Bank Secrecy Act Regulations-Reports of Foreign Financial Accounts Civil Penalties, 72844-72845 [2021-27623]

Agencies

• DEPARTMENT OF THE TREASURY
• Financial Crimes Enforcement Network

[Federal Register Volume 86, Number 244 (Thursday, December 23, 2021)]
[Rules and Regulations]
[Pages 72844-72845]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-27623]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 1010

RIN 1506-AB53


Bank Secrecy Act Regulations--Reports of Foreign Financial 
Accounts Civil Penalties

AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.

ACTION: Final rule.

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SUMMARY: FinCEN is amending the Bank Secrecy Act civil penalty 
regulations relating to the requirements for reporting foreign 
financial accounts and for reporting transactions with foreign 
financial agencies. The amendments remove civil penalty language, which 
was made obsolete with the enactment of the American Jobs Creation Act 
of 2004. The American Jobs Creation Act of 2004 revised the manner for 
computing the penalty, including providing a greater maximum penalty 
for willful violations than was previously authorized.

DATES: Effective Date: The final rule is effective December 23, 2021.

FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section 
at 1-800-767-2825 or electronically at https://fincen.gov/contact.

SUPPLEMENTARY INFORMATION:

I. Background

    The purposes of the Bank Secrecy Act (BSA), Titles I and II of 
Public Law 91-508, as amended, codified at 12 U.S.C. 1829b, 12 U.S.C. 
1951-1959, and 31 U.S.C. 5311-5314 and 5316-5336, include, among other 
things, requiring certain reports or records that are highly useful in 
criminal, tax, or regulatory investigations. The regulations 
implementing the BSA appear at 31 CFR chapter X. The Secretary's 
authority to administer the BSA has been delegated to the Director of 
FinCEN.\1\
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    \1\ See Treasury Order 180-01 (Jan. 14, 2020).
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    Pursuant to 31 U.S.C. 5314, the Secretary is authorized to require 
any ``resident or citizen of the United States or a person in, and 
doing business in, the United States, to . . . keep records and file 
reports, when the resident, citizen, or person makes a transaction or 
maintains a relation for any person with a foreign financial agency.'' 
The regulations implementing 31 U.S.C. 5314 appear at 31 CFR 1010.350, 
1010.360, and 1010.420. Section 1010.350 sets forth the requirements 
for filing a Foreign Bank Account Report (FBAR), which generally 
require each U.S. person having a financial interest in, or signature 
or other authority over, a bank, securities, or other financial account 
in a foreign country to report such relationship for each year in which 
such relationship exists. Section 1010.420 outlines the recordkeeping 
requirements associated with foreign financial accounts required to be 
reported under Section 1010.350. Section 1010.360, commonly referred to 
as the report of foreign financial agency transactions, provides that 
FinCEN may promulgate regulations requiring specified financial 
institutions to file reports of certain transactions with designated 
foreign financial agencies.

II. Civil Monetary Penalty

    Section 5321 of Title 31 of the U.S. Code describes civil monetary 
penalties for violations of the BSA. In October 1986, Congress amended 
31 U.S.C. 5321 to add a provision--31 U.S.C. 5321(a)(5)--authorizing a 
civil monetary penalty for willful violations of section 5314. (Pub. L. 
99-570, section 1357(c), October 26, 1986) (``the Anti-Drug Abuse Act 
of 1986'' or the ``1986 Act'')). The terms of the 1986 amendment were 
incorporated into the BSA implementing regulations at 31 CFR 
1010.820(g).\2\
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    \2\ 52 FR 11436, April 8, 1987.
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    The American Jobs Creation Act of 2004 amended 31 U.S.C. 
5321(a)(5). The amendments revised the manner in which the penalty is 
calculated, including an increase to the maximum amount that could be 
assessed for willful violations of section 5314.

III. Section by Section Analysis

    Section 821 of the American Jobs Creation Act of 2004 is self-
executing, and the penalty provisions apply to violations occurring 
after the date of its enactment. For those reasons, the provisions in 
31 CFR 1010.820(g) are obsolete and superseded by statute. FinCEN is 
therefore rescinding 31 CFR 1010.820(g). The remaining paragraphs (h) 
and (i) in Sec.  1010.820 are redesignated as paragraphs (g) and (h).

IV. Administrative Procedure Act and Effective Date

    Under 5 U.S.C. 553(b)(3)(B) of the Administrative Procedure Act 
(APA), an agency may, for good cause, find (and incorporate the finding 
and a brief statement of reasons therefore in the rules issued) that 
notice and public procedure thereon are impracticable, unnecessary, or 
contrary to the public interest. The final rule rescinds civil penalty 
regulations at 31 CFR 1010.820(g)(1) and (2) because they have been 
rendered obsolete with the 2004 amendments to 31 U.S.C. 5321(a)(5). The 
agency has therefore determined that publishing a notice of proposed 
rulemaking and providing opportunity for public comment is unnecessary. 
This amendment to the regulations merely conforms the regulations to 
the current statute.
    Under 5 U.S.C. 553(d)(3) of the APA, the required publication or 
service of a substantive rule shall be made not less than 30 days 
before its effective date, except, among other things, as provided by 
the agency for good cause found and published with the rule. FinCEN 
finds that there is good cause for shortened notice since 31 CFR 
1010.820(g) is obsolete and the revisions made by this final rule are 
non-substantive and technical. This final rule takes effect on December 
23, 2021.

V. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) does 
not apply to a rulemaking where a general notice of proposed rulemaking 
is not required. As noted above, FinCEN has determined that it is 
unnecessary to publish a notice of proposed rulemaking for this final 
rule. Accordingly, the RFA's requirements relating to an initial and 
final regulatory flexibility analysis do not apply.

VI. Executive Order 13563 and 12866

    Executive Orders 13563 and 12866 direct agencies to assess costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. 
FinCEN

[[Page 72845]]

has determined that Executive Orders 13563 and 12866 do not apply to 
this final rulemaking.

VII. Paperwork Reduction Act (PRA) Notices

    There is no collection of information requirement in this final 
rule.

VIII. Unfunded Mandates Act of 1995 Statement

    Section 202 of the Unfunded Mandates Reform Act of 1995, 12 U.S.C. 
1532, Public Law 104-4 (March 22, 1995) (Unfunded Mandates Act), 
requires that an agency prepare a budgetary impact statement before 
promulgating a rule that may result in expenditure by state, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. If a budgetary impact statement is 
required, Section 202 of the Unfunded Mandates Act also requires an 
agency to identify and consider a reasonable number of regulatory 
alternatives before promulgating a rule. FinCEN has determined that no 
portion of this final rule will result in expenditures by State, local, 
and tribal governments, or by the private sector, of $100 million or 
more in any one year. Accordingly, this final rule is not subject to 
section 202 of the Unfunded Mandates Act.

List of Subjects in 31 CFR Part 1010

    Administrative practice and procedure, Banks, Banking, Brokers, 
Currency, Foreign banking, Foreign currencies, Gambling, 
Investigations, Penalties, Reporting and recordkeeping requirements, 
Securities, Terrorism.

Amendments to the Regulations

    For the reasons set forth above in the preamble, 31 CFR part 1010 
is amended as follows:

PART 1010--GENERAL PROVISIONS

0
1. The authority citation for part 1010 is revised to read as follows:

    Authority: 12 U.S.C. 1829b and 1951-1960; 31 U.S.C. 5311-5314 
and 5316-5336; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307; 
sec. 701, Pub. L. 114-74, 129 Stat. 599.


Sec.  1010.820   [Amended]

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2. Section 1010.820 is amended as follows:
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a. Remove paragraph (g); and
0
b. Redesignate paragraphs (h) and (i) as paragraphs (g) and (h).

Himamauli Das,
Acting Director, Financial Crimes Enforcement Network.
[FR Doc. 2021-27623 Filed 12-22-21; 8:45 am]
BILLING CODE 4810-02-P[FEDREG][VOL]*[/VOL][NO]*[/NO][DATE]*[/
DATE][RULES]