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Money Services Business (MSB) Registration
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AbdulJaami, PLLC helps money services businesses (MSBs) minimize their exposure to Bank Secrecy Act and USA PATRIOT Act risk so that MSBs are able to conduct their businesses without constantly worrying about regulators harming their businesses. Unlike anti-money laundering (AML) consulting services, accountants and others, we only work with money services businesses and do not work with banks. We take a proactive approach geared towards identifying, minimizing and/or managing risk from the outset. This allows MSB owners and operators to focus on running their business free from profit killing interruptions.
MSB Registration on FinCEN Form 107
FinCEN requires each money services business to register with FinCEN using Form 107. The FinCEN registration requirement covers foreign-located MSBs that do money services business transactions in the U.S., whether or not on a regular basis. Money services business registration must be completed on or before the end of the 180-day period beginning on the day following the date the business was established.
A money services business' failure to complete MSB registration will lead to fines, civil penalties and possibly criminal prosecution. It is unlawful for an MSB to do business in the U.S. if it has not registered as a money services business. Filing of false or materially incomplete information in connection with the registration of a money services business is considered to be a failure to comply with MSB registration requirements. Any money services business that fails to comply will be liable for a civil penalty of $5,000 for each violation. FinCEN considers each day a violation continues as a separate violation. The Secretary of the Treasury may bring a civil action to enjoin the violation. Additionally, anyone that knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money services business, may be fined up to $250,000 for individuals ($500,000 for organizations) or imprisoned not more than 5 years, or both.
MSB Registration Designation Agreement
The Bank Secrecy Act requires that any person who owns or controls a money services business to register the business the business with FinCEN. Although the sweep of the BSA is broad enough to cover all owners and/or controllers of a particular money services business, FinCEN regulations only require that MSBs disclose one owner/controller on the Form 107 money services business registration. If more than one person owns or controls a money services business, FinCEN allows the owning/controlling persons to enter into an agreement designating one owner/controller to register the money services business.
"The failure of the designated person to register the money services business does not, however, relieve any of the other persons who own or control the business of liability for the failure to register the business." Due to the potential impact of the decision, and the risks involved, if more than one person owns/controls your money services business you are strongly advised to enter into an MSB registration designation agreement. Contact us for more information.
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MSB Bank Secrecy Act (BSA)/ Anti-Money Laundering (AML) Risk Assessment
Pursuant to applicable regulations, your BSA/AML compliance program must be "commensurate with the risks posed by the location and size of, and the nature and volume of the financial services provided by, [your] money services business." This means that your BSA anti-money laundering policies, procedures and internal controls must address the risks revealed by your risk assessment. To save time, and to have a clear basis for your MSBs policies and procedures, your MSB BSA / AML risk assessment should be documented in a form that is easily reviewable by IRS BSA examiners. Written documentation of your MSB risk assessment provides you with a clear basis for your BSA/AML policies and procedures. To learn more about this hidden money services business registration requirement, read MSB BSA/AML Risk Assessment. Contact us for help with your MSB risk assessment.
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MSB Anti-Money Laundering (AML) Program
All MSBs are required to develop, implement, and maintain an effective BSA/AML program. Failure to establish and implement an adequate written AML program could result in a penalty ranging from $25,000 to $100,000 (31 USC 5321(a)(1)). An effective anti-money laundering program is an AML that is reasonably designed to prevent your MSB from being used to facilitate money laundering and the financing of terrorist activities. Your BSA/AML program should be tailored to match the risks posed by the location and size of your MSB, and the nature and volume of the financial services provided. Your BSA / AML program must be in writing, with documented board of directors approval, and available for inspection by the Department of the Treasury (FinCEN). Your MSB BSA/AML compliance program must meet the four core BSA requirements, one of which is internal controls designed to detect and deter money laundering and terrorist financing based upon your MSB BSA/AML Risk Assessment. An effective BSA AML program is a core MSB registration requirement. Contact us for help with your anti-money laundering program.
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Special MSB Registration Services for Foreign-Located Money Services Businesses
We offer money services business registration services tailored to the foreign-located MSB that does business within the U.S., whether or not on a regular basis. These special services are in addition to our MSB registration on FinCEN Form 107. FinCEN regulations require each foreign-located money services business to designate the name and address of a U.S. resident who the foreign-located MSB has authorized to be an agent to accept service of legal process with respect to the foreign-located MSB's compliance with the BSA and applicable U.S. regulation. The foreign located money services business must also identify the address of a location within the U.S. at which the foreign located MSB maintains certain records as required by U.S. law. AbdulJaami, PLLC provides foreign located MSB's with special FinCEN registration services including legal process agent services at fixed annual cost. Contact us to request a copy of our FinCEN legal process agency agreement.
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MSB Registration - Determination of Agency Status
FinCEN exempts money service business agents from money services business registration requirements. A person that is a money services business solely because that person serves as an agent of another money services business is not required to register. However a money services business that engages in msb activities both on its own behalf and as an agent for others must register. The determination of whether an MSB is an agent depends on all the facts and circumstances. Those money services businesses that mistakenly conclude that they are exempt from msb registration are subject to civil and/or criminal penalties as described above. To be on the safe side, contact us for help determining whether you are an agent exempt from msb registration.
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Re-Registering as an MSB - Transfers and Changes in Control
A money services business that experiences any of the following three events must complete a new MSB registration: (1) a change in ownership or control that requires the MSB to re-register under State law; (2) a transfer of more than 10% of the money services business' voting power or equity, unless the MSB is required to the transfer to the SEC; or (3) a more than 50% increase in the number of agents. If you are experiencing, or will experience, the occurrence of any of these three events, you need to determine whether you must re-register. Additionally, re-registration raises all of the issues that an initial money services business registration must resolve, including the appropriateness of an MSB registration designation agreement. Contact us for assistance or additional information.
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For more information or to schedule a money services business (MSB) registration consultation, call: +1 646 435 0668
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- Money Service Business License
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New FinCEN Form 107 Registration Package. Everything you need to comply and move on. US$799.95 everyday value rate includes 30 minutes of MSB legal advice.
- FinCEN Form 107 Registration Guide;
- MSB BSA/AML Risk Assessment (template);
- MSB Anti-Money Laundering Program (template);
- Designation of Compliance Officer (template);
- Independent Audit Function Assignment (template);
- Business Volume Annual Estimate (template);
- MSB Ownership and Control Information (template);
- MSB Agent List (template).
Call now to receive your introductory rate good until 1 March 2012 (US$299.99 - legal advice not included): 1 646 435 0668. |
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- MSB Anti Money Laundering
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| If you own or operate a money services business, a documented Bank Secrecy Act anti money laundering risk assessment (BSA / AML Risk Assessment) may help you avoid IRS examiners. |
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