Reasons for Not Using the Phase I Exemption Process

23.	Prior to 2006, did your institution ever file a Phase I exemption?
	1.		Yes
	2.		No
	3.		Don't know

24.	In 2006, how important were each of the following factors in your financial institution's decision NOT to exempt a customer eligible for the Phase I exemption?

		Very great importance	Great importance	Moderate importance	Some importance	Little or no importance	Don't know
	a. Difficulty determining exemption eligibility
	b. Difficulty determining if at least 51% of business is owned by a publicly traded company
	c. Lack of clear understanding of the exemption process
	d. Annual reviews are time consuming
	e. Concern that examiners will find that the exemption was not done correctly
	f. It is easier to file CTRs than to go through the exemption process
	g. Other factor- Please describe below.

	h. If you mentioned another factor, please describe it.

25.	For 2006, how many, if any, additional Phase I exemptions might your institution have filed had it chosen to file exemptions for ALL eligible customers?
	1.		None
	2.		A few
	3.		Some
	4.		A lot
	5.		Not able to estimate

26.	In your opinion, can the Phase I exemption process be changed (either by statute, by regulation, or by using more efficient processes) to reduce any burdens associated with it without increasing the risk of not detecting money laundering or other illegal activities?
	1.		Yes, the burden can be reduced without increasing risk
	2.		No (Click to go to Question 30.)
	3.		Not sure

27.	If the following changes could be made without increasing the risk of not detecting money laundering or similar illegal activities, to what extent, if at all, would each of these changes to the Phase I exemption process, reduce the burden of filing exemptions?

		Greatly reduce	Moderately reduce	Reduce little or not at all	Don't know	Not applicable
	a. Modifying the CTR filing rules to eliminate the annual review for all Phase I customers
	b. Modify the CTR rules to eliminate the annual review for the following Phase I customers: government entities based in the United States and U.S. regulated banks and credit unions
	c. Change the annual Phase I review requirement to every 3 years
	d. Have FinCEN publish and maintain an up-to-date list of publicly traded companies that financial institutions can use for Phase I exemption determination
	e. Have FinCEN develop a Web based training manual that would provide instructions on the exemption rules and information on how to conduct the annual (Phase I) review

28.	How much, if at all, would each of the following changes increase the likelihood of your institution using the exemption process?

		Greatly increase	Moderately increase	Increase little or not at all	Don't know	Not applicable
	a. Modifying the CTR filing rules to eliminate the annual review for all Phase I customers
	b. Modifying the CTR rules to eliminate the annual review for the following Phase I customers: government entities based in the United States and U.S. regulated banks and credit unions
	c. Change the annual Phase I review requirement to every 3 years
	d. Have FinCEN publish and maintain an up-to-date list of publicly traded companies that financial institutions can use for Phase I exemption determination
	e. Have FinCEN develop a Web based training manual that would provide instructions on the exemption rules and information on how to conduct the annual (Phase I) review

29.	What else could be done, if anything, to encourage your institution to file Phase I exemptions for all qualifying customers?.

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Full Report: GAO-08-355

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