Federal Register / Vol. 69, No. 239 / Tuesday, December 14, 2004 / Rules and Regulations 74441

5Our anti-money laundering program rule, 31 

CFR 103.125(d)(iii), permits Money Service 

Businesses to satisfy this last requirement with 

regard to their domestic agents (which are also 

Money Service Businesses under the BSA 

regulations), by allocating responsibility for the 

program to their agents. Such an allocation, 

however, does not relieve a Money Service Business 

from ultimate responsibility for establishing and 

maintaining an effective anti-money laundering 

program. Id.

6Nothing in this Interpretive Guidance is 

intended to require Money Service Businesses to 

monitor or review, for purposes of the Bank Secrecy 

Act, transactions or activities of foreign agents or 

counterparties that occur entirely outside of the 

United States and do not flow from, to, or through 

the United States.

preventing the products and services of the 

Money Services Business from being used to 

facilitate money laundering or terrorist 

financing through these relationships and 

detecting the use of these products and 

services for money laundering or terrorist 

financing by the Money Services Business or 

agent. Relevant risk factors may include, but 

are not limited to: 

• The foreign agent or counterparty’s 

location and jurisdiction of organization, 

chartering, or licensing. This would include 

considering the extent to which the relevant 

jurisdiction is internationally recognized as 

presenting a greater risk for money 

laundering or is considered to have more 

robust anti-money laundering standards. 

• The ownership of the foreign agent or 

counterparty. This includes whether the 

owners are known, upon reasonable inquiry, 

to be associated with criminal conduct or 

terrorism. For example, have the individuals 

been designated by Treasury’s Office of 

Foreign Assets Control as Specially 

Designated Nationals or Blocked Persons 

(i.e., involvement in terrorism, drug 

trafficking, or the proliferation of weapons of 

mass destruction)?

• The extent to which the foreign agent or 

counterparty is subject to anti-money 

laundering requirements in its jurisdiction 

and whether it has established such controls. 

• Any information known or readily 

available to the Money Services Business 

about the foreign agent or counterparty’s antimoney laundering record, including public 

information in industry guides, periodicals, 

and major publications. 

• The nature of the foreign agent or 

counterparty’s business, the markets it 

serves, and the extent to which its business 

and the markets it serves present an 

increased risk for money laundering or 

terrorist financing. 

• The types and purpose of services to be 

provided to, and anticipated activity with, 

the foreign agent or counterparty. 

• The nature and duration of the Money 

Services Business’ relationship with the 

foreign agent or counterparty. 

Specifically, a Money Services Business’

anti-money laundering program should 

include procedures for the following: 

1. Conduct of Due Diligence on Foreign 

Agents and Counterparties 

Money Services Businesses should 

establish procedures for conducting 

reasonable, risk-based due diligence on 

potential and existing foreign agents and 

counterparties to help ensure that such 

foreign agents and counterparties are not 

themselves complicit in illegal activity 

involving the Money Services Business’

products and services, and that they have in 

place appropriate anti-money laundering 

controls to guard against the abuse of the 

Money Services Business’ products and 

services. Such due diligence must, at a 

minimum, include reasonable procedures to 

identify the owners of the Money Services 

Business’ foreign agents and counterparties, 

as well as to evaluate, on an ongoing basis, 

the operations of those foreign agents and 

counterparties and their implementation of 

policies, procedures, and controls reasonably 

designed to help assure that the Money 

Services Business’ products and services are 

not subject to abuse by the foreign agent’s or 

counterparty’s customers, employees, or 

contractors.5 The extent of the due diligence 

required will depend on a variety of factors 

specific to each agent or counterparty. We 

expect Money Services Businesses to assess 

such risks and perform due diligence in a 

manner consistent with that risk, in light of 

the availability of information.

2. Risk-based Monitoring of Foreign Agents or 

Counterparties 

In addition to the due diligence described 

above, in order to detect and report suspected 

money laundering or terrorist financing, 

Money Services Businesses should establish 

procedures for risk-based monitoring and 

review of transactions from, to, or through 

the United States that are conducted through 

foreign agents and counterparties.6 Such 

procedures should also focus on identifying 

material changes in the agent’s risk profile, 

such as a change in ownership, business, or 

the regulatory scrutiny to which it is subject.

The review of transactions should enable 

the Money Services Business to identify and, 

where appropriate, report as suspicious such 

occurrences as: instances of unusual wire 

activity, bulk sales or purchases of 

sequentially numbered instruments, multiple 

purchases or sales that appear to be 

structured, and illegible or missing customer 

information. Additionally, Money Services 

Businesses should establish procedures to 

assure that their foreign agents or 

counterparties are effectively implementing 

an anti-money laundering program and to 

discern obvious breakdowns in the 

implementation of the program by the foreign 

agent or counterparty. 

Similarly, money transmitters should have 

procedures in place to enable them to review 

foreign agent or counterparty activity for 

signs of structuring or unnecessarily complex 

transmissions through multiple jurisdictions 

that may be indicative of layering. Such 

procedures should also enable them to 

discern attempts to evade identification or 

other requirements, whether imposed by 

applicable law or by the Money Services 

Business’ own internal policies. Activity by 

agents or counterparties that appears aimed 

at evading the Money Services Business’ own 

controls can be indicative of complicity in 

illicit conduct; this activity must be 

scrutinized, reported as appropriate, and 

corrective action taken as warranted. 

3. Corrective Action and Termination 

Money Services Businesses should have 

procedures for responding to foreign agents 

or counterparties that present unreasonable 

risks of money laundering or the financing of 

terrorism. Such procedures should provide 

for the implementation of corrective action 

on the part of the foreign agent or 

counterparty or for the termination of the 

relationship with any foreign agent or 

counterparty that the Money Services 

Business determines poses an unacceptable 

risk of money laundering or terrorist 

financing, or that has demonstrated systemic, 

willful, or repeated lapses in compliance 

with the Money Services Business’ own antimoney laundering procedures or 

requirements. 

While Money Services Businesses may 

already have implemented some or all of the 

procedures described in this Interpretive 

Guidance as a part of their anti-money 

laundering programs, we wish to provide a 

reasonable period of time for all affected 

Money Services Businesses to assess their 

operations, review their existing policies and 

programs for compliance with this Advisory, 

and implement any additional necessary 

changes. We will expect full compliance with 

this Interpretive Release within 180 days. 

Finally, we are mindful of the potential 

impact that this Interpretive Release may 

have on continuing efforts to bring informal 

value transfer systems into compliance with 

the existing regulatory framework of the Bank 

Secrecy Act. Experience has demonstrated 

the challenges in securing compliance by, for 

instance, hawalas and other informal value 

transfer systems. Further specification of 

Bank Secrecy Act compliance obligations 

carries with it the risk of driving these 

businesses underground, thereby 

undermining our ultimate regulatory goals. 

On balance, however, we believe that 

outlining the requirements for dealing with 

foreign agents and counterparties, including 

informal networks, is appropriate in light of 

the risks of money laundering and the 

financing of terrorism.

William J. Fox, 

Director.

[FR Doc. 04–27287 Filed 12–13–04; 8:45 am] 

BILLING CODE 4810–02–P

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[CGD01–04–146] 

Drawbridge Operation Regulations: 

Merrimack River, MA

AGENCY: Coast Guard, DHS.

ACTION: Notice of temporary deviation 

from regulations. 

SUMMARY: The Commander, First Coast 

Guard District, has issued a temporary 

deviation from the drawbridge operation 

74442 Federal Register / Vol. 69, No. 239 / Tuesday, December 14, 2004 / Rules and Regulations 

regulations for the Essex Merrimack 

Bridge, mile 5.8, across the Merrimack 

River, at Newburyport, Massachusetts. 

This deviation allows the bridge to 

remain in the closed position from 6 

a.m. on December 13, 2004 through 6 

p.m. on December 17, 2004. This 

temporary deviation is necessary to 

facilitate structural repairs at the bridge.

DATES: This deviation is effective from 

December 13, 2004 through December 

17, 2004.

FOR FURTHER INFORMATION CONTACT: John 

McDonald, Project Officer, First Coast 

Guard District, at (617) 223–8364.

SUPPLEMENTARY INFORMATION: The Essex 

Merrimack Bridge, at mile 5.8, across 

the Merrimack River, has a vertical 

clearance of 15 feet at mean high water, 

and 22 feet at mean low water in the 

closed position. The existing regulations 

are listed at 33 CFR § 117.605(c). 

The bridge owner, Massachusetts 

Highway Department, requested a 

temporary deviation from the 

drawbridge operating regulations to 

facilitate necessary structural repairs to 

the balance wheels at the bridge. 

This deviation to the operating 

regulations allows the bridge to remain 

in the closed position from 6 a.m. on 

December 13, 2004 through 6 p.m. on 

December 17, 2004. 

This deviation from the operating 

regulations is authorized under 33 CFR 

§ 117.35 and will be performed with all 

due speed in order to return the bridge 

to normal operation as soon as possible.

Dated: December 3, 2004. 

David P. Pekoske, 

Rear Admiral, U.S. Coast Guard, Commander, 

First Coast Guard District.

[FR Doc. 04–27303 Filed 12–13–04; 8:45 am] 

BILLING CODE 4910–15–P

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165

[CGD05–04–216] 

RIN 1625–AA00

Security Zone; Cape Fear River, Eagle 

Island, North Carolina State Port 

Authority Terminal, Wilmington, NC

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

SUMMARY: The Coast Guard is 

establishing a temporary security zone 

at the North Carolina State Port 

Authority (NCSPA), Wilmington to 

include the Cape Fear River and Eagle 

Island. Entry into or movement within 

the security zone will be prohibited 

without authorization from the COTP. 

This action is necessary to safeguard the 

vessels and the facility from sabotage, 

subversive acts, or other threats.

DATES: This rule is effective from 

December 3, 2004, until April 1, 2005.

ADDRESSES: Documents indicated in this 

preamble as being available in the 

docket are part of docket CGD05–04–

216 and are available for inspection or 

copying at the Marine Safety Office 721 

Medical Center Drive, Suite 100, 

Wilmington, North Carolina 28401 

between 7:30 a.m. and 3 p.m., Monday 

through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

LCDR Charles A. Roskam II, Chief Port 

Operations (910) 772–2200 or toll free 

(877) 229–0770.

SUPPLEMENTARY INFORMATION: 

Regulatory Information 

We did not publish a notice of 

proposed rulemaking (NPRM) for this 

rule. The Coast Guard is promulgating 

this security zone regulation to protect 

NCSPA Wilmington and the 

surrounding vicinity from threats to 

national security. Accordingly, based on 

the military function exception set forth 

in the Administrative Procedure Act, 5 

U.S.C. 553(a)(1), notice and comment 

rule-making and advance publication 

are not required for this regulation. 

Background and Purpose 

Vessels frequenting the North 

Carolina State Port Authority (NCSPA) 

Wilmington facility serve as a vital link 

in the transportation of military 

munitions, explosives, equipment, and 

personnel in support of Department of 

Defense missions at home and abroad. 

This vital transportation link is 

potentially at risk to acts of terrorism, 

sabotage and other criminal acts. 

Munitions and explosives laden vessels 

also pose a unique threat to the safety 

and security of the NCSPA Wilmington, 

vessel crews, and others in the maritime 

and surrounding community should the 

vessels be subject to acts of terrorism or 

sabotage, or other criminal acts. The 

ability to control waterside access to 

vessels laden with munitions and 

explosives, as well as those used to 

transport military equipment and 

personnel, moored at the NCSPA 

Wilmington is critical to national 

defense and security, as well as to the 

safety and security of the NCSPA 

Wilmington, vessel crews, and others in 

the maritime and surrounding 

community. Therefore, the Coast Guard 

is establishing this security zone to 

safeguard human life, vessels and 

facilities from sabotage, terrorist acts or 

other criminal acts. 

Discussion of Rule 

The security zone is necessary to 

provide security for, and prevent acts of 

terrorism against vessels loading or 

offloading at the NCSPA Wilmington 

facility during a military operation. It 

will include an area from 800 yards 

south of the Cape Fear River Bridge 

encompassing the southern end of Eagle 

Island, the Cape Fear River, and the 

grounds of the State Port Authority 

Terminal south to South Wilmington 

Terminal. The security zone will 

prevent access to unauthorized persons 

who may attempt to enter the secure 

area via the Cape Fear River, the North 

Carolina State Port Authority terminal, 

or use Eagle Island as vantage point for 

surveillance of the secure area. The 

security zone will protect vessels 

moored at the facility, their crews, 

others in the maritime community and 

the surrounding communities from 

subversive or terrorist attack that could 

cause serious negative impact to vessels, 

the port, or the environment, and result 

in numerous casualties. 

No person or vessel may enter or 

remain in the security zone at any time 

without the permission of the Captain of 

the Port, Wilmington. Each person or 

vessel operating within the security 

zone will obey any direction or order of 

the Captain of the Port. The Captain of 

the Port may take possession and 

control of any vessel in a security zone 

and/or remove any person, vessel, 

article or thing from this security zone. 

Regulatory Evaluation 

This rule is not a ‘‘significant 

regulatory action’’ under section 3(f) of 

Executive Order 12866, Regulatory 

Planning and Review, and does not 

require an assessment of potential costs 

and benefits under section 6(a)(3) of that 

Order. The Office of Management and 

Budget has not reviewed it under that 

Order. It is not ‘‘significant’’ under the 

regulatory policies and procedures of 

the Department of Homeland Security 

(DHS).

Although this regulation restricts 

access to the security zone, the effect of 

this regulation will not be significant 

because: (i) The COTP or his or her 

representative may authorize access to 

the security zone; (ii) the security zone 

will be enforced for limited duration; 

and (iii) the Coast Guard will make 

notifications via maritime advisories so 

mariners can adjust their plans 

accordingly.