 was applicable in the Western Union matter because there were instances of misconduct on the part of Western Union agents and Western Union (the licensee) did not file the required Part 300 Form with respect to those agents.
Additionally, 3 NYCRR Part 406.3(g) was cited in the Western Union matter because there was also evidence that Western Union was not exercising effective supervision over their agents which is required by that part. Section 651-b of the Banking Law was cited because these failures also constituted a variety of books and records violations.
I am enclosing copies of the following materials that may be helpful to you:
- A copy of the Agreement and Imposition of Monetary Penalty Issued Upon Consent in the Western Union matter;
- A copy of Article XIII-B of the New York State Banking Law relating to Money Transmitters;
- A copy of 3 NYCRR Part 300 - Reporting of Crimes Against Banking Institution, Mysterious Disappearances and Misconduct;
- A copy of 3 NYCRR Part 406 - Money Transmitters;
- A copy of the Bank Secrecy Act and Anti-Money Laundering Compliance Examination Manual for Money Transmitters utilized by the Financial Services Division of the Banking Department; and
- Pages 14-16 of the Model Bank Secrecy Act and Anti Money Laundering Compliance Handbook for Money Transmitters, prepared by External Compliance Officer, Inc., 400 38th Street, Suite 303, Union City, NJ 07087, relating to the USA Patriot Act of 2001 and the Office of Foreign Assets Control.
You may also wish to consult the Financial Crimes Enforcement Network website at www.msb.gov for additional information.
I trust that this letter is responsive to your inquiry.
Very truly yours,
Jacquelyn A. Hart