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FIL-55-2000 Attachment

[Federal Register: July 28, 2000 (Volume 65, Number 146)]

[Rules and Regulations]

[Page 46356-46361]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr28jy00-4]


 

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DEPARTMENT OF THE TREASURY


 

Financial Crimes Enforcement Network


 

31 CFR Part 103


 

RIN 1506-AA23


 

 

Amendment to the Bank Secrecy Act Regulations--Exemptions From

the Requirement to Report Transactions in Currency; Interim Rule


 

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


 

ACTION: Interim rule with request for comments.


 

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SUMMARY: Rules previously issued under the Bank Secrecy Act established

new procedures for exemption of transactions of retail and other

businesses from the requirement that depository institutions report

transactions in currency in excess of $10,000. The interim rule (the

``Interim Rule'') contained in this document modifies those procedures

so that they will also apply to transactions involving money market

deposit accounts used for business purposes. The Interim Rule also

makes certain technical changes in the exemption procedures.

Modification of the exemption procedures is another step in the

Department of the Treasury's continuing program to increase the cost-

effectiveness of the counter-money laundering policies of the

Department of the Treasury.


 

DATES: Effective Date: July 31, 2000.

Comment Deadline: Comments must be received by September 26, 2000.


 

ADDRESSES: Written comments should be submitted to: Office of Chief

Counsel, Financial Crimes Enforcement Network, Department of the

Treasury, 2070 Chain Bridge Road, Vienna, VA 22182, Attention: Interim

Rule--MMDA. Comments also may be submitted by electronic mail to the

following Internet address: ``regcomments@fincen.treas.gov'' with the

caption ``Attention: Interim Rule--MMDA.'' Comments may be inspected at

the Department of the Treasury between 10 a.m. and 4 p.m., in the

FinCEN reading room at the Franklin Court Building, 14th and L Streets,

NW., Washington, DC. Persons wishing to inspect the comments submitted

should request an appointment by telephoning (202) 354-6400.


 

[[Page 46357]]



 

FOR FURTHER INFORMATION CONTACT: Peter Djinis, Executive Assistant

Director (Regulatory Policy), FinCEN, (703) 905-3930; Christine E.

Carnavos, Assistant Director (Office of Compliance and Regulatory

Enforcement), FinCEN, (1-800) 949-2732; Stephen R. Kroll, Chief

Counsel, Cynthia L. Clark, Deputy Chief Counsel, and Albert R. Zarate

and Christine L. Schuetz, Attorney-Advisors, Office of Chief Counsel,

FinCEN, (703) 905-3590.


 

SUPPLEMENTARY INFORMATION:


 

I. Background


 

A. Statutory Provisions


 

The Bank Secrecy Act, 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. 5311-5330, authorizes the Secretary of the Treasury, inter alia,

to issue regulations requiring financial institutions to keep records

and file reports that are determined to have a high degree of

usefulness in criminal, tax, and regulatory matters, and to implement

counter-money laundering programs and compliance procedures.

Regulations implementing the Bank Secrecy Act appear at 31 CFR Part

103. The authority of the Secretary to administer the Bank Secrecy Act

has been delegated to the Director of FinCEN.

The reporting by financial institutions of transactions in currency

in excess of $10,000 has long been a major component of the Department

of the Treasury's implementation of the Bank Secrecy Act. The reporting

requirement is imposed by 31 CFR 103.22, a rule issued under the broad

authority granted to the Secretary of the Treasury by 31 U.S.C. 5313(a)

to require reports of domestic coin and currency transactions.

The provisions of 31 U.S.C. 5313(d) through (g), added to the Bank

Secrecy Act in 1994,\1\ concern the exemption, from the currency

transaction reporting requirements, of transactions by certain

customers of depository institutions.\2\ 31 U.S.C. 5313(d) (sometimes

called the ``mandatory exemption'' provision) states that the Secretary

of the Treasury shall exempt a depository institution from the

requirement to report currency transactions with respect to

transactions between the depository institution and four specified

categories of customers, while 31 U.S.C. 5313(e) (sometimes called the

``discretionary exemption'' provision) authorizes the Secretary of the

Treasury to exempt a depository institution from the requirement to

report transactions in currency between it and a qualified business

customer.\3\

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\1\ See section 402 of the Money Laundering Suppression Act of

1994 (the ``Money Laundering Suppression Act''), Title IV of the

Riegle Community Development and Regulatory Improvement Act of 1994,

Public Law 103-325 (September 23, 1994).

\2\ Section 402(b) of the Money Laundering Suppression Act

states simply that in administering the new statutory exemption

provisions: the Secretary of the Treasury shall seek to reduce,

within a reasonable period of time, the number of reports required

to be filed in the aggregate by depository institutions pursuant to

section 5313(a) of title 31 * * * by at least 30 percent of the

number filed during the year preceding [September 23, 1994,] the

date of enactment of [the Money Laundering Suppression Act]. The

enactment of 31 U.S.C. 5313(d) through (g) reflects a Congressional

intention to ``reform * * * the procedures for exempting

transactions between depository institutions and their customers.''

See H.R. Rep. 103-652, 103d Cong., 2d Sess. 186 (August 2, 1994).

\3\ For additional information about the terms of 31 U.S.C.

5313(e)-(g), see 63 FR 50147, 50148 (September 21, 1998).

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A ``qualified business customer,'' for purposes of the

discretionary exemption provision, is a business that


 

(A) maintains a transaction account (as defined in section

19(b)(1)(C) of the Federal Reserve Act) at the depository

institution;

(B) frequently engages in transactions with the depository

institution which are subject to the reporting requirements of

subsection (a); and

(C) meets criteria which the Secretary determines are sufficient

to ensure that the purposes of this subchapter are carried out

without requiring a report with respect to such transactions.


 

31 U.S.C. 5313(e)(2). The Secretary of the Treasury is required to

establish, by regulation, the criteria for granting and maintaining an

exemption for qualified business customers, see 31 U.S.C. 5313(e)(3),

as well as guidelines for depository institutions to follow in

selecting customers for exemption. See 31 U.S.C. 5313(e)(4)(A).


 

B. Regulatory Provisions


 

The reformed exemption procedures called for by 31 U.S.C. 5313(d)-

(g) are now found in the Bank Secrecy Act regulations at 31 CFR

103.22(d). The procedures are the result of a four-part rulemaking \4\

and are designed to permit streamlined exemption from the reporting

requirements of transactions by most depository institution customers

that have recurring needs for large amounts of currency to support

their commercial enterprises in the United States. (Certain non-

publicly-traded companies are ineligible for exemption under the

procedures, as the statute contemplates.\5\ See 31 CFR

103.22(d)(6)(viii).)

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\4\ An interim rule (with a request for comments) implementing

the mandatory exemption provision (in what was called ``Phase I'' of

exemption reform, aimed primarily at larger national and regional

customers of depository institutions) was published on April 24,

1996. 61 FR 18204. A final rule based on the Phase I interim rule

was published on September 8, 1997, 62 FR 47141, as 31 CFR

103.22(h), and a proposed rule implementing the discretionary

exemption provision (``Phase II'' of exemption reform, aimed at non-

publicly-traded retail and other businesses) was published on the

same day. 62 FR 47156. The comment period for the proposed rule was

extended on November 28, 1997, 62 FR 63298, and a final rule based

on the Phase II proposal was published on September 21, 1998. 63 FR

50147. The final rule containing the Phase II provisions completely

restated the language of 31 CFR 103.22; as part of that restatement,

the Phase I provisions (previously found in 31 CFR 103.22(h)) and

the Phase II provisions were combined in new 31 CFR 103.22(d).

\5\ 31 U.S.C. 5313(e)(4)(B) provides that the required

regulatory exemption guidelines may include a description of the

type of businesses for which no exemption will be granted under the

discretionary exemption provision. The ineligible classes of

customer are listed at note 8, see infra.

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Classes of Exempt Persons.

The reformed exemption procedures apply to depository institution

customers who fall within one of the classes of exempt persons

described in 31 CFR 103.22(d)(2)(i)-(vii). The classes of exempt

persons are:

(i) Other banks operating in the United States;

(ii) Government departments and agencies;

(iii) Certain entities that exercise governmental authority;

(iv) Entities whose equity interests are listed on one of the major

national stock exchanges;

(v) Certain subsidiaries of entities whose equity interests are

listed on one of the major national stock exchanges;

(vi) ``Non-listed businesses,'' as defined and described more fully

below; and

(vii) ``Payroll customers,'' as defined and described more fully

below. \6\

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\6\ Generally, a depository institution seeking to exempt

transactions by an eligible customer from the currency transaction

reporting requirement need only make a one-time designation

identifying the exempting depository institution, the exempt

customer, and the category of exempt person into which the customer

falls. The designation is made on Treasury Form TD F 90-22.53. As

explained below, the Interim Rule changes the language of 31 CFR

103.22(d)(3)(i) and (d)(5)(ii) to specify the use of Form TD F 90-

22.53.

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Non-Listed Businesses and Payroll Customers

Under the exemption rules, a ``non-listed business'' is any other

commercial enterprise (i.e., an enterprise that is neither a bank, \7\

a government agency, a publicly-traded company, nor a subsidiary of a

publicly-traded company


 

[[Page 46358]]


 

and that is not ineligible for exemption \8\) that

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\7\ As used in 31 CFR 103.22, as elsewhere in the Bank Secrecy

Act regulations, the term ``bank'' includes all of the classes of

depository institution listed at 31 CFR 103.11(c).

\8\ Non-listed businesses ineligible for exemption are

businesses engaged primarily in one or more of the following

activities: serving as financial institutions or agents of financial

institutions of any type; purchase or sale to customers of motor

vehicles of any kind, vessels, aircraft, farm equipment or mobile

homes; the practice of law, accountancy, or medicine; auctioning of

goods; chartering or operation of ships, buses, or aircraft; gaming

of any kind (other than licensed parimutuel betting at race tracks);

investment advisory services or investment banking services; real

estate brokerage; pawn brokerage; title insurance and real estate

closing; trade union activities; and any other activities that may

be specified by FinCEN. 31 CFR 103.22(d)(6)(viii).

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(A) Has maintained a transaction account at the bank for at least

12 months;

(B) Frequently engages in transactions in currency with the bank in

excess of $10,000; and

(C) Is incorporated or organized under the laws of the United

States or a State, or is registered as and eligible to do business

within the United States or a State.


 

31 CFR 103.22(d)(2)(vi). Such an enterprise is an exempt person only

``[t]o the extent of its domestic operations.'' Id. The addition of

non-listed businesses as a category of exempt person was intended to

make eligible for the reformed exemption procedures transactions of all

established depository institution customers (other than ineligible

companies) not included within the scope of the mandatory exemption

provision.

A ``payroll customer,'' under the exemption rules, is any other

person (i.e., a person not otherwise covered under the exempt person

definitions) that

(A) Has maintained a transaction account at the bank for at least

12 months;

(B) Operates a firm that regularly withdraws more than $10,000 in

order to pay its United States employees in currency; and

(C) Is incorporated or organized under the laws of the United

States or a State, or is registered as and eligible to do business

within the United States or a State.


 

31 CFR 103.22(d)(2)(vii). A payroll customer is an exempt person

``[w]ith respect solely to withdrawals for payroll purposes.'' Id.

The ``Transaction Account'' Limitation

As indicated above, a person must maintain a ``transaction

account'' with a depository institution in order to be treated as a

``non-listed business'' or ``payroll customer'' for purposes of the

reformed exemption procedures. In addition, non-listed businesses and

payroll customers may be treated as exempt persons ``only to the extent

of [their] eligible transaction accounts'' under the present language

of the reformed procedures. See 31 CFR 103.22(d)(6)(ix).

A ``transaction account'' for this purpose is an account described

in section 19(b)(1)(C) of the Federal Reserve Act.\9\ Section

19(b)(1)(C) of the Federal Reserve Act, codified at 12 U.S.C.

461(b)(1)(C), in turn, states that a transaction account is

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\9\ See 31 U.S.C. 5313(e)(2)(A) (defining a qualified business

customer (whose transactions the Secretary of the Treasury is

authorized to exempt from currency transaction reporting by 31

U.S.C. 5313(e)(1)), as a business which, among other things,

``maintains a transaction account (as defined in section 19(b)(1)(c)

of the Federal Reserve Act) at the depository institution.'').


 

a deposit or account on which the depositor or account holder is

permitted to make withdrawals by negotiable or transferable

instrument, payment orders of withdrawal, telephone transfers, or

other similar items for the purpose of making payments or transfers

to third persons or others. Such term includes demand deposits,

negotiable order of withdrawal accounts, savings deposits subject to

automatic transfers, and share draft accounts.

Money Market Deposit Accounts

Given the operative definition of a transaction account, the

exemption procedures published on September 21, 1998, do not extend to

transactions by non-listed businesses or payroll customers that involve

so-called money market deposit accounts.\10\ See 12 CFR 204.2(d)(2) (in

implementing section 19(b)(1)(C) of the Federal Reserve Act, defining a

money market deposit account as a ``savings deposit'') and 12 CFR

204.2(e) (defining a transaction account to exclude ``savings deposits

or accounts described in paragraph (d)(2) of this section even though

such accounts permit third party transfers''). FinCEN noted this

limitation when it proposed the new exemption procedures for non-listed

businesses and payroll customers, see 62 FR 47156, 47162 (September 8,

1997), and again when it issued the final rule containing those

procedures. See 63 FR 50147, 50154 (September 21, 1998). At the same

time, FinCEN indicated that it would entertain requests for relief if

the transaction account limitation proved to be unduly difficult to

apply. Id.

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\10\ Money market deposit accounts were established by the Garn-

St. Germain Act of 1982, as interest-bearing accounts comparable to

money market mutual funds upon which a limited number of checks may

be drawn or other withdrawals made.

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II. The Interim Rule


 

Modification of the Transaction Account Limitation


 

A number of depository institutions have contacted FinCEN to

request reconsideration of the decision to limit the reformed exemption

procedures for non-listed businesses and payroll customers to

transactions in currency involving transaction accounts. The

transaction account limitation has been asserted to limit unnecessarily

the ability of banks to make use of the procedures within their

intended scope, for two reasons.

The first reason is that smaller businesses often place their

receipts in money market deposit accounts to obtain some return on

their funds until those funds are necessary for use in their

businesses. Use of money market deposit accounts for this purpose

reflects the fact that businesses are not generally permitted to hold

interest-bearing checking accounts.\11\ To satisfy their check-writing

needs, businesses simply transfer funds from their money market deposit

accounts to their transaction (that is, their checking) accounts as

necessary.

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\11\ Prior to the passage of the Monetary Control Act of 1980,

all interest payments on demand deposits were prohibited. The

Monetary Control Act established, among other things, negotiable

order of withdrawal (``NOW'') accounts, to allow customers to earn

interest on balances against which checks may be drawn. However,

businesses are not permitted to hold NOW accounts.

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The second reason flows from the first. Several banks have

indicated that their computerized systems for tracking the currency

transactions of their business customers do not distinguish between

transaction accounts and money market accounts. Thus, an exemption

system that does not extend to money market deposit accounts cannot be

used at all for such customers (even for transaction accounts) without

either an expensive system change or a time-intensive manual research

process. The banks state that, faced with these choices, they would opt

simply to file currency transaction reports and not use the exemption

procedures at all for the customers in question.

The transaction account limitation was intended to help ensure that

streamlined exemption procedures were available only for routine uses

of currency by legitimate ongoing commercial enterprises. Deposits and

withdrawals of currency from money market accounts by enterprises in

the circumstances described above are within the classes of

transactions for which the new exemption procedures were designed. For

that reason, the


 

[[Page 46359]]


 

Interim Rule modifies the new exemption procedures so that they will

apply to the transactions of non-listed businesses and withdrawals for

payroll purposes by payroll customers that involve a money market

deposit account, within the meaning of section 19(b)(1)(C) of the

Federal Reserve Act and that section's implementing regulations. See 12

CFR 204.2(d)(2).

The change made by the Interim Rule, however, as noted in more

detail below, does not alter the definition of an exempt person itself.

Thus, for example, a non-listed business may only be treated as an

exempt person to the extent that it has maintained a transaction

account at the depository institution for at least twelve months. See

31 CFR 103.22(d)(2)(vi). Moreover, under the new exemption procedures

applicable to non-listed businesses and payroll customers, as modified

by the Interim Rule, money market deposit accounts maintained other

than as part of a commercial enterprise are not eligible for exemption.

See 31 CFR 103.22(d)(2)(vi).

FinCEN is requesting comments on the expansion of the exemption

procedures made by the Interim Rule. Commenters may wish to address any

of the issues discussed above (for example, the fact that the changes

made by the Interim Rule do not permit treatment as an exempt person of

a customer whose only relationship with a bank is maintenance of a

money market deposit account), or other matters related to the subject

of the Interim Rule (for example, whether other savings accounts should

be treated in the same manner as money market deposit accounts). The

comments should include as much statistical or other information as

possible about the terms and business or commercial uses of particular

types of accounts that are discussed in any comments. Comments should

also explain the reasons that any additional modifications to the

exemption procedures sought by the comments are appropriate to

accomplish the goals of the procedures and are not subject to the risk

of extending the exemption procedures beyond their intended scope.

The provisions of the Interim Rule concerning money market deposit

accounts become effective on July 31, 2000. Although FinCEN believes

that the definition of a ``transaction account'' has been made clear

heretofore, for reasons of administrative convenience, FinCEN will not

generally require backfiling regarding any exemption granted based on

the mistaken assumption that the term ``transaction account'' included

money market deposit accounts.


 

Conforming Changes Based Upon Modification of Transaction Account

Limitation


 

The Interim Rule makes several conforming changes to the exemption

procedures based on the amendment to the transaction account limitation

described above. First, the Interim Rule extends the exemption

procedures to all exemptible accounts of a non-listed business or

payroll customer, rather than just those customers' transaction

accounts. Correspondingly, the term ``exemptible accounts'' is defined,

for purposes of non-listed businesses and payroll customers, to include

both transaction accounts and money market deposit accounts. (These

changes are reflected in the new language of 31 CFR 103.22(d)(6)(ix).)

Lastly, the Interim Rule substitutes the term ``exemptible account''

for the term ``transaction account'' for purposes of the terms of the

exemption procedures concerning aggregation. Thus, when determining the

qualification of a customer as a non-listed business or payroll

customer, a bank may treat all exemptible accounts (rather than just

transaction accounts) of the customer as a single account.


 

Reference to Treasury Form TD F 90-22.53


 

Since the reformed exemption procedures were published on September

21, 1998, 63 FR 50149, a new form, Treasury Form TD F 90-22.53, has

been designated by FinCEN for use by banks when filing both the initial

and biennial renewal of designation of exempt persons. Thus, the

Interim Rule amends the exemption procedures to require the use of

Treasury Form TD F 90-22.53 in that regard.


 

III. Specific Provisions


 

A. 103.22(d)(2)(vi)--Non-listed Businesses


 

The Interim Rule amends the language of 31 CFR 103.22(d)(2)(vi) to

state that a non-listed business may only be treated as an exempt

person to the extent of transactions conducted through its exemptible

accounts. FinCEN believes that this change will help clarify the

limitation on exemption for non-listed businesses.

The Interim Rule further modifies the language of 31 CFR

103.22(d)(2)(vi) to refer to the definition of a transaction account

that is set forth at 31 CFR 103.22(d)(6)(ix). FinCEN believes that a

cross-reference here would be helpful because of the change in the

heading to paragraph (d)(6)(ix) that is described below.


 

B. 103.22(d)(2)(vii)--Payroll Customers


 

The Interim Rule amends the language of 31 CFR 103.22(d)(2)(vii)

regarding withdrawals for payroll purposes to refer to withdrawals from

exemptible accounts. The Interim Rule further modifies the language of

31 CFR 103.22(d)(2)(vii) to refer to the definition of a transaction

account that is set forth at 31 CFR 103.22(d)(6)(ix). FinCEN believes

that a cross-reference here would be helpful because of the change in

the heading to paragraph (d)(6)(ix) that is described below.


 

C. 103.22(d)(3)(i)--Initial Designation of Exempt Persons


 

The Interim Rule amends the language of 31 CFR 103.22(d)(3)(i) to

refer to the use of Treasury Form TD F 90-22.53 when filing the initial

designation of exempt person. \12\

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\12\ A bank is not required to file a form with respect to the

transfer of currency to or from any of the twelve Federal Reserve

Banks.

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D. 103.22(d)(5)(ii)--Renewal of Designations for Non-listed Businesses

and Payroll Customers


 

The Interim Rule amends the language of 31 CFR 103.22(d)(5)(ii) to

refer to the use of Treasury Form TD F 90-22.53 when filing the

biennial renewal of designation of exempt persons regarding customers

who are non-listed businesses or payroll customers.


 

E. 103.22(d)(6)(v)--Aggregated Accounts


 

The Interim Rule modifies the language of 31 CFR 103.22(d)(6)(v) to

state that a bank may aggregate all exemptible accounts (rather than

simply transaction accounts) of a non-listed business or payroll

customer to apply the terms of the exemption procedures to such a

customer. Thus, for example, the determination whether a non-listed

business ``frequently engages in transactions in currency with the bank

in excess of $10,000'' (see 31 CFR 103.22(d)(2)(vi)(B)) is to be made

by aggregating transactions in transaction and money market deposit

accounts.


 

F. 103.22(d)(6)(ix)--Exemptible Accounts


 

The Interim Rule modifies the language of 31 CFR 103.22(d)(6)(ix)

to state that the exemptible accounts of a non-listed business or

payroll customer include both transaction accounts and money market

deposit accounts. (The heading for paragraph (d)(6)(ix) correspondingly

has been changed from ``Transaction account'' to ``Exemptible


 

[[Page 46360]]


 

accounts of a non-listed business or payroll customer''.) The term

``money market deposit account,'' for purposes of paragraph (d), is

defined by reference to the definition of that term contained in 12 CFR

204.2(d)(2). Currently, section 204.2(d)(2) defines a money market

deposit account as any interest-bearing account on which the account

holder is authorized to make no more than six transfers per calendar

month or similar period for the purpose of making payments or transfers

to another account of the depositor at the same institution or to a

third person by means of a preauthorized, automatic, or telephonic

order or instruction; of those six authorized transfers, no more than

three may be made by check or similar order to a third person. The term

``transaction account,'' for purposes of paragraph (d), continues to be

defined by reference to section 19(b)(1)(C) of the Federal Reserve Act,

12 U.S.C. 461(b)(1)(C), and that statute's implementing regulations,

found at 12 CFR 204 et seq.


 

IV. Regulatory Matters


 

A. Executive Order 12866


 

The Department of the Treasury has determined that this interim

rule is not a significant regulatory action under Executive Order

12866.


 

B. Unfunded Mandates Act of 1995 Statement


 

Section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded

Mandates Act''), Public Law 104-4 (March 22, 1995), requires that an

agency prepare a budgetary impact statement before promulgating a rule

that includes a federal mandate 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 it is not required to prepare a written statement under

section 202 and has concluded that on balance the Interim Rule provides

the most cost-effective and least burdensome alternative to achieve the

objectives of the rule.


 

C. Administrative Procedure Act


 

The Interim Rule grants significant relief from existing regulatory

requirements. Thus, the Interim Rule may be made effective without the

need to abide by the notice and comment procedures contained in 5

U.S.C. 553(b), and, further, may be made effective before 30 days have

passed after its publication date. See 5 U.S.C. 553(d).


 

D. Regulatory Flexibility Act


 

The provisions of the Regulatory Flexibility Act relating to an

initial and final regulatory analysis (5 U.S.C. 604) are not applicable

to the Interim Rule contained in this document because FinCEN was not

required to publish a notice of proposed rulemaking under 5 U.S.C. 553

or any other law.


 

E. Paperwork Reduction Act


 

The Interim Rule is being issued without prior notice and public

procedure pursuant to 5 U.S.C. 553. By expanding the applicable

exemptions from an information collection that has been reviewed and

approved by the Office of Management and Budget (OMB) under control

number 1506-0004, relating to the Currency Transaction Report, the

Interim Rule contained in this document significantly reduces the

existing burden of information collection under 31 CFR 103.22. Thus,

the Paperwork Reduction Act does not require FinCEN to follow any

particular procedures in connection with the promulgation of the

Interim Rule.


 

List of Subjects in 31 CFR Part 103


 

Administrative practice and procedure, Authority delegations

(Government agencies), Banks and banking, Currency, Foreign banking,

Foreign currencies, Gambling, Investigations, Law enforcement,

Penalties, Reporting and recordkeeping requirements, Securities, Taxes.


 

Amendment


 

For the reasons set forth above in the preamble, 31 CFR Part 103 is

amended as follows:


 

PART 103--FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND

FOREIGN TRANSACTIONS


 

1. The authority citation for part 103 continues to read as

follows:


 

Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5330.



 

2. Section 103.22 is amended by--

a. Revising the introductory text of paragraph (d)(2)(vi),

b. Revising paragraph (d)(2)(vi)(A),

c. Revising the introductory text of paragraph (d)(2)(vii),

d. Revising paragraph (d)(2)(vii)(A),

e. Removing the second sentence of paragraph (d)(3)(i) and adding

two new sentences in its place,

f. Revising the first sentence of paragraph (d)(5)(ii),

g. Revising paragraph (d)(6)(v), and

h. Revising paragraph (d)(6)(ix).

The revisions and additions read as follows:



 

Sec. 103.22 Reports of transactions in currency.


 

* * * * *

(d) Transactions of exempt persons * * *

(2) Exempt person. * * *

(vi) To the extent of its domestic operations and only with respect

to transactions conducted through its exemptible accounts, any other

commercial enterprise (for purposes of this paragraph (d), a ``non-

listed business''), other than an enterprise specified in paragraph

(d)(6)(viii) of this section, that:

(A) Has maintained a transaction account, as defined in paragraph

(d)(6)(ix) of this section, at the bank for at least 12 months;

* * * * *

(vii) With respect solely to withdrawals for payroll purposes from

existing exemptible accounts, any other person (for purposes of this

paragraph (d), a ``payroll customer'') that:

(A) Has maintained a transaction account, as defined in paragraph

(d)(6)(ix) of this section, at the bank for at least 12 months;

* * * * *

(3) Initial designation of exempt persons--(i) General. * * *

Except as provided in paragraph (d)(3)(ii) of this section, designation

by a bank of an exempt person shall be made by a single filing of

Treasury Form TD F 90-22.53. (A bank is not required to file a Treasury

Form TD F 90-22.53 with respect to the transfer of currency to or from

any of the twelve Federal Reserve Banks.) * * *

* * * * *

(5) Biennial filing with respect to certain exempt persons * * *

(ii) Non-listed businesses and payroll customers. The designation

of a non-listed business or a payroll customer as an exempt person must

be renewed biennially, beginning on March 15 of the second calendar

year following the year in which the first designation of such customer

as an exempt person is made, and every other March 15 thereafter, on

Treasury Form TD F 90-22.53. * * *

(6) Operating rules * * *

(v) Aggregated accounts. In determining the qualification of a

customer as a non-listed business or a payroll customer, a bank may

treat all exemptible accounts of the customer as a single account. If a

bank elects to treat


 

[[Page 46361]]


 

all exemptible accounts of a customer as a single account, the bank

must continue to treat such accounts consistently as a single account

for purposes of determining the qualification of the customer as a non-

listed business or payroll customer.

* * * * *

(ix) Exemptible accounts of a non-listed business or payroll

customer. The exemptible accounts of a non-listed business or payroll

customer include transaction accounts and money market deposit

accounts. However, money market deposit accounts maintained other than

in connection with a commercial enterprise are not exemptible accounts.

A transaction account, for purposes of this paragraph (d), is any

account described in section 19(b)(1)(C) of the Federal Reserve Act, 12

U.S.C. 461(b)(1)(C), and its implementing regulations (12 CFR part

204). A money market deposit account, for purposes of this paragraph

(d), is any interest-bearing account that is described as a money

market deposit account in 12 CFR 204.2(d)(2).

* * * * *


 

Dated: July 14, 2000.

James F. Sloan,

Director, Financial Crimes Enforcement Network.

[FR Doc. 00-18770 Filed 7-27-00; 8:45 am]

BILLING CODE 4820-03-P

Last Updated: March 23, 2024