(BILLING CODE: 4820-03-P)

**DEPARTMENT OF THE TREASURY**

**Financial Crimes Enforcement Network**

**31 CFR Part 103**

**RIN 1506-AA25**

**Amendment to the Bank Secrecy Act Regulations \--**

**Requirement that Nonfinancial Trades or Businesses Report Certain
Currency Transactions**

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

**ACTION:** Notice of proposed rulemaking by cross reference to interim
rule.

**SUMMARY:** This document proposes to amend the Bank Secrecy Act
regulations to require that persons who, in the course of conducting a
nonfinancial trade or business, receive more than \$10,000 in coins or
currency in one transaction (or two or more related transactions), file
a report of such transaction with the Treasury Department.

**DATES:** Written comments on all aspects of the proposed rule are
welcome and must be received on or before \[Insert date 60 days
following publication of this document in the FEDERAL REGISTER.\]

**ADDRESSES:** Written comments should be submitted to: Cash
Reporting---Section 5331 Comments, P.O. Box 1618, Vienna, VA 22183-1618.
Comments may also be submitted by electronic mail to the following
Internet address: \"regcomments@fincen.treas.gov\" with the caption in
the body of the text, \"[Attention]{.underline}: Proposed Rule---Cash
Reporting---Section 5331.\" For additional instructions on the
submission of comments, see **SUPPLEMENTARY INFORMATION** under the
heading \"Submission of Comments.\"

[Inspection of comments]{.underline}: Comments may be inspected at
FinCEN between 10 a.m. and 4 p.m., in the FinCEN Reading Room in
Washington, D.C. Persons wishing to inspect the comments submitted must
request an appointment by telephoning (202) 354-6400.

**FOR FURTHER INFORMATION CONTACT:** Cynthia L. Clark, Deputy Chief
Counsel, or Laurence J. Levine, Attorney-Advisor, Office of Chief
Counsel, FinCEN, (703) 905-3590.

**SUPPLEMENTARY INFORMATION:**

I. [Introduction]{.underline}.

Published elsewhere in this issue of the FEDERAL REGISTER is an interim
rule adding a new section 31 CFR 103.30. The text of the interim rule
serves as the text of this notice of proposed rulemaking.

This document proposes a new section 31 CFR 103.30 in order to implement
31 U.S.C. 5331, as added to the Bank Secrecy Act by section 365 of the
Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001,
Pub. L. 107-56 (October 26, 2001).

II\. [Statutory Provisions]{.underline}.

The Bank Secrecy Act, Titles I and II of Pub. L. 91-508, as amended,
codified at 12 U.S.C. 1829b, 12 U.S.C. 1951‑1959, and 31 U.S.C. 5311,
[et]{.underline} [seq.]{.underline}, authorizes the Secretary of the
Treasury, [inter]{.underline} [alia]{.underline}, 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, or in the conduct of intelligence or
counter-intelligence activities, to protect against international
terrorism, and to implement counter-money laundering programs and
compliance procedures.[^1] Regulations implementing Title II of the Bank
Secrecy Act (codified at 31 U.S.C. 5311, [et]{.underline}
[seq]{.underline}.), appear at 31 CFR Part 103. The authority of the
Secretary to administer Title II of the Bank Secrecy Act has been
delegated to the Director of FinCEN.

Under 31 U.S.C. 5331, any person who is engaged in a trade or business
and who, in the course of such trade or business, receives more than
\$10,000 in coins or currency in one transaction (or two or more related
transactions) is required to file a report with respect to such
transaction (or related transactions) with the Treasury Department.
Reporting under section 5331 does not apply to amounts received in a
transaction reported under 31 U.S.C. 5313 and the accompanying
regulations.

For purposes of section 5331, currency includes foreign currency, and to
the extent provided in regulations, any monetary instrument, whether or
not in bearer form, with a face amount of not more than \$10,000. Such
monetary instruments shall not include any check drawn on the account of
the writer in a financial institution referred to in subparagraph (A),
(B), (C), (D), (E), (F), (G), (J), (K), (R), or (S) of 31 U.S.C. 5312
(a)(2).

Reports required under section 5331 must be in such form as the
Secretary may prescribe. The reports must contain: (1) the name,
address, and such other identification information as the Secretary may
require, of the person from whom the coins or currency was received; (2)
the amount of coins or currency received; (3) the date and nature of the
transaction; and (4) such other information, including the
identification of the person filing the report, as the Secretary may
prescribe.

III\. [Proposed Rule]{.underline}.

With a minor exception, section 5331 requires reporting of the same
transaction that must be reported to the Internal Revenue Service
("IRS") under section 6050I of title 26, United States Code, and 26 CFR
1.6050I-1. Section 5331 does not require reporting of currency received
by clerks of court. [Cf]{.underline}. 26 U.S.C. 6050I(g). Further,
section 5331 does not require the person making a report under section
5331 to furnish to the person whose name is required to be set forth on
the report a statement concerning the report. [Cf]{.underline}. 26
U.S.C. 6050I(e).

Because section 5331 is substantially similar to 26 U.S.C. 6050I, the
proposed rule provides that persons required to report a transaction
under section 5331 must make that report by filing a joint FinCEN/IRS
form with the IRS. Under this dual-reporting regime, only one form is
required to be filed for a transaction subject to both section 5331 and
section 6050I of title 26. Thus, the proposed rule imposes no new
reporting or record-keeping burden on persons required to report certain
transactions under section 5331.

Because of the similarity between the provisions, FinCEN believes it is
appropriate that the proposed rule adopt the same rules for multiple
payments, monetary instruments, and designated reporting transactions as
appear in the regulations under section 6050I. Thus, for example, the
proposed rule would require that recipients aggregate an initial payment
and subsequent payments such that a report is required if the
aggregation exceeds \$10,000 within one year of the initial payment. In
addition, the proposed rule, like 26 CFR 1.6050I-1, includes within the
definition of currency monetary instruments such as cashiers' checks,
bank drafts, traveler's checks or money orders, not having a face amount
of more than \$10,000, when such monetary instruments are received in a
"designated reporting transaction," [i.e.]{.underline}, certain retail
sales as defined in the regulation.

IV\. [Submission of Comments]{.underline}.

An original and four copies of any comment (other than one sent
electronically) must be submitted. All comments will be available for
public inspection and copying, and no material in any such comments,
including the name of any person submitting comments, will be recognized
as confidential. Accordingly, material not intended to be disclosed to
the public should not be submitted.

V. [Regulatory Flexibility Act]{.underline}.

It is hereby certified that the proposed rule is not likely to have a
significant economic impact on a substantial number of small entities.
This certification is based on the fact that the proposed rule applies
only to persons already required to report information concerning
transactions under the Internal Revenue Code and imposes no new
reporting or recordkeeping requirements on those persons. Accordingly,
an initial regulatory flexibility analysis is not required by the
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 [et
seq]{.underline}.).

VI\. [Paperwork Reduction Act]{.underline}.

The collection of information contained in this regulation has been
submitted to the Office of Management and Budget (OMB) for review under
the requirements of the Paperwork Reduction Act (44 U.S.C. 3507(d)).
Comments on the collection of information should be sent to the Office
of Management and Budget, Attn: Alexander T. Hunt, Office of Information
and Regulatory Affairs, New Executive Office Building, Room 3208,
Washington, DC 20503, with copies to FinCEN at Post Office Box 39,
Vienna, VA 22183. 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 control number assigned by OMB.

FinCEN specifically invites comments on (a) whether the proposed
collection of information is necessary for the proper performance of the
mission of FinCEN, including whether the information shall have
practical utility; (b) the accuracy of FinCEN's estimate of the burden
of the proposed collection of information (see below); (c) ways to
enhance the quality, utility, and clarity of the information to be
collected; and (d) ways to minimize the burden of the collection of
information on respondents, including through the use of automated
collection techniques or other forms of information technology.

[Desciption of Respondents]{.underline}: Persons receiving cash payments
greater than \$10,000 in the course of a trade or business.

[Estimated Number of Respondents]{.underline}: 46,800

[Frequency]{.underline}: As required.

[Estimate of Burden]{.underline}: None. Because this information is
already required to be reported to the Internal Revenue Service pursuant
to 26 U.S.C. 6050I, and is subject to IRS recordkeeping requirements,
there is no burden associated with this collection of information. This
regulation does not impose any requirement on any person that is not
already required by 26 U.S.C. 6050I.

In addition, the Paperwork Reduction Act of 1995 requires agencies to
estimate the total annual cost burden to respondents or recordkeepers
resulting from the collection of information. Thus, FinCEN also
specifically requests comments to assist with this estimate. In this
connection, FinCEN requests commenters to identify any additional costs
associated with the completion of the form. These comments on costs
should be divided into two parts: (1) any additional costs associated
with reporting; and (2) any additional costs associated with
recordkeeping.

VII\. [Executive Order 12866]{.underline}.

The Department of the Treasury has determined that this proposed rule is
not a significant regulatory action under Executive Order 12866.

VIII\. [Unfunded Mandates Act of 1995 Statement]{.underline}.

Section 202 of the Unfunded Mandates Reform Act of 1995, Pub. L. 104-4
(Unfunded Mandates Act), 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 this proposal provides the most cost-effective
and least burdensome alternative to achieve the objectives of the rule.

**List of Subjects in 31 CFR Part 103**

Authority delegations (Government agencies), Banks and banking,
Currency, Investigations, Law enforcement, Reporting and recordkeeping
requirements.

[Proposed Amendments to the Regulations]{.underline}

For the reasons set forth above in the preamble, FinCEN proposes to
amend 31 CFR Part 103 as follows:

**PART 103 ‑‑ FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND
FOREIGN TRANSACTIONS**

1\. The authority citation for Part 103 is amended to read as follows:

**Authority:** 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5331.

2\. A new section 103.30 is added as follows:

\[The text of proposed 103.30 is the same as the text of 31 CFR 103.30
published elsewhere in this issue of the FEDERAL REGISTER.\]

Dated: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

James F. Sloan,

Director,

Financial Crimes Enforcement

Network

[^1]: Language expanding the scope of the Bank Secrecy Act to
    intelligence or counter-intelligence activities to protect against
    international terrorism was added by Section 358 of the USA Patriot
    Act of 2001.