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Background
Effective April 14 through Sept. 9, 2025, unless renewed, FinCEN’s GTO aims to combat Mexico-based cartels and other illicit actors in certain California and Texas counties along the U.S.-Mexico border. The GTO requires all MSBs located in the specified targeted areas to (i) file Currency Transaction Reports (CTRs) with FinCEN for cash transactions of more than $200 but not more than $10,000; and (ii) verify the identity of persons making such transactions.
The GTO is intended to support the Trump administration’s goal of halting the flow of harmful drugs into the United States by drug cartels and other criminal actors. President Trump issued an executive order (EO) in January mandating the classification of drug cartels and other organizations as Foreign Terrorist Organizations (FTOs) or Specially Designated Global Terrorists (SDGTs). Following the EO, the U.S. Departments of the Treasury and State designated eight organizations as FTOs and SDGTs, including six drug cartels based in Mexico. According to U.S. Treasury Secretary Scott Bessent, the GTO “underscores [the] deep concern with the significant risk to the U.S. financial system of the cartels, drug traffickers, and other criminal actors along the Southwest border.”
Which MSBs Must Comply with the GTO?
MSBs1 located in the seven counties in California and Texas listed below, as denoted by their respective ZIP codes, are required to comply with the GTO (collectively, Covered MSBs):
- Imperial County, California: 92231, 92249, 92281, and 92283;
- San Diego County, California: 91910, 92101, 92113, 92117, 92126, 92154, and 92173;
- Cameron County, Texas: 78520 and 78521;
- El Paso County, Texas: 79901, 79902, 79903, 79905, 79907, and 79935;
- Hidalgo County, Texas: 78503, 78557, 78572, 78577, and 78596;
- Maverick County, Texas: 78852; and
- Webb County, Texas: 78040, 78041, 78043, 78045, and 78046.
MSBs located in these specified targeted areas must transmit the GTO to each of their agents located in these areas.
What Transactions Must Be Reported and How?
Covered MSBs must report each deposit, withdrawal, exchange of currency, or other payment or transfer by, through, or to the Covered MSB that involves a transaction in currency of more than $200 but not more than $10,000. The CTR filing requirement, however, does not apply to transactions with a commercial bank.
The Covered MSB must report the transaction to FinCEN in a CTR through the BSA E-Filing System within 15 days of the date when the transaction occurred and include “MSB0325GTO” in Field 45 in Part IV of the CTR. FinCEN instructs Covered MSBs to continue with the submission notwithstanding the BSA E-Filing System-generated warnings indicating the transaction being reported is below the $10,000 reporting threshold.
The GTO reminds Covered MSBs to comply with the identification requirements set forth at 31 C.F.R. § 1010.312 before concluding a covered transaction, including the requirement that the specific identifying information used in verifying the identity of the customer be recorded on the CTR. The GTO prohibits the mere notation of “known customer” or “bank signature card on file” on the CTR. The GTO exempts Covered MSBs from verifying the identity of armored car service employees.
Although dollar thresholds for Suspicious Activity Report requirements remain the same (i.e., as low as $2,000),2 FinCEN encourages the voluntary filing of SARs where appropriate to report transactions conducted to evade the $200 reporting threshold imposed by the GTO.
Record Retention Requirements
Covered MSBs must retain all CTRs filed in compliance with the GTO and any related records for a period of five years from the last day the GTO is in effect (including any renewals thereof). MSBs must make these records available to FinCEN or any other law enforcement or regulatory agencies upon request.
Noncompliance
Noncompliance with the terms of the GTO may result in civil or criminal fines/penalties for the Covered MSB and any of its officers, directors, employees, and agents.3
Key Takeaways for Covered Businesses
The GTO will directly impact the operations of MSBs that engage in cash-based transactions in the 30 ZIP codes subject to the GTO. MSBs operating in these areas should become familiar with the GTO’s requirements and take steps to ensure the implementation of adequate controls to comply with the GTO’s terms by April 14, 2025. This may involve updating existing risk assessments, reviewing BSA-mandated compliance programs, and training customer-facing and compliance staff.
Covered MSBs should closely monitor regulatory updates from FinCEN, as GTOs historically have been renewed and at times, expanded to address emerging areas of concern.
