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How Recently Announced U.S. Federal Government Changes in FinCEN Reporting Requirements Affect U.S. Casino Operators

Publish Date
December 13, 2011
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How Recently Announced U.S. Federal Government Changes in FinCEN Reporting Requirements Affect U.S. Casino Operators

What Is Happening?
The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has a critical mission – to safeguard the nation’s financial systems from abuse and potential national security risks by detecting and deterring criminal activity. Casinos across the U.S. play an essential role in the process by pulling up the drawbridge on potential money launderers who use laundered money for a wide range of criminal activities, from child prostitution to terrorism.

Recently, FinCEN issued an important alert indicating their rules are dramatically changing. Federal standards for casinos are now the same as federal standards for all other business types. These modifications will change the types of reports casinos are required to submit as well as the process casinos are required to follow to submit them. In fact, now all data has to be stored and submitted.

These rule changes will affect all casino operators’ processes, staffing levels and software in order to comply.

What Are Some Specific Examples of Changes Occurring?
There are significant changes to CTR and SAR filings, and FinCEN estimates that each new CTR will take approximately 40 minutes to complete while each new SAR will take approximately two hours. Here are some specific examples of anticipated changes that will take effect next year:

• All forms must be completed electronically through the FinCEN website; no paper version will be available
• FinCEN will be adding attachments and multiple entries (up to 99 per) on the SAR to many fields
• Consolidation of reporting specifications into one format for CTR and one format for SAR
• Increase in field lengths of critical fields and collection of new data fields
• Ability to submit an attachment to SAR filings, which allows for acceptance of Excel/tabular based file formats up to 1MB per SAR
• Additional suspicious activity categories
• Ability to provide multiple attributes to subjects, including multiple names, addresses and phone numbers

Why Does This Matter To Casino Operators?
These changes are not suggestions – they are requirements, and casinos must be in compliance or risk fines – each of which could number in the hundreds of thousands of dollars. Further, without software automation these changes will require extensive data entry on the BSA site. Given FinCEN’s estimates that each SAR will take approximately two hours to complete, many casinos will have to either staff-up considerably, adding FTE expense, or invest in software that will auto-populate and auto-submit SAR and CTR forms.

What Should Casino Operators Be Doing Now?
All changes are currently slated to go into effect by July 1, 2012, meaning casinos should be laying the groundwork now, to ensure that staffing levels and/or systems are up-to-date and can accommodate all of the changes. Failure to act immediately could result in costly fines, and overstaffing unnecessarily as you scramble to remain in compliance.

How Is NEWave Responding?
At NEWave, we are moving extremely fast to update our myCompliance suite to accommodate all of the FinCEN changes to ensure you remain in compliance, without adding FTE expenses. We are also creating a new SAR Manager that will replace yesterday’s SAR-C Manager. Why? Because SAR-C forms and software will be obsolete with the new FinCEN changes. Our new program will gather data and submit the information automatically for you. Additionally, it will only show you the fields on the new SAR forms that are relevant to you.

For existing NEWave clients, your existing Title 31 software may not be able to accommodate the changes, and the myCompliance suite will suit your needs better with the new FinCEN rules. For those casinos reporting manually, you must immediately begin planning your migration from a manual system to an electronic system because the new FinCEN rules will no longer accept paper entries of any kind. All data (there will be no forms in the future) must be submitted electronically.

What’s The Next Step?
Casinos that currently complete and submit SAR-C and CTR-C forms manually must begin a migration to an electronic system, as no paper submissions will be accepted after June 30, 2012. Casinos that currently use an electronic software system to submit SAR-C and CTR-C forms must audit their software to ensure it can accommodate all of the new FinCEN changes. New software must be active and able to submit according to the new rules by July 1, 2012, and failure to comply will result in fines.

How Much Time Do I Have?
Not much. The shot clock is really ticking on this one. In fact, some changes go into effect on December 1, 2011, and the rest go into effect on July 1, 2012. In other words, now is the time to audit and upgrade your software and/or FTE staffing levels or to plan your migration from a manual system to an electronic system.

 

For more information about NEWave, visit www.mynewave.com.