[Federal Register Volume 87, Number 131 (Monday, July 11, 2022)]
[Notices]
[Pages 41186-41188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-14638]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network


Agency Information Collection Activities; Proposed Renewal; 
Comment Request; Renewal Without Change on Information Sharing Between 
Government Agencies and Financial Institutions

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

ACTION: Notice and request for comments.

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SUMMARY: As part of its continuing efforts to reduce paperwork and 
respondent burden, FinCEN invites comments on the proposed renewal, 
without change, of a currently approved information collection found in 
existing Bank Secrecy Act regulations concerning information sharing 
between government agencies and financial institutions. Specifically, 
the regulations require that, upon receiving an information request 
from FinCEN, a financial institution must search its records to 
determine whether it maintains or has maintained any account or engaged 
in any transaction with an individual, entity, or organization named in 
the request. If a financial institution identifies an account or 
transaction named in the request, it must report such information to 
FinCEN in the manner and timeframe specified in the request. This 
request for comment is being made pursuant to the Paperwork Reduction 
Act of 1995.

DATES: Written comments are welcome and must be received on or before 
September 9, 2022.

ADDRESSES: Comments may be submitted by any of the following methods:
    <bullet> Federal E-rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. Refer to Docket Number 
FINCEN-2022-0008 and the specific Office of Management and Budget (OMB) 
control number 1506-0049.
    <bullet> Mail: Policy Division, Financial Crimes Enforcement 
Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-
2022-0008 and OMB control number 1506-0049.
    Please submit comments by one method only. Comments will be 
reviewed consistent with the Paperwork Reduction Act of 1995 (PRA) and 
applicable OMB regulations and guidance. Comments submitted in response 
to this notice will become a matter of public record. Therefore, you 
should submit only information that you wish to make publicly 
available.

FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section 
at 1-800-767-2825 or electronically at https://www.fincen.gov/contact.

SUPPLEMENTARY INFORMATION: 

I. Statutory and Regulatory Provisions

    The legislative framework generally referred to as the Bank Secrecy 
Act (BSA) consists of the Currency and Financial Transactions Reporting 
Act of 1970, as amended by the Uniting and Strengthening America by 
Providing Appropriate Tools Required to Intercept and Obstruct 
Terrorism Act of 2001 (USA PATRIOT Act), Public Law 107-56 (October 26, 
2001), and other legislation, including most recently the Anti-Money 
Laundering Act of 2020 (AML Act).\1\ The BSA is codified at 12 U.S.C. 
1829b, 12 U.S.C. 1951-1960, 31 U.S.C. 5311-5314 and 5316-5336, and 
includes notes thereto, with implementing regulations at 31 CFR chapter 
X.
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    \1\ The AML Act was enacted as Division F, 6001-6511, of the 
William M. (Mac) Thornberry National Defense Authorization Act for 
Fiscal Year 2021, Public Law 116-283, 134 Stat 3388 (2021).
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    The BSA authorizes the Secretary of the Treasury, inter alia, to 
require financial institutions to keep records and file reports that 
are determined to have a high degree of usefulness in criminal, tax, 
and regulatory matters, or in the conduct of intelligence or

[[Page 41187]]

counter-intelligence activities to protect against international 
terrorism, and to implement AML programs and compliance procedures.\2\ 
Regulations implementing the BSA appear at 31 CFR Chapter X. The 
authority of the Secretary to administer the BSA has been delegated to 
the Director of FinCEN.\3\
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    \2\ Section 358 of the USA PATRIOT Act added language expanding 
the scope of the BSA to intelligence or counter-intelligence 
activities to protect against international terrorism. Section 6101 
of the AML Act added language further expanding the scope of the BSA 
but did not amend these longstanding purposes.
    \3\ Treasury Order 180-01 (re-affirmed Jan. 14, 2020).
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    The USA PATRIOT Act charged the Department of the Treasury 
(Treasury) with developing regulations to facilitate information 
sharing among governmental entities and financial institutions for the 
purpose of combatting terrorism and money laundering. On September 26, 
2002, FinCEN published a final rule implementing the authority 
contained in section 314(a) of the USA PATRIOT Act.\4\ The rule 
required financial institutions, upon FinCEN's request (``314(a) 
request''), to search their records to determine whether they have 
maintained an account or conducted a transaction with a person that a 
Federal law enforcement agency has certified is suspected, based on 
credible evidence, of engaging in terrorist activity or money 
laundering. The rule was expanded on February 10, 2010, to enable 
certain entities other than Federal law enforcement agencies to benefit 
from 314(a) requests to industry. As amended, the rule also enables 
certain foreign law enforcement agencies, state and local law 
enforcement agencies, and FinCEN itself, on its own behalf and on 
behalf of appropriate components of Treasury, to initiate 314(a) 
requests.\5\ Before processing a request, FinCEN requires the 
requesting agency to certify that, in the case of money laundering, the 
matter is significant, and that the requesting agency has been unable 
to locate the information sought through traditional methods of 
investigation and analysis. The regulations implementing the rules are 
found at 31 CFR 1010.520.
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    \4\ FinCEN, Final Rule--Special Information Sharing Procedures 
to Deter Money Laundering and Terrorist Activity, 67 FR 60579, 
(Sept. 26, 2002).
    \5\ FinCEN, Final Rule--Expansion of Special Information Sharing 
Procedures To Deter Money Laundering and Terrorist Activity, 75 FR 
6560, (Feb. 10, 2010).
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    31 CFR 1010.520(b)(3)(i) requires financial institutions,\6\ upon 
receiving a 314(a) request, to search their records to determine 
whether they maintain, or have maintained, an account for, or engaged 
in any transaction with, each individual, entity, or organization named 
in a 314(a) request. Unless noted otherwise in a request, financial 
institutions are only required to search their records for the 
following: (i) current accounts maintained for the named suspect; (ii) 
any account maintained for a named suspect during the preceding twelve 
months; and (iii) any transactions \7\ conducted by or on behalf of a 
named suspect, or any transmittal of funds conducted in which the named 
suspect was either the transmittor or the recipient, during the 
preceding six months, which are recorded and maintained electronically.
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    \6\ Defined for the purposes of this requirement at 31 CFR 
1010.520(a)(1).
    \7\ As defined at 31 CFR 1010.505(d).
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    31 CFR 1010.520(b)(3)(ii) requires financial institutions that 
identify accounts or transactions for the subject of a 314(a) request 
to report the match to FinCEN in the manner and timeframe specified by 
FinCEN. 31 CFR 1010.520(b)(3)(iii) requires financial institutions to 
designate one person to be the point of contact at the institution to 
receive 314(a) requests.

II. Paperwork Reduction Act of 1995 \8\
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    \8\ The PRA does not apply to the requirement in section 
1010.520(b) concerning reports by financial institutions in response 
to a request from FinCEN on behalf of a Federal law enforcement 
agency. See 5 CFR 1320.4(a)(2). Therefore, this renewal applies only 
to the use of the 314(a) requests with respect to queries initiated 
by non-Federal law enforcement entities.
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    Title: Information sharing between government agencies and 
financial institutions (31 CFR 1010.520).
    OMB Control Number: 1506-0049.
    Report Number: Not applicable.
    Abstract: FinCEN is issuing this notice to renew the OMB control 
number for regulations requiring information sharing between government 
agencies and financial institutions.
    Affected Public: Businesses or other for-profit and non-profit 
institutions.
    Type of Review: Renewal without change of a currently approved 
collection.
    Frequency: As required.
    Estimated Number of Respondents: 14,960.\9\
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    \9\ On an annual basis, FinCEN sends 314(a) requests to 
approximately 14,960 financial institutions, consisting of certain 
commercial banks, savings associations, and credit unions, broker or 
dealers in securities, future commission merchants, trust companies, 
life insurance companies, mutual funds and money services 
businesses.
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    Estimated Annual Responses per Respondent: 365 searches/
responses.\10\
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    \10\ Based on the number of 314(a) requests issued between May 
2021 and April 2022, FinCEN estimates the annual number of requests 
subject to the PRA to include: 3 from FinCEN, 45 from state/local 
law enforcement, and 9 from European Union countries approved by 
treaty, for a total of 57 requests per year, with each request 
containing an average of 6.4 subjects (including aliases). 57 
requests multiplied by 6.4 subjects per request equals 364.8 
(rounded up to 365) searches and potential responses annually.
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    Estimated Reporting and Recordkeeping Burden:
    In general, FinCEN receives requests from law enforcement, reviews 
those requests, posts those requests on a secure internet website, and 
sends notifications to designated contacts within financial 
institutions across the United States once every two weeks. A 314(a) 
request contains subject and business names, addresses, and as much 
identifying data as possible to assist financial institutions in 
searching their records. Financial institutions must query their 
records for data matches, including accounts maintained by the named 
subject during the preceding 12 months and transactions conducted 
within the last six months. Financial institutions have two weeks from 
the posting date of the request to respond with any positive matches. 
Financial institutions are instructed not to reply to the 314(a) 
request if a search does not uncover any matching of accounts or 
transactions.
    Currently, 100% of 314(a) responses are filed using automated 
technology. The 314(a) files are posted on FinCEN's secure website. The 
files are available for download in .csv, .txt, and .doc format to 
allow for ingestion into various software that financial institutions 
use to run searches against their systems. All positive responses can 
be submitted through FinCEN's secure website by checking the box next 
to each subject for which there is a match and clicking the ``submit'' 
button to transmit the responses to FinCEN. Providing downloads in a 
variety of formats reduces burden on financial institutions by allowing 
them to automate the search of their records in a format that is 
compatible with their software and systems.
    For the following reasons, FinCEN estimates that it will take 
approximately 4 minutes to research and report, as necessary, each 
subject of a 314(a) request:
    <bullet> Financial institutions have well established processes, 
and in most cases automated processes, in place to conduct 314(a) 
searches, given the 20 years that the program has been running.
    <bullet> Financial institutions are only required to search their 
records for account and transaction information that is maintained 
electronically.

[[Page 41188]]

    <bullet> Only positive responses confirming a match are required to 
be reported to FinCEN by checking a box corresponding to the match on 
FinCEN's secure website.
    <bullet> FinCEN has been estimating a burden of 4 minutes per 
subject in PRA renewals since the expansion of the rule in 2010.\11\ We 
have not received public comments questioning or contradicting this 
estimate.
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    \11\ See supra note 5.
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    Estimated Burden Hours per Respondent: 24 hours annually.\12\
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    \12\ FinCEN estimates each subject requires 4 minutes to 
research and report, resulting in approximately 24 hours per year 
per respondent (365 searches/responses multiplied by 4 minutes per 
subject and divided by 60 minutes). FinCEN welcomes comments on the 
accuracy of this assumption.
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    Estimated Total Annual Burden Hours: 363,827.\13\
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    \13\ The total annual burden computation is as follows: 
approximately 24 hours per year per respondent multiplied by 14,960 
respondents equals 363,827 hours.
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    Estimated Total Annual Cost: $34,563,565.\14\
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    \14\ The total annual cost computation is as follows: 363,827 
hours times the financial institution fully loaded wage estimate of 
$95 per hour equals $34,563,565. To estimate an average hourly 
financial institution employee wage, FinCEN uses hourly wage data 
for the following six occupations in each of the nine categories of 
covered financial institutions that face BSA requirements: chief 
executives (OCC-code: 11-1010); financial managers (OCC-code: 11-
3031); compliance officers (OCC-code: 13-1041); financial clerks 
(OCC-code: 43-3099); lawyers and judicial clerks (OCC-code: 23-
1010); and computer and information systems managers (OCC-code: 11-
3021). The 54 hourly wage estimate inputs (9 financial industry 
categories multiplied by six occupations) yield a comprehensive 
financial institution hourly wage estimate of $67.23. The ratio 
between benefits and wages for private industry workers is $11.22 
(hourly benefits)/$26.86 (hourly wages) = 0.42, as of December 2021. 
The benefit factor is 1 plus the benefit/wages ratio, or 1.42. See 
U.S. Bureau of Labor Statistics, ``Employer Costs for Employee 
Compensation Historical Listing,'' https://www.bls.gov/web/ecec/ececqrtn.pdf. The private industry workers series data for December 
2021 is available at https://www.bls.gov/web/ecec/ecec-private-dataset.xlsx. Multiplying the hourly wage estimate of $67.23 by the 
benefits factor of 1.42 and rounding to the nearest dollar produces 
a fully loaded hourly compensation amounts of $95 per hour.
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    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collection of 
information displays a valid OMB control number.

Request for Comments

    (a) Specific request for comments on the PRA hourly burden and 
cost.
    FinCEN invites comments on any aspect of the PRA burden set out in 
section II of this notice. In particular, FinCEN seeks comments on the 
adequacy of: (i) FinCEN's assumptions underlying its estimate of the 
burden; (ii) the estimated amount of time per subject; and (iii) the 
organizational levels of employees engaged in responding to requests.
    (b) Specific questions for comment regarding compliance with 
information requests as outlined in 31 CFR 1010.520 (if the commenter 
represents a financial institution, FinCEN asks that the comment 
provide information particular to that financial institution.)
    1. To what extent can a financial institution rely on existing 
software to conduct its 314(a) search?
    2. On average, how long does it take your financial institution to 
perform a search for a particular subject of a 314(a) request (``314(a) 
subject'')?
    3. How often does your financial institution generate a positive 
match to a 314(a) subject that requires additional research to confirm 
if the account or transaction is in fact connected to that subject?
    4. What steps does your financial institution take once your 
automated system generates a match to a 314(a) subject to determine if 
it is an actual match or a false positive? What type of records does 
your financial institution maintain to document the results of this 
type of research?
    5. How frequently does your financial institution's automated 
system identify matches to a 314(a) subject that ultimately result in a 
false positive?
    6. What type of records does your financial institution maintain to 
document that a 314(a) search has been conducted?
    7. What is the role of the individual at your financial institution 
that acts as the point of contact for 314(a) requests?
    8. Is more than one employee at your financial institution involved 
in conducting the biweekly 314(a) searches?
    9. Does senior management play a role in reviewing the results of 
your financial institution's biweekly search for subjects of 314(a) 
requests?
    (c) General request for comments.
    Comments submitted in response to this notice will be summarized 
and/or included in the request for OMB approval. All comments will 
become a matter of public record. Comments are invited on: (1) whether 
the collection of information is necessary for the proper performance 
of the functions of the agency, including whether the information shall 
have practical utility; (2) the accuracy of the agency's estimate of 
the burden of the collection of information; (3) ways to enhance the 
quality, utility, and clarity of the information to be collected; (4) 
ways to minimize the burden of the collection of information on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and (5) estimates 
of capital or start-up costs and costs of operation, maintenance and 
purchase of services to provide information.

Himamauli Das,
Acting Director, Financial Crimes Enforcement Network.
[FR Doc. 2022-14638 Filed 7-8-22; 8:45 am]
BILLING CODE 4810-02-P