[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
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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