"Structuring" and your obligations with respect to structuring
- For purposes of § 1010.314, a person structures a transaction if that person, acting alone, or in conjunction with, or on behalf of, other persons, conducts or attempts to conduct one or more transactions in currency, in any amount, at one or more financial institutions, on one or more days, in any manner, for the purpose of evading the reporting requirements under §§ 1010.311, 1010.313, 1020.315, 1021.311 and 1021.313 of this chapter. “In any manner” includes, but is not limited to, the breaking down of a single sum of currency exceeding $ 10,000 into smaller sums, including sums at or below $ 10,000, or the conduct of a transaction, or series of currency transactions at or below $ 10,000. The transaction or transactions need not exceed the $ 10,000 reporting threshold at any single financial institution on any single day in order to constitute structuring within the meaning of this definition. [31 CFR 1010.100(xx)]
While the regulations prohibit structuring and causing or attempting to cause an institution to fail to file a currency transaction report, they say nothing about whether financial institutions have any duty to detect this sort of behavior. However, in material outside its regulations, the Treasury Department says that institutions do have such a duty. According to the supplementary material issued by the Treasury at the same time the definition of structuring was issued (Federal Register, January 23, 1989, page 3026), financial institutions cannot close their eyes to structuring. While institutions are not required to set up record-keeping or tracking capabilities to detect currency transactions over more than one day, they do have an obligation to report suspected structuring that is within the personal knowledge of their employees or is apparent from computer or other record-keeping systems. If the institution suspects that structuring is taking place, it should check its records and report its suspicions to the local office of the Internal Revenue Service’s Criminal Investigation Division.
- The person, after being informed that the institution intends to file a report on the transaction, seeks to take back part of the currency in order to reduce the amount of the transaction to $10,000 or less.
- The person conducts multiple transactions—each involving less than $10,000 but totaling more than $10,000—over the course of several consecutive or near-consecutive days (e.g., Monday, Wednesday, and Friday), whether at the same financial institution, different branches of the same institution, or different institutions.
- Two or more persons enter a financial institution together and separately make cash purchases of instruments, such as cashier’s checks, that individually do not exceed $10,000 but that total more than $10,000 from different tellers in the same institution.
- A customer makes a $9,000 deposit at 1:59 P.M. and a second deposit of $9,000 at 2:01 P.M. when the bank’s business day changes at 2 P.M.
- A customer comes into the bank on Monday, Tuesday, Wednesday, and Thursday and, each time, deposits $8,000 into his checking account. On Friday, the customer comes in and orders that the $32,000 he deposited over the course of those days be wire transferred out of the country.
Also see Administrative Ruling 88-1 in the October 13, 1988, Federal Register on page 40064, which deals with what an institution should do when it suspects structuring.