6560 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Rules and Regulations 

1Special Information Sharing Procedures to Deter 

Money Laundering and Terrorist Activity, 67 FR 

60,579 (Sept. 26, 2002). 

2 31 CFR 103.100. 

the narrative portion of the notice to 

cosigner. 

(i) The name and address of the 

Federal credit union; 

(ii) An identification of the debt to be 

cosigned (e.g., a loan identification 

number); 

(iii) The amount of the loan; 

(iv) The date of the loan; 

(v) A signature line for a cosigner to 

acknowledge receipt of the notice; and 

(vi) To the extent permitted by State 

law, a cosigner notice required by State 

law may be included in the notice in 

paragraph (b)(1) of this section. 

(3) To the extent the notice to cosigner 

specified in paragraph (b)(1) of this 

section refers to an action against a 

cosigner that is not permitted by State 

law, the notice to cosigner may be 

modified. 

§ 706.4 Late charges. 

(a) In connection with collecting a 

debt arising out of an extension of credit 

to a consumer, it is an unfair act or 

practice for a Federal credit union, 

directly or indirectly, to levy or collect 

any delinquency charge on a payment, 

which payment is otherwise a full 

payment for the applicable period and 

is paid on its due date or within an 

applicable grace period, when the only 

delinquency is attributable to late fee(s) 

or delinquency charge(s) assessed on 

earlier installment(s). 

(b) For purposes of this section, 

‘‘collecting a debt’’ means any activity 

other than the use of judicial process 

that is intended to bring about or does 

bring about repayment of all or part of 

a consumer debt. 

By the National Credit Union 

Administration Board, on January 29, 2010. 

Mary F. Rupp, 

Secretary of the Board. 

[FR Doc. 2010–2311 Filed 2–9–10; 8:45 am] 

BILLING CODE 7535–01–P 

DEPARTMENT OF THE TREASURY 

31 CFR Part 103 

RIN 1506–AB04 

Financial Crimes Enforcement 

Network; Expansion of Special 

Information Sharing Procedures To 

Deter Money Laundering and Terrorist 

Activity 

AGENCY: Financial Crimes Enforcement 

Network (‘‘FinCEN’’), Treasury. 

ACTION: Final rule. 

SUMMARY: FinCEN is issuing this final 

rule to amend the relevant Bank Secrecy 

Act (‘‘BSA’’) information sharing rules to 

allow certain foreign law enforcement 

agencies, and State and local law 

enforcement agencies, to submit 

requests for information to financial 

institutions. The rule also clarifies that 

FinCEN itself, on its own behalf and on 

behalf of other appropriate components 

of the Department of the Treasury 

(‘‘Treasury’’), may submit such requests. 

Modification of the information sharing 

rules is a part of Treasury’s continuing 

effort to increase the efficiency and 

effectiveness of its anti-money 

laundering and counter-terrorist 

financing policies. 

DATES: Effective Date: February 10, 

2010. 

FOR FURTHER INFORMATION CONTACT: The 

FinCEN regulatory helpline at (800) 

949–2732 and select Option 2. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Statutory Provisions 

On October 26, 2001, the President 

signed into law the Uniting and 

Strengthening America by Providing 

Appropriate Tools Required to Intercept 

and Obstruct Terrorism Act of 2001 

(‘‘USA PATRIOT ACT’’), Public Law 

107–56 (‘‘the Act’’). Title III of the Act 

amends the anti-money laundering 

provisions of the BSA, codified at 12 

U.S.C. 1829b and 1951–1959 and 31 

U.S.C. 5311–5314 and 5316–5332, to 

promote the prevention, detection, and 

prosecution of international money 

laundering and the financing of 

terrorism. Regulations implementing the 

BSA appear at 31 CFR Part 103. The 

authority of the Secretary of the 

Treasury (‘‘the Secretary’’) to administer 

the BSA has been delegated to the 

Director of FinCEN. 

Of the Act’s many goals, the 

facilitation of information sharing 

among governmental entities and 

financial institutions for the purpose of 

combating terrorism and money 

laundering is of paramount importance. 

Section 314 of the Act furthers this goal 

by providing for the sharing of 

information between the government 

and financial institutions, and among 

financial institutions themselves. As 

with many other provisions of the Act, 

Congress has charged Treasury with 

promulgating regulations to implement 

these information-sharing provisions. 

Subsection 314(a) of the Act states in 

part that: 

[t]he Secretary shall * * * adopt regulations 

to encourage further cooperation among 

financial institutions, their regulatory 

authorities, and law enforcement authorities, 

with the specific purpose of encouraging 

regulatory authorities and law enforcement 

authorities to share with financial 

institutions information regarding 

individuals, entities, and organizations 

engaged in or reasonably suspected based on 

credible evidence of engaging in terrorist acts 

or money laundering activities. 

B. Overview of the Current Regulatory 

Provisions Regarding the 314(a) 

Program 

On September 26, 2002, FinCEN 

published a final rule implementing the 

authority contained in section 314(a) of 

the Act.1 That rule (‘‘the 314(a) rule’’) 

allows FinCEN to require financial 

institutions to search their records to 

determine whether they have 

maintained an account or conducted a 

transaction with a person that a Federal 

law enforcement agency has certified is 

suspected based on credible evidence of 

engaging in terrorist activity or money 

laundering.2 Before processing a request 

from a Federal law enforcement agency, 

FinCEN also requires the requesting 

agency to certify that, in the case of 

money laundering, the matter is 

significant, and that the requesting 

agency has been unable to locate the 

information sought through traditional 

methods of investigation and analysis 

before attempting to use this authority 

(‘‘the 314(a) program’’). 

Since its inception, the 314(a) 

program has yielded significant 

investigative benefits to Federal law 

enforcement users in terrorist financing 

and major money laundering cases. 

Feedback from the requesters and 

illustrations from sample case studies 

consistently demonstrate how useful the 

program is in enhancing the scope and 

expanding the universe of 

investigations. In view of the proven 

success of the 314(a) program, FinCEN 

is broadening access to the program as 

outlined in the following paragraphs. 

C. Objectives of Changes 

1. Allowing Certain Foreign Law 

Enforcement Agencies To Initiate 314(a) 

Queries 

In order to satisfy the United States’ 

treaty obligation with certain foreign 

governments, FinCEN is extending the 

use of the 314(a) program to include 

foreign law enforcement agencies. On 

June 25, 2003, the Agreement on Mutual 

Legal Assistance between the United 

States and the European Union (‘‘EU’’) 

(hereinafter, the ‘‘U.S.–EU MLAT’’) was 

signed. In 2006, the U.S.–EU MLAT, 

along with twenty-five bilateral 

instruments, were submitted to the U.S. 

Senate for its advice and consent for 


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3An additional two bilateral instruments, with 

Romania and Bulgaria, were concluded and 

submitted to the Senate in 2007, following those 

countries’ accession to the EU. 

4 In addition, Article 4 makes clear that the 

United States and the EU are under an obligation 

to ensure that the application of Article 4 does not 

impose extraordinary burdens on States that receive 

search requests. 5See 31 U.S.C. 310. 6See 74 FR 58926 (Nov. 16, 2009). 

ratification. The U.S.–EU MLAT and all 

twenty-seven bilateral instruments were 

ratified by the President on September 

23, 2008, upon the advice and consent 

of the U.S. Senate.3

Article 4 of the U.S.–EU MLAT 

(entitled ‘‘Identification of Bank 

Information’’) obligates a requested 

Signatory State to search on a 

centralized basis for bank accounts 

within its territory that may be 

important to a criminal investigation in 

the requesting Signatory State. Article 4 

also contemplates that Signatory States 

may search for information in the 

possession of a non-bank financial 

institution. Under Article 4, a Signatory 

State receiving a request may limit the 

scope of its obligation to provide 

assistance to terrorist activity and 

money laundering offenses, and many 

did so in their respective bilateral 

instruments with the United States.4 In 

negotiating the terms of Article 4, the 

United States expressly envisioned that 

EU member States would be able to 

access the 314(a) program. Expanding 

that process to include certain foreign 

law enforcement requesters will greatly 

benefit the United States by granting 

law enforcement agencies in the United 

States reciprocal rights to obtain 

information about matching accounts in 

EU member States. 

Foreign law enforcement agencies 

will be able to use the 314(a) program 

in a way analogous to how Federal law 

enforcement agencies currently access 

the program. Thus, a foreign law 

enforcement agency, prior to initiating a 

314(a) query, will have to certify that, in 

the case of a money laundering 

investigation, the matter is significant, 

and that it has been unable to locate the 

information sought through traditional 

methods of investigation and analysis 

before attempting to use the 314(a) 

program. A Federal law enforcement 

official serving as an attache ́ to the 

requesting jurisdiction will be notified 

of and will review the foreign request 

prior to its submission to FinCEN. The 

application of these internal procedures 

will help ensure that the 314(a) program 

is utilized only in significant situations, 

thereby minimizing the cost to reporting 

financial institutions. Comments 

addressed to the expansion of the 314(a) 

program to include foreign law 

enforcement agencies will be discussed 

below. 

2. Allowing State and Local Law 

Enforcement Agencies To Initiate 314(a) 

Queries 

Money laundering and terroristrelated financial crimes are not limited 

by jurisdiction or geography. Detection 

and deterrence of these crimes require 

information sharing across all levels of 

investigative authorities, to include 

State and local law enforcement, to 

ensure the broadest U.S. Government 

defense. 

Access to the 314(a) program by State 

and local law enforcement agencies will 

provide them a platform from which 

they can more effectively and efficiently 

fill information gaps, including those 

connected with multi-jurisdictional 

financial transactions, in the same 

manner as Federal law enforcement 

agencies. This expansion of the 314(a) 

program, in certain limited 

circumstances, to include State and 

local law enforcement authorities, will 

benefit overall efforts to ensure that all 

law enforcement resources are made 

available to combat money laundering 

and terrorist financing. 

As is the case currently with 

requesting Federal law enforcement 

agencies, State and local law 

enforcement, prior to initiating a 314(a) 

query, will have to certify that, in the 

case of a money laundering 

investigation, the matter is significant, 

and that it has been unable to locate the 

information sought through traditional 

methods of investigation and analysis 

before attempting to use the 314(a) 

program. The application of these 

internal procedures will help ensure 

that the 314(a) program will be utilized 

only in the most compelling situations, 

thereby minimizing the cost incurred by 

reporting financial institutions. 

Comments addressed to the expansion 

of the 314(a) program to allow State and 

local law enforcement participation will 

be discussed below. 

3. Clarifying That FinCEN, on Its Own 

Behalf and on Behalf of Appropriate 

Components of the Department of the 

Treasury, May Initiate 314(a) Queries 

FinCEN’s statutory mandate includes 

working to identify possible criminal 

activity to appropriate Federal, State, 

local, and foreign law enforcement 

agencies, and to support ongoing 

criminal financial investigations and 

prosecutions.5 FinCEN also routinely 

assists the law enforcement community 

through proactive analyses to discover 

trends, patterns, and common activity in 

the financial information contained in 

BSA reports. FinCEN’s use of the 314(a) 

program will enhance the scope and 

utility of its case support efforts, 

including insights provided from BSA 

data, thereby delivering critical 

information about significant criminal 

activity on a timelier basis. 

FinCEN assists law enforcement by 

providing advanced or specialized 

analysis of BSA data on significant 

investigations involving offenses of 

money laundering or terrorist financing. 

These investigations often involve 

multiple locations or are otherwise 

linked to other investigations. A single 

314(a) request issued by FinCEN can 

more efficiently coordinate and 

simultaneously support several 

investigations, thereby eliminating the 

need for separate requests from each 

investigating agency or jurisdiction. 

There also are instances in which 

FinCEN’s analytical products will 

benefit from access to the 314(a) 

program by providing a more complete 

picture of financial transactions and 

mechanisms, as well as 

interrelationships among investigative 

subjects and financial transactions or 

entities. In addition, other appropriate 

components of Treasury that provide 

analytical support in areas such as 

Treasury’s counter-terrorist financing 

and anti-money laundering efforts will 

be better equipped to fulfill their 

missions with access to the 314(a) 

program. It is anticipated that the 

findings from the use of the 314(a) 

program will reveal additional insights 

and overall patterns of suspicious 

financial activities. Comments 

addressed to the expansion of the 314(a) 

program to allow FinCEN to self-initiate 

requests will be discussed below. 

II. Notice of Proposed Rulemaking 

The final rule contained in this 

document is based on the Notice of 

Proposed Rulemaking published in the 

Federal Register on November 16, 2009 

(‘‘Notice’’).6 With the intent of 

broadening access to the 314(a) 

program, the Notice proposed to allow 

certain foreign law enforcement 

agencies, and State and local law 

enforcement agencies, to initiate 314(a) 

queries. In addition, the Notice 

proposed to clarify that FinCEN, on its 

own behalf and on behalf of appropriate 

components of Treasury, may initiate 

314(a) queries. 

III. Comments on the Notice—Overview 

and General Issues 

The comment period for the Notice 

ended on December 16, 2009. We 


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6562 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Rules and Regulations 

7All comments to the Notice are available for 

public viewing at www.regulations.gov. 

8One comment letter was submitted on behalf of 

two entities. 

received a total of 13 comment letters 

from 14 entities and individuals.7 Of 

these, 7 were submitted by trade groups 

or associations, 4 were submitted by 

individuals, 2 were submitted by 

Federal law enforcement agencies, and 

1 was submitted by an individual 

financial institution.8

Comments on the Notice focused on 

the following matters: (1) Requirements 

for foreign, State, and local law 

enforcement 314(a) requests; (2) 

Confidentiality and privacy concerns 

regarding information provided to 

foreign, State, and local law 

enforcement; (3) Requirements for 

FinCEN self-initiated 314(a) requests; (4) 

FinCEN’s authority to expand the 314(a) 

rule; (5) The 314(a) statutory goal of 

sharing information with financial 

institutions; and (6) Estimate of burden. 

A. Requirements for Foreign, State, and 

Local Law Enforcement 314(a) Requests 

Some commenters requested that 

FinCEN clarify what the requirements 

are for foreign, State, and local law 

enforcement to submit 314(a) requests. 

In addition, those commenters asked 

FinCEN to clarify how the requests will 

be monitored to ensure that regulatory 

and procedural requirements are met. 

For example, some commenters 

requested clarification as to how 

FinCEN will determine whether a 

money laundering investigation is 

‘‘significant’’ and that more traditional 

means of investigation have been 

exhausted. FinCEN will require these 

law enforcement agencies to certify that 

each individual, entity, or organization 

about which the law enforcement 

agency is seeking information is 

engaged in, or is reasonably suspected 

based on credible evidence of engaging 

in, terrorist financing, or money 

laundering. As discussed above, FinCEN 

will require these law enforcement 

agencies to certify that, in the case of 

money laundering, the matter is 

significant, and the requesting agency 

has been unable to locate the 

information sought through traditional 

methods of investigation before 

attempting to make a 314(a) request. In 

addition, foreign, State, and local law 

enforcement agencies making 314(a) 

requests are required to include the 

following information in their 

certification request: A citation of the 

relevant statutory provisions; a 

description of the suspected criminal 

conduct; for money laundering cases, a 

description as to why the case is 

significant, and a list of the traditional 

methods of investigation and analysis 

which have been conducted prior to 

making the request. Factors that 

contribute towards evaluating the 

significance of a money laundering case 

include, for example: The seriousness 

and magnitude of suspected criminal 

conduct; the dollar amount involved; 

whether the analysis is being conducted 

as part of a multi-agency task force; the 

importance of analysis to agency 

program goals; criminal organization 

involvement; and multi-regional and/or 

cross border implications. 

All requests made by foreign, State, 

and local law enforcement agencies will 

be submitted to FinCEN for review and 

approval. With regard to a request made 

by a foreign law enforcement agency, 

the request will be submitted to a 

Federal law enforcement attache ́. The 

attache ́ will review the request to ensure 

that the request is from a legitimate 

entity. The attache ́ will then forward the 

request to FinCEN for review. Following 

FinCEN’s approval, the request will be 

made available to financial institutions 

via the 314(a) Secure Information 

Sharing System. The financial 

institutions may contact FinCEN’s 314 

Program Office with any questions 

regarding a foreign law enforcement 

request. With regard to a State or local 

law enforcement request, the financial 

institution may contact FinCEN, or the 

State or local law enforcement agency 

with any questions regarding its request. 

FinCEN’s determination to subject 

foreign, State, and local law 

enforcement requests to the same 

procedural review and vetting process 

imposed upon Federal law enforcement 

requests goes directly to the 

recommendations offered by many 

commenters. 

One commenter asked whether 

foreign, State, or local law enforcement 

will be identified as the requester on 

314(a) requests sent by FinCEN to 

financial institutions. Currently, in a 

request made by a Federal law 

enforcement agency, the request made 

available by FinCEN to financial 

institutions only includes the name and 

contact number of the agency 

representative making the request. The 

Federal law enforcement agency making 

the request is not identified on 314(a) 

requests sent by FinCEN to financial 

institutions. For a request made by a 

State or local law enforcement agency, 

the request made available by FinCEN to 

financial institutions also will include 

the name and contact number of the 

agency representative making the 

request. For a request made by a foreign 

law enforcement agency, the request 

made available by FinCEN to financial 

institutions will include the contact 

number for FinCEN’s 314 Program 

Office. This decision was made to 

alleviate the need for financial 

institutions to call overseas. 

One commenter asked for clarification 

as to whether foreign, State, and local 

law enforcement requests could be 

made independent of a Federal 

investigation. There is no obligation that 

requests from these agencies be linked 

to a Federal investigation. However, 

with regard to State and local law 

enforcement requests, the law 

enforcement agency must include in the 

certification the identity of any Federal 

law enforcement agency with whom 

they have consulted. In addition, for 

terrorism cases FinCEN will review the 

request with the FBI liaison to FinCEN 

prior to further processing the request. 

A few commenters suggested that 

FinCEN should limit access to those 

countries that cooperate with the United 

States via a treaty or other bilateral 

agreement. As we discuss above, only 

foreign law enforcement agencies with 

criminal investigative authority that are 

from a jurisdiction that is a party to a 

treaty that provides for, or in the 

determination of FinCEN is from a 

jurisdiction that otherwise allows, law 

enforcement agencies in the United 

States reciprocal access to information 

comparable to that obtainable under 

section 103.100 will be allowed to 

access the 314(a) program. Some 

commenters suggested that FinCEN 

should clarify which State and local law 

enforcement agencies will be allowed to 

access the 314(a) program. All State and 

local law enforcement agencies with 

criminal investigative authority will be 

allowed to access the 314(a) program. 

One association suggested that before 

any expansion in the proposal is 

considered, the current internal controls 

over the 314(a) program should be 

incorporated into the rule. FinCEN is 

not inclined to incorporate its internal 

operating procedures into the 

regulation, as this would not allow us 

sufficient latitude to revise our internal 

operating procedures as needed. 

A few commenters asked for 

clarification as to what steps foreign, 

State, and local law enforcement will be 

required to take to obtain information 

from a financial institution if a match to 

their request is identified. The steps 

required to be taken by one of these law 

enforcement agencies to obtain 

information from a financial institution 

once a match has been confirmed is not 

addressed within the 314(a) rule. These 

law enforcement agencies will have to 

follow the standard procedures that they 

currently follow in order to obtain 

financial information from financial 


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Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Rules and Regulations 6563 

9See, e.g., ‘‘BSA Records, 314(a) Request Assists 

Investigation of International Money Laundering 

Using Stored Value Cards,’’ SAR Activity Review— 

Trends, Tips & Issues, Issue 12, October 2007, 

http://www.fincen.gov/law_enforcement/ss/html/ 

008.html. 10 12 U.S.C. 3413(d). 

institutions, for example through 

issuance of a subpoena, a letter rogatory, 

or national security letter. 

Two commenters noted that Federal 

law enforcement is required to track 

their use of the 314(a) data to provide 

feedback, demonstrate program value, 

and maintain accountability. FinCEN 

routinely provides feedback and data to 

the regulated public as to the 

effectiveness of the 314(a) program (e.g., 

SAR Activity Review articles 9) and will 

continue to do so in the future. The 

commenters suggested that the data 

reporting requirements be made explicit 

in the implementing regulations and the 

same data reporting requirements 

should apply to foreign, State, and local 

law enforcement. As noted above, 

FinCEN is not inclined to incorporate its 

internal operating procedures into the 

regulation. However, the same data 

reporting requirements will apply to 

foreign, State, and local law 

enforcement. 

One commenter asked how FinCEN 

would address overlapping interests of 

different law enforcement agencies 

pursuing the same subject. With regard 

to foreign requests, while processing the 

request, any existing cases the 314(a) 

subject(s) hits against will be brought to 

the immediate attention of FinCEN’s 

314 Team Leader to determine what 

further action will take place. FinCEN 

will automatically network (i.e., notify) 

all international terrorism-related 

requests with the FBI only, and will 

automatically network all international 

money laundering requests with both 

Federal and non-Federal law 

enforcement agencies, as applicable. 

With regard to State and local law 

enforcement requests, the law 

enforcement agency must include in the 

certification the identity of any Federal 

law enforcement agency with whom 

they have consulted. For State and local 

law enforcement requests related to 

terrorism cases, FinCEN will review the 

request with the FBI liaison to FinCEN 

prior to further processing the request. 

In addition, it is FinCEN’s policy to 

network different requesters that have 

submitted requests for information to 

FinCEN on the same subject. 

Networking gives requesters the 

opportunity to coordinate their efforts 

with U.S. law enforcement and other 

international entities on matters of 

mutual interest. Networking will apply 

to requests made by foreign, State, and 

local law enforcement. 

A few commenters suggested that 

FinCEN provide training to foreign, 

State, and local law enforcement 

regarding the proper procedures for 

utilizing the 314(a) program. While a 

formal process has not been instituted at 

this point, FinCEN’s intention is to 

provide outreach to the new law 

enforcement users. 

Another commenter suggested that 

instead of allowing all State and local 

law enforcement agencies to access the 

314(a) program, a 2-year pilot program 

allowing access to two or three large 

State and local law enforcement 

agencies be implemented instead. The 

commenter noted that FinCEN could 

monitor the results of the pilot program 

and report the results to Congress and 

the public. While FinCEN will monitor 

the effectiveness of the program’s 

expansion, arbitrarily limiting access to 

certain large local jurisdictions would 

deny potential access to smaller 

communities confronting serious 

criminal threats. 

One commenter suggested that local 

law enforcement agencies be required to 

enter into a memorandum of 

understanding with FinCEN in order to 

access the 314(a) program. FinCEN has 

an active cooperative relationship with 

law enforcement at every level in the 

country, and expanding the 314(a) 

program to allow local law enforcement 

access is part of the ongoing support 

FinCEN provides to law enforcement. 

This support includes, for example, 

providing access to BSA data, fostering 

information exchange with international 

counterparts, and offering financial 

subject matter knowledge in key realms. 

B. Confidentiality and Privacy Concerns 

Regarding Information Provided to 

Foreign, State, and Local Law 

Enforcement 

A few commenters expressed concern 

about the confidentiality of information 

that financial institutions would 

provide to FinCEN as a result of the 

rule, particularly when such 

information is shared by FinCEN with 

requesting foreign, State and local law 

enforcement agencies. At least one 

commenter drew an analogy between 

section 314(a) ‘‘hit’’ information and 

information in suspicious activity 

reports (‘‘SARs’’) to argue that section 

314(a) information should be accorded 

the same protections and assurances of 

confidentiality when such information 

is shared with foreign law enforcement 

agencies. 

FinCEN believes these concerns are 

unfounded. Section 314(a) information 

is extremely limited. Unlike SAR 

information, section 314(a) information 

will continue to consist of only a 

confirmation that a matching account or 

transaction exists. Also unlike the 

documentation supporting the filing of 

a SAR, the underlying account and 

transaction information relating to a 

314(a) hit that contains sensitive 

customer financial information is not 

deemed to be part of the 314(a) 

response, and can only be obtained by 

the requesting agency through 

appropriate legal process, such as a 

subpoena. FinCEN is not part of that 

legal process to obtain the underlying 

information; its involvement ends at 

informing requesting agencies that a 

match exists. In addition, unlike with 

SARs, the personally-identifiable 

information (e.g., subject names, aliases, 

dates of birth, and social security 

numbers) that a financial institution 

uses to conduct a section 314(a) search 

is provided not by the institution, but by 

the requesting agency. 

Another commenter questioned 

whether sharing section 314(a) 

information with foreign law 

enforcement agencies may run afoul of 

the Right to Financial Privacy Act 

(‘‘RFPA’’), 12 U.S.C. 3401 et seq., or any 

other Federal or state privacy law. 

Because any hit information provided to 

FinCEN would be reported pursuant to 

a Federal rule, the reporting of such 

information to FinCEN would fall 

within an exception to the RFPA.10

FinCEN is not aware of any other 

Federal or state law that would prohibit 

a financial institution from reporting 

section 314(a) information to FinCEN in 

response to a foreign law enforcement 

agency’s request or that would prevent 

FinCEN from sharing such information 

with the foreign requester. 

C. Requirements for FinCEN SelfInitiated 314(a) Requests 

Some commenters requested that 

FinCEN clarify the reason FinCEN needs 

access to expand the 314(a) program to 

allow it to make self-initiated requests, 

how FinCEN will use the information, 

the procedures that will apply to 

initiating the requests, the parties who 

will screen such requests, and any 

limitations that will apply to FinCEN’s 

self-initiated requests. FinCEN selfinitiated requests will be for the purpose 

of conducting analysis to deter and 

detect terrorist financing activity or 

money laundering. These requests will 

be made in order to increase the value 

of analytical support to law 

enforcement. FinCEN or the appropriate 

Treasury component making the request 

shall certify in writing in the same 

manner as a requesting law enforcement 

agency that each individual, entity or 


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6564 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Rules and Regulations 

organization about which FinCEN or the 

appropriate Treasury component is 

seeking information is engaged in, or is 

reasonably suspected based on credible 

evidence of engaging in, terrorist 

activity or money laundering. FinCEN 

or the other appropriate Treasury 

component making the request shall 

also certify that, in the case of money 

laundering, the matter is significant, and 

the requesting agency has been unable 

to locate the information sought through 

traditional methods of analysis before 

attempting to make a 314(a) request. In 

addition, FinCEN or the appropriate 

Treasury component making the 314(a) 

request is required to include 

information such as the following in 

their certification request: For money 

laundering cases, a description as to 

why the case is significant, and a list of 

the traditional methods of analysis 

which have been conducted prior to 

making the request. If FinCEN uses the 

314(a) process in support of proactive 

target development, FinCEN will first 

brief law enforcement to ensure that the 

analysis is of interest to law 

enforcement and to ensure deconfliction with any ongoing 

investigation. In addition, FinCEN selfinitiated 314(a) requests will be 

independently reviewed and approved 

by multiple offices within FinCEN. 

In addition, some commenters 

requested that FinCEN clarify the 

components of Treasury that will have 

access to the 314(a) program and under 

what circumstances. The components of 

Treasury that will have access to the 

314(a) program will be those 

components that provide analytical 

support, such as those providing 

support to Treasury’s counter-terrorist 

financing and anti-money laundering 

efforts. The components of Treasury 

which submit 314(a) requests will be 

required to comply with the same 

procedures and certification 

requirements as FinCEN self-initiated 

requests. 

Two commenters noted that 

permitting FinCEN and other 

components of Treasury to self-initiate 

314(a) requests may be detrimental to 

law enforcement and may cause many 

unnecessary searches by banks. The 

same commenters noted that it appears 

that FinCEN is lowering the threshold as 

to when FinCEN can initiate 314(a) 

requests. The commenters explained 

that law enforcement must exhaust all 

traditional methods of investigation 

before they can initiate a 314(a) request. 

Because FinCEN is not a law 

enforcement agency, FinCEN cannot 

exhaust all traditional methods of 

investigation, and therefore FinCEN will 

be held to a much lower threshold than 

law enforcement. In addition, the 

commenters are concerned that law 

enforcement may be precluded from 

making a 314(a) request on a subject, at 

a crucial point of an investigation, if 

FinCEN has previously conducted a 

self-initiated request on the same 

subject, because this would create a 

duplicative search, something that has 

been discouraged by FinCEN. The 

commenters also are concerned that a 

FinCEN or Treasury 314(a) request may 

be submitted on a subject who is already 

under investigation by law enforcement, 

because the broad audience that 

receives these requests could cause 

operational concerns for the 

investigation. In addition, the 

commenters noted that it is not clear 

what FinCEN will do with the 

information once it learns of a 

previously unknown bank account 

through the 314(a) process if FinCEN 

does not have subpoena or summons 

authority to pursue the lead any further. 

Finally these commenters noted that 

FinCEN’s requests will be competing 

with law enforcement for access to the 

limited number of 314(a) requests that 

can be made, due to the need not to 

overburden financial institutions. 

FinCEN will be implementing review 

procedures to ensure that any request it 

intends to make will not conflict with 

ongoing law enforcement efforts. As 

noted above, in the certification FinCEN 

or other components of Treasury will 

submit for a 314(a) request, they must 

certify that to ensure de-confliction with 

any possible on-going investigation 

within the Federal law enforcement 

community, they have consulted with 

FinCEN’s Federal law enforcement 

liaisons. In addition, FinCEN must also 

certify that they have been unable to 

locate the information sought through 

traditional methods of analysis, and 

they must list the type of analysis they 

have conducted. It is anticipated that 

any direct use by FinCEN of the 314(a) 

program will not cause any significant 

increase in the amount of case requests 

going to the industry. The primary 

scenarios in which we would envision 

FinCEN making a 314(a) request are as 

follows: (1) A request could be made for 

FinCEN to serve as a conduit in issuing 

a consolidated 314(a) request on behalf 

of a multi-agency task force 

investigation. In this instance, it might 

actually reduce/preclude an otherwise 

larger number of separate requests 

emanating from individual agencies. 

FinCEN would request that these 

agencies conduct the subpoena/ 

investigative followup on any positive 

hits received from the industry. (2) 

FinCEN may occasionally develop 

significant, multi-state proactive targets/ 

leads which might be appropriate for a 

314(a) request. These are typically longterm selective efforts and therefore not 

likely to constitute any significant 

increase in the number of 314(a) 

requests. In addition, FinCEN would 

first brief the law enforcement 

community on the target package before 

deciding to issue a 314(a) request to 

ensure it is of substantial interest to law 

enforcement agencies and also to ensure 

an opportunity for de-confliction. If 

positive hits occur, FinCEN would 

collaborate with law enforcement on 

any subpoena/investigative follow-up. 

Furthermore, for any FinCEN selfinitiated 314(a) requests, the same 

parameters will exist for justifying the 

significance of the ‘case request’ which, 

in turn, will also likely limit the number 

of such requests. 

D. FinCEN’s Authority To Expand the 

314(a) Rule 

A few commenters questioned 

FinCEN’s authority to expand the 

section 314(a) program to include 

requesters other than Federal law 

enforcement agencies. Section 314(a) 

authorizes Treasury to adopt regulations 

to encourage further cooperation among 

‘‘financial institutions, their regulatory 

authorities, and law enforcement 

authorities.’’ Nowhere in section 314(a) 

is the term ‘‘law enforcement’’ limited to 

just Federal law enforcement agencies. 

That FinCEN initially included only 

Federal law enforcement agencies when 

it first established the section 314(a) 

program in 2002 was never meant to 

suggest a limitation on FinCEN’s 

authority. On the contrary, the section 

314(a) program began with Federal law 

enforcement because of uncertainty 

about how the program would work in 

practice and uncertainty about the 

resulting burden to financial 

institutions. FinCEN has had almost 

eight years of experience in 

administering the section 314(a) 

program, and for the reasons outlined 

elsewhere in this rulemaking, believes 

that its expansion to include other 

requesters will reap benefits that far 

outweigh the additional obligations on 

financial institutions. This is 

particularly true in the case of foreign 

requesters because law enforcement 

agencies in the United States, as a result 

of FinCEN accommodating foreign 

requesters, now will have the 

opportunity to obtain information about 

matching accounts and transactions in 

those EU jurisdictions that have signed 

the U.S.-EU MLAT. FinCEN therefore 

believes that its expansion of the section 

314(a) program is entirely consistent 

with the stated goals of section 314(a) of 


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11Two commenters noted that they are opposed 

to redefining what constitutes money laundering for 

314(a) information sharing purposes by 

incorporating guidance that was issued in 2009 

under the companion statutory provision, section 

314(b), that allows U.S. financial institutions to 

share information. The commenters noted that 

broadening the scope improperly sends a signal that 

serious money-laundering and terrorist financing 

crimes have no greater priority than standard 

financial fraud or other criminal cases. FinCEN has 

not expanded the definition of the term ‘‘money 

laundering’’ beyond the change noted above. 

12See 18 U.S.C. 1956(c)(7) (defining the term 

‘‘specified unlawful activity’’ to include, inter alia, 

an offense listed in 18 U.S.C. 1961(1)). 

13The U.S.-EU MLAT, and 27 bilateral 

instruments with EU Member States implementing 

its terms, require each EU member State to be able 

to search for the kind of information covered by 31 

CFR 103.100 and to report to the requesting State 

the results of such a search promptly. 

14Two Federal law enforcement agencies noted 

that the NPRM’s appeal to add the EU countries as 

well as state and local law enforcement to the 

Continued 

encouraging cooperation between 

financial institutions and law 

enforcement agencies. 

FinCEN received another comment 

questioning its ‘‘expansion’’ of the term 

‘‘money laundering,’’ as that term is used 

in the rule. Currently, that term is 

defined to mean activity criminalized by 

18 U.S.C. 1956 or 1957. The one change 

to the definition of the term ‘‘money 

laundering’’ would be to clarify that the 

term includes activity that would be 

criminalized by 18 U.S.C. 1956 or 1957 

if such activity occurred in the United 

States. The change is necessary because 

of the addition of foreign law 

enforcement agencies as an authorized 

requester. Aside from making the 

provisions of the rule relevant to foreign 

requesters, the change is not intended 

and should not be viewed as expanding 

the scope of activity for which the 

section 314(a) program may be used. 

One commenter also expressed 

concern about the pace at which 

FinCEN is seeking to amend the section 

314(a) process, given its belief that 

section 314(a) information may be 

obtained through existing processes. As 

was explained in the Notice and 

elsewhere in this rulemaking, FinCEN is 

seeking to finalize a rule as quickly as 

possible so that the U.S. Government 

can comply with its obligations under 

the U.S.-E.U. MLAT and related 

bilateral instruments. Those treaties 

enter into force on February 1, 2010. 

Contrary to that commenter’s belief, 

there is no current mechanism available 

to State, local and foreign law 

enforcement agencies that would allow 

those agencies to ascertain quickly 

whether financial institutions 

throughout the United States have 

established an account or conducted a 

transaction for a particular person or 

entity. 

E. 314(a) statutory goal of sharing 

information with financial institutions 

A few commenters noted that the 

proposed rule sets forth additional 

reporting requirements for the industry, 

but does not address how this furthers 

the statutory goal of sharing information 

with financial institutions. One of these 

commenters noted that FinCEN should 

develop mechanisms, in addition to its 

bi-annual SAR Activity Review 

publication, that will help share 

information with financial institutions. 

The overarching policy directive of the 

Act generally, and section 314 in 

particular, is that more information 

sharing will better enable the Federal 

Government and financial institutions 

to guard against money laundering and 

terrorist financing. This rule supports 

the policy directive of the Act. FinCEN 

recognizes the importance of providing 

financial institutions information to 

assist them in identifying and reporting 

suspected terrorist activity and money 

laundering. For this reason, FinCEN 

regularly provides sample case feedback 

studies to the industry which illustrate 

how the use of 314(a) has often made a 

‘breakthrough’ difference in terrorist 

financing and significant money 

laundering cases. The studies also 

convey insight on related trends and 

patterns. FinCEN also has posted several 

Federal law enforcement informational 

alerts on the 314(a) Secure Information 

Sharing System, which has provided for 

enhanced sharing of information 

between the financial industry and law 

enforcement in a secure environment. In 

addition, the final rule does not 

preclude law enforcement, when 

submitting a list of suspects to FinCEN, 

from providing additional information 

relating to suspicious trends and 

patterns, and FinCEN specifically will 

encourage law enforcement to share 

such information with the financial 

community. 

F. Estimate of burden 

Refer to section V–Administrative 

Matters, item D—Paperwork Reduction 

Act for details regarding comments on 

the estimate of burden. 

IV. Section-by-Section Analysis 

A. Section 103.90(a) 

FinCEN proposed to amend 31 CFR 

103.90(a) by changing the definition of 

the term ‘‘money laundering’’ to include 

activity that would be criminalized by 

18 U.S.C. 1956 or 1957 if such activity 

occurred in the United States.11 The 

change will allow the term to be applied 

to information requests by foreign law 

enforcement agencies. State and local 

law enforcement requesters will be 

subject to the same definition of money 

laundering that currently applies to 

Federal law enforcement agencies—i.e., 

activity that is criminalized by 18 U.S.C. 

1956 or 1957. Thus, in the case of a 

significant money laundering matter, a 

State or local law enforcement agency 

seeking information under the section 

314(a) program will have to certify that 

it is investigating activity that would be 

criminalized under 18 U.S.C. 1956 or 

1957. Such activity could include, for 

example, conducting a financial 

transaction with proceeds of murder, 

kidnapping, or dealing in a controlled 

substance (as defined in section 102 of 

the Controlled Substances Act), which 

is punishable as a felony under State 

law.12 FinCEN is adopting this 

amendment as proposed. 

B. Section 103.100(a)(4) 

FinCEN proposed to add 31 CFR 

103.100(a)(4), which will define a ‘‘law 

enforcement agency’’ to include a 

Federal, State, local, or foreign law 

enforcement agency with criminal 

investigative authority, provided that 

the foreign law enforcement agency is 

from a jurisdiction that is a party to a 

treaty that provides, or in the 

determination of FinCEN is from a 

jurisdiction that otherwise allows, law 

enforcement agencies in the United 

States with reciprocal access to 

information comparable to that 

obtainable under section 103.100. The 

addition of foreign law enforcement 

agencies will enable the United States to 

be compliant with its obligations under 

the U.S.-EU MLAT, thereby providing 

law enforcement agencies in the United 

States with the benefit of reciprocal 

access to information in EU member 

States.13

The addition of State and local law 

enforcement agencies, as discussed 

above, will provide a platform for such 

agencies to deal more effectively with 

multi-jurisdictional financial 

transactions in the same manner as 

Federal law enforcement agencies. 

Access to the 314(a) program will 

provide State and local law enforcement 

agencies with another resource to aid in 

discovering the whereabouts of stolen 

proceeds. FinCEN is adopting these 

amendments as proposed. 

C. Section 103.100(b)(1) 

FinCEN proposed, for the reasons 

discussed above, to amend section 

103.100(b)(1) to make conforming 

changes to reflect the addition of State 

and local law enforcement agencies, and 

foreign law enforcement agencies, as 

potential requesters of information.14


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6566 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Rules and Regulations 

314(a) program is understandable, because these 

elements are all law enforcement entities. 

15 31 CFR 103.11(c). 

16U.S. Small Business Administration, ‘‘Table of 

Small Business Size Standards Matched to North 

American Industry Classification System Codes’’ at 

28 (Aug. 22, 2008). 

17See FDIC, Bank Find (Number of Banks), 

http://www2.fdic.gov/idasp/main_bankfind.asp 

(last visited Mar. 24, 2009). 

18See also NCUA, Credit Union Data (Number of 

Credit Unions), http://webapps.ncua.gov/ 

customquery/ (last visited Mar. 24, 2009). 

19 17 CFR 240.0–10. 

20See 73 FR 13692, 13704 (Mar. 13, 2008) (The 

Securities and Exchange Commission (‘‘SEC’’) 

reports from commission records that there are 6016 

broker-dealers, 894 of which are small businesses. 

FinCEN only sends 314(a) requests to an estimated 

5,000 broker-dealers; however we rely on the SEC 

numbers to estimate that 15% are small businesses). 

21 31 CFR 103.100. 

22 31 CFR 103.100(b)(2). 

23 31 CFR 103.100(b)(2)(ii). 

24Estimated requests per annum subject to the 

Paperwork Reduction Act include 10 from FinCEN, 

50 from State/local law enforcement, and 60 from 

foreign law enforcement agencies, for a total of 120 

requests. 

25FinCEN based its estimate on experience and 

contact with the regulated industries. However, due 

to one of the comments received on the proposed 

rule, FinCEN re-assessed this original estimate. For 

example, FinCEN considered the time necessary for 

a depository institution to process basic customer 

transactions. These types of transactions are similar 

to searching and identifying the subject of a 314(a) 

request because, in order to process a transaction 

for a customer, a depository institution teller must 

confirm that a customer maintains an account with 

the depository institution. In many cases, this 

requires the customer to provide some sort of 

identifying information to the depository institution 

teller, such as a driver’s license, which contains 

specific identifying information, including name, 

address, and date of birth. When a 314(a) request 

is submitted to a Covered Institution, the request 

includes the following identification information 

for a subject: name, address, date of birth, and 

social security number. Therefore, an employee of 

FinCEN adopts this amendment as 

proposed. 

D. Section 103.100(b)(2) 

FinCEN proposed to add a new 31 

CFR 103.100(b)(2) which will clarify 

that FinCEN may request directly, on its 

own behalf and on behalf of appropriate 

components of Treasury, whether a 

financial institution or a group of 

financial institutions maintains or has 

maintained accounts for, or has engaged 

in transactions with, specified 

individuals, entities, or organizations. 

Comments directed to this amendment 

were discussed above and FinCEN has 

reviewed and weighed the concerns 

expressed by some commenters. 

FinCEN, however, continues to hold 

that expanding the 314(a) program to 

allow itself, and acting on behalf of 

other appropriate Treasury components, 

to initiate search requests for the 

purpose of conducting analyses to deter 

and detect terrorist financing activity or 

money laundering will enhance 

Treasury’s ability to fulfill its collective 

mission. FinCEN, therefore, adopts the 

amendments as proposed. 

V. Administrative Matters 

A. Executive Order 12866 

It has been determined that this rule 

is a significant regulatory action for 

purposes of Executive Order 12866 

because it raises a novel policy issue. 

However, a regulatory impact analysis 

was not required. 

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 may result in expenditure by that 

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. 

C. Regulatory Flexibility Act 

When an agency issues a final rule, 

the Regulatory Flexibility Act (‘‘RFA’’) (5 

U.S.C. 601 et seq.), requires the agency 

to prepare either a final regulatory 

flexibility analysis, which will ‘‘describe 

the impact of the rule on small entities,’’ 

or to certify that the final rule is not 

expected to have a significant economic 

impact on a substantial number of small 

entities. For the reasons stated below, 

FinCEN certifies that the final rule will 

not have a significant economic impact 

on a substantial number of small 

entities. 

Estimate of the number of small 

entities to which the rule will apply: 

The proposed rule applies to all 

financial institutions of which FinCEN 

estimates there are 55,000. However, 

FinCEN has limited its inquiries to 

banks,15 broker-dealers in securities, 

future commission merchants, trust 

companies, and life insurance 

companies (‘‘Covered Institutions’’). 

Because entities of all sizes are 

vulnerable to abuse by money 

launderers and financers of terrorism, 

the final rule will apply to all Covered 

Institutions regardless of size. As 

discussed below, FinCEN acknowledges 

that the final rule will affect a 

substantial number of small entities. 

For purposes of the RFA, both banks 

and credit unions are considered small 

entities if they have less than $175 

million in assets.16 Of the estimated 

8,000 banks, 80% have less than $175 

million in assets and are considered 

small entities.17 Of the estimated 7,000 

credit unions, 90% have less than $175 

million in assets.18 A broker-dealer is 

considered a small entity if its total 

capital is less than $500,000, and it is 

not affiliated with a broker-dealer that 

has $500,000 or more in total capital.19

Of the estimated 5,000 broker-dealers, 

15% are small entities.20 FinCEN 

estimates that the majority of the 

remaining 250 affected Covered 

Institutions are small entities. Therefore, 

FinCEN acknowledges that the rule will 

affect a substantial number of small 

entities. 

Description of the projected reporting 

and recordkeeping requirements of the 

rule: 

Currently, Covered Institutions are 

already subject to the reporting 

requirements of section 314 of the USA 

PATRIOT Act and FinCEN’s 

implementing regulation.21 However, 

FinCEN estimates that the final 

amendment may potentially increase 

the cost of reporting. Under the 314(a) 

program, Covered Institutions are 

provided a list of individuals and 

entities that are subjects of significant 

money laundering or terrorist financing 

investigations. The list is primarily 

provided bi-weekly. Covered 

Institutions are required to review their 

records to determine whether the 

institutions currently maintain, or have 

maintained, an account for a named 

subject during the preceding 12 months, 

or have conducted any transactions 

involving any named subjects during 

the previous six months.22 Covered 

Institutions are required to report any 

positive matches to FinCEN.23

Currently, only Federal law enforcement 

agencies participate in the 314(a) 

program. The final rule will allow State 

and local law enforcement, as well as 

certain foreign law enforcement 

agencies, and FinCEN, as well as other 

Treasury components, to add subjects to 

this list. This expansion will most likely 

result in additional requests for 

information from Covered Institutions. 

As discussed in the Paperwork 

Reduction Act analysis below, FinCEN 

estimates 120 search requests 24 per year 

associated with the recordkeeping 

requirement in this rule and 9 subjects 

(including aliases) per request, resulting 

in an estimated 1,080 subjects per year. 

The estimated burden associated with 

searching and identifying each subject is 

4 minutes per subject.25 FinCEN 


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a Covered Institution researching the subject of a 

314(a) request, has the same type of information 

available to them, as a depository institution teller 

processing a customer transaction. In addition, they 

both, most likely, will be accessing similar systems 

to confirm whether the individual maintains an 

account with the depository institution. These types 

of depository institution transactions can be 

processed in a matter of a few minutes regardless 

of institution size. 

26See Bureau of Labor Statistics, ‘‘Occupational 

Employment and Wages, May 2006,’’ http:// 

www.bls.gov/oes/2006/may/oes131041.htm. 

27The Paperwork Reduction Act does not apply 

to the requirement in section 103.100(b)(2) 

concerning reports by financial institutions in 

response to a request from FinCEN on behalf of a 

Federal law enforcement agency. See 5 CFR 

1320.4(a)(2). 

28These calculations were based on previous 

requests for information. A review of incoming 

requests from European Union countries revealed 

an average of about 350 cases per year from 2006– 

2008. Of these, approximately 75% (an average of 

269) were money laundering and/or terrorism 

related, however, the majority were not identified 

as complex cases. Conversations with FinCEN 

personnel responsible for European Union 

countries indicated not more than 10% of the 

money laundering and/or terrorism related cases 

will be significant enough to meet 314(a) use 

criteria, however, it is anticipated that there may be 

additional requests that will be submitted outside 

of the normal Financial Intelligence Unit channels. 

29Estimated requests per annum subject to the 

Paperwork Reduction Act include 10 from FinCEN, 

50 from State/local law enforcement, and 60 from 

foreign law enforcement agencies, for a total of 120 

requests. 

therefore estimates that each 

recordkeeper will, on average, spend 

approximately 4,320 minutes, or 

roughly 72 hours per year to comply 

with the recordkeeping requirement in 

this rule. According to the Bureau of 

Labor Statistics, a compliance officer’s 

mean hourly wage is $24.47. This would 

equate to a cost of $1,761.84 per year for 

a financial institution to comply with 

this recordkeeping requirement.26

Because this is a minimal increase to the 

annual payroll of small businesses 

within the regulated industries, FinCEN 

does not expect the impact of the rule 

to be significant. FinCEN was unable to 

quantify an exact number of this effect 

due to a lack of available information 

specific to the regulated industries. 

In the proposed rule, FinCEN 

requested comment on whether 4 

minutes to search and identify each 

subject that is part of a 314(a) request 

was an accurate estimate. A few 

commenters stated that this estimate 

may be low, however only one 

association offered an alternative 

estimate. The association suggested that 

the estimate of time to search and 

identify each subject be increased to 

more than 30 minutes per subject. In 

describing this estimate, the association 

explained that it included the time 

required to verify a positive match and 

to determine whether a Covered 

Institution should file a SAR. FinCEN 

disagrees with the reasoning behind the 

association’s increased estimate. 

Including the time necessary to conduct 

additional due diligence to confirm a 

positive match in the estimate of 

researching each subject overstates the 

time required to search and identify a 

positive match. Based upon the 

experience of FinCEN’s 314(a) program 

office, the average Covered Institution 

will experience a positive hit on a 

subject only a handful of times per year. 

In addition, incorporating the time 

necessary to conduct due diligence on a 

positive match to a subject to determine 

whether filing a SAR is necessary also 

overstates the time required to search 

and identify a positive match. 

Conducting research to determine 

whether to file a SAR on a customer 

who is a positive match to a 314(a) 

request is not required by this rule. A 

financial institution’s determination as 

to whether to research a customer and 

file a SAR is based upon its own 

policies and procedures to identify 

suspicious activity. Additionally, this 

time is already reflected in FinCEN’s 

burden estimates for filing a SAR. The 

association’s estimate relies on time 

spent outside the scope of the 

regulation, and the association did not 

provide a breakdown of the time 

required to search and identify a match 

to a 314(a) request in their suggested 

estimate of over 30 minutes. For these 

reasons, along with the fact that FinCEN 

received no other comments providing 

an alternative estimate to 4 minutes per 

subject, FinCEN will continue to rely on 

this estimate. 

Certification 

As acknowledged above, the final rule 

will impact a substantial number of 

small entities. However, as also 

discussed above, FinCEN estimates that 

the impact from these requirements will 

not be significant. Accordingly, FinCEN 

certifies that the final rule will not have 

a significant economic impact on a 

substantial number of small entities. 

D. Paperwork Reduction Act 

The collection of information 

contained in this rule has been 

approved by the Office of Management 

and Budget in accordance with the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3507(d)) under control number 

1506–0049. The collection of 

information in this final rule is in 31 

CFR 103.100. The information will be 

used by Federal 27 and State and local 

law enforcement agencies, as well as 

certain foreign law enforcement 

agencies, and FinCEN and other 

appropriate components of Treasury, in 

the conduct of investigating money 

laundering and terrorist financing 

activity. The collection of information is 

mandatory. 

International Requests: FinCEN 

estimates that there will be no more 

than 60 requests for research submitted 

to the 314(a) program by foreign law 

enforcement agencies annually.28

State and Local Requests: While there 

are more than 18,000 State and local law 

enforcement agencies, FinCEN estimates 

that the number of cases that will meet 

the stringent 314(a) submission criteria 

will be relatively few. The majority of 

significant money laundering and 

terrorist financing related cases are 

worked jointly with Federal 

investigators and are thus already 

eligible for 314(a) request submission. 

FinCEN estimates that there will be no 

more than 50 State and local cases per 

annum of 314(a) requests that meet 

submission criteria. 

FinCEN and appropriate components 

of Treasury Requests: FinCEN estimates 

that the 314(a) program will be used by 

FinCEN and other appropriate Treasury 

components in fewer than 10 cases per 

annum. Taking into consideration the 

estimated number of potential use cases 

that will fit recommended internal 

314(a) criteria, FinCEN does not believe 

that this expansion will be a significant 

strain on existing program resources. 

Description of Recordkeepers: 

Covered financial institutions as defined 

in 31 CFR 103.100. 

Estimated Number of Recordkeepers: 

On an annual basis, there are 

approximately 20,134 covered financial 

institutions, consisting of 15,106 

commercial banks, savings associations, 

and credit unions, 4,793 securities 

broker-dealers, 139 future commission 

merchants, 79 trust companies, and 17 

life insurance companies. 

Estimated Average Annual Burden 

Hours per Recordkeeper: FinCEN 

estimates 120 search requests 29 per year 

associated with the recordkeeping 

requirement in this rule and 9 subjects 

(including aliases) per request, resulting 

in an estimated 1,080 subjects per year. 

The estimated average burden 

associated with searching each subject 

is 4 minutes per subject. FinCEN 

therefore estimates that each 

recordkeeper will, on average, spend 

approximately 4,320 minutes, or 

roughly 72 hours per year to comply 

with the recordkeeping requirement in 

this rule. 

Estimated Total Annual 

Recordkeeping Burden: 1,449,648 

annual burden hours (20,134 


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6568 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Rules and Regulations 

recordkeepers × 72 average annual 

burden hours per recordkeeper). 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless the collection of information 

displays a valid OMB control number. 

Records required to be retained under 

the BSA must be retained for five years. 

In the Notice, FinCEN specifically 

invited comments on: (a) Whether the 

recordkeeping requirement is necessary 

for the proper performance of the 

mission of the Financial Crimes 

Enforcement Network, and whether the 

information shall have practical utility; 

(b) the accuracy of our estimate of the 

burden of the recordkeeping 

requirement; (c) ways to enhance the 

quality, utility, and clarity of the 

information required to be maintained; 

(d) ways to minimize the burden of the 

recordkeeping requirement, including 

through the use of automated collection 

techniques or other forms of information 

technology; and (e) estimates of capital 

or start-up costs and costs of operation, 

maintenance, and purchase of services 

to maintain the information. With 

regard to item (a), two commenters 

noted that this recordkeeping 

requirement does further the mission 

and goals of FinCEN. With regard to 

item (c), two commenters suggested that 

it would be helpful if financial 

institutions had a standardized form to 

complete when sharing information 

with law enforcement. The same 

process by which a financial institution 

confirms a positive match to a 314(a) 

request, made by a Federal law 

enforcement agency, via the 314(a) 

Secure Information Sharing System, will 

apply to requests made by all other 

requesting agencies. In addition, the 

same commenters suggested that law 

enforcement utilize a standardized form 

to request information from financial 

institutions when a match to a 314(a) 

request is identified. The underlying 

account and transaction information 

related to a positive 314(a) match is not 

deemed to be part of the 314(a) 

response, and can only be obtained by 

the requesting agency through 

appropriate legal processes, such as a 

subpoena. FinCEN is not part of that 

legal process to obtain the underlying 

information; its involvement ends at 

informing requesting agencies that a 

match exists. Therefore, each requesting 

agency is responsible for determining 

the method by which they will request 

additional transaction information 

related to a 314(a) match. With regard to 

items (d) and (e), two commenters noted 

that the recordkeeping requirement 

should not place any additional burden 

or start-up costs on financial 

institutions, because the 314(a) program 

is already in place and financial 

institutions should have procedures in 

place to process these requests. 

With regard to our request for 

comment on the accuracy of our 

estimate of the burden of the 

recordkeeping requirement, we received 

a variety of different comments. A few 

commenters suggested that expanding 

access to the 314(a) program would 

increase the volume of inquiries to an 

unmanageable level for financial 

institutions, which would be 

disproportionate to the benefits 

obtained by law enforcement. Other 

commenters suggested that increasing 

the volume of 314(a) requests would 

substantially increase financial 

institutions’ employee-hours required to 

complete searches, increase the cost to 

financial institutions, and may lead to 

the inability of financial institutions 

conducting manual searches to provide 

timely responses. Other commenters 

noted that the proposal would 

exponentially increase the burden on 

financial institutions, FinCEN, and the 

314(a) program. However, these 

commenters did not provide any 

alternative estimates of the increase in 

the volume of inquiries to support their 

concerns. On the other hand, as noted 

above, two other commenters noted that 

the recordkeeping requirement should 

not place any additional burden or startup costs on financial institutions, 

because the 314(a) program is already in 

place, and financial institutions should 

have procedures in place to process 

these requests. Two commenters 

suggested that FinCEN engage in 

additional industry outreach beyond the 

comment period to better gauge the 

impact on the industry. 

Some commenters felt that the 

estimates that only 60 foreign law 

enforcement requests, 50 State and local 

law enforcement requests, and 10 

FinCEN requests would occur annually 

were low estimates. FinCEN’s estimates 

are extrapolated from an analysis of the 

volume and type of information requests 

it has received in past years from foreign 

as well as State and local law 

enforcement agencies. Additionally, 

FinCEN’s internal review process is 

stringent and also will serve as a buffer 

to an unreasonable increase in the 

volume of 314(a) requests. Other 

commenters suggested that FinCEN 

should track the increase in requests in 

order to verify the estimates in the 

proposal. FinCEN already monitors the 

volume of requests and will continue to 

do so after this final rule goes effective. 

Another commenter asked how FinCEN 

would control the number of requests 

from foreign, State, and local law 

enforcement if they exceed the estimates 

in the proposal. As discussed above, 

FinCEN has internal procedures that 

will help ensure that the 314(a) program 

will be utilized only in compelling 

situations, thereby minimizing the 

burden on financial institutions. 

A few commenters noted that they felt 

FinCEN’s estimate of 4 minutes to 

research each subject was low, but only 

one commenter offered an alternative 

figure for us to consider, as noted above. 

The commenters explained that some 

small financial institutions conduct 

searches manually. In addition, 

although most larger financial 

institutions are likely to conduct 

automated searches, there is still a 

manual element to their research. 

Further, financial institutions have to 

access a variety of internal systems to 

research subjects, such as commercial 

and consumer loan systems. Also, 

financial institutions of all sizes 

manually review matches to ensure 

accuracy. As described above, one of 

these commenters suggested that to 

reflect the time needed to research a 

subject more accurately, the estimate be 

increased to more than 30 minutes per 

subject. The commenter did not offer 

sufficient evidence to support the 

suggestion. The same commenter noted 

that the estimate misses the most 

burdensome element, which is 

responding to law enforcement requests 

when there has been a data match to a 

314(a) request. The commenter noted 

that while an accurate estimate of this 

aspect of the research is difficult to 

identify, it should be factored into the 

estimate of burden. As noted above, 

section 314(a) information will continue 

to consist of only a confirmation that a 

matching account or transaction exists. 

The underlying account and transaction 

information relating to a 314(a) match is 

not deemed to be part of the 314(a) 

response, and can only be obtained by 

the requesting agency through 

appropriate legal process, such as a 

subpoena. FinCEN is not part of that 

legal process to obtain the underlying 

information; its involvement ends at 

informing requesting agencies that a 

match exists. Any interaction between a 

requesting law enforcement agency and 

a financial institution subsequent to a 

314(a) match occurs outside the context 

of this rule and this analysis and should 

not be factored into our burden 

estimates. 

One commenter suggested that 

requests from foreign, State, and local 

law enforcement be submitted to 

financial institutions on the same 

schedule as requests from Federal law 

enforcement currently are, in order to 

keep the number of searches to a 


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Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Rules and Regulations 6569 

30 5 U.S.C. 553(d). 

minimum. FinCEN intends to submit 

requests from all agencies on the same 

schedule. Another commenter suggested 

that 314(a) requests made by foreign, 

State, and local law enforcement be 

limited to terrorist financing 

investigations, initially, in order to 

minimize the number of requests. While 

FinCEN will monitor the effectiveness 

of the program’s expansion, limiting 

access to terrorist financing 

investigations would deny these law 

enforcement agencies the ability to 

confront serious money laundering 

investigations which they are pursuing. 

E. Effective Date 

Publication of a substantive rule not 

less than 30 days before its effective 

date is required by the Administrative 

Procedure Act except as otherwise 

provided by the agency for good 

cause.30 In order to satisfy the United 

States’ treaty obligation with certain 

foreign governments to provide access 

to the 314(a) program within the 

deadline to comply with the U.S.–EU 

MLAT, FinCEN finds that there is good 

cause for making this amendment 

effective on February 10, 2010. In 

finding good cause, FinCEN considered 

the possible effect of providing less than 

30 days notice to affected persons. 

FinCEN determined that immediate 

implementation would not unfairly 

burden these persons because, as 

explained above, persons affected by the 

rule have already implemented the 

procedures necessary to comply with 

the 314(a) rule since its original 

implementation on September 26, 2002. 

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. 

Authority and Issuance 

For the reasons set forth above, 

FinCEN is amending 31 CFR Part 103 as 

follows: 

PART 103—FINANCIAL 

RECORDKEEPING AND REPORTING 

OF CURRENCY AND FINANCIAL 

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. 5311–5314 and 5316–5332; 

title III, sec. 314, Pub. L. 107–56, 115 Stat. 

307. 

■ 2. Section 103.90(a) is revised to read 

as follows: 

§ 103.90 Definitions. 

* * * * * 

(a) Money laundering means an 

activity criminalized by 18 U.S.C. 1956 

or 1957, or an activity that would be 

criminalized by 18 U.S.C. 1956 or 1957 

if it occurred in the United States. 

* * * * * 

■ 3. Section 103.100 is amended by— 

■ a. Adding new paragraph (a)(4); 

■ b. Revising paragraph (b)(1); 

■ c. Redesignating paragraphs (b)(2) 

through (4) as paragraphs (b)(3) through 

(5); 

■ d. Adding new paragraph (b)(2); 

■ e. Revising newly redesignated 

paragraph (b)(3)(i) introductory text; 

■ f. Revising newly redesignated 

paragraph (b)(3)(iv)(B)(1); 

■ g. Revising newly redesignated 

paragraph (b)(3)(iv)(B)(2); 

■ h. Revising newly redesignated 

paragraph (b)(3)(iv)(C); 

■ i. Revising newly redesignated 

paragraph (b)(4); and 

■ j. Revising newly redesignated 

paragraph (b)(5). 

The revisions and additions read as 

follows: 

§ 103.100 Information sharing between 

government agencies and financial 

institutions. 

(a) * * * 

(4) Law enforcement agency means a 

Federal, State, local, or foreign law 

enforcement agency with criminal 

investigative authority, provided that in 

the case of a foreign law enforcement 

agency, such agency is from a 

jurisdiction that is a party to a treaty 

that provides, or in the determination of 

FinCEN is from a jurisdiction that 

otherwise allows, law enforcement 

agencies in the United States reciprocal 

access to information comparable to that 

obtainable under this section. 

(b) Information requests based on 

credible evidence concerning terrorist 

activity or money laundering—(1) In 

general. A law enforcement agency 

investigating terrorist activity or money 

laundering may request that FinCEN 

solicit, on the investigating agency’s 

behalf, certain information from a 

financial institution or a group of 

financial institutions. When submitting 

such a request to FinCEN, the law 

enforcement agency shall provide 

FinCEN with a written certification, in 

such form and manner as FinCEN may 

prescribe. At a minimum, such 

certification must: state that each 

individual, entity, or organization about 

which the law enforcement agency is 

seeking information is engaged in, or is 

reasonably suspected based on credible 

evidence of engaging in, terrorist 

activity or money laundering; include 

enough specific identifiers, such as date 

of birth, address, and social security 

number, that would permit a financial 

institution to differentiate between 

common or similar names; and identify 

one person at the agency who can be 

contacted with any questions relating to 

its request. Upon receiving the requisite 

certification from the requesting law 

enforcement agency, FinCEN may 

require any financial institution to 

search its records to determine whether 

the financial institution maintains or 

has maintained accounts for, or has 

engaged in transactions with, any 

specified individual, entity, or 

organization. 

(2) Requests from FinCEN. FinCEN 

may solicit, on its own behalf and on 

behalf of appropriate components of the 

Department of the Treasury, whether a 

financial institution or a group of 

financial institutions maintains or has 

maintained accounts for, or has engaged 

in transactions with, any specified 

individual, entity, or organization. 

Before an information request under this 

section is made to a financial 

institution, FinCEN or the appropriate 

Treasury component shall certify in 

writing in the same manner as a 

requesting law enforcement agency that 

each individual, entity or organization 

about which FinCEN or the appropriate 

Treasury component is seeking 

information is engaged in, or is 

reasonably suspected based on credible 

evidence of engaging in, terrorist 

activity or money laundering. The 

certification also must include enough 

specific identifiers, such as date of birth, 

address, and social security number, 

that would permit a financial institution 

to differentiate between common or 

similar names, and identify one person 

at FinCEN or the appropriate Treasury 

component who can be contacted with 

any questions relating to its request. 

(3) Obligations of a financial 

institution receiving an information 

request—(i) Record search. Upon 

receiving an information request from 

FinCEN under this section, a financial 

institution shall expeditiously search its 

records to determine whether it 

maintains or has maintained any 

account for, or has engaged in any 

transaction with, each individual, 

entity, or organization named in 

FinCEN’s request. A financial 

institution may contact the law 

enforcement agency, FinCEN or 

requesting Treasury component 

representative, or U.S. law enforcement 

attache ́ in the case of a request by a 

foreign law enforcement agency, which 


cprice-sewell on DSK2BSOYB1PROD with RULES
6570 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Rules and Regulations 

has been named in the information 

request provided to the institution by 

FinCEN with any questions relating to 

the scope or terms of the request. Except 

as otherwise provided in the 

information request, a financial 

institution shall only be required to 

search its records for: 

* * * * * 

(iv) * * * 

(B)(1) A financial institution shall not 

disclose to any person, other than 

FinCEN or the requesting Treasury 

component, the law enforcement agency 

on whose behalf FinCEN is requesting 

information, or U.S. law enforcement 

attache ́ in the case of a request by a 

foreign law enforcement agency, which 

has been named in the information 

request, the fact that FinCEN has 

requested or has obtained information 

under this section, except to the extent 

necessary to comply with such an 

information request. 

(2) Notwithstanding paragraph 

(b)(3)(iv)(B)(1) of this section, a financial 

institution authorized to share 

information under § 103.110 may share 

information concerning an individual, 

entity, or organization named in a 

request from FinCEN in accordance 

with the requirements of such section. 

However, such sharing shall not 

disclose the fact that FinCEN has 

requested information concerning such 

individual, entity, or organization. 

(C) Each financial institution shall 

maintain adequate procedures to protect 

the security and confidentiality of 

requests from FinCEN for information 

under this section. The requirements of 

this paragraph (b)(3)(iv)(C) shall be 

deemed satisfied to the extent that a 

financial institution applies to such 

information procedures that the 

institution has established to satisfy the 

requirements of section 501 of the 

Gramm-Leach-Bliley Act (15 U.S.C. 

6801), and applicable regulations issued 

thereunder, with regard to the 

protection of its customers’ nonpublic 

personal information. 

* * * * * 

(4) Relation to the Right to Financial 

Privacy Act and the Gramm-LeachBliley Act. The information that a 

financial institution is required to report 

pursuant to paragraph (b)(3)(ii) of this 

section is information required to be 

reported in accordance with a federal 

statute or rule promulgated thereunder, 

for purposes of subsection 3413(d) of 

the Right to Financial Privacy Act (12 

U.S.C. 3413(d)) and subsection 502(e)(8) 

of the Gramm-Leach-Bliley Act (15 

U.S.C. 6802(e)(8)). 

(5) No effect on law enforcement or 

regulatory investigations. Nothing in 

this subpart affects the authority of a 

Federal, State or local law enforcement 

agency or officer, or FinCEN or another 

component of the Department of the 

Treasury, to obtain information directly 

from a financial institution. 

Dated: February 4, 2010. 

James H. Freis, Jr., 

Director, Financial Crimes Enforcement 

Network. 

[FR Doc. 2010–2928 Filed 2–9–10; 8:45 am] 

BILLING CODE 4810–02–P 

POSTAL SERVICE 

39 CFR Part 965 

Rules of Practice in Proceedings 

Relative to Mail Disputes 

AGENCY: Postal Service. 

ACTION: Final rule. 

SUMMARY: This document revises the 

rules of practice of the Postal Service’s 

Office of the Judicial Officer to allow 

qualified persons licensed to practice 

law to be designated by the Judicial 

Officer as presiding officers in 

proceedings relating to mail disputes. 

DATES: Effective Date: March 1, 2010. 

ADDRESSES: Judicial Officer Department, 

United States Postal Service, 2101 

Wilson Boulevard, Suite 600, Arlington, 

VA 22201–3078. 

FOR FURTHER INFORMATION CONTACT: 

Administrative Judge Gary E. Shapiro, 

(703) 812–1910. 

SUPPLEMENTARY INFORMATION: 

A. Executive Summary 

39 CFR Part 965 contains the rules 

governing proceedings involving Mail 

Disputes. Only one change is made. 

Paragraph (a) of section 965.4 of the 

rules has defined the ‘‘presiding officer’’ 

as an Administrative Law Judge or an 

Administrative Judge qualified in 

accordance with law. The revised rule 

expands the definition of presiding 

officer to include any other qualified 

person licensed to practice law 

designated by the Judicial Officer to 

preside over a proceeding conducted 

pursuant to this part. 

B. Summary of Change 

Expanding the definition of presiding 

officer in Part 965 is intended to permit 

qualified staff counsel employed in the 

Office of the Judicial Officer to be 

designated as the initial presiding 

official authorized to conduct 

proceedings and issue Initial Decisions 

in the resolution of mail disputes. 

Administrative Law Judges and 

Administrative Judges qualified in 

accordance with law will continue to be 

designated as presiding officers in such 

matters. The appellate procedure is 

unchanged. 

C. Effective Dates and Applicability 

These revised rules will govern 

proceedings under Part 965 docketed on 

or after March 1, 2010. 

List of Subjects in 39 CFR Part 965 

Administrative practice and 

procedure, Mail disputes, Postal 

Service. 

■ For the reasons stated in the preamble, 

the Postal Service amends 39 CFR Part 

965 as set forth below: 

■ 1. The authority citation for part 965 

continues to read as follows: 

Authority: 39 U.S.C. 204, 401. 

■ 2. In § 965.4, paragraph (a) is revised 

to read as follows: 

§ 965.4 Presiding officers. 

(a) The presiding officer shall be an 

Administrative Law Judge, an 

Administrative Judge qualified in 

accordance with law, or any other 

qualified person licensed to practice law 

designated by the Judicial Officer to 

preside over a proceeding conducted 

pursuant to this part. The Judicial 

Officer assigns cases under this part. 

Judicial Officer includes Associate 

Judicial Officer upon delegation thereto. 

The Judicial Officer may, on his or her 

own initiative or for good cause found, 

preside at the reception of evidence. 

* * * * * 

Stanley F. Mires, 

Chief Counsel, Legislative. 

[FR Doc. 2010–2844 Filed 2–9–10; 8:45 am] 

BILLING CODE P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R06–OAR–2009–0014; FRL–9113–5] 

Approval and Promulgation of Air 

Quality Implementation Plans; 

Louisiana; Baton Rouge 1-Hour Ozone 

Nonattainment Area; Determination of 

Attainment of the 1-Hour Ozone 

Standard 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: The EPA has determined that 

the Baton Rouge (BR) 1-hour ozone 

nonattainment area has attained the 1- 

hour ozone National Ambient Air 

Quality Standard (NAAQS). This 


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