Orders Imposing Additional Reporting and Recordkeeping Requirements, 62914-62916 [2021-24602]
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62914
Federal Register / Vol. 86, No. 217 / Monday, November 15, 2021 / Rules and Regulations
Point ID No.
1
2
3
4
6
(yellow can buoy)
(red bell buoy ‘‘4’’
(yellow can buoy)
(yellow can buoy)
(yellow can buoy)
Latitude
...........................................................................................................................................
with flashing red 4-second light) .......................................................................................
...........................................................................................................................................
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(5) The 0.13 mi2 area near Pillar Point from
the Pillar Point Harbor entrance along a 100yard wide access route to the south along a
bearing of approximately 174° true (161°
magnetic) to the green bell buoy (identified
as ‘‘Buoy 3’’) at 37.48154 N, 122.48156 W
and then along a 100-yard wide access route
northwest along a bearing of approximately
284° true (271° magnetic) to the green gong
buoy (identified as ‘‘Buoy 1’’) at 37.48625 N,
122.50603 W, the southwest boundary of
Zone Five. Zone Five exists only when a
High Surf Advisory has been issued by the
National Weather Service and is in effect for
36.61146
36.62459
36.65168
36.63833
36.61146
BILLING CODE 3510–NK–P
DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
31 CFR Part 1010
RIN 1506–AB56
Orders Imposing Additional Reporting
and Recordkeeping Requirements
Financial Crimes Enforcement
Network (‘‘FinCEN’’), Treasury.
ACTION: Final rule.
AGENCY:
FinCEN is issuing this final
rule to update its regulation to reflect
amendments to the underlying statute
concerning the authority of FinCEN to
issue orders imposing additional
reporting and recordkeeping
requirements on financial institutions
and nonfinancial trades or businesses in
a geographic area.
DATES: Effective Date: November 15,
2021.
FOR FURTHER INFORMATION CONTACT: The
FinCEN Regulatory Support Section at
(800) 767–2825 or electronically at
https://www.fincen.gov/contact.
SUPPLEMENTARY INFORMATION:
SUMMARY:
khammond on DSKJM1Z7X2PROD with RULES
Latitude
(green gong buoy ‘‘1’’ with flashing green 2.5-second light) .........................................................................
(intersection of sight lines due north of green gong buoy ‘‘1’’ and due west of Sail Rock) ..........................
(Sail Rock) ......................................................................................................................................................
(intersection of sight lines due east of green gong buoy ‘‘1’’ and due south of Sail Rock) ..........................
(green gong buoy ‘‘1’’ with flashing green 2.5-second light) .........................................................................
[FR Doc. 2021–24646 Filed 11–12–21; 8:45 am]
I. Background
The Currency and Foreign
Transactions Reporting Act of 1970, as
amended, is the legislative framework
commonly referred to as the Bank
Secrecy Act (BSA).1
1 The BSA is codified at 12 U.S.C. 1829b, 12
U.S.C. 1951–1960, 31 U.S.C. 5311–5314 and 5316–
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In 1988, the Anti-Drug Abuse Act
amended the BSA, codified in relevant
part at 31 U.S.C. 5326, to authorize the
Secretary to impose additional reporting
and recordkeeping requirements on
domestic financial institutions in a
geographic area.2 This grant of authority
to the Secretary did not require the
promulgation of an implementing
regulation, and therefore was, and
continues to be, self-executing.
Nevertheless, in 1989, Treasury
issued a regulation incorporating the
terms of Section 5326 that were in effect
at that time. The regulation mirrored the
statute, with the addition of certain
clarifying and procedural language. See
54 FR 33675 (Aug. 16, 1989) (now
codified at 31 CFR 1010.370).3 For
example, the regulation substituted
‘‘and/or’’ for ‘‘and’’ in the first
paragraph to make clear, consistent with
the statute, that the Secretary could
impose reporting or recordkeeping
requirements upon a finding that such
requirements are necessary, but need
not do both. The regulation also
interpreted the statutory phrase
‘‘geographic area’’ to mean ‘‘any area in
one or more States of the United States,
the District of Columbia, the
Commonwealth of Puerto Rico, the
United States Virgin Islands, Guam, the
Commonwealth of the Northern Mariana
Islands, American Samoa, the Trust
Territory of the Pacific Islands, the
territories and possessions of the United
5336, and notes thereto, with implementing
regulations at 31 CFR chapter X.
2 Public Law 100–69, Title VI, Sec. 6185(c) (Nov.
18, 1988) (codified at 31 U.S.C. 5326).
3 The original regulation was codified at 31 CFR
103.26. In 2011, FinCEN transferred its regulations
from 31 CFR part 103 to 31 CFR chapter X.
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¥121.87696
¥121.89594
¥121.87416
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¥121.87696
San Mateo County and only during
December, January, and February. The
boundary for Zone 5 begins at Point 1 in the
coordinate table listed below and continues
to each subsequent point in numerical order
ending at Point 5.
Point ID No.
1
2
3
4
5
Longitude
37.48625
37.49305
37.49305
37.48625
37.48625
Longitude
¥122.50603
¥122.50603
¥122.50105
¥122.50105
¥122.50603
States, and/or political subdivision or
subdivisions thereof . . . .’’ In addition,
the regulation specified certain
procedures, including that the Secretary
would direct any order to the Chief
Executive Officer of a reporting
financial institution and would
prescribe certain information in the
order.
In subsequent years, Section 5326 was
amended three times in a manner that
expanded the Secretary’s authority. In
1992, the Annunzio-Wylie Anti-Money
Laundering Act amended Section 5326
by, among other things, prohibiting
financial institutions from disclosing
the existence of an order to any person
except as prescribed by the Secretary.4
In 2001, the Uniting and
Strengthening America by Providing
Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001
(‘‘USA PATRIOT Act’’) extensively
amended the BSA, including Section
5326 by adding ‘‘nonfinancial trade or
business’’ after ‘‘financial institution’’
where that phrase appears, thereby
authorizing the Secretary to issue orders
to nonfinancial trades or businesses in
addition to financial institutions. The
Act also amended Section 5326 to
extend the maximum period for an
order (unless renewed) from 60 days to
180 days.5
In 2017, the Countering America’s
Adversaries Through Sanctions Act
further amended Section 5326. This Act
amended Section 5326’s original title
(‘‘Records of certain coin and currency
4 Public Law 102–550, Title XV, Sec. 1562 (Oct.
28, 1992) (now codified at 31 U.S.C. 5326(c)).
5 Public Law 107–56, Title III, Secs. 353(d),
365(c)(2)(B) (Oct. 26, 2001) (now codified at 31
U.S.C. 5326(d)).
E:\FR\FM\15NOR1.SGM
15NOR1
Federal Register / Vol. 86, No. 217 / Monday, November 15, 2021 / Rules and Regulations
transactions’’) by striking out the phrase
‘‘coin and currency’’ before
‘‘transactions.’’ The Act also replaced
the reference to any ‘‘coins,’’
‘‘currency,’’ and ‘‘monetary instrument’’
with the word ‘‘funds,’’ thereby making
clear that a transaction need not involve
only coin, currency, or monetary
instruments to be covered under an
order. The section was also amended to
change the Secretary’s required finding
that an order be ‘‘necessary to carry out
the purposes of this subtitle or to
prevent evasions thereof.’’ In replacing
‘‘and’’ with ‘‘or,’’ this amendment
thereby required one such finding, but
not both.6
The elements of the regulation that
incorporated the terms of the statute in
1989 were not intended to limit the
Secretary’s authority under the statute.
Accordingly, as subsequent
amendments described above have
expanded the Secretary’s authority,
FinCEN has understood the authority to
be coextensive with the statute. To
avoid any potential confusion regarding
FinCEN’s authority under the statute,
this final rule updates the regulation to
reflect the subsequent statutory
amendments. This rule does not
materially amend the other provisions
in the regulation, except for one
amendment to FinCEN’s procedure for
directing orders to chief executive
officers. The rule amends that procedure
to conform it to the amended statute by
adding ‘‘nonfinancial trades or
businesses’’ after ‘‘financial institution’’
in the paragraph where the procedure is
described.
II. Section-by-Section Analysis
khammond on DSKJM1Z7X2PROD with RULES
A. Section 1010.370 Section Title
The section heading is changed from
‘‘Reports of certain domestic coin and
currency transactions’’ to ‘‘Reports of
certain domestic transactions’’ to align
with the statutory Section Title.
B. Section 1010.370(a)
Paragraph (a) has been divided into
three parts: (a)(1), (2), and (3). The
revised paragraph (a)(1) contains the
language in current § 1010.370(a), but
with the following additions and
substitutions of terms that are reflected
in 31 U.S.C. 5326(a): ‘‘chapter or to’’ is
substituted for ‘‘chapter and to’’; ‘‘, or
any domestic nonfinancial trade or
business or group of domestic
nonfinancial trades or businesses,’’ is
added after ‘‘group of domestic financial
institutions’’; ‘‘transfer of funds (as the
Secretary may describe in such order)’’
is substituted for ‘‘transfer of United
6 Public Law 115–44, Title II, Sec. 275(a) (Aug. 2,
2017) (codified at 31 U.S.C. 5326).
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Jkt 256001
States coins or currency (or such other
monetary instruments as the Secretary
may describe in such order)’’; and ‘‘or
group of domestic financial institutions,
or domestic nonfinancial trade or
business or group of domestic
nonfinancial trades or businesses’’ is
added after ‘‘such financial institution’’,
and further adds ‘‘nonfinancial trade or
business’’ after ‘‘financial institution’’ to
clarify FinCEN’s procedure for directing
orders to chief executive officers, if any.
Paragraphs (a)(2) and (3) reflect the
language set forth in 31 U.S.C. 5326(b).
C. Section 1010.370(b)
Paragraph (b) contains the language in
current § 1010.370(b), but substitutes
‘‘funds’’ for ‘‘currency’’ and ‘‘currency
and/or monetary instruments’’ to reflect
the use of the term ‘‘funds’’ throughout
31 U.S.C. 5326.
62915
coextensive with the statute, this update
to the regulation does not alter FinCEN’s
authority and merely provides clarity to
the public.
In conforming the regulation to the
statute, this rule also adds the phrase
‘‘nonfinancial trades or businesses’’
after ‘‘financial institution’’ in the
provision relating to FinCEN’s
procedure for directing orders to chief
executive officers. This update does not
change the procedure specified in the
regulation, but only updates it to reflect
the statute’s inclusion of ‘‘nonfinancial
trades or businesses.’’ FinCEN finds that
public procedure and a delayed
effective date are unnecessary for this
amendment because it amends a rule of
agency procedure, and in any event,
merely conforms that rule to the statute.
IV. Regulatory Flexibility Act
D. Section 1010.370(d)(1)
Paragraph (d)(1) contains the language
in current § 1010.370(d)(1), but replaces
‘‘60 days’’ with ‘‘180 days,’’ to reflect
the language in 31 U.S.C. 5326(d).
Because no notice of proposed
rulemaking is required, the provisions
of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.) do not apply.
E. Section 1010.370(e)
New paragraph (e) reflects the
nondisclosure language that is set forth
in 31 U.S.C. 5326(c).
This final rule is not a significant
regulatory action under section 3.f. of
Executive Order 12866.
III. Administrative Procedure Act
The Administrative Procedure Act
(APA) (codified in relevant part at 5
U.S.C. 553), generally requires that
agencies give interested persons an
opportunity to participate in a
rulemaking by the submission of
comments, except when, among other
reasons, the agency is amending its own
‘‘rules of agency organization,
procedure, or practice’’ or the agency
finds good cause that notice and public
procedure are ‘‘impracticable,
unnecessary, or contrary to the public
interest.’’ Likewise, the APA requires a
delayed effective date for a rule except
under certain conditions, including
rules of agency procedure, and as
provided by the agency for good cause
found and published with the rule.
FinCEN finds that public procedure is
unnecessary, as this final rule merely
updates the regulation to reflect the
terms set forth in the underlying statute
in order to avoid any potential
confusion regarding FinCEN’s statutory
authority under Section 5326. Because
the final rule conforms the regulation to
the statute and reflects no discretionary
or substantive determination, public
procedure would not inform this rule.
For similar reasons, FinCEN also finds
that a delayed effective date is
unnecessary. Because FinCEN
understands its authority to be
The collection of information
contained in this rule has been reviewed
and approved by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act of 1995
(44 U.S.C. 3507(d)), and has been
assigned OMB Control Number 1506–
0056. An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid OMB control
number.
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V. Executive Order 12866
VI. Paperwork Reduction Act
List of Subjects in 31 CFR Part 1010
Administrative practice and
procedure, Banks, Banking, Currency,
Foreign banking, Foreign currencies,
Investigations, Penalties, Reporting and
recordkeeping requirements, Terrorism.
Authority and Issuance
For the reasons set forth in the
preamble, part 1010 of chapter X of title
31 of the Code of Federal Regulations
are amended as follows:
PART 1010—GENERAL PROVISIONS
1. The authority citation for part 1010
is revised to read:
■
Authority: 12 U.S.C. 1829b and 1951–
1960; 31 U.S.C. 5311–5314 and 5316–5336;
title III, sec. 314, Pub. Law 107–56, 115 Stat.
307; sec. 701, Pub. L. 114–74, 129 Stat. 599.
2. Section 1010.370 is amended by
revising the section heading and
■
E:\FR\FM\15NOR1.SGM
15NOR1
62916
Federal Register / Vol. 86, No. 217 / Monday, November 15, 2021 / Rules and Regulations
paragraphs (a), (b), and (d)(1) and
adding paragraph (e) to read as follows:
khammond on DSKJM1Z7X2PROD with RULES
§ 1010.370 Reports of certain domestic
transactions.
(a)(1) If the Secretary of the Treasury
finds, upon the Secretary’s own
initiative or at the request of an
appropriate Federal or State law
enforcement official, that reasonable
grounds exist for concluding that
additional recordkeeping and/or
reporting requirements are necessary to
carry out the purposes of this chapter or
to prevent persons from evading the
reporting/recordkeeping requirements of
this chapter, the Secretary may issue an
order requiring any domestic financial
institution or group of domestic
financial institutions, or any domestic
nonfinancial trade or business or group
of domestic nonfinancial trades or
businesses, in a geographic area, and
any other person participating in the
type of transaction, to file a report in the
manner and to the extent specified in
such order. The order shall contain such
information as the Secretary may
describe concerning any transaction in
which such financial institution or
group of domestic financial institutions,
or domestic nonfinancial trade or
business or group of domestic
nonfinancial trades or businesses is
involved for the payment, receipt, or
transfer of funds (as the Secretary may
describe in such order) the total
amounts or denominations of which are
equal to or greater than an amount
which the Secretary may prescribe.
(2) The Secretary may, by regulation
or order, require any depository
institution (as defined in section 3(c) of
the Federal Deposit Insurance Act)—
(i) To request any financial institution
or nonfinancial trade or business (other
than a depository institution) which
engages in any reportable transaction
with the depository institution to
provide the depository institution with
a copy of any report filed by the
financial institution or nonfinancial
trade or business under the Title 31
provisions of the Bank Secrecy Act with
respect to any prior transaction
(between such financial institution or
nonfinancial trade or business and any
other person) which involved any
portion of the funds which are involved
in the reportable transaction with the
depository institution; and
(ii) If no copy of any report described
in paragraph (a)(2)(i) of this section is
received by the depository institution in
connection with any reportable
transaction to which paragraph (a)(2)(i)
applies, to submit (in addition to any
report required under this subchapter
with respect to the reportable
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Jkt 256001
transaction) a written notice to the
Secretary that the financial institution
or nonfinancial trade or business failed
to provide any copy of such report.
(3) For purposes of paragraph (a)(2) of
this section, the term reportable
transaction means any transaction
involving funds (as the Secretary may
describe in the regulation or order) the
total amounts or denominations of
which are equal to or greater than an
amount which the Secretary may
prescribe.
(b) An order issued under paragraph
(a) of this section shall be directed to the
Chief Executive Officer of the financial
institution or nonfinancial trade or
business and shall designate one or
more of the following categories of
information to be reported: Each
deposit, withdrawal, exchange of funds
or other payment or transfer, by,
through or to such financial institution
specified in the order, which involves
all or any class of transactions in funds
equal to or exceeding an amount
specified in the order.
*
*
*
*
*
(d)(1) No order issued pursuant to
paragraph (a) of this section shall
prescribe a reporting period of more
than 180 days unless renewed pursuant
to the requirements of paragraph (a).
*
*
*
*
*
(e) No financial institution or
nonfinancial trade or business or officer,
director, employee, or agent of a
financial institution or nonfinancial
trade or business subject to an order
under this section may disclose the
existence of, or terms of, the order to
any person except as prescribed by the
Secretary.
Dated: November 5, 2021.
Himamauli Das,
Acting Director, Financial Crimes
Enforcement Network.
[FR Doc. 2021–24602 Filed 11–12–21; 8:45 am]
BILLING CODE 4810–02–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 100
[Docket No. USCG–2021–0772]
Special Local Regulation: Palm Beach
Holiday Boat Parade
Coast Guard, DHS.
ACTION: Notice of enforcement of
regulation.
AGENCY:
The Coast Guard will enforce
a special local regulation on December
SUMMARY:
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4, 2021 to provide for the safety and
security of navigable waterways during
the Palm Beach Holiday Boat Parade.
During the enforcement period, all nonparticipant persons and vessels will be
prohibited from entering, transiting,
anchoring, or remaining within the
regulated area unless authorized by the
Captain of the Port Miami or a
designated representative. The operator
of any vessel in the regulated area must
comply with instructions from the Coast
Guard or designated representative.
DATES: The regulation in 33 CFR
100.702, Table 1 to § 100.702, Line 9,
will be enforced on December 4, 2021,
from 5:30 p.m. through 8:30 p.m.
FOR FURTHER INFORMATION CONTACT: If
you have questions about this notice of
enforcement, call or email Mr. Omar
Beceiro, Sector Miami Waterways
Management Division, U.S. Coast
Guard: Telephone: 305–535–4317,
Email: Omar.Beceiro@uscg.mil.
SUPPLEMENTARY INFORMATION: The Coast
Guard will enforce a special local
regulation for the Palm Beach Holiday
Boat Parade published in 33 CFR
100.702, Table 1 to § 100.702, Line 9, on
December 4, 2021 from 5:30 p.m.
through 8:30 p.m. This action is being
taken to provide for the safety and
security of navigable waterways during
this one-day event. The regulations for
marine events within the Seventh Coast
Guard District can be found in
§ 100.702(c) covers this event and Table
1 to § 100.702, Line 9, specifies the
location of the special local regulation
for the Palm Beach Holiday Boat Parade,
which encompasses a moving buffer
zone of 50 yards around the parade as
it travels along the Intracoastal
Waterway in Palm Beach, FL. Only
event sponsor designated participants
and official patrol vessels will be
allowed to enter the regulated area.
Spectators may contact the Coast Guard
Patrol Commander to request
permission to pass through the
regulated area. If permission is granted,
spectators must pass directly through
the regulated area at a safe speed
without loitering.
In addition to this notice of
enforcement in the Federal Register, the
Coast Guard will inform the public
through Local Notice to Mariners and
marine information broadcasts at least
24 hours in advance of the enforcement
of the special local regulation.
Dated: October 27, 2021.
J.F. Burdian,
Captain, U.S. Coast Guard, Captain of the
Port Miami.
[FR Doc. 2021–24906 Filed 11–12–21; 8:45 am]
BILLING CODE 9110–04–P
E:\FR\FM\15NOR1.SGM
15NOR1
]]>Agencies
[Federal Register Volume 86, Number 217 (Monday, November 15, 2021)]
[Rules and Regulations]
[Pages 62914-62916]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-24602]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
31 CFR Part 1010
RIN 1506-AB56
Orders Imposing Additional Reporting and Recordkeeping
Requirements
AGENCY: Financial Crimes Enforcement Network (``FinCEN''), Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: FinCEN is issuing this final rule to update its regulation to
reflect amendments to the underlying statute concerning the authority
of FinCEN to issue orders imposing additional reporting and
recordkeeping requirements on financial institutions and nonfinancial
trades or businesses in a geographic area.
DATES: Effective Date: November 15, 2021.
FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section
at (800) 767-2825 or electronically at https://www.fincen.gov/contact.
SUPPLEMENTARY INFORMATION:
I. Background
The Currency and Foreign Transactions Reporting Act of 1970, as
amended, is the legislative framework commonly referred to as the Bank
Secrecy Act (BSA).\1\
---------------------------------------------------------------------------
\1\ The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1960,
31 U.S.C. 5311-5314 and 5316-5336, and notes thereto, with
implementing regulations at 31 CFR chapter X.
---------------------------------------------------------------------------
In 1988, the Anti-Drug Abuse Act amended the BSA, codified in
relevant part at 31 U.S.C. 5326, to authorize the Secretary to impose
additional reporting and recordkeeping requirements on domestic
financial institutions in a geographic area.\2\ This grant of authority
to the Secretary did not require the promulgation of an implementing
regulation, and therefore was, and continues to be, self-executing.
---------------------------------------------------------------------------
\2\ Public Law 100-69, Title VI, Sec. 6185(c) (Nov. 18, 1988)
(codified at 31 U.S.C. 5326).
---------------------------------------------------------------------------
Nevertheless, in 1989, Treasury issued a regulation incorporating
the terms of Section 5326 that were in effect at that time. The
regulation mirrored the statute, with the addition of certain
clarifying and procedural language. See 54 FR 33675 (Aug. 16, 1989)
(now codified at 31 CFR 1010.370).\3\ For example, the regulation
substituted ``and/or'' for ``and'' in the first paragraph to make
clear, consistent with the statute, that the Secretary could impose
reporting or recordkeeping requirements upon a finding that such
requirements are necessary, but need not do both. The regulation also
interpreted the statutory phrase ``geographic area'' to mean ``any area
in one or more States of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, the United States Virgin Islands,
Guam, the Commonwealth of the Northern Mariana Islands, American Samoa,
the Trust Territory of the Pacific Islands, the territories and
possessions of the United States, and/or political subdivision or
subdivisions thereof . . . .'' In addition, the regulation specified
certain procedures, including that the Secretary would direct any order
to the Chief Executive Officer of a reporting financial institution and
would prescribe certain information in the order.
---------------------------------------------------------------------------
\3\ The original regulation was codified at 31 CFR 103.26. In
2011, FinCEN transferred its regulations from 31 CFR part 103 to 31
CFR chapter X.
---------------------------------------------------------------------------
In subsequent years, Section 5326 was amended three times in a
manner that expanded the Secretary's authority. In 1992, the Annunzio-
Wylie Anti-Money Laundering Act amended Section 5326 by, among other
things, prohibiting financial institutions from disclosing the
existence of an order to any person except as prescribed by the
Secretary.\4\
---------------------------------------------------------------------------
\4\ Public Law 102-550, Title XV, Sec. 1562 (Oct. 28, 1992) (now
codified at 31 U.S.C. 5326(c)).
---------------------------------------------------------------------------
In 2001, the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (``USA PATRIOT Act'') extensively amended the BSA, including
Section 5326 by adding ``nonfinancial trade or business'' after
``financial institution'' where that phrase appears, thereby
authorizing the Secretary to issue orders to nonfinancial trades or
businesses in addition to financial institutions. The Act also amended
Section 5326 to extend the maximum period for an order (unless renewed)
from 60 days to 180 days.\5\
---------------------------------------------------------------------------
\5\ Public Law 107-56, Title III, Secs. 353(d), 365(c)(2)(B)
(Oct. 26, 2001) (now codified at 31 U.S.C. 5326(d)).
---------------------------------------------------------------------------
In 2017, the Countering America's Adversaries Through Sanctions Act
further amended Section 5326. This Act amended Section 5326's original
title (``Records of certain coin and currency
[[Page 62915]]
transactions'') by striking out the phrase ``coin and currency'' before
``transactions.'' The Act also replaced the reference to any ``coins,''
``currency,'' and ``monetary instrument'' with the word ``funds,''
thereby making clear that a transaction need not involve only coin,
currency, or monetary instruments to be covered under an order. The
section was also amended to change the Secretary's required finding
that an order be ``necessary to carry out the purposes of this subtitle
or to prevent evasions thereof.'' In replacing ``and'' with ``or,''
this amendment thereby required one such finding, but not both.\6\
---------------------------------------------------------------------------
\6\ Public Law 115-44, Title II, Sec. 275(a) (Aug. 2, 2017)
(codified at 31 U.S.C. 5326).
---------------------------------------------------------------------------
The elements of the regulation that incorporated the terms of the
statute in 1989 were not intended to limit the Secretary's authority
under the statute. Accordingly, as subsequent amendments described
above have expanded the Secretary's authority, FinCEN has understood
the authority to be coextensive with the statute. To avoid any
potential confusion regarding FinCEN's authority under the statute,
this final rule updates the regulation to reflect the subsequent
statutory amendments. This rule does not materially amend the other
provisions in the regulation, except for one amendment to FinCEN's
procedure for directing orders to chief executive officers. The rule
amends that procedure to conform it to the amended statute by adding
``nonfinancial trades or businesses'' after ``financial institution''
in the paragraph where the procedure is described.
II. Section-by-Section Analysis
A. Section 1010.370 Section Title
The section heading is changed from ``Reports of certain domestic
coin and currency transactions'' to ``Reports of certain domestic
transactions'' to align with the statutory Section Title.
B. Section 1010.370(a)
Paragraph (a) has been divided into three parts: (a)(1), (2), and
(3). The revised paragraph (a)(1) contains the language in current
Sec. 1010.370(a), but with the following additions and substitutions
of terms that are reflected in 31 U.S.C. 5326(a): ``chapter or to'' is
substituted for ``chapter and to''; ``, or any domestic nonfinancial
trade or business or group of domestic nonfinancial trades or
businesses,'' is added after ``group of domestic financial
institutions''; ``transfer of funds (as the Secretary may describe in
such order)'' is substituted for ``transfer of United States coins or
currency (or such other monetary instruments as the Secretary may
describe in such order)''; and ``or group of domestic financial
institutions, or domestic nonfinancial trade or business or group of
domestic nonfinancial trades or businesses'' is added after ``such
financial institution'', and further adds ``nonfinancial trade or
business'' after ``financial institution'' to clarify FinCEN's
procedure for directing orders to chief executive officers, if any.
Paragraphs (a)(2) and (3) reflect the language set forth in 31
U.S.C. 5326(b).
C. Section 1010.370(b)
Paragraph (b) contains the language in current Sec. 1010.370(b),
but substitutes ``funds'' for ``currency'' and ``currency and/or
monetary instruments'' to reflect the use of the term ``funds''
throughout 31 U.S.C. 5326.
D. Section 1010.370(d)(1)
Paragraph (d)(1) contains the language in current Sec.
1010.370(d)(1), but replaces ``60 days'' with ``180 days,'' to reflect
the language in 31 U.S.C. 5326(d).
E. Section 1010.370(e)
New paragraph (e) reflects the nondisclosure language that is set
forth in 31 U.S.C. 5326(c).
III. Administrative Procedure Act
The Administrative Procedure Act (APA) (codified in relevant part
at 5 U.S.C. 553), generally requires that agencies give interested
persons an opportunity to participate in a rulemaking by the submission
of comments, except when, among other reasons, the agency is amending
its own ``rules of agency organization, procedure, or practice'' or the
agency finds good cause that notice and public procedure are
``impracticable, unnecessary, or contrary to the public interest.''
Likewise, the APA requires a delayed effective date for a rule except
under certain conditions, including rules of agency procedure, and as
provided by the agency for good cause found and published with the
rule.
FinCEN finds that public procedure is unnecessary, as this final
rule merely updates the regulation to reflect the terms set forth in
the underlying statute in order to avoid any potential confusion
regarding FinCEN's statutory authority under Section 5326. Because the
final rule conforms the regulation to the statute and reflects no
discretionary or substantive determination, public procedure would not
inform this rule. For similar reasons, FinCEN also finds that a delayed
effective date is unnecessary. Because FinCEN understands its authority
to be coextensive with the statute, this update to the regulation does
not alter FinCEN's authority and merely provides clarity to the public.
In conforming the regulation to the statute, this rule also adds
the phrase ``nonfinancial trades or businesses'' after ``financial
institution'' in the provision relating to FinCEN's procedure for
directing orders to chief executive officers. This update does not
change the procedure specified in the regulation, but only updates it
to reflect the statute's inclusion of ``nonfinancial trades or
businesses.'' FinCEN finds that public procedure and a delayed
effective date are unnecessary for this amendment because it amends a
rule of agency procedure, and in any event, merely conforms that rule
to the statute.
IV. Regulatory Flexibility Act
Because no notice of proposed rulemaking is required, the
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do
not apply.
V. Executive Order 12866
This final rule is not a significant regulatory action under
section 3.f. of Executive Order 12866.
VI. Paperwork Reduction Act
The collection of information contained in this rule has been
reviewed and approved by the Office of Management and Budget (OMB)
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), and has
been assigned OMB Control Number 1506-0056. An agency may not conduct
or sponsor, and a person is not required to respond to, a collection of
information unless it displays a valid OMB control number.
List of Subjects in 31 CFR Part 1010
Administrative practice and procedure, Banks, Banking, Currency,
Foreign banking, Foreign currencies, Investigations, Penalties,
Reporting and recordkeeping requirements, Terrorism.
Authority and Issuance
For the reasons set forth in the preamble, part 1010 of chapter X
of title 31 of the Code of Federal Regulations are amended as follows:
PART 1010--GENERAL PROVISIONS
0
1. The authority citation for part 1010 is revised to read:
Authority: 12 U.S.C. 1829b and 1951-1960; 31 U.S.C. 5311-5314
and 5316-5336; title III, sec. 314, Pub. Law 107-56, 115 Stat. 307;
sec. 701, Pub. L. 114-74, 129 Stat. 599.
0
2. Section 1010.370 is amended by revising the section heading and
[[Page 62916]]
paragraphs (a), (b), and (d)(1) and adding paragraph (e) to read as
follows:
Sec. 1010.370 Reports of certain domestic transactions.
(a)(1) If the Secretary of the Treasury finds, upon the Secretary's
own initiative or at the request of an appropriate Federal or State law
enforcement official, that reasonable grounds exist for concluding that
additional recordkeeping and/or reporting requirements are necessary to
carry out the purposes of this chapter or to prevent persons from
evading the reporting/recordkeeping requirements of this chapter, the
Secretary may issue an order requiring any domestic financial
institution or group of domestic financial institutions, or any
domestic nonfinancial trade or business or group of domestic
nonfinancial trades or businesses, in a geographic area, and any other
person participating in the type of transaction, to file a report in
the manner and to the extent specified in such order. The order shall
contain such information as the Secretary may describe concerning any
transaction in which such financial institution or group of domestic
financial institutions, or domestic nonfinancial trade or business or
group of domestic nonfinancial trades or businesses is involved for the
payment, receipt, or transfer of funds (as the Secretary may describe
in such order) the total amounts or denominations of which are equal to
or greater than an amount which the Secretary may prescribe.
(2) The Secretary may, by regulation or order, require any
depository institution (as defined in section 3(c) of the Federal
Deposit Insurance Act)--
(i) To request any financial institution or nonfinancial trade or
business (other than a depository institution) which engages in any
reportable transaction with the depository institution to provide the
depository institution with a copy of any report filed by the financial
institution or nonfinancial trade or business under the Title 31
provisions of the Bank Secrecy Act with respect to any prior
transaction (between such financial institution or nonfinancial trade
or business and any other person) which involved any portion of the
funds which are involved in the reportable transaction with the
depository institution; and
(ii) If no copy of any report described in paragraph (a)(2)(i) of
this section is received by the depository institution in connection
with any reportable transaction to which paragraph (a)(2)(i) applies,
to submit (in addition to any report required under this subchapter
with respect to the reportable transaction) a written notice to the
Secretary that the financial institution or nonfinancial trade or
business failed to provide any copy of such report.
(3) For purposes of paragraph (a)(2) of this section, the term
reportable transaction means any transaction involving funds (as the
Secretary may describe in the regulation or order) the total amounts or
denominations of which are equal to or greater than an amount which the
Secretary may prescribe.
(b) An order issued under paragraph (a) of this section shall be
directed to the Chief Executive Officer of the financial institution or
nonfinancial trade or business and shall designate one or more of the
following categories of information to be reported: Each deposit,
withdrawal, exchange of funds or other payment or transfer, by, through
or to such financial institution specified in the order, which involves
all or any class of transactions in funds equal to or exceeding an
amount specified in the order.
* * * * *
(d)(1) No order issued pursuant to paragraph (a) of this section
shall prescribe a reporting period of more than 180 days unless renewed
pursuant to the requirements of paragraph (a).
* * * * *
(e) No financial institution or nonfinancial trade or business or
officer, director, employee, or agent of a financial institution or
nonfinancial trade or business subject to an order under this section
may disclose the existence of, or terms of, the order to any person
except as prescribed by the Secretary.
Dated: November 5, 2021.
Himamauli Das,
Acting Director, Financial Crimes Enforcement Network.
[FR Doc. 2021-24602 Filed 11-12-21; 8:45 am]
BILLING CODE 4810-02-P
