10148 Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Proposed Rules 

1The Federal bank regulatory agencies have 

parallel SAR requirements for their supervised 

entities: See 12 CFR 208.62 (the Board of Governors 

of the Federal Reserve System (‘‘Fed’’)); 12 CFR 

353.3 (the Federal Deposit Insurance Corporation 

(‘‘FDIC’’)); 12 CFR 748.1 (the National Credit Union 

Administration (‘‘NCUA’’)); 12 CFR 21.11 (the 

Office of the Comptroller of Currency (‘‘OCC’’)) and 

12 CFR 563.180 (the Office of Thrift Supervision 

(‘‘OTS’’)). Of these agencies the OCC and OTS are 

proposing corollary regulation changes 

contemporaneously. 

2This single docket number is shared by three 

related documents (this notice of proposed 

rulemaking, and two related pieces of proposed 

guidance) published simultaneously by FinCEN in 

today’s Federal Register. Accordingly, commenters 

may submit comments related to any of the 

proposals, or any combination of proposals, in a 

single comment letter. 

analysis otherwise required under 

section 604 of the RFA is not required 

if the agency certifies that the rule will 

not have a significant economic impact 

on a substantial number of small entities 

and publishes its certification and a 

short, explanatory statement in the 

Federal Register along with its rule. 

The OTS has determined that the 

proposed rules do not impose any 

economic costs as they simply clarify 

the scope of the statutory prohibition 

against the disclosure by financial 

institutions and by the government of 

SAR information. Therefore, pursuant to 

section 605(b) of the RFA, the OTS 

hereby certifies that this proposal will 

not have a significant economic impact 

on a substantial number of small 

entities. Accordingly, a regulatory 

flexibility analysis is not needed. 

Executive Order 12866 

The OTS has determined that this 

proposal is not a significant regulatory 

action under Executive Order 12866. We 

have concluded that the changes that 

would be made by the proposed 

amendments will not have an annual 

effect on the economy of $100 million 

or more. The OTS further concludes that 

this proposal does not meet any of the 

other standards for a significant 

regulatory action set forth in Executive 

Order 12866. 

Paperwork Reduction Act 

We have reviewed the proposed 

amendments in accordance with the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3506; 5 CFR 1320, Appendix A.1) 

(PRA) and have determined that they do 

not contain any ‘‘collections of 

information’’ as defined by the PRA. 

Unfunded Mandates Reform Act of 1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995, Public 

Law 104–4 (UMRA) requires that an 

agency prepare a budgetary impact 

statement before promulgating a rule 

that includes a Federal mandate that 

may result in the expenditure by state, 

local, and tribal governments, in the 

aggregate, or by the private sector of 

$100 million or more (adjusted annually 

for inflation) in any one year. If a 

budgetary impact statement is required, 

section 205 of the UMRA also requires 

an agency to identify and consider a 

reasonable number of regulatory 

alternatives before promulgating a rule. 

The OTS has determined that its 

proposed rule will not result in 

expenditures by state, local, and tribal 

governments, or by the private sector, of 

$133 million or more. Accordingly, OTS 

has not prepared a budgetary impact 

statement or specifically addressed the 

regulatory alternatives considered. 

List of Subjects in 12 CFR Part 510 

Administrative practice and 

procedure, Freedom of information, 

Individuals with disabilities, Minority 

businesses, Organization and functions 

(Government agencies), Reporting and 

recordkeeping requirements, Women. 

Authority and Issuance 

For the reasons set forth in the 

preamble, part 510 of title 12 of the 

Code of Federal Regulations is proposed 

to be amended as follows: 

PART 510—MISCELLANEOUS 

ORGANIZATIONAL REGULATIONS 

1. The authority citation for part 510 

continues to read as follows: 

Authority: 12 U.S.C. 1462a, 1463, 1464; 

Pub.L. 101–410, 104 Stat 890; Pub.L. 104– 

134, 110 Stat 1321–358. 

2. Amend § 510.5 by: 

a. Adding paragraph (a)(3)(iv); 

b. Removing, at the end of paragraph 

(d)(4)(i)(C), the word ‘‘or’’; 

c. Removing the period at the end of 

paragraph (d)(4)(i)(D) and adding in its 

place ‘‘; or’’ and 

d. Adding paragraph (d)(4)(i)(E) as 

follows: 

§ 510.5 Release of unpublished OTS 

information. 

(a) * * * 

(3) * * * 

(iv) Requests for a Suspicious Activity 

Report (SAR), or any information that 

would reveal the existence of a SAR. 

* * * * * 

(d) * * * 

(4) * * * 

(i) * * * 

(E) Information that should not be 

disclosed, because such disclosure is 

prohibited by law. 

* * * * * 

Dated: November 18, 2009. 

By the Office of Thrift Supervision. 

John M. Reich, 

Director. 

Editorial Note: This document was 

received at the Office of the Federal Register 

on February 27, 2009. 

[FR Doc. E9–4699 Filed 3–6–09; 8:45 am] 

BILLING CODE 6720–01–P 

DEPARTMENT OF THE TREASURY 

31 CFR Part 103 

RIN 1506–AA99 

[Docket Number: TREAS–FinCEN–2008– 

0022] 

Financial Crimes Enforcement 

Network; Confidentiality of Suspicious 

Activity Reports 

AGENCY: The Financial Crimes 

Enforcement Network (FinCEN), 

Department of the Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Financial Crimes 

Enforcement Network (‘‘FinCEN’’), a 

bureau of the Department of the 

Treasury (‘‘Treasury’’), is proposing to 

revise the regulations implementing the 

Bank Secrecy Act (‘‘BSA’’) regarding the 

confidentiality of a report of suspicious 

activity (‘‘SAR’’) to: Clarify the scope of 

the statutory prohibition against the 

disclosure by a financial institution of a 

SAR; address the statutory prohibition 

against the disclosure by the 

government of a SAR; clarify that the 

exclusive standard applicable to the 

disclosure of a SAR by the government 

is to fulfill official duties consistent 

with the purposes of the BSA; modify 

the safe harbor provision to include 

changes made by the Uniting and 

Strengthening America by Providing the 

Appropriate Tools Required to Intercept 

and Obstruct Terrorism Act of 2001 

(‘‘USA PATRIOT Act’’); and make minor 

technical revisions for consistency and 

harmonization among the different 

rules. These amendments are consistent 

with similar proposals to be issued by 

some of the Federal bank regulatory 

agencies.1

DATES: Comments must be received by 

June 8, 2009. 

ADDRESSES: You may submit comments, 

identified by RIN 1506–AA99 or docket 

number TREAS-FinCen-2008–0022,2 by 

any of the following methods: 


pwalker on PROD1PC71 with PROPOSALS2
Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Proposed Rules 10149 

3The Annunzio-Wylie Anti-Money Laundering 

Act of 1992 (the Annunzio-Wylie Act), amended the 

BSA and authorized the Secretary of the Treasury 

to require financial institutions to report suspicious 

transactions relevant to a possible violation of law 

or regulation. See Public Law 102–550, Title XV, 

§ 1517(b), 106 Stat. 4055, 4058–9 (1992); 31 U.S.C. 

5318(g)(1). 

4See 31 U.S.C. 5318(g)(2). 

5Bank Secrecy Act regulations expressly 

permitting the filing of a joint SAR when multiple 

financial transactions are involved in a common 

transaction or series of transactions involving 

suspicious activity can be found at 31 CFR 

103.15(a)(3) (for mutual funds); 31 CFR 

103.16(b)(3)(ii) (for insurance companies); 31 CFR 

103.17(a)(3) (for futures commission merchants and 

introducing brokers in commodities); 31 CFR 

103.19(a)(3) (for broker-dealers in securities); and 

31 CFR 103.20(a)(4) (for money services 

businesses). 

6See USA PATRIOT Act, section 351(b). Public 

Law 107–56, Title III, § 351, 115 Stat. 272, 321 

(2001); 31 U.S.C. 5318(g)(2). 

7See USA PATRIOT Act, section 351(a). Public 

Law 107–56, Title III, § 351, 115 Stat. 272, 321 

(2001); 31 U.S.C. 5318(g)(3). 

8 Generally, these regulations are known as 

‘‘Touhy regulations,’’ after the Supreme Court’s 

decision in United States ex rel. Touhy v. Ragen, 

340 U.S. 462 (1951). In that case, the Supreme Court 

held that an agency employee could not be held in 

contempt for refusing to disclose agency records or 

information when following the instructions of his 

or her supervisor regarding the disclosure. As such, 

an agency’s Touhy regulations are the instructions 

agency employees must follow when those 

employees receive requests or demands to testify or 

otherwise disclose agency records or information. 

9See 31 U.S.C. 5318(g)(2). 

• Federal e-rulemaking portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: FinCEN, P.O. Box 39, Vienna, 

VA 22183. Include RIN 1506–AA99 or 

docket number TREAS-FinCen-2008– 

0022 in the body of the text. 

Inspection of comments: Comments 

may be inspected, between 10 a.m. and 

4 p.m., in the FinCEN reading room in 

Vienna, VA. Persons wishing to inspect 

the comments submitted must request 

an appointment with the Disclosure 

Officer by telephoning (703) 905–5034 

(Not a toll free call). 

FOR FURTHER INFORMATION CONTACT: 

Regulatory Policy and Programs 

Division, FinCEN (800) 949–2732 and 

select option 1. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The BSA requires financial 

institutions to keep certain records and 

make certain reports that have been 

determined to be useful in criminal, tax, 

or regulatory investigations or 

proceedings, and for intelligence or 

counter intelligence activities to protect 

against international terrorism. In 

particular, the BSA and its 

implementing regulations require 

financial institutions to file a SAR when 

they detect a known or suspected 

violation of Federal law or regulation, or 

a suspicious activity related to money 

laundering, terrorist financing, or other 

criminal activity.3

SARs generally are unproven reports 

of possible violations of law or 

regulation, or of suspicious activities, 

that are used for law enforcement or 

regulatory purposes. The BSA provides 

that a financial institution and its 

officers, directors, employees, and 

agents are prohibited from notifying any 

person involved in a suspicious 

transaction that the transaction was 

reported.4 FinCEN implemented this 

provision in its SAR regulations for each 

industry through an explicit prohibition 

that closely mirrored the statutory 

language. Specifically, we clarified that 

disclosure could not be made to the 

person involved in the transaction, but 

that the SAR could be provided to 

FinCEN, law enforcement, and the 

institution’s supervisor or examining 

authority. In certain SAR rules, we have 

expressly provided for the possibility of 

institutions jointly filing a SAR 

regarding suspicious activity that 

occurred at multiple institutions.5

The USA PATRIOT Act strengthened 

the confidentiality of SARs by adding to 

the BSA a new provision that prohibits 

officers or employees of the Federal 

government or any State, local, tribal, or 

territorial government within the United 

States with knowledge of a SAR from 

disclosing to any person involved in a 

suspicious transaction that the 

transaction was reported, other than as 

necessary to fulfill the official duties of 

such officer or employee.6

To encourage the reporting of possible 

violations of law or regulation, and the 

filing of SARs, the BSA contains a safe 

harbor provision that shields financial 

institutions making such reports from 

civil liability. In 2001, the USA 

PATRIOT Act clarified that the safe 

harbor covers voluntary disclosure of 

possible violations of law and 

regulations to a government agency and 

expanded the scope of the limit on 

liability to cover any civil liability 

which may exist ‘‘under any contract or 

other legally enforceable agreement 

(including any arbitration agreement).’’ 7

II. Overview of Proposal 

The proposed amendments to 

FinCEN’s SAR rules include key 

changes that would (1) clarify the scope 

of the statutory prohibition against the 

disclosure by a financial institution of a 

SAR; (2) address the statutory 

prohibition against the disclosure by the 

government of a SAR; (3) clarify that the 

exclusive standard applicable to the 

disclosure of a SAR, or any information 

that would reveal the existence of a SAR 

by the government is ‘‘to fulfill official 

duties consistent with Title II of the 

BSA,’’ in order to ensure that SAR 

information is protected from 

inappropriate disclosures unrelated to 

the BSA purposes for which SARs are 

filed; (4) modify the safe harbor 

provision to include changes made by 

the USA PATRIOT Act; and (5) where 

possible, harmonize minor technical 

differences that exist between the 

confidentiality, safe harbor, and 

compliance provisions of our 

rulemakings for different industries. 

In separate but contemporaneous 

rulemakings, some of the Federal bank 

regulatory agencies are proposing to 

amend their SAR rules to incorporate 

comparable provisions, and to amend 

their information disclosure 

regulations 8 to clarify that the exclusive 

standard governing the release of a SAR, 

or any information that would reveal the 

existence of a SAR is set forth in the 

confidentiality provisions of their 

respective SAR rules. 

Additionally, elsewhere in this part, 

FinCEN is simultaneously issuing for 

notice and comment proposed guidance 

regarding the sharing of SARs with 

affiliates. This proposed guidance 

interprets one of the provisions of this 

notice of proposed rulemaking and, 

accordingly, should be read in 

conjunction with this notice. 

III. Section-by-Section Analysis 

A. Confidentiality of SARs 

Out of recognition that ‘‘reports with 

a high degree of usefulness’’ were 

unlikely to be filed unless afforded strict 

confidentiality, Congress established 

what is often referred to as the ‘‘nondisclosure provision’’ 9 in the BSA. This 

provision prohibits financial 

institutions and officers or employees of 

the government with knowledge that a 

SAR was filed from notifying the person 

involved in the transaction that the 

transaction has been reported. 

Accordingly, under the section heading 

‘‘confidentiality of reports,’’ FinCEN’s 

rules currently prohibit financial 

institutions from disclosing that a SAR 

was filed to any person involved in the 

transaction. The SAR rules also provide 

that no institution may disclose a SAR 

in response to a subpoena or other 

request, except when that request comes 

from FinCEN or an appropriate 

supervisory or law enforcement agency. 

Over the years, FinCEN has received 

numerous questions regarding the scope 

of the prohibition against the disclosure 

of a SAR in its current rules. 

Accordingly, in this rulemaking, we are 


pwalker on PROD1PC71 with PROPOSALS2
10150 Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Proposed Rules 

10See, e.g., Whitney Nat’l Bank v. Karam, 306 F. 

Supp. 2d 678, 682 (S.D. Tex. 2004); Cotton v. 

Private Bank and Trust Co., 235 F. Supp. 2d 809, 

815 (N.D. Ill. 2002). 

proposing to clarify the scope of SAR 

confidentiality. 

FinCEN believes it is important to 

clarify that the statutory prohibition on 

notifying the person involved in the 

transaction that the transaction has been 

reported must be interpreted more 

broadly to prohibit disclosures to any 

person. SAR rules issued by the Federal 

bank regulatory agencies already 

provide that ‘‘SARs are confidential.’’ 

As described further in the Section-bySection Analysis below, this view of 

SAR confidentiality also has been 

repeatedly upheld in relevant case law. 

FinCEN also recognizes that in order 

to protect the confidentiality of a SAR, 

any information that would reveal the 

existence of a SAR must be afforded the 

same protection as the SAR itself. The 

confidentiality of SARs must be 

maintained for a number of compelling 

reasons. For example, the disclosure of 

a SAR could result in notification to 

persons involved in the transaction that 

is being reported and compromise any 

investigations being conducted in 

connection with the SAR. In addition, 

FinCEN recognizes that any disclosure 

of a SAR could reduce the willingness 

of all financial institutions to file SARs. 

If institutions believe that a SAR can be 

used for purposes unrelated to the law 

enforcement and regulatory purposes of 

the BSA, the disclosure of such 

information could adversely affect the 

timely, appropriate, and candid 

reporting of suspicious transactions. 

Institutions also may be reluctant to 

report suspicious transactions for fear 

that the disclosure of a SAR will 

interfere with the institution’s 

relationship with its customer. Further, 

a SAR may provide insight into how an 

institution uncovers potential criminal 

conduct that can be used by others to 

circumvent detection. The disclosure of 

a SAR also could compromise 

personally identifiable information or 

commercially sensitive information, or 

damage the reputational interests of 

companies that may be named. Finally, 

the disclosure of a SAR increases the 

risk that an institution’s employees or 

others involved in the preparation and 

filing of SARs could become targets for 

retaliation by persons whose criminal 

conduct has been reported. 

FinCEN believes that all of the 

reasons for maintaining the 

confidentiality of SARs are equally 

applicable to any information that 

would reveal the existence of a SAR. 

Therefore, FinCEN is proposing to 

modify the general introduction in our 

rules to state that ‘‘[a] SAR, and any 

information that would reveal the 

existence of a SAR, are confidential.’’ 

The introduction also indicates that 

neither a SAR, nor any information that 

would reveal the existence of a SAR, 

may be disclosed, except as authorized 

in the limited circumstances that follow. 

FinCEN is also proposing to modify 

this introductory section by clarifying 

that ‘‘for purposes of [the confidentiality 

provision] only, a SAR shall include any 

suspicious activity report filed with 

FinCEN pursuant to any regulation in 

this part.’’ By using the term ‘‘SAR’’ in 

each of the proposed confidentiality 

provisions, FinCEN is purposefully 

using a term broader than the existing 

references in those provisions to 

specific types of SARs. We note that our 

rules require institutions to comply with 

our filing requirements through the use 

of particular versions of the SAR form, 

e.g., a SAR–SF for those in the securities 

and futures sector, or a SAR–MSB for 

money services businesses. 

Nevertheless, it is critical that the 

confidentiality provisions of our SAR 

rules apply with respect to any type of 

SAR in the filing institution’s 

possession, which since it may result 

from the joint filing or sharing of a SAR 

with another type of financial 

institution in accordance with the 

provisions of these proposed rules, 

could include a type of SAR form not 

used by the institution. 

B. Disclosure by Financial Institutions 

FinCEN’s current rules provide that 

any institution subpoenaed or otherwise 

requested to disclose a SAR or the 

information contained in a SAR must 

decline to produce the SAR or to 

provide any information that would 

disclose that a SAR has been prepared 

or filed, and must notify FinCEN of the 

request and its response to the request. 

The proposed rules more specifically 

address the prohibition on the 

disclosure of a SAR by a financial 

institution. The rules provide that the 

prohibition includes ‘‘any information 

that would reveal the existence of a 

SAR’’ instead of using the phrase ‘‘any 

information that would disclose that a 

SAR has been prepared or filed.’’ 

FinCEN believes that this phrase more 

clearly describes the type of information 

that is covered by the prohibition 

against the disclosure of a SAR. In 

addition, the proposed rules incorporate 

the specific reference in 31 U.S.C. 

5318(g)(2)(A)(i) to ‘‘directors, officers, 

employees and agents,’’ and clarify that 

the prohibition against disclosure 

extends to those individuals in a 

financial institution who may have 

access to a SAR or information that 

would reveal the existence of a SAR. 

Although 31 U.S.C. 5318(g)(2)(A)(i) 

states that a person involved in the 

transaction may not be notified that the 

transaction has been reported, the 

proposed rules continue to reflect case 

law that has consistently concluded, in 

accordance with applicable regulations, 

that financial institutions are broadly 

prohibited from disclosing a SAR, or 

information that would reveal the 

existence of a SAR, to any person. 

Accordingly, these cases have held that, 

in the context of discovery in 

connection with civil lawsuits, financial 

institutions are prohibited from 

disclosing a SAR or information that 

would reveal the existence of a SAR 

because section 5318(g) and its 

implementing regulations have created 

an unqualified discovery and 

evidentiary privilege for such 

information that cannot be waived by 

financial institutions.10 Consistent with 

case law and current regulation, the 

texts of the proposed rules do not limit 

the prohibition on disclosure only to the 

person involved in the transaction. 

Permitting disclosure to any outside 

party may make it likely that SAR 

information would be disclosed to a 

person involved in the transaction, 

which is prohibited by the statute. 

The proposed rules continue to 

provide that any financial institution, or 

any director, officer, employee, or agent 

of a financial institution, that is 

subpoenaed or otherwise requested to 

disclose a SAR or information that 

would reveal the existence of a SAR 

must decline to provide the information, 

citing this section of the rules and 31 

U.S.C. 5318(g)(2)(A)(i), and must 

provide notification of the request and 

its response thereto to FinCEN and its 

primary Federal regulator if that 

regulator has a parallel SAR 

requirement. 

C. Rules of Construction 

FinCEN is proposing rules of 

construction to address issues that have 

arisen over the years about the scope of 

the SAR disclosure prohibition and to 

implement statutory modifications to 

the BSA made by the USA PATRIOT 

Act. The proposed rules of construction 

primarily describe situations that are 

not covered by the prohibition against 

the disclosure of SAR information. The 

introduction to these rules makes clear 

that the rules of construction are each 

qualified by the statutory mandate that 

no person involved in any reported 

suspicious transaction can be notified 

that the transaction has been reported. 

The first proposed rule of 

construction builds upon the existing 


pwalker on PROD1PC71 with PROPOSALS2
Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Proposed Rules 10151 

11See Cotton, 235 F. Supp. 2d at 815. 

12Although the underlying facts, transactions, 

and documents upon which a SAR is based may 

include previously filed SARs or other information 

that would reveal the existence of a SAR, these 

materials would not be disclosable as underlying 

documents. 

13On December 21, 2006, FinCEN and the Federal 

bank regulatory agencies announced that the format 

for the SAR form for depository institutions had 

been revised to support a new joint filing initiative 

to reduce the number of duplicate SARs filed for 

a single suspicious transaction. ‘‘Suspicious 

Activity Report (SAR) Revised to Support Joint 

Filings and Reduce Duplicate SARs,’’ Joint Release 

issued by FinCEN, the FRB, the OCC, the OTS, the 

FDIC, and NCUA (Dec. 21, 2006). On February 17, 

2006, FinCEN and the Federal bank regulatory 

agencies published a joint Federal Register notice 

seeking comment on proposed revisions to the SAR 

form. See 71 FR 8640. On April 26, 2007, FinCEN 

announced a delay in implementation of the revised 

SAR form until further notice. See 72 FR 23891. 

Until such time as a new SAR form is available that 

facilitates joint filing, institutions authorized to 

jointly file should follow FinCEN’s guidance to use 

the words ‘‘joint filing’’ in the narrative of the SAR 

and ensure that both institutions maintain a copy 

of the SAR and any supporting documentation (See, 

e.g., http://www.fincen.gov/statutes_regs/guidance/ 

html/guidance_faqs_sar_10042006.html). 

14 31 U.S.C. 5318(g)(2)(B). 

15See ‘‘Interagency Guidance on Sharing 

Suspicious Activity Reports with Head Offices and 

Controlling Companies’’ (January 20, 2006). http:// 

www.fincen.gov/statutes_regs/guidance/pdf/ 

sarsharingguidance01122006.pdf; and ‘‘Guidance 

on Sharing of Suspicious Activity Reports by 

Securities Broker-Dealers, Futures Commission 

Merchants, and Introducing Brokers in 

Commodities’’ (January 20, 2006). http:// 

www.fincen.gov/statutes_regs/guidance/pdf/ 

sarsharingguidance01202006.pdf. 

provision to clarify that a financial 

institution, or any director, officer, 

employee, or agent of a financial 

institution, may disclose a SAR or 

information that would reveal the 

existence of a SAR to FinCEN or any 

Federal, state, or local law enforcement 

agency or any Federal or state regulatory 

agency that examines the financial 

institution for compliance with the 

BSA. For the rules governing brokerdealers, futures commission merchants, 

and introducing brokers in 

commodities, such disclosure is also 

permissible at the request of an 

appropriate self-regulatory organization 

that is examining the institution for 

compliance with the SAR reporting 

requirement. Although the 

permissibility of such disclosures may 

be readily apparent, the proposal 

contains this statement to clarify that 

the prohibition against disclosure 

cannot be used to withhold this 

information from governmental 

authorities or other examining 

authorities that are otherwise entitled by 

law to receive SARs and to examine for 

and investigate suspicious activity. 

The second proposed rule of 

construction provides that the phrase ‘‘a 

SAR or information that would reveal 

the existence of a SAR’’ does not 

include the underlying facts, 

transactions, and documents upon 

which a SAR is based. This statement 

reflects case law which has recognized 

that, while a financial institution is 

prohibited from producing documents 

in discovery that evidence the existence 

of a SAR, factual documents created in 

the ordinary course of business (for 

example, business records and account 

information upon which a SAR is 

based), may be discoverable in civil 

litigation under the Federal Rules of 

Civil Procedure.11

This proposed rule of construction 

includes illustrative examples of 

situations where the underlying facts, 

transactions, and documents upon 

which a SAR is based may be disclosed. 

The first example clarifies that this 

information 12 may be disclosed to 

another financial institution, or any 

director, officer, employee, or agent of 

the financial institution, for the 

preparation of a joint SAR. Although 

FinCEN had not previously prohibited 

any institution from jointly filing with 

any other institution that was subject to 

the suspicious activity reporting 

requirement, this rule of construction 

clarifies the authority for all institutions 

with a SAR requirement to jointly file 

SARs with any other institution with a 

SAR requirement.13

The second example, applicable only 

to depository institutions, brokerdealers, futures commission merchants, 

and introducing brokers in 

commodities, codifies a rule of 

construction added to the BSA by 

section 351 of the USA PATRIOT Act 

which provides that such underlying 

information may be disclosed in certain 

written employment references and 

termination notices.14 These two 

examples are not intended to be an 

exhaustive list of all possible scenarios 

in which the disclosure of underlying 

information is permissible. 

The third proposed rule of 

construction, applicable at this time 

only to depository institutions, brokerdealers, mutual funds, futures 

commission merchants, and introducing 

brokers in commodities, makes clear 

that the prohibition against the 

disclosure of a SAR or information that 

would reveal the existence of a SAR 

does not include the sharing by any of 

these financial institutions, or any 

director, officer, employee, or agent of 

these institutions, of a SAR or 

information that would reveal the 

existence of the SAR within the 

institution’s corporate organizational 

structure, for purposes that are 

consistent with Title II of the BSA, as 

determined by regulation or in 

guidance. This proposed rule of 

construction recognizes that these 

financial institutions may find it 

necessary to share a SAR or information 

that would reveal the existence of a SAR 

to fulfill reporting obligations under the 

BSA, and to facilitate more effective 

enterprise-wide BSA monitoring, 

reporting, and general risk-management. 

The term ‘‘share’’ used in this rule of 

construction is an acknowledgement 

that sharing within a corporate 

organization for purposes consistent 

with Title II of the BSA is 

distinguishable from a prohibited 

disclosure. 

FinCEN and the Federal bank 

regulatory agencies have already issued 

joint guidance making clear that the 

U.S. branch or agency of a foreign bank 

may share a SAR with its head office, 

and that a U.S. bank or savings 

association may share a SAR with its 

controlling company (whether domestic 

or foreign). In consultation with the 

staffs of the SEC and CFTC, FinCEN also 

issued comparable guidance for brokerdealers, futures commission merchants, 

and introducing brokers in commodities 

permitting them to share SARs with 

parent entities (whether domestic or 

foreign). These guidance documents 

recognized that the sharing of a SAR 

with a head office, controlling company, 

or parent entity facilitates both the 

compliance with the applicable 

requirements of the BSA and the 

discharge of oversight responsibilities 

with respect to enterprise-wide risk 

management and compliance with 

applicable laws and regulations.15

In this same part of the Federal 

Register, FinCEN and certain Federal 

bank regulatory agencies today are 

issuing for notice and comment 

proposed guidance that further clarifies 

when a SAR can be shared with an 

institution’s affiliates for purposes 

consistent with the BSA. FinCEN, in 

consultation with the SEC and CFTC, is 

also proposing for notice and comment 

similar guidance for the broker-dealer, 

mutual fund, futures commission 

merchant, and introducing broker in 

commodities industries. 

D. Disclosures by Government 

Authorities 

As previously noted, section 351 of 

the USA PATRIOT Act, 31 U.S.C. 

5318(g)(2)(A)(ii), amended the BSA, 

adding a new provision prohibiting 

officers and employees of the 

government from disclosing a SAR 

except ‘‘as necessary to fulfill [their] 

official duties.’’ FinCEN is proposing a 

new section in the regulations that 


pwalker on PROD1PC71 with PROPOSALS2
10152 Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Proposed Rules 

16 31 U.S.C. 5311. 

17See, e.g.,, Giglio v. United States, 405 U.S. 150, 

153–54 (1972); Brady v. State of Maryland, 373 U.S. 

83, 86–87 (1963); Jencks v. United States, 353 U.S. 

657, 668 (1957). 

18See supra footnote 2. 

19See, e.g., 31 CFR 103.18(e). The safe harbor 

regulations are also applicable to oral reports of 

violations. (In situations requiring immediate 

attention, a financial institution must immediately 

notify its regulator and appropriate law 

enforcement by telephone, in addition to filing a 

SAR.) See e.g., 12 CFR 21.11(d). 

extends this prohibition against 

disclosure to all federal, state, local, 

territorial, or tribal government 

authorities, and any director, officer, 

employee, or agent of those authorities. 

The proposed rules track the statutory 

language closely by clarifying that any 

officer or employee of the government 

may not disclose a SAR or information 

that would reveal the existence of the 

SAR, ‘‘except as necessary to fulfill 

official duties consistent with Title II of 

the Bank Secrecy Act.’’ 

As stated in 5318(g)(2)(A)(i), which 

prohibits a financial institution’s 

disclosure of a SAR, section 

5318(g)(2)(A)(ii) also prohibits the 

government from disclosing a SAR to 

‘‘any person involved in the 

transaction.’’ FinCEN is proposing to 

address sections 5318(g)(2)(A)(i) and 

(A)(ii) in a consistent manner, because 

disclosure to any outside party may 

make it likely that a SAR or any 

information that would reveal the 

existence of a SAR, will be disclosed to 

a person involved in the transaction. 

Accordingly, the section of the rules 

that address the disclosure of a SAR or 

of such information by the government 

and its officers, employees, and agents 

is broad and does not prohibit 

disclosure only to ‘‘any person involved 

in the transaction.’’ 

Section 5318(g)(2)(A)(ii) narrowly 

permits governmental disclosures ‘‘as 

necessary to fulfill the official duties,’’ 

a phrase that is not defined in the BSA. 

FinCEN is proposing to construe this 

phrase in the context of the BSA, in 

light of the purpose for which SARs are 

filed. Accordingly, the proposed rules 

interpret ‘‘official duties’’ to mean 

‘‘official duties consistent with the 

purposes of Title II of the BSA,’’ 

namely, for ‘‘criminal, tax, or regulatory 

investigations or proceedings, or in the 

conduct of intelligence or 

counterintelligence activities, including 

analysis, to protect against international 

terrorism.’’ 16 This standard would 

permit, for example, official disclosures 

responsive to a grand jury subpoena; a 

request from an appropriate Federal or 

State law enforcement or regulatory 

agency; a request from an appropriate 

Congressional committee or 

subcommittees; and prosecutorial 

disclosures mandated by statute or the 

Constitution, in connection with the 

statement of a government witness to be 

called at trial, the impeachment of a 

government witness, or as material 

exculpatory of a criminal defendant.17

This proposed interpretation of section 

5318(g)(2)(A)(ii) would ensure that a 

SAR or information that would reveal 

the existence of a SAR will not be 

disclosed for a reason that is unrelated 

to the purposes of the BSA. For 

example, this standard would not 

permit the disclosure of a SAR or 

information that would reveal the 

existence of a SAR to the media. 

The proposed rules also specifically 

provide that ‘‘official duties consistent 

with Title II of the BSA’’ shall not 

include the disclosure of a SAR or 

information that would reveal the 

existence of a SAR in response to a 

request for disclosure of non-public 

information or in response to a request 

for use in a private legal proceeding, 

including a request under 31 CFR 1.11. 

The BSA exists, in part, to protect the 

public’s interest in an effective reporting 

system that benefits the nation by 

helping to assure that the U.S. financial 

system will not be used for criminal 

activity or to support terrorism. FinCEN 

believes that this purpose would be 

undermined by the disclosure of a SAR 

or information that would reveal the 

existence of a SAR to a private litigant 

for use in a civil lawsuit for the reasons 

described earlier, including the reason 

that such disclosures could negatively 

impact full and candid reporting by 

financial institutions. 

Finally, the proposed regulations 

would apply to any government 

authority, in addition to its officers, 

employees, and agents. FinCEN is 

proposing to include each government 

authority itself in the scope of coverage 

because requests for SARs are typically 

directed to the government authority, 

rather than to individuals within the 

government with authority to respond to 

the request. In addition, agents are 

included in the proposed paragraph 

because agents of a government 

authority may have access to a SAR or 

information that would reveal the 

existence of a SAR. 

E. Disclosures by Self-Regulatory 

Organizations 

Although not part of any federal, 

state, local, territorial, or tribal 

government authority, self-regulatory 

organizations registered with or 

designated by the SEC or CFTC are 

permitted to access SARs through 

FinCEN’s delegation of examination 

authority to the SEC or CFTC, for the 

purpose of examining broker-dealers, 

futures commission merchants, and 

introducing brokers in commodities for 

compliance with their SAR 

requirements. Although the BSA does 

not explicitly address the issue of 

disclosures of SARs by self-regulatory 

organizations, FinCEN believes it was 

Congress’s clear intent that selfregulatory organizations with access to 

SARs should be subject to the same 

confidentiality provisions as all other 

users of SAR data. Accordingly, in the 

rules governing entities which may be 

examined for compliance with their 

SAR requirements by a self-regulatory 

organization, FinCEN is proposing a 

provision regarding disclosures by selfregulatory organizations that closely 

follows the provision regarding 

government disclosures. The language 

differs, however, to reflect the fact that 

self-regulatory organizations are not 

governmental entities. As with the 

provision for financial institutions and 

government authorities, the provision 

for self-regulatory organizations would 

apply equally to any director, officer, 

employee, or agent of the self-regulatory 

organization. 

F. Limitation on Liability 

In 1992, the Annunzio-Wylie Act 

amended the BSA by providing a safe 

harbor for financial institutions and 

their employees from civil liability for 

the reporting of known or suspected 

criminal offenses or suspicious activity 

through the filing of a SAR.18 FinCEN 

incorporated the safe harbor provisions 

of the 1992 law into its SAR rules.19 In 

Section 351 of the USA PATRIOT Act, 

Congress amended section 5318(g)(3) to 

clarify that the scope of the safe harbor 

provision includes the voluntary 

disclosure of possible violations of law 

and regulations to a government agency, 

and to expand the scope of the limit on 

liability to include any liability which 

may exist ‘‘under any contract or other 

legally enforceable agreement (including 

any arbitration agreement).’’ FinCEN has 

more closely tracked the statutory 

language in the proposed rules, 

particularly by stating that the safe 

harbor applies to ‘‘disclosures’’ (and not 

‘‘reports’’ as in some previous 

rulemakings) made by institutions. 

Additionally, to comport with the 

authorization to jointly file SARs in the 

second rule of construction, FinCEN is 

clarifying that the safe harbor also 

applies to ‘‘a disclosure made jointly 

with another institution.’’ This concept 

exists currently in those SAR rules 


pwalker on PROD1PC71 with PROPOSALS2
Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Proposed Rules 10153 

20See 31 CFR 103.56. 

21 ‘‘Transfer and Reorganization of Bank Secrecy 

Act Regulations,’’ 73 FR 66414. See, http// 

www.fincen.gov/statutes_regs/frn/pdf/ 

frnChapt_X_NPRM-Final.pdf. 

where joint filing had been explicitly 

referenced, but has been revised to track 

more closely the statutory language. It 

has also been inserted for the sake of 

consistency into those SAR rules where 

it had been absent previously, clarifying 

that all parties to a joint filing, and not 

simply the party that provides the form 

to FinCEN, fall within the scope of the 

safe harbor. 

For consistency, FinCEN also 

separated the provision for 

confidentiality of reports and limitation 

of liability into two separate provisions 

in those rules for industries which 

previously contained both provisions 

under the single heading 

‘‘confidentiality of reports; limitation of 

liability.’’ 

G. Compliance 

Each of FinCEN’s existing SAR rules 

contains a provision that clarifies that 

Treasury, through FinCEN or its 

delegatee,20 may audit a financial 

institution for compliance with the 

requirement. Some of the SAR rules list 

the appropriate delegatee(s) for the type 

of financial institution, and for certain 

financial institutions clarify that SARs 

must be provided to those delegatees 

within the context of an examination of 

compliance with the SAR requirement. 

The newly proposed rule of 

construction that authorizes the 

disclosure of a SAR to, among other 

official entities, a federal regulatory 

authority examining the institution for 

compliance with the BSA or any selfregulatory organization that examines 

the institution for compliance with the 

SAR requirement eliminates the need 

for what would be a duplicate provision 

in the compliance section. Accordingly, 

we have streamlined the section to 

provide only that (1) FinCEN or its 

delegatees may examine the institution 

for compliance with the SAR 

requirement; (2) that a failure to satisfy 

the requirements of the SAR rule may 

constitute a violation of the BSA or BSA 

regulations; and (3) for depository 

institutions with parallel Title 12 SAR 

requirements, that failure to comply 

with FinCEN’s SAR requirement may 

also constitute a violation of the parallel 

Title 12 rules. Also, although some of 

FinCEN’s current rules use the heading 

‘‘Examination and Enforcement’’ while 

others use ‘‘Compliance’’ for the same 

provision, for consistency we have used 

only the heading ‘‘Compliance’’ for the 

same parallel provision in each of the 

proposed rules. 

H. Technical Corrections and 

Harmonization 

In addition to the changes described 

above in the Section-by-Section 

analysis, FinCEN is proposing technical 

corrections to harmonize each of the 

seven SAR rules with rules being issued 

by some of the Federal bank regulatory 

agencies. FinCEN believes that such 

efforts will simplify compliance with 

SAR reporting requirements. 

IV. Proposed Location in 31 CFR 

Chapter X 

As per the Federal Register Notice of 

November 7, 2008,21 FinCEN is 

separately proposing to remove Part 103 

of Chapter I of Title 31, Code of Federal 

Regulations, and add Parts 1000 to 1099 

under a new 31 CFR Chapter X. As such 

and if finalized, the proposed changes 

herein would be reorganized according 

to the changes proposed in the Notice 

for Proposed Rulemaking for Chapter X. 

The planned reorganization will have 

no substantive effect on the proposed 

regulatory changes herein. The 

proposed regulatory changes of this 

specific NPRM would be renumbered 

according to the proposed Chapter X as 

follows: 

(a) 31 CFR 103.15, Reports by mutual 

funds of suspicious transactions, would 

be moved to 31 CFR 1024.320. 

(b) 31 CFR 103.16, Reports by 

insurance companies of suspicious 

transactions, would be moved to 31 CFR 

1025.320. 

(c) 31 CFR 103.17, Reports by futures 

commission merchants and introducing 

brokers in commodities of suspicious 

transactions, would be moved to 31 CFR 

1026.320. 

(d) 31 CFR 103.18, Reports by banks 

of suspicious transactions, would be 

moved to 31 CFR 1020.320. 

(e) 31 CFR 103.19, Reports by brokers 

or dealers in securities, would be moved 

to 31 CFR 1023.320. 

(f) 31 CFR 103.20, Reports by money 

services businesses in securities, would 

be moved to 31 CFR 1022.320. 

(g) 31 CFR 103.21, Reports by casinos 

of suspicious transactions, would be 

moved to 31 CFR 1021.320. 

V. Request for Comments 

FinCEN welcomes comments on any 

aspect of these proposed amendments to 

the SAR rules. FinCEN has timed the 

release of the notice of proposed 

rulemaking to coincide with the 

following related items: (1) A notice of, 

and request for comment on, proposed 

guidance regarding the sharing of SARs 

with affiliates; (2) parallel amendments 

proposed by certain Federal bank 

regulatory agencies to their own 

respective SAR confidentiality 

regulations; and (3) proposed rules by 

certain Federal bank regulatory agencies 

to amend the information disclosure 

rules. Commenters are encouraged to 

consider each proposal when 

commenting on the others. 

While FinCEN welcomes comment on 

any part of the proposed rules, we 

specifically solicit comment on the 

following areas: 

• Should any of the proposed 

provisions which would apply only to 

a limited segment of SAR filers be 

applicable to additional types of 

financial institutions? For example, 

should sharing within an institution’s 

corporate organizational structure for 

purposes consistent with Title II of the 

BSA be limited only to banks, brokerdealers, futures commission merchants, 

and introducing brokers in 

commodities? 

• Are any of the terms or provisions 

that were used for consistency across 

financial institutions inappropriate for 

any one type of financial institution 

based on its specific characteristics? 

• Have any important provisions from 

the existing regulations been 

unintentionally or inappropriately 

eliminated or confused by the proposed 

new regulations? 

• Are any of the provisions or terms 

used in the rules or this preamble 

unclear in their meaning, application, or 

scope? 

• If finalized, how would these 

proposed rules impact compliance costs 

and practices? 

• What additional or alternative 

methods could be used to strengthen the 

confidentiality of SARs? 

• Should additional parts of the SAR 

rules be harmonized? If so, please 

describe the benefit of such revisions. 

VI. Regulatory Matters 

A. Regulatory Flexibility Act 

Pursuant to the Regulatory Flexibility 

Act (RFA) ( 5 U.S.C. 601 et seq.), 

FinCEN certifies that these proposed 

regulation revisions will not have a 

significant economic impact on a 

substantial number of small entities. 

The proposals in this notice of proposed 

rulemaking would affect only the 

disclosure provisions of the current 

rules relating to the reporting of 

suspicious activity by financial 

institutions, and would not change any 

requirement to file or maintain a report. 

In the context of disclosure, the 

proposals clarify, rather than add to, 


pwalker on PROD1PC71 with PROPOSALS2
10154 Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Proposed Rules 

existing regulatory provisions regarding 

the confidentiality of suspicious activity 

reports. FinCEN therefore expects little 

or no economic impact to result from 

these proposals. Accordingly, a 

regulatory flexibility analysis is not 

required. 

B. Paperwork Reduction Act Notices 

We have reviewed the proposed rules 

in accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3506; 

5 CFR 1320, Appendix A.1) (PRA) and 

have determined that it does not contain 

any ‘‘collections of information’’ as 

defined by the PRA. 

C. Executive Order 12866 

It has been determined that this 

proposed rule is not a significant 

regulatory action for purposes of 

Executive Order 12866. Accordingly, a 

regulatory impact analysis is not 

required. 

D. Unfunded Mandates Reform Act of 

1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995, Public 

Law 104–4 (2 U.S.C. 1532) (Unfunded 

Mandates Act), requires that an agency 

prepare a budgetary impact statement 

before promulgating any rule likely to 

result in a Federal mandate that may 

result in the expenditure by State, local, 

and tribal governments, in the aggregate, 

or by the private sector of $100 million 

or more in any one year. The current 

inflation-adjusted expenditure threshold 

is $133 million. If a budgetary impact 

statement is required, § 205 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 the 

proposed rules will not result in 

expenditures by State, local, and tribal 

governments, or by the private sector, of 

$133 million or more in any one year. 

Accordingly, this proposal is not subject 

to section 202 of the Unfunded 

Mandates Act. 

List of Subjects in 31 CFR Part 103 

Administrative practice and 

procedure, Authority delegations 

(government agencies), Crime, Currency, 

Investigations, Law enforcement, 

Reporting and recordkeeping 

requirements, Security measures. 

Authority and Issuance 

For the reasons set forth in the 

preamble, 31 CFR Part 103 is proposed 

to be amended as follows: 

PART 103—FINANCIAL 

RECORDKEEPING AND REPORTING 

OF CURRENCY AND FOREIGN 

TRANSACTIONS 

1. The authority citation for part 103 

continues to read as follows: 

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

31 U.S.C. 5311–5314 and 5316–5332; title III, 

sec. 314 Public Law 107–56, 115 Stat. 307. 

2. Section 103.15 is amended by: 

a. Revising paragraphs (d) and (e); 

b. Redesignating paragraphs (f) and (g) 

as paragraphs (g) and (h); and 

c. Adding new paragraph (f). 

§ 103.15 Reports by mutual funds of 

suspicious transactions. 

* * * * * 

(d) Confidentiality of SARs. A SAR, 

and any information that would reveal 

the existence of a SAR, are confidential 

and shall not be disclosed except as 

authorized in this paragraph (d). For 

purposes of this paragraph (d) only, a 

SAR shall include any suspicious 

activity report filed with FinCEN 

pursuant to any regulation in this part. 

(1) Prohibition on disclosures by 

mutual funds—(i) General rule. No 

mutual fund, and no director, officer, 

employee, or agent of any mutual fund, 

shall disclose a SAR or any information 

that would reveal the existence of a 

SAR. Any mutual fund, and any 

director, officer, employee, or agent of 

any mutual fund that is subpoenaed or 

otherwise requested to disclose a SAR 

or any information that would reveal the 

existence of a SAR, shall decline to 

produce the SAR or such information, 

citing this section and 31 U.S.C. 

5318(g)(2)(A)(i), and shall notify 

FinCEN of any such request and the 

response thereto. 

(ii) Rules of Construction. Provided 

that no person involved in any reported 

suspicious transaction is notified that 

the transaction has been reported, this 

paragraph (d)(1) shall not be construed 

as prohibiting: 

(A) The disclosure by a mutual fund, 

or any director, officer, employee, or 

agent of a mutual fund of: 

(1) A SAR, or any information that 

would reveal the existence of a SAR, to 

FinCEN or any Federal, state, or local 

law enforcement agency, or any Federal 

regulatory authority that examines the 

mutual fund for compliance with its 

SAR reporting requirements; or 

(2) The underlying facts, transactions, 

and documents upon which a SAR is 

based, including disclosures to another 

financial institution, or any director, 

officer, employee, or agent of a financial 

institution, for the preparation of a joint 

SAR; or 

(B) The sharing by a mutual fund, or 

any director, officer, employee, or agent 

of the mutual fund, of a SAR, or any 

information that would reveal the 

existence of a SAR, within the mutual 

fund’s corporate organizational 

structure for purposes consistent with 

Title II of the Bank Secrecy Act as 

determined by regulation or in 

guidance. 

(2) Prohibition on disclosures by 

government authorities. A Federal, state, 

local, territorial, or tribal government 

authority, or any director, officer, 

employee, or agent of any of the 

foregoing, shall not disclose a SAR, or 

any information that would reveal the 

existence of a SAR, except as necessary 

to fulfill official duties consistent with 

Title II of the Bank Secrecy Act. For 

purposes of this section, official duties 

shall not include the disclosure of a 

SAR, or any information that would 

reveal the existence of a SAR, in 

response to a request for disclosure of 

non-public information or in response 

to a request for use in a private legal 

proceeding, including a request under 

31 CFR 1.11. 

(e) Limitation on liability. A mutual 

fund, and any director, officer, 

employee, or agent of any mutual fund, 

that makes a voluntary disclosure of any 

possible violation of law or regulation to 

a government agency or makes a 

disclosure pursuant to this section or 

any other authority, including a 

disclosure made jointly with another 

institution, shall be protected from 

liability for any such disclosure, or for 

failure to provide notice of such 

disclosure to any person identified in 

the disclosure, or both, to the full extent 

provided by 31 U.S.C. 5318(g)(3). 

(f) Compliance. Mutual funds shall be 

examined by FinCEN or its delegatees 

for compliance with this section. Failure 

to satisfy the requirements of this 

section may be a violation of the Bank 

Secrecy Act and of this part. 

* * * * * 

3. Section 103.16 is amended by: 

a. Revising paragraph (f); 

b. Redesignating paragraphs (g) 

through (i) as paragraphs (h) through (j); 

c. Adding new paragraph (g); and 

d. Revising newly designated 

paragraph (h). 

§ 103.16 Reports by insurance companies 

of suspicious transactions. 

* * * * * 

(f) Confidentiality of SARs. A SAR, 

and any information that would reveal 

the existence of a SAR, are confidential 

and shall not be disclosed except as 

authorized in this paragraph (f). For 

purposes of this paragraph (f) only, a 

SAR shall include any suspicious 


pwalker on PROD1PC71 with PROPOSALS2
Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Proposed Rules 10155 

activity report filed with FinCEN 

pursuant to any regulation in this part. 

(1) Prohibition on disclosures by 

insurance companies—(i) General rule. 

No insurance company, and no director, 

officer, employee, or agent of any 

insurance company, shall disclose a 

SAR or any information that would 

reveal the existence of a SAR. Any 

insurance company, and any director, 

officer, employee, or agent of any 

insurance company that is subpoenaed 

or otherwise requested to disclose a 

SAR or any information that would 

reveal the existence of a SAR, shall 

decline to produce the SAR or such 

information, citing this section and 31 

U.S.C. 5318(g)(2)(A)(i), and shall notify 

FinCEN of any such request and the 

response thereto. 

(ii) Rules of Construction. Provided 

that no person involved in any reported 

suspicious transaction is notified that 

the transaction has been reported, this 

paragraph (f)(1) shall not be construed 

as prohibiting the disclosure by an 

insurance company, or any director, 

officer, employee, or agent of an 

insurance company of: 

(A) A SAR, or any information that 

would reveal the existence of a SAR, to 

FinCEN or any Federal, state, or local 

law enforcement agency, or any Federal 

or state regulatory authority that 

examines the insurance company for 

compliance with the Bank Secrecy Act; 

or 

(B) The underlying facts, transactions, 

and documents upon which a SAR is 

based, including disclosures to another 

financial institution, or any director, 

officer, employee, or agent of a financial 

institution, for the preparation of a joint 

SAR. 

(2) Prohibition on disclosures by 

government authorities. A Federal, 

State, local, territorial, or tribal 

government authority, or any director, 

officer, employee, or agent of any of the 

foregoing, shall not disclose a SAR, or 

any information that would reveal the 

existence of a SAR, except as necessary 

to fulfill official duties consistent with 

Title II of the Bank Secrecy Act. For 

purposes of this section, official duties 

shall not include the disclosure of a 

SAR, or any information that would 

reveal the existence of a SAR, in 

response to a request for disclosure of 

non-public information or in response 

to a request for use in a private legal 

proceeding, including a request under 

31 CFR 1.11. 

(g) Limitation on liability. An 

insurance company, and any director, 

officer, employee, or agent of any 

insurance company, that makes a 

voluntary disclosure of any possible 

violation of law or regulation to a 

government agency or makes a 

disclosure pursuant to this section or 

any other authority, including a 

disclosure made jointly with another 

institution, shall be protected from 

liability for any such disclosure, or for 

failure to provide notice of such 

disclosure to any person identified in 

the disclosure, or both, to the full extent 

provided by 31 U.S.C. 5318(g)(3). 

(h) Compliance. Insurance companies 

shall be examined by FinCEN or its 

delegatees for compliance with this 

section. Failure to satisfy the 

requirements of this section may be a 

violation of the Bank Secrecy Act and of 

this part. 

* * * * * 

4. Section 103.17 is amended by 

revising paragraphs (e), (f), and (g) to 

read as follows: 

§ 103.17 Reports by futures commission 

merchants and introducing brokers in 

commodities of suspicious transactions. 

* * * * * 

(e) Confidentiality of SARs. A SAR, 

and any information that would reveal 

the existence of a SAR, are confidential 

and shall not be disclosed except as 

authorized in this paragraph (e). For 

purposes of this paragraph (e) only, a 

SAR shall include any suspicious 

activity report filed with FinCEN 

pursuant to any regulation in this part. 

(1) Prohibition on disclosures by 

futures commission merchants and 

introducing brokers in commodities—(i) 

General rule. No futures commission 

merchant (‘‘FCM’’) or introducing 

broker in commodities (‘‘IB–C’’), and no 

director, officer, employee, or agent of 

any FCM or IB–C, shall disclose a SAR 

or any information that would reveal the 

existence of a SAR. Any FCM or IB–C, 

and any director, officer, employee, or 

agent of any FCM or IB–C that is 

subpoenaed or otherwise requested to 

disclose a SAR or any information that 

would reveal the existence of a SAR, 

shall decline to produce the SAR or 

such information, citing this section and 

31 U.S.C. 5318(g)(2)(A)(i), and shall 

notify FinCEN of any such request and 

the response thereto. 

(ii) Rules of Construction. Provided 

that no person involved in any reported 

suspicious transaction is notified that 

the transaction has been reported, this 

paragraph (e)(1) shall not be construed 

as prohibiting: 

(A) The disclosure by an FCM or 

IB–C, or any director, officer, employee, 

or agent of an FCM or IB–C of: 

(1) A SAR, or any information that 

would reveal the existence of a SAR, to 

FinCEN or any Federal, state, or local 

law enforcement agency, any Federal 

regulatory authority that examines the 

FCM or IB–C for compliance with the 

BSA, or any self-regulatory organization 

examining the FCM or IB–C for 

compliance with the requirements of 

this section; or 

(2) The underlying facts, transactions, 

and documents upon which a SAR is 

based, including, disclosures: 

(i) To another financial institution, or 

any director, officer, employee, or agent 

of a financial institution, for the 

preparation of a joint SAR; or 

(ii) In connection with certain 

employment references or termination 

notices, to the full extent authorized in 

31 U.S.C. 5318(g)(2)(B); or 

(B) The sharing by an FCM or IB–C, 

or any director, officer, employee, or 

agent of the FCM or IB–C, of a SAR, or 

any information that would reveal the 

existence of a SAR, within the FCM’s or 

IB–C’s corporate organizational 

structure for purposes consistent with 

Title II of the Bank Secrecy Act as 

determined by regulation or in 

guidance. 

(2) Prohibition on disclosures by 

government authorities. A Federal, state, 

local, territorial, or tribal government 

authority, or any director, officer, 

employee, or agent of any of the 

foregoing, shall not disclose a SAR, or 

any information that would reveal the 

existence of a SAR, except as necessary 

to fulfill official duties consistent with 

Title II of the Bank Secrecy Act. For 

purposes of this section, official duties 

shall not include the disclosure of a 

SAR, or any information that would 

reveal the existence of a SAR, in 

response to a request for disclosure of 

non-public information or in response 

to a request for use in a private legal 

proceeding, including a request under 

31 CFR 1.11. 

(3) Prohibition on disclosures by SelfRegulatory Organizations. Any selfregulatory organization registered with 

or designated by the Commodity 

Futures Trading Commission, or any 

director, officer, employee, or agent of 

any of the foregoing, shall not disclose 

a SAR, or any information that would 

reveal the existence of a SAR except as 

necessary to fulfill official duties 

consistent with Title II of the Bank 

Secrecy Act. For purposes of this 

section, official duties shall not include 

the disclosure of a SAR, or any 

information that would reveal the 

existence of a SAR, in response to a 

request for disclosure of non-public 

information or in response to a request 

for use in a private legal proceeding. 

(f) Limitation on liability. An FCM or 

IB–C, and any director, officer, 

employee, or agent of any FCM or IB– 

C, that makes a voluntary disclosure of 

any possible violation of law or 


pwalker on PROD1PC71 with PROPOSALS2
10156 Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Proposed Rules 

regulation to a government agency or 

makes a disclosure pursuant to this 

section or any other authority, including 

a disclosure made jointly with another 

institution, shall be protected from 

liability for any such disclosure, or for 

failure to provide notice of such 

disclosure to any person identified in 

the disclosure, or both, to the full extent 

provided by 31 U.S.C. 5318(g)(3). 

(g) Compliance. FCMs or IB–Cs shall 

be examined by FinCEN or its 

delegatees for compliance with this 

section. Failure to satisfy the 

requirements of this section may be a 

violation of the Bank Secrecy Act and of 

this part. 

* * * * * 

5. Section 103.18 is amended by 

revising paragraphs (e) and (f), and 

adding paragraph (g), to read as follows: 

§ 103.18 Reports by banks of suspicious 

transactions. 

* * * * * 

(e) Confidentiality of SARs. A SAR, 

and any information that would reveal 

the existence of a SAR, are confidential 

and shall not be disclosed except as 

authorized in this paragraph (e). For 

purposes of this paragraph (e) only, a 

SAR shall include any suspicious 

activity report filed with FinCEN 

pursuant to any regulation in this part. 

(1) Prohibition on disclosures by 

banks—(i) General rule. No bank, and 

no director, officer, employee, or agent 

of any bank, shall disclose a SAR or any 

information that would reveal the 

existence of a SAR. Any bank, and any 

director, officer, employee, or agent of 

any bank that is subpoenaed or 

otherwise requested to disclose a SAR 

or any information that would reveal the 

existence of a SAR, shall decline to 

produce the SAR or such information, 

citing this section and 31 U.S.C. 

5318(g)(2)(A)(i), and shall notify 

FinCEN and its primary Federal 

regulator of any such request and the 

response thereto. 

(ii) Rules of Construction. 

Provided that no person involved in 

any reported suspicious transaction is 

notified that the transaction has been 

reported, this paragraph (e)(1) shall not 

be construed as prohibiting: 

(A) The disclosure by a bank, or any 

director, officer, employee, or agent of a 

bank of: 

(1) A SAR, or any information that 

would reveal the existence of a SAR, to 

FinCEN or any Federal, state, or local 

law enforcement agency, or any Federal 

or state regulatory authority that 

examines the bank for compliance with 

the Bank Secrecy Act; or 

(2) The underlying facts, transactions, 

and documents upon which a SAR is 

based, including, disclosures: 

(i) To another financial institution, or 

any director, officer, employee, or agent 

of a financial institution, for the 

preparation of a joint SAR; or 

(ii) In connection with certain 

employment references or termination 

notices, to the full extent authorized in 

31 U.S.C. 5318(g)(2)(B); or 

(B) The sharing by a bank, or any 

director, officer, employee, or agent of 

the bank, of a SAR, or any information 

that would reveal the existence of a 

SAR, within the bank’s corporate 

organizational structure for purposes 

consistent with Title II of the Bank 

Secrecy Act as determined by regulation 

or in guidance. 

(2) Prohibition on disclosures by 

government authorities. A Federal, state, 

local, territorial, or tribal government 

authority, or any director, officer, 

employee, or agent of any of the 

foregoing, shall not disclose a SAR, or 

any information that would reveal the 

existence of a SAR, except as necessary 

to fulfill official duties consistent with 

Title II of the Bank Secrecy Act. For 

purposes of this section, official duties 

shall not include the disclosure of a 

SAR, or any information that would 

reveal the existence of a SAR, in 

response to a request for disclosure of 

non-public information or in response 

to a request for use in a private legal 

proceeding, including a request under 

31 CFR 1.11. 

(f) Limitation on liability. A bank, and 

any director, officer, employee, or agent 

of any bank, that makes a voluntary 

disclosure of any possible violation of 

law or regulation to a government 

agency or makes a disclosure pursuant 

to this section or any other authority, 

including a disclosure made jointly with 

another institution, shall be protected 

from liability for any such disclosure, or 

for failure to provide notice of such 

disclosure to any person identified in 

the disclosure, or both, to the full extent 

provided by 31 U.S.C. 5318(g)(3). 

(g) Compliance. Banks shall be 

examined by FinCEN or its delegatees 

for compliance with this section. Failure 

to satisfy the requirements of this 

section may be a violation of the Bank 

Secrecy Act and of this part. Such 

failure may also violate provisions of 

Title 12 of the Code of Federal 

Regulations. 

6. Section 103.19 is amended by 

revising paragraphs (e), (f), and (g) to 

read as follows: 

§ 103.19 Reports by brokers or dealers in 

securities of suspicious transactions. 

* * * * * 

(e) Confidentiality of SARs. A SAR, 

and any information that would reveal 

the existence of a SAR, are confidential 

and shall not be disclosed except as 

authorized in this paragraph (e). For 

purposes of this paragraph (e) only, a 

SAR shall include any suspicious 

activity report filed with FinCEN 

pursuant to any regulation in this part. 

(1) Prohibition on disclosures by 

brokers or dealers in securities—(i) 

General rule. No broker-dealer, and no 

director, officer, employee, or agent of 

any broker-dealer, shall disclose a SAR 

or any information that would reveal the 

existence of a SAR. Any broker-dealer, 

and any director, officer, employee, or 

agent of any broker-dealer that is 

subpoenaed or otherwise requested to 

disclose a SAR or any information that 

would reveal the existence of a SAR, 

shall decline to produce the SAR or 

such information, citing this section and 

31 U.S.C. 5318(g)(2)(A)(i), and shall 

notify FinCEN of any such request and 

the response thereto. 

(ii) Rules of Construction. Provided 

that no person involved in any reported 

suspicious transaction is notified that 

the transaction has been reported, this 

paragraph (e)(1) shall not be construed 

as prohibiting: 

(A) The disclosure by a broker-dealer, 

or any director, officer, employee, or 

agent of a broker-dealer of: 

(1) A SAR, or any information that 

would reveal the existence of a SAR, to 

FinCEN or any Federal, state, or local 

law enforcement agency, any Federal 

regulatory authority that examines the 

broker-dealer for compliance with the 

BSA, or any self-regulatory organization 

examining the broker-dealer for 

compliance with the requirements of 

this section; or 

(2) The underlying facts, transactions, 

and documents upon which a SAR is 

based, including, disclosures: 

(i) To another financial institution, or 

any director, officer, employee, or agent 

of a financial institution, for the 

preparation of a joint SAR; or 

(ii) In connection with certain 

employment references or termination 

notices, to the full extent authorized in 

31 U.S.C. 5318(g)(2)(B); or 

(B) The sharing by a broker-dealer, or 

any director, officer, employee, or agent 

of the broker-dealer, of a SAR, or any 

information that would reveal the 

existence of a SAR, within the brokerdealer’s corporate organizational 

structure for purposes consistent with 

Title II of the Bank Secrecy Act as 

determined by regulation or in 

guidance. 

(2) Prohibition on disclosures by 

government authorities. A Federal, 

State, local, territorial, or tribal 


pwalker on PROD1PC71 with PROPOSALS2
Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Proposed Rules 10157 

government authority, or any director, 

officer, employee, or agent of any of the 

foregoing, shall not disclose a SAR, or 

any information that would reveal the 

existence of a SAR, except as necessary 

to fulfill official duties consistent with 

Title II of the Bank Secrecy Act. For 

purposes of this section, official duties 

shall not include the disclosure of a 

SAR, or any information that would 

reveal the existence of a SAR, in 

response to a request for disclosure of 

non-public information or in response 

to a request for use in a private legal 

proceeding, including a request under 

31 CFR 1.11. 

(3) Prohibition on disclosures by SelfRegulatory Organizations. Any selfregulatory organization registered with 

the Securities and Exchange 

Commission, or any director, officer, 

employee, or agent of any of the 

foregoing, shall not disclose a SAR, or 

any information that would reveal the 

existence of a SAR except as necessary 

to fulfill official duties consistent with 

Title II of the Bank Secrecy Act. For 

purposes of this section, official duties 

shall not include the disclosure of a 

SAR, or any information that would 

reveal the existence of a SAR, in 

response to a request for disclosure of 

non-public information or in response 

to a request for use in a private legal 

proceeding. 

(f) Limitation on liability. A brokerdealer, and any director, officer, 

employee, or agent of any broker-dealer, 

that makes a voluntary disclosure of any 

possible violation of law or regulation to 

a government agency or makes a 

disclosure pursuant to this section or 

any other authority, including a 

disclosure made jointly with another 

institution, shall be protected from 

liability for any such disclosure, or for 

failure to provide notice of such 

disclosure to any person identified in 

the disclosure, or both, to the full extent 

provided by 31 U.S.C. 5318(g)(3). 

(g) Compliance. Broker-dealers shall 

be examined by FinCEN or its 

delegatees for compliance with this 

section. Failure to satisfy the 

requirements of this section may be a 

violation of the Bank Secrecy Act and of 

this part. 

* * * * * 

7. Section 103.20 is amended by: 

a. Revising paragraph (d); 

b. Redesignating paragraphs (e) and (f) 

as paragraphs (f) and (g); 

c. Adding new paragraph (e); and 

d. Revising newly designated 

paragraph (f). 

§ 103.20 Reports by money services 

businesses of suspicious transactions. 

* * * * * 

(d) Confidentiality of SARs. A SAR, 

and any information that would reveal 

the existence of a SAR, are confidential 

and shall not be disclosed except as 

authorized in this paragraph (d). For 

purposes of this paragraph (d) only, a 

SAR shall include any suspicious 

activity report filed with FinCEN 

pursuant to any regulation in this part. 

(1) Prohibition on disclosures by 

money services businesses—(i) General 

rule. No money services business, and 

no director, officer, employee, or agent 

of any money services business, shall 

disclose a SAR or any information that 

would reveal the existence of a SAR. 

Any money services business, and any 

director, officer, employee, or agent of 

any money services business that is 

subpoenaed or otherwise requested to 

disclose a SAR or any information that 

would reveal the existence of a SAR, 

shall decline to produce the SAR or 

such information, citing this section and 

31 U.S.C. 5318(g)(2)(A)(i), and shall 

notify FinCEN of any such request and 

the response thereto. 

(ii) Rules of Construction. Provided 

that no person involved in any reported 

suspicious transaction is notified that 

the transaction has been reported, this 

paragraph (d)(1) shall not be construed 

as prohibiting the disclosure by a money 

services business, or any director, 

officer, employee, or agent of a money 

services business of: 

(A) A SAR, or any information that 

would reveal the existence of a SAR, to 

FinCEN or any Federal, state, or local 

law enforcement agency, or any Federal 

or State regulatory authority that 

examines the money services business 

for compliance with the BSA; or 

(B) The underlying facts, transactions, 

and documents upon which a SAR is 

based, including disclosures to another 

financial institution, or any director, 

officer, employee, or agent of a financial 

institution, for the preparation of a joint 

SAR. 

(2) Prohibition on disclosures by 

government authorities. A Federal, 

State, local, territorial, or tribal 

government authority, or any director, 

officer, employee, or agent of any of the 

foregoing, shall not disclose a SAR, or 

any information that would reveal the 

existence of a SAR, except as necessary 

to fulfill official duties consistent with 

Title II of the Bank Secrecy Act. For 

purposes of this section, official duties 

shall not include the disclosure of a 

SAR, or any information that would 

reveal the existence of a SAR, in 

response to a request for disclosure of 

non-public information or in response 

to a request for use in a private legal 

proceeding, including a request under 

31 CFR 1.11. 

(e) Limitation on liability. A money 

services business, and any director, 

officer, employee, or agent of any money 

services business, that makes a 

voluntary disclosure of any possible 

violation of law or regulation to a 

government agency or makes a 

disclosure pursuant to this section or 

any other authority, including a 

disclosure made jointly with another 

institution, shall be protected from 

liability for any such disclosure, or for 

failure to provide notice of such 

disclosure to any person identified in 

the disclosure, or both, to the full extent 

provided by 31 U.S.C. 5318(g)(3). 

(f) Compliance. Money services 

businesses shall be examined by 

FinCEN or its delegatees for compliance 

with this section. Failure to satisfy the 

requirements of this section may be a 

violation of the Bank Secrecy Act and of 

this part. 

* * * * * 

8. Section 103.21 is amended by: 

a. Revising paragraph (e); 

b. Redesignating paragraphs (f) and (g) 

as paragraphs (g) and (h); 

c. Adding new paragraph (f); and 

d. Revising newly designated 

paragraph (g). 

§ 103.21 Reports by casinos of suspicious 

transactions. 

* * * * * 

(e) Confidentiality of SARs. A SAR, 

and any information that would reveal 

the existence of a SAR, are confidential 

and shall not be disclosed except as 

authorized in this paragraph (e). For 

purposes of this paragraph (e) only, a 

SAR shall include any suspicious 

activity report filed with FinCEN 

pursuant to any regulation in this part. 

(1) Prohibition on disclosures by 

casinos—(i) General rule. No casino, 

and no director, officer, employee, or 

agent of any casino, shall disclose a SAR 

or any information that would reveal the 

existence of a SAR. Any casino, and any 

director, officer, employee, or agent of 

any casino that is subpoenaed or 

otherwise requested to disclose a SAR 

or any information that would reveal the 

existence of a SAR, shall decline to 

produce the SAR or such information, 

citing this section and 31 U.S.C. 

5318(g)(2)(A)(i), and shall notify 

FinCEN of any such request and the 

response thereto. 

(ii) Rules of Construction. Provided 

that no person involved in any reported 

suspicious transaction is notified that 

the transaction has been reported, this 

paragraph (e)(1) shall not be construed 

as prohibiting the disclosure by a 

casino, or any director, officer, 

employee, or agent of a casino of: 


pwalker on PROD1PC71 with PROPOSALS2
10158 Federal Register / Vol. 74, No. 44 / Monday, March 9, 2009 / Proposed Rules 

1This single docket number is shared by three 

related documents (a notice of proposed 

rulemaking, and this and another piece of proposed 

guidance related to that notice of proposed 

rulemaking) published simultaneously by FinCEN 

in today’s Federal Register. Accordingly, 

commenters may submit comments related to any 

of the proposals, or any combination of proposals, 

in a single comment letter. 

2See 31 CFR 103.15 to 103.21. 

3See 12 CFR 208.62 (FRB); 12 CFR 353.3 (FDIC); 

12 CFR 748.1 (NCUA); 12 CFR 21.11 (OCC); and 12 

CFR 563.180 (OTS). 

4 31 U.S.C. 5318(g)(2)(A)(i). 

5 ‘‘Interagency Guidance on Sharing Suspicious 

Activity Reports with Head Offices and Controlling 

Companies’’ (January 20, 2006). 

(A) A SAR, or any information that 

would reveal the existence of a SAR, to 

FinCEN or any Federal, state, or local 

law enforcement agency, or any Federal 

or state regulatory authority that 

examines the casino for compliance 

with the BSA; or 

(B) The underlying facts, transactions, 

and documents upon which a SAR is 

based, including disclosures to another 

financial institution, or any director, 

officer, employee, or agent of a financial 

institution, for the preparation of a joint 

SAR. 

(2) Prohibition on disclosures by 

government authorities. A Federal, 

State, local, territorial, or tribal 

government authority, or any director, 

officer, employee, or agent of any of the 

foregoing, shall not disclose a SAR, or 

any information that would reveal the 

existence of a SAR, except as necessary 

to fulfill official duties consistent with 

Title II of the Bank Secrecy Act (BSA). 

For purposes of this section, official 

duties shall not include the disclosure 

of a SAR, or any information that would 

reveal the existence of a SAR, in 

response to a request for disclosure of 

non-public information or in response 

to a request for use in a private legal 

proceeding, including a request under 

31 CFR 1.11. 

(f) Limitation on liability. A casino, 

and any director, officer, employee, or 

agent of any casino, that makes a 

voluntary disclosure of any possible 

violation of law or regulation to a 

government agency or makes a 

disclosure pursuant to this section or 

any other authority, including a 

disclosure made jointly with another 

institution, shall be protected from 

liability for any such disclosure, or for 

failure to provide notice of such 

disclosure to any person identified in 

the disclosure, or both, to the full extent 

provided by 31 U.S.C. 5318(g)(3). 

(g) Compliance. Casinos shall be 

examined by FinCEN or its delegatees 

for compliance with this section. Failure 

to satisfy the requirements of this 

section may be a violation of the Bank 

Secrecy Act and of this part. 

* * * * * 

Dated: February 27, 2009. 

James H. Freis, Jr., 

Director, Financial Crimes Enforcement 

Network. 

[FR Doc. E9–4697 Filed 3–6–09; 8:45 am] 

BILLING CODE 4810–02–P 

DEPARTMENT OF THE TREASURY 

31 CFR Part 103 

[Docket Number: TREAS–FinCen–2008– 

0022] 

Interpretive Guidance—Sharing 

Suspicious Activity Reports by 

Depository Institutions With Certain 

U.S. Affiliates 

AGENCY: Financial Crimes Enforcement 

Network, Department of the Treasury. 

ACTION: Proposed guidance. 

SUMMARY: The Financial Crimes 

Enforcement Network (‘‘FinCEN’’) of the 

Department of the Treasury, after 

consulting with the staffs of the Board 

of Governors of the Federal Reserve 

System (‘‘FRB’’), the Federal Deposit 

Insurance Corporation (‘‘FDIC’’), the 

National Credit Union Administration 

(‘‘NCUA’’), the Office of the Comptroller 

of the Currency (‘‘OCC’’), and the Office 

of Thrift Supervision (‘‘OTS’’) 

(hereinafter, the ‘‘Federal Banking 

Agencies’’), is issuing for comment this 

proposed interpretive guidance. 

Published elsewhere in this part of the 

Federal Register are proposed rules 

clarifying the scope of the statutory 

prohibition on the disclosure by a 

financial institution of a report of a 

suspicious transaction set forth in the 

Bank Secrecy Act (‘‘BSA’’). The 

proposed rules include a provision 

which states that the prohibition does 

not apply when a bank shares a 

suspicious activity report (‘‘SAR’’), or 

any information that would reveal the 

existence of a SAR, within its corporate 

organizational structure for purposes 

consistent with Title II of the BSA, as 

determined by regulation or guidance. 

The proposed guidance interprets this 

provision to permit a bank to share a 

SAR with its affiliates that also are 

subject to SAR rules. 

DATES: Written comments on the 

proposed guidance may be submitted on 

or before June 8, 2009. 

ADDRESSES: You may submit comments, 

identified by docket number TREAS– 

FinCen–2008–0022,1 by any of the 

following methods: 

• Federal e-rulemaking portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regcomments@fincen.treas.gov. Include 

docket number TREAS–FinCen–2008– 

0022 in the subject line of the message. 

• Mail: FinCEN, P.O. Box 39, Vienna, 

VA 22183. Include docket number 

TREAS–FinCen–2008–0022 in the body 

of the text. 

FOR FURTHER INFORMATION CONTACT: 

Regulatory Policy and Programs 

Division, FinCEN, (800) 949–2732. 

SUPPLEMENTARY INFORMATION: 

I. Background 

FinCEN, through its authority under 

the BSA as delegated by the Secretary of 

the Treasury, may require financial 

institutions to keep records and file 

reports that FinCEN determines have a 

high degree of usefulness in criminal, 

tax or regulatory investigations or 

proceedings, or for intelligence or 

counterintelligence activities to protect 

against international terrorism. Within 

this framework, FinCEN may require 

financial institutions to file SARs and 

has issued rules implementing that 

specific authority with respect to certain 

types of financial institutions.2 The 

Federal Banking Agencies have issued 

comparable rules for financial 

institutions subject to their 

jurisdiction.3 The SAR rules issued by 

FinCEN and those issued by the Federal 

Banking Agencies currently include a 

section implementing the statutory 

prohibition on the disclosure by a 

financial institution of a SAR that is set 

forth in the BSA.4

Sharing Within the Corporate 

Organizational Structure 

In January 2006, FinCEN and all the 

Federal Banking Agencies other than the 

NCUA issued joint guidance concluding 

that, subject to certain exceptions or 

qualifications, a U.S. branch or agency 

of a foreign bank may share a SAR with 

its head office outside the United States, 

and a U.S. bank or savings association 

may disclose a SAR to its controlling 

company, no matter where the entity or 

party is located.5 FinCEN also issued 

guidance in consultation with the staffs 

of the Securities and Exchange 

Commission (‘‘SEC’’) and the 

Commodity Futures Trading 

Commission (‘‘CFTC’’) determining that, 

subject to certain exceptions or 

qualifications, a securities broker-dealer, 

futures commission merchant, or 

introducing broker in commodities may 

share a SAR with its parent entities, 


pwalker on PROD1PC71 with PROPOSALS2