If you read our blog, you might be already familiar the Financial Crimes Enforcement Network (FinCen) and some of the tools such as the FBAR (Report Foreign Bank and Financial Accounts when you have an aggregate of $10,000 in foreign accounts), the CTR (Currency Transaction Reports where financial institutions report currency (cash or coin) transactions over $10,000) and the BOI report (discuss extensively in our blog) that is no longer applicable to US entities and US persons.  

We should be familiar with another tool used by FinCen called the Geographic Targeting Order (GTO) to address potential money laundering and other illicit financial activity.

The GTO is a temporary directive issued by FinCEN that requires U.S. financial institutions or businesses in a specific geographic area to collect and report additional information about certain types of transactions that could be linked to criminal activity. The GTO has several characteristics:

  • Targeted Location and Sector: The order applies to a specific geographic area (like a city or group of counties) and may target specific sectors, such as real estate, money services businesses, or jewelry dealers.
  • Transaction Thresholds: The GTO sets minimum dollar thresholds for transactions (e.g., all-cash real estate purchases over $300,000 / e.g.2, CTR over $200 – not the normal $10,000 threshold).
  • Enhanced Reporting Requirements: Covered entities must collect and report detailed information which includes a) the identity of the individuals involved in the transaction, b) the nature and structure of the transaction, c) beneficial ownership if an entity is involved, and d) other data.
  • Time-Limited: GTOs are typically valid for 180 days, though they can be renewed.
  • Enforcement and Penalties: Non-compliance can result in civil or criminal penalties, similar to violations under the Bank Secrecy Act.

The most recent GTOs are:

1. March 2025 – Combating Illicit Financial activities linked to Mexico-based drug cartels along the southwest border of the United States – Threshold of $200 for CTRs. This GTO imposes additional reporting requirements on Money Services Businesses (MSBs) operating in specific ZIP codes within California and Texas border counties.

Note that this temporary directive, with extremely low threshold for CTR, was challenged by the Texas Association for Money Service Businesses. On April 10, 2025, a federal judge issued a temporary restraining order, exempting these businesses from complying with the GTO for 14 days. The plaintiffs argue that the lowered reporting threshold is financially burdensome and could drive customers to unregulated alternatives.

2. April 2025 – Detecting higher risk illicit financial activity in the real estate sector –  In many covered metropolitan areas in several States (CA, CO, NY, TX, etc.) the threshold is $300,000 while the City and County of Baltimore is $50,000. Title insurance companies identify the natural persons behind shell companies used in non-financed purchases of residential real estate.

We want to keep our readers informed on the tools available to government agencies and how to comply to avoid civil or criminal penalties. For further questions about this topic, reach out to our office.