What are the two categories of exempt persons for CTRs?

The correct choice identifies the two categories of exempt persons for Currency Transaction Reports (CTRs) as Phase I and Phase II. Understanding these phases is crucial for BSA compliance.

Phase I exempt persons include certain types of entities, such as government agencies, banks, and publicly traded corporations, that are not required to be reported when completing CTRs. These persons have a lower risk profile and are already subjected to regulatory scrutiny, which justifies their exemption from CTR filing.

Phase II exempt persons refer to those non-reporting entities that operate under the criteria established for smaller transactions or specific operational principles. These can include particular types of non-profits or similar entities that meet certain regulatory requirements.

Together, these two categories help financial institutions streamline their reporting processes while maintaining compliance with the Bank Secrecy Act's purpose of preventing money laundering and related financial crimes. Understanding the distinctions within these phases allows compliance specialists to better evaluate customers and determine which transactions require reporting.