MAYBE.... Only Non-financial institutions are required to report. Financial institutions are required to have a compliance officer. If that officer has deemed Kirk to have a regular ongoing cash business and is satisfied the Kirk is not laundering money, that officer is not required to file the same paperwork. They would not be required to file a suspicious activity report. However, it is a HUGE fine if the officer is wrong.

Non-Financial Institutions

Non-financial institutions are required to report cash and currency transactions totaling $10,000, or more ("Cash Transactions") to the Financial Crimes Enforcement Network ("FinCEN"). Cash Transactions include monetary instruments such as travelers' checks and other negotiable instruments.

Financial Institutions

The primary provision affecting financial institutions is Title III of the USA PATRIOT Act, entitled "International Money Laundering Abatement and Anti- Terrorism Financing Act of 2001" ("Title III"). Title III requires an institution to take reasonable steps to safeguard against money-laundering. The primary safeguard measures include: (1) designating a compliance offer; (2) implementing an ongoing training program; (3) adopting an independent audit function; and (4) developing internal policies, procedures, and controls. There are no specific guidelines or procedures to direct compliance; instead, an institution must determine its own particular risks in developing a program, which is likely to include an analysis of its customer base, industry, and location. As in the context of traditional financial institutions, compliance is more a matter of fine tuning and reassessment since anti-money laundering programs are already in place; however, for untraditional financial institutions, a category which is growing, implementing a compliance program will present significant adjustment to operations.

In addition to implementing a compliance program, financial institutions are required to share information and provide Suspicious Activity Reports ("SARS"). The USA PATRIOT Act requires branches of the federal government to share information with financial institutions to assist in the identification of suspected terrorism and money laundering activity. This requires a financial institution to designate an employee to receive information on suspicious activities, and if necessary, monitor suspected accounts. In addition, financial institutions may corroborate amongst one another concerning suspicious activity; however, notice must first be provided to the appropriate government authority. If a governmental authority requests information, then the institution must provide the information within five (5) days of the request. Fortunately, the drafters of the USA PATRIOT Act had the foresight to provide a "safe-harbor" for monitoring and reporting suspicious activity and providing information requested by the federal government.

Currently, the Treasury Department is promulgating regulations that will set forth minimum standards to open an account. As to foreign nationals and foreign companies, contemplated regulations include the issuance of identification numbers, similar to tax identification numbers, as a prerequisite to opening an account. Regulations and compliance procedures should be approved and mainstreamed later this year.

Sanctions for Non-Compliance

Pursuant to the USA PATRIOT Act, if a financial institution fails to implement a compliance program, then fines may be assessed at $25,000 per day for civil violations, or $250,000 to $500,000 per day if the failure is criminal and based on a pattern of illegal activity. Due diligence violations, or failing to "know" your customer, may result in a penalty equal to double the amount of the transaction. Violations of OFAC regulations range from $10,000 to $1 million per occurrence and 10 to 12 years imprisonment.