6074 Federal Register / Vol. 89, No. 21 / Wednesday, January 31, 2024 / Proposed Rules 

1On 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, Public Law 

107–56 (USA PATRIOT Act). Title III of the USA 

PATRIOT Act amended the anti-money laundering 

(AML) provisions of the Bank Secrecy Act (BSA) to 

promote the prevention, detection, and prosecution 

of international money laundering and the 

financing of terrorism. The BSA, as amended, is the 

popular name for a collection of statutory 

authorities that FinCEN administers that is codified 

at 12 U.S.C. 1829b, 1951–1960 and 31 U.S.C. 5311– 

5314, 5316–5336, and includes other authorities 

reflected in notes thereto. Regulations 

implementing the BSA appear at 31 CFR Chapter 

X. 

2Pursuant to Treasury Order 180–01 (Jan. 14, 

2020), the authority of the Secretary to administer 

the BSA, including, but not limited to, 31 U.S.C. 

5318A, has been delegated to the Director of 

FinCEN. 

3 31 U.S.C. 5318A(b)(1)–(b)(4). For definition of 

‘‘covered financial institutions,’’ see 31 CFR 

1010.100(t) and section V.A.3 of this notice. 

one-half of the aircraft’s maximum 

authorized load of agricultural material 

within 45 seconds. If the aircraft is 

equipped with a device for releasing the 

tank or hopper as a unit, there must be 

a means to prevent inadvertent release 

by the pilot or other crewmember. 

PART 145—REPAIR STATIONS 

■ 15. The authority citation for part 145 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40113, 44701– 

44702, 44707, 44709, 44717. 

■ 16. Amend § 145.109 by revising 

paragraph (d) to read as follows: 

§ 145.109 Equipment, materials, and data 

requirements. 

* * * * * 

(d) A certificated repair station must 

maintain, in a format acceptable to the 

FAA, the documents and data required 

for the performance of maintenance, 

preventive maintenance, and alterations 

under its repair station certificate and 

operations specifications in accordance 

with part 43 of this chapter. These 

documents and data must be accessible 

when the relevant work is being done. 

■ 17. Amend § 145.201 by revising 

paragraph (a)(2) to read as follows: 

§ 145.201 Privileges and limitations of 

certificate. 

(a) * * * 

(2) Arrange for another person to 

perform the maintenance, preventive 

maintenance, or alterations of any 

article. The certificated repair station 

may approve an article for return to 

service following the maintenance, 

preventive maintenance, or alterations 

performed on the article by the other 

person if— 

(i) The certificated repair station is 

rated to perform maintenance, 

preventive maintenance, or alterations 

on the article; and 

(ii) The requirements for contract 

maintenance in § 145.217 have been 

met. 

* * * * * 

■ 18. Amend § 145.217 by: 

■ a. Revising paragraph (a) introductory 

text; 

■ b. Removing ‘‘; and’’ at the end of 

paragraph (a)(1) and adding a period in 

its place; 

■ c. Adding paragraph (a)(3); 

■ d. Adding the word ‘‘and’’ at the end 

of paragraph (b)(1); 

■ e. Removing ‘‘; and’’ at the end of 

paragraph (b)(2) and adding a period in 

its place; and 

■ f. Removing paragraph (b)(3). 

The revision and addition read as 

follows: 

§ 145.217 Contract maintenance. 

(a) A certificated repair station may 

approve an article for return to service 

following the maintenance, preventive 

maintenance, or alterations performed 

on an article by an outside source under 

contract or other arrangement, in 

accordance with § 145.201(a)(2), 

provided all the following conditions 

are met: 

* * * * * 

(3) The certificated repair station 

verifies, by test and/or inspection, that 

the work has been performed 

satisfactorily by the other person and 

that the article is airworthy before 

approving it for return to service. 

* * * * * 

Issued under authority provided by 49 

U.S.C. 106(f), 44701(a), and 44707 in 

Washington, DC. 

Robert M. Ruiz, 

Deputy Executive Director, Flight Standards 

Service. 

[FR Doc. 2024–00763 Filed 1–30–24; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Financial Crimes Enforcement Network 

31 CFR Part 1010 

RIN 1506–AB65 

Proposal of Special Measure 

Regarding Al-Huda Bank, as a Foreign 

Financial Institution of Primary Money 

Laundering Concern 

AGENCY: Financial Crimes Enforcement 

Network (FinCEN), Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: FinCEN is issuing a notice of 

proposed rulemaking (NPRM), pursuant 

to section 311 of the USA PATRIOT Act, 

that proposes prohibiting the opening or 

maintaining of a correspondent account 

in the United States for, or on behalf of, 

Al-Huda Bank, a foreign financial 

institution based in Iraq found to be of 

primary money laundering concern. 

DATES: Written comments on the notice 

of proposed rulemaking must be 

submitted on or before March 1, 2024. 

ADDRESSES: Comments must be 

submitted by one of the following 

methods: 

• Federal E-rulemaking Portal: 

https://www.regulations.gov. Follow the 

instructions for submitting comments. 

Refer to Docket Number FINCEN–2024– 

0001 in the submission. 

• Mail: Financial Crimes Enforcement 

Network, P.O. Box 39, Vienna, VA 

22183. Refer to Docket Number 

FINCEN–2024–0001 in the submission. 

Please submit comments by one 

method only and note that comments 

submitted in response to this NPRM 

will become a matter of public record. 

FOR FURTHER INFORMATION CONTACT: The 

FinCEN Regulatory Support Section at 

1–800–767–2825 or electronically at 

frc@fincen.gov. 

SUPPLEMENTARY INFORMATION: 

I. Statutory Provisions 

Section 311 of the USA PATRIOT Act 

(section 311), codified at 31 U.S.C. 

5318A, grants the Secretary of the 

Treasury (Secretary) authority, upon 

finding that reasonable grounds exist for 

concluding that one or more financial 

institutions operating outside of the 

United States is of primary money 

laundering concern, to require domestic 

financial institutions and domestic 

financial agencies to take certain 

‘‘special measures.’’ 1 The authority of 

the Secretary to administer the Bank 

Secrecy Act (BSA) and its implementing 

regulations has been delegated to 

FinCEN.2

The five special measures set out in 

section 311 are safeguards that may be 

employed to defend the U.S. financial 

system from money laundering and 

terrorist financing risks. The Secretary 

may impose one or more of these special 

measures in order to protect the U.S. 

financial system from such threats. 

Through special measures one through 

four, the Secretary may impose 

additional recordkeeping, information 

collection, and reporting requirements 

on covered domestic financial 

institutions and domestic financial 

agencies—collectively, ‘‘covered 

financial institutions.’’ 3 Through 

special measure five, the Secretary may 

prohibit, or impose conditions on, the 

opening or maintaining in the United 

States of correspondent or payableVerDate Sep<11>2014 16:27 Jan 30, 2024 Jkt 262001 PO 00000 Frm 00050 Fmt 4702 Sfmt 4702 E:\FR\FM\31JAP1.SGM 31JAP1

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4 31 U.S.C. 5318A(b)(5). 

5 31 U.S.C. 5318A(c)(1). 

6 31 U.S.C. 5318A(c)(2)(B). 

7 31 U.S.C. 5318A(a)(4)(A). 

8 31 U.S.C. 5318A(b)(5). 

9 31 U.S.C. 5318A(a)(4)(B). 

10The Department of State has authority to 

designate organizations as FTOs. The U.S. 

Department of the Treasury’s Office of Foreign 

Assets Control (OFAC) has also designated the 

IRGC, IRGC–QF, KH, and AAH pursuant to multiple 

sanctions authorities. 

11The CBI dollar auction comprises both (1) the 

wire auction and (2) bulk USD banknote shipments 

to Iraq which the CBI sells to exchange houses and 

banks in return for IQD. The latter is known as the 

‘‘cash auction’’ and is a separate process from the 

wire auction. Al-Huda Bank’s illicit finance 

activities described herein are related to the wire 

auction. See Section III.A.2. 

through accounts for or on behalf of a 

foreign banking institution, if such 

correspondent account or payablethrough account involves the foreign 

financial institution found to be of 

primary money laundering concern.4

Before making a finding that 

reasonable grounds exist for concluding 

that a foreign financial institution is of 

primary money laundering concern, the 

Secretary is required to consult with 

both the Secretary of State and the 

Attorney General.5 The Secretary is also 

required to consider such information as 

the Secretary determines to be relevant, 

including the following potentially 

relevant factors: 

• The extent to which such a 

financial institution is used to facilitate 

or promote money laundering in or 

through a jurisdiction outside the 

United States, including any money 

laundering activity by organized 

criminal groups, international terrorists, 

or entities involved in the proliferation 

of weapons of mass destruction (WMD) 

or missiles; 

• The extent to which such a foreign 

financial institution is used for 

legitimate business purposes in the 

jurisdiction; and 

• The extent to which such action is 

sufficient to ensure that the purposes of 

section 311 are fulfilled and to guard 

against international money laundering 

and other financial crimes.6

Upon finding that a foreign financial 

institution is of primary money 

laundering concern, the Secretary may 

require covered financial institutions to 

take one or more special measures. In 

selecting one or more special measures, 

the Secretary ‘‘shall consult with the 

Chairman of the Board of Governors of 

the Federal Reserve System, any other 

appropriate Federal banking agency (as 

defined in section 3 of the Federal 

Deposit Insurance Act), the Secretary of 

State, the Securities and Exchange 

Commission, the Commodity Futures 

Trading Commission, the National 

Credit Union Administration Board, and 

in the sole discretion of the Secretary, 

such other agencies and interested 

parties as the Secretary may find 

appropriate.’’ 7 When imposing special 

measure five, the Secretary must do so 

‘‘in consultation with the Secretary of 

State, the Attorney General, and the 

Chairman of the Board of Governors of 

the Federal Reserve System.’’ 8

In addition, the Secretary is required 

to consider the following factors when 

selecting special measures: 

• Whether similar action has been or 

is being taken by other nations or 

multilateral groups; 

• Whether the imposition of any 

particular special measure would create 

a significant competitive disadvantage, 

including any undue cost or burden 

associated with compliance, for 

financial institutions organized or 

licensed in the United States; 

• The extent to which the action or 

the timing of the action would have a 

significant adverse systemic impact on 

the international payment, clearance, 

and settlement system, or on legitimate 

business activities involving the 

particular jurisdiction, institution, class 

of transactions, or type of account; and 

• The effect of the action on United 

States national security and foreign 

policy.9

II. Summary of NPRM 

For years, Al-Huda Bank has 

exploited its access to U.S. dollars 

(USD) to support designated foreign 

terrorist organizations (FTOs), including 

Iran’s Islamic Revolutionary Guard 

Corps (IRGC) and IRGC-Quds Force 

(IRGC–QF) as well as Iran-aligned Iraqi 

militias Kata’ib Hizballah (KH) and 

Asa’ib Ahl al-Haq (AAH).10 Since its 

establishment, Al-Huda Bank has been 

controlled and operated by the IRGC 

and IRGC–QF. Moreover, the chairman 

of Al-Huda Bank is complicit in AlHuda Bank’s illicit financial activities, 

including money laundering through 

front companies that conceal the true 

nature of and parties involved in illicit 

transactions, ultimately enabling the 

financing of terrorism. 

Given the nature of Iraq’s economy 

and trade relationships, Iraqi businesses 

that import goods into Iraq rely on wire 

transfers of USD from the account of the 

Central Bank of Iraq (CBI) at the Federal 

Reserve Bank of New York (FRBNY), a 

process known as the wire auction, or 

more generally the ‘‘CBI dollar 

auction.’’ 11 Many Iraqi businesses and 

financial institutions use the CBI dollar 

auction for legitimate purposes. 

However, FinCEN assesses that Al-Huda 

Bank has deliberately embarked on a 

strategy that relies on exploiting the CBI 

dollar auction to support designated 

FTOs, including the IRGC, IRGC–QF, 

KH, and AAH, with the support of the 

Iranian government. Al-Huda Bank has 

actively supported terrorist groups and 

abused the CBI dollar auction through 

numerous money laundering typologies, 

including use of fraudulent 

documentation to obscure the ultimate 

beneficiaries of the transactions. Given 

these facts, FinCEN assesses that there 

is a high risk of Al-Huda Bank 

exploiting USD correspondent 

relationships to support its money 

laundering and terrorist financing 

activity. 

This NPRM (1) sets forth FinCEN’s 

finding that Al-Huda Bank is a foreign 

financial institution of primary money 

laundering concern; and (2) proposes 

that, under special measure five, 

covered financial institutions be 

prohibited from opening or maintaining 

a correspondent account for, or on 

behalf of, Al-Huda Bank. 

III. Finding That Al-Huda Bank Is a 

Foreign Financial Institution of 

Primary Money Laundering Concern 

Pursuant to 31 U.S.C. 5318A(a)(1), 

FinCEN finds that reasonable grounds 

exist for concluding that Al-Huda Bank 

is a foreign financial institution of 

primary money laundering concern. 

Below is a discussion of the relevant 

statutory factors FinCEN considered in 

making this finding related to this Iraqbased financial institution. 

A. The Extent to Which Al-Huda Bank 

Is Used To Facilitate or Promote Money 

Laundering Outside the United States, 

Including Any Money Laundering 

Activity by Organized Criminal Groups, 

International Terrorists, or Entities 

Involved in the Proliferation of WMD or 

Missiles 

FinCEN assesses that Al-Huda Bank is 

used to facilitate or promote money 

laundering outside the United States, 

particularly money laundering activity 

to support designated FTOs. FinCEN 

based this assessment on information 

available through both public and nonpublic reporting, and after thorough 

consideration of each of the following 

factors: (1) that Al-Huda Bank is a 

foreign financial institution; and (2) that 

Al-Huda Bank exploits its access to USD 

through the dollar auction; and (3) that 

through the exploitation of the dollar 

auction, Al-Huda Bank provides support 

to designated FTOs, in particular the 

IRGC and IRGC–QF, as well as Iranaligned Iraqi militias KH and AAH. 


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6076 Federal Register / Vol. 89, No. 21 / Wednesday, January 31, 2024 / Proposed Rules 

12Al-Arabiya, ‘‘Billions of Dollars’’ Smuggled Out 

of Iraq During Maliki’s Rule, November 9, 2015, 

available at https://english.alarabiya.net/News/ 

middle-east/2015/11/09/Iraq-smuggled-billions-ofdollars-during-Maliki-s-rule. 

1. Al-Huda Bank Is a Foreign Financial 

Institution 

Al-Huda Bank is a private commercial 

bank registered and headquartered in 

Baghdad, Iraq, with five domestic 

branch locations. These domestic 

branches are in Baghdad, Karbala, and 

Nasiriyah. Al-Huda Bank has no 

subsidiaries or branches outside of Iraq, 

and is regulated by the CBI. 

Al-Huda Bank has no direct U.S. 

correspondent banking relationships but 

interacts with the U.S. financial system 

indirectly through USD correspondent 

accounts at six foreign financial 

institutions. In other words, Al-Huda 

Bank interacts with foreign banks that 

themselves have correspondent 

accounts with U.S. banks. Al-Huda 

Bank also accesses USD through the CBI 

dollar auction. 

2. Al-Huda Bank Exploits Its Access to 

USD Through the CBI Dollar Auction 

Individual Iraqi businesses that 

import goods into Iraq rely on wire 

transfers of USD from CBI’s account at 

the FRBNY. The CBI wire auction is the 

mechanism by which the CBI provides 

USD to facilitate the purchase of 

imports. When Iraq sells oil in the 

international petroleum markets, the 

revenues are credited in USD to the 

CBI’s account at the FRBNY. Iraqi 

companies with accounts at Iraqi banks 

can then access the CBI dollar auction 

to purchase USD with Iraqi dinar (IQD) 

to pay for imports. USD are transferred 

from the CBI’s FRBNY account to an 

Iraqi bank, and onward to a thirdcountry bank on behalf of a thirdcountry exporter. 

Many Iraqi businesses and their banks 

use the CBI dollar auction for its 

intended, legitimate purpose of 

facilitating imports of goods. However, 

as discussed in section III.A.3, FinCEN 

assesses that Al-Huda Bank has 

deliberately embarked on a strategy that 

relies on illegitimate exploitation of the 

dollar auction to support designated 

FTOs, including the IRGC, IRGC–QF, 

KH, and AAH, with the support of the 

Iranian government. 

With the knowledge of Al-Huda 

Bank’s chairman, Al-Huda Bank’s abuse 

of the dollar auction is obfuscated 

through the application of numerous 

money laundering typologies, including 

the use of fraudulent documentation, 

fake deposits, identity documents of the 

deceased, fake companies, and 

counterfeit IQD, which are used to 

purchase USD and support terrorist 

groups and militias. For years, Al-Huda 

Bank has been involved in these 

deceptive money laundering activities. 

Examples of three of these money 

laundering typologies are discussed 

below: (1) fraudulent documentation; (2) 

stolen identities; and (3) counterfeit 

IQD. Al-Huda Bank’s use of these 

money laundering typologies also risks 

exposing covered financial institutions 

to Al-Huda Bank’s exploitation of USD 

correspondent banking relationships to 

support its terrorist financing activities, 

discussed in section III.A.3. 

Since at least 2012, Al-Huda Bank has 

used fraudulent documentation to 

purchase foreign currency—including 

USD—from the CBI at dollar auctions. 

Based on media reporting, during 2012 

to 2014, Al-Huda Bank filed false 

documentation to justify international 

transfers of over $6 billion to banks and 

companies.12 On at least one occasion, 

government authorities detected AlHuda Bank’s filing of fraudulent 

documentation, which resulted in 

freezing of a transfer of a significant 

amount of money. In another scheme, 

Al-Huda Bank would deposit fake 

checks to make the balance seem higher 

on the account Al-Huda Bank used in 

dollar auctions. The fake check deposits 

would allow Al-Huda Bank to purchase 

USD using that false higher balance 

before the fake check bounced, which 

Al-Huda Bank would then write off. 

Al-Huda Bank, with its chairman’s 

knowledge, has also abused the dollar 

auction by utilizing stolen identities. In 

one scheme, the Al-Huda Bank 

chairman and other Al-Huda Bank 

officials would use the identification 

documents of deceased individuals to 

purchase USD in dollar auctions. AlHuda Bank officials would also pay 

living people for use of their 

identification documents. The illicit use 

of identification documents allowed AlHuda Bank to circumvent limits on 

currency purchases. 

With the knowledge of Al-Huda 

Bank’s chairman, Al-Huda Bank has 

also been involved in funneling of 

counterfeit IQD through fake businesses 

in Iraq. The counterfeit IQD would be 

printed in Iran, funneled through Iraqi 

businesses, and then exchanged for 

USD. The use of counterfeit IQD greatly 

increases the amount of illicit profit 

gained from exchanging IQD for USD at 

the CBI dollar auction, and the 

funneling of counterfeit IQD through 

Iraqi businesses disguises the 

counterfeit IQD’s source in Iran. 

3. Through the Exploitation of the CBI 

Dollar Auction, Al-Huda Bank Provides 

Support to Designated FTOs 

Iran has exploited its relationship 

with Iraq-based, Iran-backed militias to 

influence Iraqi businesses and officials 

to generate illicit revenue for the 

militias’ operations. As part of this 

effort, Iran has developed a network of 

commercial platforms, including 

financial institutions, to move funds 

and misrepresent trade-based financial 

transactions that obscure the ultimate 

beneficiary, namely Iran-backed terrorist 

groups and militias. 

Since its establishment, Al-Huda 

Bank has been controlled and operated 

by the IRGC and IRGC–QF. In 2008, the 

chairman of Al-Huda Bank established 

the bank specifically for the benefit of 

KH and has met with and taken orders 

from IRGC–QF leadership in Tehran, 

Iran. After establishing the bank, the AlHuda Bank chairman began money 

laundering operations on behalf of the 

IRGC–QF and KH. 

Al-Huda Bank has funded Iranaligned militias through a scheme in 

which Al-Huda Bank and other Iraqi 

banks have falsely claimed imports that 

did not exist into Iraq worth billions of 

dollars to justify the purchase of USD in 

the CBI dollar auction. Al-Huda Bank 

would purchase the USD with 

counterfeit IQD printed in Iran. Al-Huda 

Bank was not allowed to conduct 

financial transactions without the Iranaligned militias’ involvement and AlHuda Bank would provide part of AlHuda Bank’s revenue from this scheme 

to those Iran-aligned militias. 

This fraudulent scheme has been a 

substantial source of funding for Iranaligned militias’ operations. The Iranaligned Iraqi militia AAH has used 

companies based across Iraq to generate 

revenue, launder illicit profits, and 

convert IQD to USD. AAH has used AlHuda Bank to maintain accounts for 

some of these companies, as well as to 

access the currency auction. The use of 

false imports, counterfeit currency, and 

front companies are essential 

components of exploitation of the CBI 

dollar auction by obscuring the source 

of funds and the purpose and ultimate 

beneficiaries of the transactions that 

support Iran-aligned Iraqi militias. 

Overall, IRGC and IRGC–QF use of AlHuda Bank and several other Iraqi banks 

to access the dollar auction resulted in 

approximately $70 billion USD in profit 

from 2019 through 2020. 


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13Al-Huda Bank, Consolidated Financial 

Statements, December 31, 2020, available at 

www.alhudabank.iq. 

14 Id. 

15Relatedly, there is limited publicly available 

information about Al-Huda Bank’s existing AML 

policies and procedures to enable a current, 

fulsome assessment. Al-Huda Bank’s 2020 End-ofYear report stated that its internal compliance 

monitor reviewed Al-Huda Bank’s procedures when 

opening checking accounts for customers and found 

that Al-Huda Bank met the instructions and 

directives of Iraqi AML, terrorist financing, and risk 

management law, and it confirmed that current 

account holders were not included in banned lists, 

domestically or internationally. Id. at 11–12. Given 

the totality of the circumstances, however, this selfassessment lacks credibility and does not alter 

FinCEN’s overall assessment of concern. 

16U.S. Department of State, 2021 Investment 

Climate Statements: Iraq, 2021, available at https:// 

www.state.gov/reports/2021-investment-climatestatements/iraq/. 

B. The Extent to Which Al-Huda Bank 

Is Used for Legitimate Business 

Purposes 

Al-Huda Bank is the 30th largest bank 

in Iraq and approximately the 11,000th 

largest in the world, with 416 billion 

IQD ($285 million USD) in total assets 

in 2020, which is approximately 0.2 

percent of total Iraqi banking system 

assets.13 Records collected by FinCEN 

show Al-Huda Bank engaged in 

approximately $4.7 billion USD in USDcleared international transactions 

through U.S. correspondent bank 

accounts between July 2017 and 

December 2022, the vast majority being 

CBI dollar auction-related transactions. 

In 2020, Al-Huda Bank’s self-reported 

total revenues were 8,937,678,000 IQD 

($6,115,456 USD) with a gross profit of 

2,753,653,000 IQD ($1,884,140 USD). As 

of December 31, 2020, Al-Huda Bank 

held 55,057,239,000 IQD ($37,671,991 

USD) in customer account deposits, 

approximately 1,110,270,000 IQD 

($760,000 USD) of which were current 

accounts belonging to private 

individuals.14

The assets noted above, based on AlHuda Bank financial statements, are 

indicative of at least a portion of 

legitimate business transiting the 

financial institution. However, FinCEN 

assesses that Al-Huda Bank’s legitimate 

business activities do not outweigh the 

money laundering risks posed by the 

bank, as the variety and type of the 

illicit finance risks presented by AlHuda Bank are such that even a higher 

volume of legitimate activity would not 

allay FinCEN’s significant money 

laundering concern.15 As demonstrated 

above, Al-Huda Bank facilitates the 

financing of a wide variety of terrorists 

and terrorist groups, many of whom 

have attacked citizens and partners of 

the United States. Further, there is 

significant information indicating that 

the owner and chairman of Al-Huda 

Bank is a witting and active participant 

in the illicit finance involving and 

perpetrated by Al-Huda Bank. 

C. The Extent to Which Action Proposed 

by FinCEN Would Guard Against 

International Money Laundering and 

Other Financial Crimes 

As noted by the U.S. Department of 

State in 2023, corruption is a significant 

impediment to conducting business in 

Iraq, and Iran-aligned militias threaten 

U.S. citizens and companies throughout 

Iraq.16 Al-Huda Bank has engaged in 

transactions that facilitate the financing 

of FTOs, including the IRGC, IRGC–QF, 

and Iran-aligned militias KH and AAH, 

with the support of the Iranian 

government. A finding that Al-Huda 

Bank is of primary money laundering 

concern would make clear to foreign 

correspondents Al-Huda Bank’s illicit 

finance risk, and this awareness may 

cause those financial institutions or 

their regulators to take their own action 

to address the risk. Moreover, such a 

finding and subsequent imposition of 

one or more special measures would 

guard against money laundering and 

other financial crimes by severing AlHuda Bank’s access to the U.S. financial 

system. 

IV. Proposed Special Measure 

Having found that Al-Huda Bank is a 

financial institution of primary money 

laundering concern, particularly with 

regard to its misuse of the dollar auction 

to finance designated terrorist 

organizations, FinCEN proposes 

imposing a prohibition on covered 

financial institutions under special 

measure five. Special measure five 

authorizes the Secretary to impose 

conditions upon the opening or 

maintaining in the United States of a 

correspondent account or payablethrough account, if such account 

‘‘involves’’ a financial institution of 

primary money laundering concern. 

Although Al-Huda Bank does not have 

correspondent accounts with U.S. 

financial institutions, it has accounts 

with foreign financial institutions that 

maintain U.S. correspondent accounts. 

Those U.S. correspondent accounts 

involve Al-Huda Bank when 

transactions involving the bank are 

processed through those accounts. Thus, 

FinCEN has determined that special 

measure five will most effectively 

mitigate the risks posed by Al-Huda 

Bank. 

FinCEN considered the other special 

measures available under section 311. 

As discussed further in Section IV.E. 

below, it determined that none of them 

would appropriately address the risks 

posed by Al-Huda Bank. 

In proposing this special measure, 

FinCEN consulted with the Board of 

Governors of the Federal Reserve 

System, the Office of the Comptroller of 

the Currency, the Secretary of State, the 

staff of the Securities and Exchange 

Commission, the Commodity Futures 

Trading Commission, staff of the 

National Credit Union Administration, 

the Federal Deposit Insurance 

Corporation, and the Attorney General. 

These consultations involved obtaining 

interagency views on the imposition of 

special measure five and the effects that 

such a prohibition would have on the 

U.S. domestic and international 

financial systems. 

Below is a discussion of the relevant 

statutory factors FinCEN considered in 

proposing the prohibition under special 

measure five. 

A. Whether Similar Action Has Been or 

Is Being Taken by Other Nations or 

Multilateral Groups Regarding Al-Huda 

Bank 

FinCEN is not aware of any other 

nation or multilateral group that has 

imposed, or is currently imposing, 

similar action against Al-Huda Bank. 

B. Whether the Imposition of Any 

Particular Special Measure Would 

Create a Significant Competitive 

Disadvantage, Including Any Undue 

Cost or Burden Associated With 

Compliance, for Financial Institutions 

Organized or Licensed in the United 

States 

While FinCEN assesses that the 

prohibition proposed in this NPRM 

would place some cost and burden on 

covered financial institutions, these 

burdens are neither undue nor 

inappropriate in view of the threat 

posed by the illicit activity facilitated by 

Al-Huda Bank. As described above, AlHuda Bank has had access to USD 

through the CBI dollar auction, which 

does not require Iraqi banks to have 

direct USD correspondent relationships. 

Also as described above, Al-Huda Bank 

has no direct USD correspondent 

relationships with U.S. financial 

institutions. Rather, it accesses USD 

through its nested correspondent 

relationships, including but not limited 

to six USD accounts outside the United 

States. These accounts may be used for 

commercial payments, as well as foreign 

exchange and money markets. Covered 

financial institutions and transaction 

partners have ample opportunity to 

arrange for alternative payment 

mechanisms in the absence of 


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17BankCheck, Al-Huda Bank—Iraq, accessed 

December 13, 2023, available at https://

bankcheck.app. 

correspondent banking relationships 

with Al-Huda Bank. 

As such, a prohibition on 

correspondent banking with Al-Huda 

Bank would impose minimal additional 

compliance costs for covered financial 

institutions, which would most 

commonly involve merely involve 

adding Al-Huda Bank to existing 

sanctions and money laundering 

screening tools. FinCEN assesses that 

given the risks posed by Al-Huda Bank’s 

facilitation of money laundering, the 

additional burden on covered financial 

institutions in preventing the opening of 

correspondent accounts with Al-Huda 

Bank, as well as conducting due 

diligence on foreign correspondent 

account holders and notifying them of 

the prohibition, will be minimal and not 

undue. 

C. The Extent to Which the Action or the 

Timing of the Action Would Have a 

Significant Adverse Systemic Impact on 

the International Payment, Clearance, 

and Settlement System, or on Legitimate 

Business Activities of Al-Huda Bank 

FinCEN assesses that imposing the 

proposed special measure would have 

minimal impact upon the international 

payment, clearance, and settlement 

system. As a comparatively small bank, 

responsible for a nominal amount of 

transaction volume in the region, AlHuda Bank is not a systemically 

important financial institution in Iraq, 

regionally, or globally. FinCEN views 

that prohibiting Al-Huda Bank’s access 

to U.S.-Iraq correspondent banking 

channels would not affect overall crossborder transaction volumes. 

Further, a prohibition under special 

measure five would not prevent AlHuda Bank from conducting legitimate 

business activities in other foreign 

currencies. In addition to the six 

correspondent accounts used to access 

USD noted above, Al-Huda Bank 

currently holds two Euro accounts and 

two United Arab Emirates (UAE) dirham 

(AED) accounts as well.17 Provided that 

its legitimate activities do not involve a 

correspondent account maintained in 

the United States, the bank could 

continue to engage in them. 

D. The Effect of the Proposed Action on 

United States National Security and 

Foreign Policy 

As described above, evidence 

available to FinCEN has demonstrated 

that Al-Huda Bank served as a 

significant conduit for the financing of 

FTOs in violation of U.S. and 

international sanctions. Imposing 

special measure five will: (1) close AlHuda Bank’s access to USD; (2) remove 

Al-Huda Bank as an illicit finance 

facilitator within an international 

network of front companies and 

sanctions evasion infrastructure 

supporting these FTOs; and (3) raise 

awareness of the way illicit actors 

exploit weaknesses in vulnerable 

jurisdictions to circumvent sanctions 

and finance terrorism. 

E. Consideration of Alternative Special 

Measures 

In assessing the appropriate special 

measure to impose, FinCEN considered 

alternatives to a prohibition on the 

opening or maintaining in the United 

States of correspondent accounts or 

payable-through accounts, including the 

imposition of one or more of the first 

four special measures, or imposing 

conditions on the opening or 

maintaining of correspondent accounts 

under special measure five. Having 

considered these alternatives and for the 

reasons set out below, FinCEN assesses 

that none of the other special measures 

available under section 311 would 

appropriately address the risks posed by 

Al-Huda Bank and the urgent need to 

prevent it from accessing USD through 

correspondent banking entirely. 

With the knowledge of Al-Huda 

Bank’s chairman, Al-Huda Bank’s abuse 

of the dollar auction is obfuscated 

through the application of numerous 

money laundering typologies, including 

the use of fraudulent documentation, 

fake deposits, identity documents of the 

deceased, fake companies, and 

counterfeit IQD, which are used to 

purchase USD and support terrorist 

groups and militias. Taken as a whole, 

Al-Huda Bank’s illicit activities present 

a heightened risk of obscured 

transaction counterparty identification 

that would be undetectable by covered 

financial institutions. Indeed, a key 

feature of the facilitation of funding for 

Iranian and Iran-aligned FTOs through 

Al-Huda Bank is the use of fake 

companies to obscure the true beneficial 

owners and ultimate destinations of 

funds involved in the transactions. 

Moreover, this behavior provides 

opportunities for obscuring the 

identities of transaction counterparties 

to correspondent banking relationship 

providers. 

Because of the nature, extent, and 

purpose of the obfuscation engaged in 

by Al-Huda Bank, any special measure 

intended to mandate additional 

information collection would likely be 

ineffective and insufficient to determine 

the true identity of illicit finance actors. 

For example, the provision under 

special measure one, that ‘‘the identity 

and address of the participants in a 

transaction or relationship, including 

the identity of the originator of any 

funds transfer’’ be collected in records 

and reports, could be circumvented by 

the operations of shell companies, 

wherein the reported identity of the 

originator serves to obscure the true 

beneficial owner or originator. This 

would accordingly be ineffective in 

preventing illicit transactions. Al-Huda 

Bank’s record of such circumvention 

suggests special measure one would not 

adequately protect the U.S. financial 

system from the threats posed by the 

bank. 

Further, the requirements under 

special measures three and four, that 

domestic financial institutions obtain 

‘‘with respect to each customer (and 

each such representative), information 

that is substantially comparable to that 

which the depository institution obtains 

in the ordinary course of business with 

respect to its customers residing in the 

United States’’, are also likely to be 

ineffective. First, Al-Huda Bank’s use of 

nested correspondent account access 

through layers of payment systems 

would render these alternative measures 

ineffective. Only significant effort and 

expense by U.S. institutions could fill 

this gap, which would impose a 

disproportionate compliance burden 

and with no guarantee that the money 

laundering threat would be addressed 

through customer due diligence 

research. 

FinCEN also considered special 

measure two, which may require 

domestic financial institutions to 

‘‘obtain and retain information 

concerning the beneficial ownership of 

any account opened or maintained in 

the United States by a foreign person.’’ 

The agency determined this special 

measure to be largely irrelevant since 

the concerns involving Al-Huda Bank 

do not involve the opening or 

maintaining of accounts in the U.S. by 

foreign persons. 

FinCEN similarly assesses that merely 

imposing conditions under special 

measure five would be inadequate to 

address the risks posed by Al-Huda 

Bank’s activities. Special measure five 

also enables FinCEN to impose 

conditions as an alternative to a 

prohibition on the opening or 

maintaining of correspondent accounts. 

Given Al-Huda Bank’s consistent and 

longstanding ties to terrorist financing 

organizations since its inception, and its 

track record of obfuscating transactions 

and account holders, FinCEN 

determined that imposing any condition 

would not be an effective measure to 

safeguard the U.S. financial system. 


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18See 31 CFR 1010.605(c)(2)(i). 

19See 31 CFR 1010.605(c)(2)(ii)–(iv). 

FinCEN assesses that the billions of 

dollars supplied to terrorist groups 

through Al-Huda Bank’s exploitation of 

its access to USD, and the exposure of 

U.S. financial institutions to Al-Huda 

Bank’s illicit activity outweigh the value 

in providing conditioned access to the 

U.S. financial system for any 

purportedly legitimate business activity. 

Conditions on the opening or 

maintaining of correspondent accounts 

would likely be insufficient to prevent 

illicit financial flows through the U.S. 

financial system, given Al-Huda Bank’s 

use of fraudulent documentation and 

front companies to obscure its financing 

of terrorist groups in order to access 

USD. Given Al-Huda Bank’s deliberate 

use of money laundering typologies, 

FinCEN cannot craft sufficient 

conditions to enable covered financial 

institutions to open or maintain 

correspondent accounts for Al-Huda 

Bank without introducing severe risk to 

those financial institutions in 

processing transactions that ultimately 

finance terrorism. 

FinCEN, thus, assesses that any 

condition or additional recordkeeping 

or reporting requirement would be an 

ineffective measure to safeguard the 

U.S. financial system. Such measures 

would not prevent Al-Huda Bank from 

accessing the correspondent accounts of 

U.S. financial institutions, thus leaving 

the U.S. financial system vulnerable to 

processing illicit transfers that are likely 

to finance terrorist groups, posing a 

significant national security and money 

laundering risk. In addition, no 

recordkeeping or reporting requirements 

or conditions would be sufficient to 

guard against the risks posed by a bank 

that processes transactions that are 

designed to obscure the transactions’ 

true nature and are ultimately for the 

benefit of terrorist groups. Therefore, 

FinCEN has determined that a 

prohibition on opening or maintaining 

correspondent banking relationships is 

the only special measure out of the 

special measures available under 

section 311 that can adequately protect 

the U.S. financial system from the illicit 

finance risk posed by Al-Huda Bank. 

For these reasons, and after thorough 

consideration of alternate measures, 

FinCEN assesses that no measures short 

of full prohibition on correspondent or 

payable-through banking access would 

be sufficient to address the money 

laundering risks posed by Al-Huda 

Bank. 

V. Section-by-Section Analysis 

The goal of this proposed rule is to 

combat and deter money laundering in 

facilitation of terrorist financing 

associated with Al-Huda Bank and 

prevent Al-Huda Bank from using the 

U.S. financial system to enable its illicit 

finance behavior. 

A. 1010.663(a)—Definitions 

1. Definition of Al-Huda Bank 

The term ‘‘Al-Huda Bank’’ means all 

subsidiaries, branches, and offices of AlHuda Bank operating as a bank in any 

jurisdiction. FinCEN is not currently 

aware of any subsidiary banks or 

branches outside of Iraq. 

2. Definition of Correspondent Account 

The term ‘‘correspondent account’’ 

has the same meaning as the definition 

contained in 31 CFR 1010.605(c)(1)(ii). 

In the case of a U.S. depository 

institution, this broad definition 

includes most types of banking 

relationships between a U.S. depository 

institution and a foreign bank that are 

established to provide regular services, 

dealings, and other financial 

transactions, including a demand 

deposit, savings deposit, or other 

transaction or asset account, and a 

credit account or other extension of 

credit. FinCEN is using the same 

definition of ‘‘account’’ for purposes of 

this proposed rule as is established for 

depository institutions in the final rule 

implementing the provisions of section 

312 of the USA PATRIOT Act, requiring 

enhanced due diligence for 

correspondent accounts maintained for 

certain foreign banks.18 Under this 

definition, ‘‘payable-through accounts’’ 

are a type of correspondent account. 

In the case of securities brokerdealers, futures commission merchants, 

introducing brokers in commodities, 

and investment companies that are 

open-end companies (mutual funds), 

FinCEN is also using the same 

definition of ‘‘account’’ for purposes of 

this proposed rule as was established for 

these entities in the final rule 

implementing the provisions of section 

312 of the USA PATRIOT Act, requiring 

due diligence for correspondent 

accounts maintained for certain foreign 

banks.19

3. Definition of Covered Financial 

Institution 

The term ‘‘covered financial 

institution’’ is defined 31 CFR 

1010.100(t), which in general includes 

the following: 

• A bank (except bank credit card 

systems); 

• A broker or dealer in securities; 

• A money services business, as 

defined in 31 CFR 1010.100(ff); 

• A telegraph company; 

• A casino; 

• A card club; 

• A person subject to supervision by 

any state or Federal bank supervisory 

authority; 

• A futures commission merchant or 

an introducing broker-commodities; and 

• A mutual fund. 

4. Definition of Foreign Banking 

Institution 

The term ‘‘foreign banking 

institution’’ means a bank organized 

under foreign law, or an agency, branch, 

or office located outside the United 

States of a bank. The term does not 

include an agent, agency, branch, or 

office within the United States of a bank 

organized under foreign law. This is 

consistent with the definition of 

‘‘foreign bank’’ under 31 CFR 1010.100. 

This proposed rule interprets Al-Huda 

Bank to be a foreign banking institution. 

5. Definition of Subsidiary 

The term ‘‘subsidiary’’ means a 

company of which more than 50 percent 

of the voting stock or analogous equity 

interest is owned by another company. 

B. 1010.663(b)—Prohibition on 

Accounts and Due Diligence 

Requirements for Covered Financial 

Institutions 

1. Prohibition on Opening or 

Maintaining Correspondent Accounts 

Section 1010.663(b)(1) of the 

proposed rule would prohibit covered 

financial institutions from opening or 

maintaining in the United States a 

correspondent account for, or on behalf 

of, Al-Huda Bank. 

2. Prohibition on Use of Correspondent 

Accounts Involving Al-Huda Bank 

Section 1010.663(b)(2) of the 

proposed rule would require covered 

financial institutions to take reasonable 

steps to not process a transaction for the 

correspondent account of a foreign 

banking institution in the United States 

if such a transaction involves Al-Huda 

Bank. Such reasonable steps are 

described in 1010.663(b)(3), which sets 

forth the special due diligence 

requirements a covered financial 

institution would be required to take 

when it knows or has reason to believe 

that a transaction involves Al-Huda 

Bank. 

3. Special Due Diligence for 

Correspondent Accounts 

As a corollary to the prohibition set 

forth in section 1010.663(b)(1) and (2), 

section 1010.663(b)(3) of the proposed 

rule would require covered financial 

institutions to apply special due 

diligence to all of their foreign 


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20 5 U.S.C. 603. 

21 12 U.S.C. 1532, Public Law 104–4 (Mar. 22, 

1995). 

22 44 U.S.C. 3507(a)(1)(D). 

23See Section VII. 

24 5 U.S.C. 603(a). 

correspondent accounts that is 

reasonably designed to guard against 

such accounts being used to process 

transactions involving Al-Huda Bank. 

As part of that special due diligence, 

covered financial institutions would be 

required to notify those foreign 

correspondent account holders that the 

covered financial institutions know or 

have reason to believe provide services 

to Al-Huda Bank, that such 

correspondents may not provide AlHuda Bank with access to the 

correspondent account maintained at 

the covered financial institution. A 

covered financial institution may satisfy 

this notification requirement using the 

following notice: 

Notice: Pursuant to U.S. regulations issued 

under Section 311 of the USA PATRIOT Act, 

see 31 CFR 1010.663, we are prohibited from 

opening or maintaining in the United States 

a correspondent account for, or on behalf of, 

Al-Huda Bank. The regulations also require 

us to notify you that you may not provide AlHuda Bank, including any of its subsidiaries, 

branches, and offices access to the 

correspondent account you hold at our 

financial institution. If we become aware that 

the correspondent account you hold at our 

financial institution has processed any 

transactions involving Al-Huda Bank, 

including any of its subsidiaries, branches, 

and offices, we will be required to take 

appropriate steps to prevent such access, 

including terminating your account. 

The purpose of the notice requirement 

is to aid cooperation with correspondent 

account holders in preventing 

transactions involving Al-Huda Bank 

from accessing the U.S. financial 

system. FinCEN does not require or 

expect a covered financial institution to 

obtain a certification from any of its 

correspondent account holders that 

access will not be provided to comply 

with this notice requirement. 

Methods of compliance with the 

notice requirement could include, for 

example, transmitting a notice by mail, 

fax, or email. The notice should be 

transmitted whenever a covered 

financial institution knows or has 

reason to believe that a foreign 

correspondent account holder provides 

services to Al-Huda Bank. 

Special due diligence also includes 

implementing risk-based procedures 

designed to identify any use of 

correspondent accounts to process 

transactions involving Al-Huda Bank. A 

covered financial institution would be 

expected to apply an appropriate 

screening mechanism to identify a funds 

transfer order that on its face listed AlHuda Bank as the financial institution of 

the originator or beneficiary, or 

otherwise referenced Al-Huda Bank in a 

manner detectable under the financial 

institution’s normal screening 

mechanisms. An appropriate screening 

mechanism could be the mechanisms 

used by a covered financial institution 

to comply with various legal 

requirements, such as commercially 

available software programs used to 

comply with the economic sanctions 

programs administered by the U.S. 

Department of the Treasury’s Office of 

Foreign Assets Control (OFAC). 

4. Recordkeeping and Reporting 

Section 1010.663(b)(4) of the 

proposed rule would clarify that the 

proposed rule does not impose any 

reporting requirement upon any covered 

financial institution that is not 

otherwise required by applicable law or 

regulation. A covered financial 

institution must, however, document its 

compliance with the notification 

requirement described above in section 

1010.663(b)(3). 

VI. Request for Comments 

FinCEN is requesting comments for 30 

days after the publication of this NPRM. 

Given Al-Huda Bank’s consistent and 

longstanding ties to terrorist financing 

and its track record of obfuscating 

transactions, FinCEN assesses that a 30- 

day comment period for this NPRM 

strikes an appropriate balance between 

ensuring sufficient time for notice to the 

public and opportunity for comment on 

the proposed rule, while minimizing 

undue risk posed to the U.S. financial 

system in processing illicit transfers that 

are likely to finance terrorist groups. 

FinCEN invites comments on all aspects 

of the proposed rule, including the 

following specific matters: 

1. FinCEN’s proposal of a prohibition 

under the fifth special measure under 31 

U.S.C. 5318A(b), as opposed to 

imposing special measures one through 

four or imposing conditions under the 

fifth special measure; 

2. The form and scope of the notice 

to certain correspondent account 

holders that would be required under 

the rule; and 

3. The appropriate scope of the due 

diligence requirements in this proposed 

rule. 

VII. Regulatory Impact Analysis 

FinCEN has analyzed this proposed 

rule under Executive Orders 12866, 

13563, and 14094, the Regulatory 

Flexibility Act,20 the Unfunded 

Mandates Reform Act,21 and the 

Paperwork Reduction Act.22

As discussed above, the intended 

effects of the imposition of special 

measure five to Al-Huda Bank are 

twofold. The rule is expected to (1) 

combat and deter money laundering in 

facilitation of terrorist financing 

associated with Al-Huda Bank, and (2) 

prevent Al-Huda Bank from using the 

U.S. financial system to enable its illicit 

finance behavior. In the analysis below, 

FinCEN discusses the economic effects 

that are expected to accompany 

adoption of the rule as proposed and 

assess such expectations in more 

granular detail. This discussion 

includes detailed explanation of certain 

ways FinCEN’s conclusions may be 

sensitive to methodological choices and 

underlying assumptions made in 

drawing inferences from available data. 

Throughout, these have been outlined 

so that the public may review and 

provide comment.23

A. Executive Orders 

Executive Orders 12866, 13563, and 

14094 direct agencies to assess costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. 

It has been determined that this 

proposed rule is not a significant 

regulatory action under section 3(f) of 

Executive Order 12866, as amended by 

Executive Order 14094. Accordingly, a 

regulatory impact analysis is not 

required. 

B. Regulatory Flexibility Act 

When an agency issues a rulemaking 

proposal, the Regulatory Flexibility Act 

(RFA) requires the agency to ‘‘prepare 

and make available for public comment 

an initial regulatory flexibility analysis’’ 

(IRFA) that will ‘‘describe the impact of 

the proposed rule on small entities.’’ 24

However, Section 605 of the RFA allows 

an agency to certify a rule, in lieu of 

preparing an analysis, if the proposed 

rulemaking is not expected to have a 

significant economic impact on a 

substantial number of small entities. 

This proposed rule would apply to all 

covered financial institutions and 

would affect a substantial number of 

small entities. However, for the reasons 

described below, FinCEN assesses that 

these changes would be unlikely to have 


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25 12 U.S.C. 1532, Public Law 104–4 (Mar. 22, 

1995). 

26 Id. 

27 Id. 

28The Unfunded Mandates Reform Act requires 

an assessment of mandates that will result in an 

annual expenditure of $100 million or more, 

adjusted for inflation. The U.S. Bureau of Economic 

Analysis reports the annual value of the gross 

domestic product (GDP) deflator in the first quarter 

of 1995, the year of the Unfunded Mandates Reform 

Act, as 66.452, and as 122.762 in the third quarter 

of 2023, the most recent available. See U.S. Bureau 

of Economic Analysis, ‘‘Table 1.1.9. Implicit Price 

Deflators for Gross Domestic Product’’ (accessed 

December 14, 2023) available at https://

www.bea.gov/itable/. Thus, the inflation adjusted 

estimate for $100 million is 122.762/66.452 × 100 

= $184.7 million. 

29 44 U.S.C. 3507(a)(1)(D). 

30This estimate is informed by public and nonpublic data sources regarding both an expected 

maximum number of entities that may be affected 

and the number of active, or currently reporting, 

registered financial institutions. 

31See 31 CFR 1010.100(t)(1); see also 31 CFR 

1010.100(d). 

32Bank data is as of December 14, 2023, from 

Federal Deposit Insurance Corporation BankFind 

(https://banks.data.fdic.gov/bankfind-suite/ 

bankfind). Credit union data is as of September 30, 

2023 from the National Credit Union 

Administration Quarterly Data Summary Reports 

(https://ncua.gov/analysis/credit-union-corporatecall-report-data/quarterly-data-summary-reports). 

33 31 CFR 1010.100(t)(2). 

34According to the Securities and Exchange 

Commission (SEC), there are 3,477 broker-dealers in 

securities as of December 2023 from website 

‘‘Company Information About Active BrokerDealers’’ (https://www.sec.gov/help/

foiadocsbdfoia). 

35 31 CFR 1010.100(t)(10). 

36According to the SEC, as of the third quarter 

of 2023, there are 1,495 open-end registered 

investment companies that report on Form N–CEN. 

(https://www.sec.gov/dera/data/form-ncen-datasets). 

37 31 CFR 1010.100(t)(8). 

38According to the Commodity Futures Trading 

Commission (CFTC), there are 62 futures 

commission merchants as of October 31, 2023. See 

Financial Data for FCMs, available at https://

www.cftc.gov/MarketReports/financialfcmdata/

index.htm. 

39 31 CFR 1010.100(t)(9). 

40According to National Futures Association, 

there are 937 introducing brokers in commodities 

as of November 30, 2023. 

a significant economic impact on such 

entities. 

Covered financial institutions would 

also be required to take reasonable 

measures to detect use of their 

correspondent accounts to process 

transactions involving Al-Huda Bank. 

All U.S. persons, including U.S. 

financial institutions, currently must 

comply with OFAC sanctions, and U.S. 

financial institutions generally have 

suspicious activity reporting 

requirements and systems in place to 

screen transactions to comply with 

OFAC sanctions and section 311 special 

measures administered by FinCEN. The 

systems that U.S. financial institutions 

have in place to comply with these 

requirements can easily be modified to 

adapt to this proposed rule. Thus, the 

special due diligence that would be 

required under the proposed rule — i.e., 

preventing the processing of 

transactions involving Al-Huda Bank 

and the transmittal of notification to 

certain correspondent account holders— 

would not impose a significant 

additional economic burden upon small 

U.S. financial institutions. For these 

reasons, FinCEN certifies that the 

proposals contained in this rulemaking 

would not have a significant impact on 

a substantial number of small 

businesses. 

FinCEN invites comments from 

members of the public who believe 

there would be a significant economic 

impact on small entities from the 

imposition of a prohibition under the 

fifth special measure regarding Al-Huda 

Bank. 

C. Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 25

(Unfunded Mandates Reform Act), 

requires that an agency prepare a 

budgetary impact statement before 

promulgating a rule that may result in 

expenditure by the state, local, and 

tribal governments, in the aggregate, or 

by the private sector, of $100 million or 

more in any one year, adjusted for 

inflation.26 If a budgetary impact 

statement is required, section 202 of the 

Unfunded Mandates Reform Act also 

requires an agency to identify and 

consider a reasonable number of 

regulatory alternatives before 

promulgating a rule.27

FinCEN has determined that this 

proposed rule will not result in 

expenditures by state, local, and tribal 

governments, in the aggregate, or by the 

private sector, of an annual $100 million 

or more, adjusted for inflation ($184.7 

million).28 Accordingly, FinCEN has not 

prepared a budgetary impact statement 

or specifically addressed the regulatory 

alternatives considered. 

D. Paperwork Reduction Act 

The recordkeeping and reporting 

requirements, referred to by the Office 

of Management and Budget (OMB) as a 

collection of information, contained in 

this proposed rule will be submitted by 

FinCEN to the OMB for review in 

accordance with the Paperwork 

Reduction Act of 1995 (PRA).29 Under 

the PRA, an agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a valid control 

number assigned by the OMB. Written 

comments and recommendations for the 

proposed prohibition can be submitted 

by visiting www.reginfo.gov/public/do/ 

PRAMain. Find this particular 

document by selecting ‘‘Currently under 

Review—Open for Public Comments’’ or 

by using the search function. Comments 

are welcome and must be received by 

[30 DAYS AFTER DATE OF 

PUBLICATION IN THE FEDERAL 

REGISTER]. In accordance with 

requirements of the PRA and its 

implementing regulations, 5 CFR part 

1320, the following information 

concerning the collection of information 

as required by 31 CFR 1010.663 is 

presented to assist those persons 

wishing to comment on the information 

collections. 

The provisions in this proposed rule 

pertaining to the collection of 

information can be found in section 

1010.663(b)(4). The information 

required to be maintained by that 

section will be used by federal agencies 

and certain self-regulatory organizations 

to verify compliance by covered 

financial institutions with the 

notification requirements in 31 CFR 

1010.663(b)(3)(i)(A), which are intended 

to aid cooperation from correspondent 

account holders in denying the Al Huda 

Bank access to the U.S. financial system. 

The collection of information would be 

mandatory. 

Frequency: As required. 

Description of Affected Financial 

Institutions: Only those covered 

financial institutions defined in section 

1010.663(a)(3) engaged in correspondent 

banking with, or processing transactions 

potentially involving, Al-Huda Bank as 

defined in section 1010.663(b)(1) and (2) 

would be affected. 

Estimated Number of Affected 

Financial Institutions: Approximately 

15,000.30

TABLE 1—ESTIMATES OF AFFECTED

FINANCIAL INSTITUTIONS BY TYPE

Financial institution type Number of 

entities 

Banks 31 ...................................... 32 9,250 

Broker-Dealers in securities 33 ... 34 3,477 

Mutual Funds 35 .......................... 36 1,495 

Futures Commission Merchants 37 .................................. 38 62 

Introducing Brokers in Commodities 39 ...................................... 40 937 

Estimated Average Annual Burden in 

Hours per Affected Financial 

Institution: The estimated average 

annual burden associated with the 

collection of information in this 


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proposed rule is one hour per affected 

financial institution. 

Estimated Total Annual Burden: 

Approximately 15,000 hours. 

FinCEN specifically invites comments 

on: (a) whether the proposed collection 

of information found in section 

1010.663(b)(4) is necessary for the 

proper performance of the mission of 

FinCEN, including whether the 

information would have practical 

utility; (b) the accuracy of FinCEN’s 

estimate of the burden of the proposed 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information required to be 

maintained; (d) ways to minimize the 

burden of the required collection of 

information, 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 report the information. 

VIII. Regulatory Text 

List of Subjects in 31 CFR Part 1010 

Administrative practice and 

procedure, Banks, Banking, Brokers, 

Crime, Foreign banking, Terrorism. 

Authority and Issuance 

For the reasons set forth in the 

preamble, FinCEN proposes amending 

31 CFR part 1010 as follows: 

PART 1010—GENERAL PROVISIONS 

■ 1. The authority citation for part 1010 

continues to read as follows: 

Authority: 12 U.S.C. 1829b and 1951–1959; 

31 U.S.C. 5311–5314, 5316–5336; title III, 

sec. 314, Pub. L. 107–56, 115 Stat. 307; sec. 

2006, Pub. L. 114–41, 129 Stat. 458–459; sec. 

701 Pub. L. 114–74, 129 Stat. 599; sec. 6403, 

Pub. L. 116–283, 134 Stat. 3388. 

■ 2. Add § 1010.663 to read as follows: 

§ 1010.663 Special measures regarding AlHuda Bank. 

(a) Definitions. For purposes of this 

section, the following terms have the 

following meanings. 

(1) Al-Huda Bank. The term ‘‘Al-Huda 

Bank’’ means all subsidiaries, branches, 

and offices of Al-Huda Bank operating 

as a bank in any jurisdiction. 

(2) Correspondent account. The term 

‘‘correspondent account’’ has the same 

meaning as provided in 

§ 1010.605(c)(l)(ii). 

(3) Covered financial institution. The 

term ‘‘covered financial institution’’ has 

the same meaning as provided in 

§ 1010.605(e)(2). 

(4) Foreign banking institution. The 

term ‘‘foreign banking institution’’ 

means a bank organized under foreign 

law, or an agency, branch, or office 

located outside the United States of a 

bank. The term does not include an 

agent, agency, branch, or office within 

the United States of a bank organized 

under foreign law. 

(5) Subsidiary. The term ‘‘subsidiary’’ 

means a company of which more than 

50 percent of the voting stock or 

analogous equity interest is owned by 

another company. 

(b) Prohibition on accounts and due 

diligence requirements for covered 

financial institutions—(1) Prohibition 

on opening or maintaining 

correspondent accounts for Al-Huda 

Bank. A covered financial institution 

shall not open or maintain in the United 

States a correspondent account for, or 

on behalf of, Al-Huda Bank. 

(2) Prohibition on processing 

transactions involving Al-Huda Bank. A 

covered financial institution shall take 

reasonable steps not to process a 

transaction for the correspondent 

account in the United States of a foreign 

banking institution if such a transaction 

involves Al-Huda Bank. 

(3) Special due diligence of 

correspondent accounts to prohibit 

transactions. (i) A covered financial 

institution shall apply special due 

diligence to its foreign correspondent 

accounts that is reasonably designed to 

guard against their use to process 

transactions involving Al-Huda Bank. 

At a minimum, that special due 

diligence must include: 

(A) Notifying those foreign 

correspondent account holders that the 

covered financial institution knows or 

has reason to believe provide services to 

Al-Huda Bank that such correspondents 

may not provide Al-Huda Bank with 

access to the correspondent account 

maintained at the covered financial 

institution; and 

(B) Taking reasonable steps to identify 

any use of its foreign correspondent 

accounts by Al-Huda Bank, to the extent 

that such use can be determined from 

transactional records maintained in the 

covered financial institution’s normal 

course of business. 

(ii) A covered financial institution 

shall take a risk-based approach when 

deciding what, if any, other due 

diligence measures it reasonably must 

adopt to guard against the use of its 

foreign correspondent accounts to 

process transactions involving Al-Huda 

Bank. 

(iii) A covered financial institution 

that knows or has reason to believe that 

a foreign bank’s correspondent account 

has been or is being used to process 

transactions involving Al-Huda Bank 

shall take all appropriate steps to further 

investigate and prevent such access, 

including the notification of its 

correspondent account holder under 

paragraph (b)(3)(i)(A) of this section 

and, where necessary, termination of the 

correspondent account. 

(4) Recordkeeping and reporting. (i) A 

covered financial institution is required 

to document its compliance with the 

notification requirement set forth in this 

section. 

(ii) Nothing in paragraph (b) of this 

section shall require a covered financial 

institution to report any information not 

otherwise required to be reported by law 

or regulation. 

Dated: January 29, 2024. 

Andrea M. Gacki, 

Director, Financial Crimes Enforcement 

Network. 

[FR Doc. 2024–02004 Filed 1–30–24; 8:45 am] 

BILLING CODE 4810–02–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R01–OAR–2024–0018; FRL–11714– 

01–R1] 

Air Plan Approval; New Hampshire; 

Amendments to Motor Vehicle 

Inspection and Maintenance Program 

Regulation 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is proposing to approve a 

State Implementation Plan (SIP) 

revision submitted by the State of New 

Hampshire. This revision includes an 

amended regulation for the Enhanced 

Motor Vehicle Inspection and 

Maintenance (I/M) program in New 

Hampshire. Overall, the submittal 

updates and clarifies the 

implementation of the New Hampshire 

I/M program. The intended effect of this 

action is to propose approval of the 

updated I/M program regulation into the 

New Hampshire SIP. This action is 

being taken under the Clean Air Act. 

DATES: Written comments must be 

received on or before March 1, 2024. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–R01– 

OAR–2024–0018 at https://

www.regulations.gov, or via email to 

martinelli.ayla@epa.gov. For comments 

submitted at Regulations.gov, follow the 

online instructions for submitting 

comments. Once submitted, comments 

cannot be edited or removed from 

Regulations.gov. For either manner of 

submission, the EPA may publish any 


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