Wire Transfer Travel Rule

The Board of Directors and FinCEN (collectively, the “Agencies”) are publishing this proposed rule to change the threshold, generally to implement the printed 68006 Bank Secrecy Act (“BSA”), which requires financial institutions to collect and retain information about certain money transfers and money transfers. The proposed amendment would lower this threshold from $3,000 to $250 for money transfers and remittances starting or ending outside the United States. FinCEN also proposes to lower from $3,000 to $250 the threshold that typically requires financial institutions to transfer information about money transfers and money transfers that begin or end outside the U.S. to other financial institutions in the payment chain. The agencies also propose to clarify the meaning of the term “currency” as used in the same rules to ensure that the rules apply to domestic and cross-border transactions involving a convertible virtual currency (“CVC”), which is a medium of exchange (e.B cryptocurrency) that has a value equivalent to the currency or acts as a substitute for the currency. but it does not have the status of legal tender. The agencies also propose to clarify that these rules apply to domestic and cross-border transactions involving legal tender digital assets. Description of Recorders: Banks that are the initiator`s bank, intermediary bank or recipient`s bank with respect to transfers of funds between $250 and $3,000 that begin or end outside the United States. A transfer of funds would be considered “beginning or ending outside the United States” if the financial institution knows or has reason to know that the principal, the principal`s financial institution, the beneficiary/recipient, or the recipient/recipient`s financial institution is located in, habitually resident, or is organized under the laws of a jurisdiction other than the United States. In addition, a financial institution would have “reason to know” that a transaction begins or ends outside the United States, only to the extent that the information could be determined based on the information it receives in the payment order or otherwise collects from the principal. [3] The Recordkeeping Rule and the Travel Rule jointly require banks and non-bank financial institutions to collect, retain and transmit the following information on money transfers and money transfers in the amount of $3,000 or more: (i) the name and address of the sender/issuer; (ii) the amount of the payment or transmission order; (iii) the date of execution of the payment or transmission order; (iv) any payment instruction received by the payer or sender with the payment or transmission order; and (v) the identity of the beneficiary`s bank or financial institution. In addition, the payer`s bank or the issuer`s financial institution shall retain the following information when it receives such information from the payer or sender: (i) the name and address of the payee/recipient; (ii) the account number of the beneficiary/beneficiary; and (iii) any other specific identification or beneficiary(ies).

Second, recent prosecutions show that individuals send and receive funds to finance terrorist activities in amounts below (and in some cases significantly lower) than the current record threshold of $3,000. These cases involved individuals providing material support for terrorist activities to a designated foreign terrorist organization (“OTF”). In such a case, the defendant allegedly transferred $1,500 to the financial account of a co-respondent in the United States in 2013; The co-accused collected money from his co-conspirators to support an OTF fighter in Syria and eventually transferred those funds through money transfers to companies and intermediaries abroad. [19] In another case, a man was prosecuted for meeting with an OTF recruiter in 2015, transferring $250 of funds to an OTF, and attempting to leave the United States with the intention of joining OTF in Libya. [20] Another example of small money transfers made in support of terrorism involved an individual in the United States who received several money transfers from OTF subsidiaries in 2015 totalling approximately $8,700 and was primarily sent for amounts under $3,000. [21] Such a transfer in 2016 was made by an Egyptian resident in the amount of $1,000 and was sent by the United States. Silver transmitter. [22] The subject later admitted to law enforcement that the money was to be used to fund a terrorist attack in the United States, and the subject was later convicted of providing material support to an OTF.

[23] In 2006, the Agencies asked the public to comment on the potential benefits and burdens of lowering the threshold for registration and travel requirements. [55] Based on comments received at the time, it appears that almost all banks, regardless of size, keep records of all money transfers and money transfers, regardless of the dollar amount, including transfers/transfers below the regulatory threshold of $3,000. Similarly, in 2006, many remittance transmitters reported that they kept transfer/transfer records to the tune of approximately $1,000. Since 2006, there have been significant technological advances that are likely to enable small businesses to meet regulatory requirements for records at a lower cost. Typically, a bank automatically fills in the sender`s name and address information in the case of a transfer directly from the customer`s record. Indeed, it is very important that the customer`s name reflects the actual party who initiated the payment order. (This topic is discussed in the Deep Dives section below.) Description of the recorders: Financial institutions other than banks that make money transfers using CVCs or legal tender digital assets. While the proposed rule applies prima facie to all non-bank financial institutions, this provision would only affect issuers of funds and other MSBs that make money transfers using CVCs or legal tender digital assets. The registration rule applies to money transfers (i.e., transactions with banks) and money transfers (i.e., transactions involving non-bank financial institutions).

The term “transfer of funds” is defined as defined in Article 4A of the Uniform Commercial Code (“UCC”) and includes “the series of transactions, beginning with the payer`s payment order, carried out for the purpose of payment to the payee of the order”. [32] The record-keeping rule, in turn, defines the “payment order” in the same way as the UCC definition in Section 4A and states that a payment order “on the instruction of a sender to a receiving bank. to pay a fixed or determinable amount of money to a beneficiary or to induce another bank or foreign bank to pay. [33] (emphasis added.) In addition to bank transfers, today there are many types of electronic transfers or EFT. .