On March 11, 2014, the Financial Crimes Enforcement Network (“FinCEN”) issued FIN-2014-R003, an administrative ruling clarifying the circumstances in which a dealer in foreign exchange may accept alternative travel documents as identification for a non-resident alien. FinCEN stated that FIN-2014-R003 was issued in an effort to balance the interests of law enforcement and financial institutions, as non-resident aliens are now allowed under certain circumstances to verify their identities and admissibility into the United States with documents other than passports when crossing the border. Because the originally issued recordkeeping requirements for dealers in foreign exchange under the Bank Secrecy Act and its implementing regulations (collectively, the “BSA”) did not contemplate alternative travel documents, financial institutions have encountered circumstances in which they were unable to comply with the recordkeeping requirements for transactions by non-resident aliens lawfully in the United States.
Under the BSA, each dealer in foreign exchange must retain either the original or a copy of a record of each exchange of currency involving transactions in excess of $1,000. These records must include: the name and address of the customer; the date and amount of the transaction; the currency name, country, and total amount of each foreign currency; and, previously, the passport number or taxpayer identification number, unless received by mail or common carrier. FIN-2014-R003 provides relief to the recordkeeping requirements for dealers in foreign exchanges by allowing them to now satisfy BSA recordkeeping requirements by retaining a copy of the number and description of an alternate valid entry document issued by a U.S. federal or state government agency – such as Border Crossing Cards bearing B1/B2 visitor visas issued by the U.S. Department of State – in lieu of a passport number or tax identification number,.
FinCEN highlighted that the relief provided by FIN-2014-R003 is applicable only to the recordkeeping requirement in connection with verifying the identity of a non-resident alien engaged in an exchange of currency at a dealer in foreign exchange. FIN-2014-R003 applies only to dealers in foreign exchange, who are defined under the BSA as any person that accepts the currency, or other monetary instruments, funds, or other instruments denominated in the currency, of one or more countries in exchange for the currency, or other monetary instruments, funds, or other instruments denominated in the currency, of one or more other countries in an amount greater than $1,000 for any other person on any day in one or more transactions, whether or not for same-day delivery.