On March 11, 2025, the United States Department of the Treasury’s (Treasury) Financial Crimes Enforcement Network (FinCEN) issued a Geographic Targeting Order (GTO) requiring certain money service businesses (MSBs) in California and Texas located near the United States–Mexico border (Affected MSBs) to (i) file Currency Transaction Reports (CTRs) with FinCEN in connection with cash transactions between $200 and $10,000 and (ii) verify the identity of persons making such cash transactions.
The GTO applies to MSBs as defined by federal law including money remitters, check cashers, money order sellers, currency exchangers, and prepaid access providers, and could apply to certain e-commerce businesses and those that facilitate foreign exchange transactions.
The GTO takes effect 30 days after it is published in the Federal Register and will remain in effect for 180 days unless renewed. As of March 12, 2025, it has not been published in the Federal Register, but we anticipate it will be published soon.
Beginning with a day-one Executive Order and with subsequent actions, the Trump Administration has articulated its policy goal of the “total elimination” of cartels and transnational criminal organizations (TCOs), and agency actions demonstrate a commitment to do so. For example, the United States Department of Justice has reassigned personnel and updated certain policies and procedures to swiftly commit investigative and prosecutorial resources to achieve the policy goal. Further, the GTO follows the Secretary of State’s February 20, 2025 designation of eight Latin American organizations as Foreign Terrorist Organizations under Section 219 of the Immigration and Nationality Act and Treasury’s designations of the same entities as Specially Designated Global Terrorists under Executive Order 13224.
Further, in a press release accompanying the GTO, FinCEN made clear that the GTO is part of a whole-of-government approach to support the Trump Administration’s priorities. Therefore, the GTO represents another affirmative step taken by FinCEN to utilize available tools to gain intelligence about financial transactions within specific zip codes and combat illicit activity, including acts involving cartels and TCOs, that may be driving them.
The GTO’s scope
The GTO does not alter any existing obligations of Affected MSBs; rather, it adds to them. Affected MSBs are those entities meeting the federal definition of “money services business” and are located in 30 ZIP codes in California and Texas near the United States–Mexico border. (Note that the 30 ZIP codes do not fully encompass all towns in California and Texas near the United States–Mexico border.)
- Imperial County, California: 92231, 92249, 92281, 92283
- San Diego County, California: 91910, 92101, 92113, 92117, 92126, 92154, 92173
- Cameron County, Texas: 78520, 78521
- El Paso County, Texas: 79901, 79902, 79903, 79905, 79907, 79935
- Hidalgo County, Texas: 78503, 78557, 78572, 78577, 78596
- Maverick County, Texas: 78852
- Webb County, Texas: 78040, 78041, 78043, 78045, 78046
The GTO’s requirements, which place new obligations on Affected MSBs
The GTO requires Affected MSBs to:
- File a CTR through the Bank Secrecy Act (BSA) E-Filing System for “each deposit, withdrawal, exchange of currency, or other payment or transfer, by, through, or to the [Affected MSB] which involves a transaction in currency, of more than $200 but not more than $10,000” “within 15 days following the day” on which the transaction occurred and include “MSB0325GTO” in Field 45 of the CTR.
- As a practical matter, when an Affected MSB files a CTR, the Affected MSB may receive a notice that the transaction being reported was less than $10,000; however, the GTO directs Affected MSBs to “ignore the warning and continue with the submission.”
- The GTO excepts Affected MSBs from filing CTRs for transactions between themselves and commercial banks that would otherwise be required by the GTO.
- Comply with the identification requirements in CFR 1010.312 and accordingly “verify and record the name and address of the individual presenting [the] transaction” and “record the identity, account number, and the social security or taxpayer identification number, if any, of any person or entity on whose behalf such transaction is to be effected.”
- The GTO excepts Affected MSBs from verifying the identities of armored car service employees.
- It is not acceptable for an Affected MSB to note “known customer” or “bank signature card on file” on the CTR to indicate the identifying information an Affected MSB used to verify the customer’s identity.
While not a requirement, the GTO “encourage[s]” Affected MSBs to voluntarily file Suspicious Activity Reports (SARs) to report transactions believed to be structured to evade the $200 reporting threshold articulated in the GTO.
Additional considerations
- In early 2023, FinCEN issued an alert about the significant increase of illicit actors seeking to profit by smuggling migrants across the United States’ Southwest border. The alert explained that the conduct was “driven by a variety of factors, including oppressive and corrupt regimes in Venezuela, Cuba, and Nicaragua,” and that the problem was exacerbated by, among other things, extremely harsh terrains and travel conditions and the threat of violence posed by TCOs or “cartels controlling territory among smuggling routes across Central America and Mexico.” Human trafficking and/or human smuggling crimes typically involve the transmission of small amounts of funds – according to FinCEN, between hundreds of dollars to over $10,000 – paid by a migrant individual or their family members to the smuggler, often in cash or wire transfer.
Key takeaways for Affected MSBs and other financial institutions
- The GTO significantly expands Affected MSBs’ screening, information collecting, reporting, and filing obligations. Affected MSBs are therefore encouraged to review and update their compliance policies and procedures to ensure that they can comply with the GTO. Affected MSBs are also encouraged to consider what additional resources are necessary to ensure full compliance and internal tracking of reporting, recognizing that this GTO may be the first of many that could further stretch their compliance operations.
- With the renewed enforcement focus on cartels and TCOs, Affected MSBs could be subject to more frequent grand jury subpoenas or other law enforcement requests related to transactions reported in CTRs and/or SARs pursuant to the GTO, which could further strain existing resources. Affected MSBs are therefore encouraged to review their compliance policies and procedures and consider whether additional resources, procedures, or controls changes would be necessary to respond to subpoenas and other requests, as well as engage with law enforcement on a case-by-case basis. Affected MSBs are also encouraged to review SAR-filing procedures, determine when and whether it is appropriate to file a voluntary SAR pursuant to the GTO, and update procedures accordingly.
- Banks, credit unions, and others who have Affected MSBs as customers, and/or unwittingly allow so-called “funnel accounts,” which are, according to FinCEN, “[a]n individual or business account in one geographic area that receives multiple cash deposits, often in amounts below the cash reporting threshold, and from which the funds are withdrawn in a different geographic area with little time elapsing between the deposits and withdrawals,” are encouraged to review the GTO and incorporate risk-based processes within their anti-money laundering programs to account for the additional requirements and related risks when clearing payments for the Affected MSBs.
- A significant decrease in CTR threshold and the related CIP documentation requirements will likely make Affected MSBs less attractive to TCOs, cartels, human smugglers, and/or money launderers as a means to move money. Accordingly, in the near term and while the GTO is in effect, money directed to support and carry out trafficking of fentanyl, human smuggling, or other cartel activity, as well as efforts to launder proceeds from such activities, may be moved to other regulated or unregulated entities, such as unregistered and/or unlicensed cryptocurrency exchanges, direct delivery bulk cash transactions, or informal, trade-based money laundering practices. Businesses that operate in these spheres may want to evaluate their own money laundering controls in light of this potential shift.
- The new, notably low threshold of $200 could result in a significant number of additional CTRs submitted within the FinCEN system. Consequently, whether the GTO is intended to and/or effective at eliminating MSBs as a preferred means by which TCOs and cartels can move money and engage in human smuggling or trafficking is an open question.
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