65806 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

1See 73 FR 66414 (November 7, 2008) (Transfer 

and Reorganization of Bank Secrecy Act 

Regulations) (referred to herein as the ‘‘Chapter X 

NPRM’’). 

2See 74 FR 59096 (November 17, 2009) (Final 

Rule for amending the Bank Secrecy Act 

Regulations Administrative Ruling System) 

(hereinafter, the ‘‘Administrative Ruling Final 

Rule’’). 

3See 75 FR 19241 (April 14, 2010) (Final Rule 

defining Mutual Funds as Financial Institutions). 

4See Id. 

DEPARTMENT OF THE TREASURY 

Financial Crimes Enforcement Network 

31 CFR Part 103 

31 CFR Chapter X 

RIN 1506–AA92 

Transfer and Reorganization of Bank 

Secrecy Act Regulations 

AGENCY: Financial Crimes Enforcement 

Network (FinCEN), Department of the 

Treasury. 

ACTION: Final rule. 

SUMMARY: FinCEN is issuing this final 

rule to move the Bank Secrecy Act 

(BSA) regulations to a new chapter in 

the Code of Federal Regulations (CFR). 

The new chapter contains the BSA 

regulations, which are generally 

reorganized by financial industry. 

Moving the BSA regulations to a new 

chapter and organizing the chapter by 

financial industry creates a user-friendly 

way to find regulations applicable to a 

particular financial industry. This new 

organization within the new chapter 

also allows for the renumbering of the 

BSA regulations in a manner that makes 

it easier to find regulatory requirements 

than under the numbering system 

currently used in the existing 

regulations. FinCEN also makes minor 

technical changes to the BSA 

regulations such as updating mailing 

addresses and points of contact. 

DATES: Effective Date: March 1, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Regulatory Policy and Programs 

Division, FinCEN (800) 949–2732 and 

select option 6. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On November 7, 2008, FinCEN 

published a proposal to transfer and 

reorganize its regulations as part of an 

ongoing effort to increase the efficiency 

and effectiveness of its regulatory 

oversight.1 Moving the regulations to a 

new chapter within Title 31 provides 

FinCEN with the opportunity to 

restructure its regulations so that they 

can readily be identified as being 

specific to a particular regulated 

industry or as being generally applicable 

to all regulated industries or covered 

persons. FinCEN received eight public 

comments on the Chapter X NPRM, 

which will be discussed below in the 

Section-by-Section Analysis. 

Making the regulatory obligations 

more clear in their structure and more 

readily accessible to regulated 

institutions facilitates compliance and 

thereby advances the purposes of the 

BSA. Additionally, the transfer of 

FinCEN’s regulations allows for better 

integration with the government-wide 

eRulemaking program. 

Since publication of the Chapter X 

NPRM, FinCEN has further improved 

public access to its rulemaking and nonrulemaking documents. On November 

17, 2009, FinCEN issued a Final Rule 

amending the procedures for publicly 

issuing an administrative ruling relating 

to the BSA.2 Since the effective date of 

that Final Rule (December 17, 2009), 

FinCEN posts administrative rulings 

with precedential value on its Web site, 

rather than publishing them in the 

Federal Register. FinCEN believes that 

posting administrative rulings with 

precedential value on FinCEN’s Web 

site will make those rulings easier to 

find. All administrative rulings with 

precedential value will be available by 

mail to any person who makes a written 

request that specifically identifies the 

administrative ruling that is sought. 

Subsequent to the publication of the 

Chapter X NPRM, FinCEN published 

several final rules, e.g., the 

Administrative Ruling Final Rule. All 

final rules that were published in the 

timeframe between the Chapter X NPRM 

and this Final Rule have been 

incorporated into FinCEN’s regulations 

in the Chapter X format. 

II. Effective Date 

The effective date of this Final Rule 

will be March 1, 2011. 

III. Section-by-Section Analysis 

A. Technical Corrections 

In the Chapter X NPRM, FinCEN 

proposed to make non-substantive 

technical corrections to the BSA 

implementing regulations. These 

corrections included updating titles and 

offices to represent organizational 

changes within the Treasury 

Department and FinCEN, changing 

mailing addresses, and updating names 

of Federal government agencies. The 

comments that FinCEN received relating 

to the technical corrections were 

comments or suggestions that would 

substantively alter the BSA. Because 

such comments are outside the scope of 

this rulemaking, FinCEN did not make 

any changes on the basis of those 

comments. 

On April 14, 2010, FinCEN issued a 

final rule to include mutual funds 

within the general definition of 

‘‘financial institution’’ in the BSA 

regulations.3 In that rule, FinCEN 

finalized two definitions of the term 

‘‘mutual fund,’’ one for the general 

definition section and the other for the 

anti-money laundering program rules 

for mutual funds.4 Although the two 

definitions contain minor textual 

differences, they were not intended to 

and do not have substantive 

distinctions. Similarly, there are textual 

differences between those two 

definitions and the definition of mutual 

fund used for the regulations 

implementing the Customer 

Identification Program requirements for 

mutual funds. Again, the textual 

differences were not intended to and do 

not signify substantive distinctions. 

Therefore, in order to be consistent and 

eliminate the textual anomalies within 

the various definitions for mutual fund 

that are currently within Part 103, the 

text of the definition of mutual fund 

from the Part 103 Customer 

Identification Programs for Mutual 

Funds will now be used as the 

definition of mutual fund in Chapter X 

for all purposes, except as provided in 

the regulatory text for the special 

measures provisions of Subpart F of the 

General Provisions Part. 

B. Restructuring and Numbering Logic 

As discussed in the Chapter X NPRM, 

FinCEN is restructuring its regulations 

to make them more accessible for 

covered individuals and financial 

institutions. Chapter X is comprised of 

a General Provisions Part and separate 

financial institution specific Parts for 

those financial institutions subject to 

FinCEN regulations. The General 

Provisions Part (Part 1010) contains 

regulatory requirements that apply to 

more than one type of financial 

institution, and in some cases, 

individuals. The financial institution 

specific Parts contain regulatory 

requirements specific to a particular 

type of financial institution. Each Part, 

whether general or specific, contains 

similarly titled and ordered Subparts. 

For consistency across all Parts and to 

facilitate ease of reference, FinCEN has 

renumbered its regulations so that the 

same numbering format is used for the 

regulations in each Subpart. 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65807 

5See 74 FR 59096, 59097 (November 17, 2009). 

See also http://www.fincen.gov/statutes_regs/ 

rulings/. 

6See 67 FR 60579, 60580 (September 26, 2002) 

(Final Rule for Special Information Sharing 

Procedures to Deter Money Laundering and 

Terrorist Activity). 

7See http://www.fincen.gov/statutes_regs/patriot/ 

section314b.html. 

8See http://www.fincen.gov/statutes_regs/ 

guidance/2000_2004.html. 

The comments received by FinCEN 

were generally supportive of FinCEN’s 

effort to organize the BSA implementing 

regulations into an easier to follow 

format. Some commenters noted that the 

renumbering format could serve to 

minimize any misunderstanding 

regarding whether a particular industry 

has a specific regulatory requirement. 

One commenter noted the structure of 

Chapter X is problematic because users 

would be required to refer to both the 

industry-specific Part, as well as the 

General Provisions Part to determine 

regulatory requirements. Some 

commenters noted that a potential 

problem with the structure of Chapter X 

and the location of the definitions is 

that it would require users to flip back 

and forth between Parts to confirm both 

the definitions and requirements. While 

there will be some cross-referencing 

between Parts for financial institutions, 

FinCEN concluded that the structure of 

Chapter X is best for identifying the 

current regulatory requirements for each 

type of financial institution and any 

future regulatory changes. 

Some commenters requested that all 

definitions be placed in the General 

Provisions Part, thus limiting the need 

for cross-referencing. FinCEN 

considered this suggestion while 

drafting this Final Rule but ultimately 

found the approach unworkable because 

it created large sub-categories of 

definitions that diluted the contextual 

distinction that applies to certain 

defined terms. For example, the 

definition for ‘‘account,’’ as one 

commenter noted, has several different 

meanings. The reason for these 

definitional differences lies not only 

with the products and services the 

covered institution offers, but also with 

the specific regulatory obligations 

involved. Placing all definitions of 

‘‘account’’ in the General Definitions 

Subpart of Part 1010, as requested by 

the commenter, would require several 

sub-definitions to reference the 

applicable regulations. So in the case of 

the term ‘‘account,’’ by removing 

‘‘account’’ from the definition section in 

the rules implementing Section 312 of 

the USA PATRIOT Act and placing 

them in the General Definitions Subpart 

of Part 1010, the needed context as to 

why the definition is different is lost. 

While there may be some crossreferencing of definitions with the 

implementation of Chapter X, keeping 

the definitional structure as proposed 

helps provide context as to why words 

are defined differently. 

Many of the comments FinCEN 

received on the Chapter X NPRM were 

substantive in nature or suggested 

changes that would alter industry 

regulatory requirements. One 

commenter suggested removing dates in 

the regulations that were perceived as 

no longer relevant, such as the dates in 

the Civil Penalties provisions of the 

previous 31 CFR 103.57. While some 

dates in the regulations appear to be so 

long-standing as to be obsolete, they still 

represent substantive differences in 

compliance obligations and 

corresponding penalties. All comments 

to the Chapter X NPRM that requested 

a substantive change, or would result in 

a substantive change, are considered 

outside the scope of this rulemaking and 

have not been incorporated into this 

Final Rule. 

C. Removal of Appendices to 31 CFR 

Part 103 

In the Chapter X NPRM, FinCEN did 

not publish the Appendices in 31 CFR 

Part 103. In the preamble to the Chapter 

X NPRM, FinCEN proposed to publish 

those Appendices that would be 

transferred to Chapter X in a subsequent 

notice of proposed rulemaking. After a 

further review of the Appendices, 

FinCEN determined that it was not 

necessary to issue a second notice of 

proposed rulemaking for the 

Appendices located in 31 CFR Part 103. 

This is because, as described in more 

detail below, FinCEN has determined 

that none of the Appendices will need 

to be included in Chapter X; instead, the 

material contained in the Appendices 

that is still required by the regulations 

will be made available on FinCEN’s 

Web site. The following is a description 

of the disposition of each 31 CFR Part 

103 Appendix: 

Appendix A to 31 CFR Part 103 

As part of the Administrative Ruling 

Final Rule, certain administrative 

rulings contained in Appendix A to 31 

CFR Part 103 (proposed as Appendix D 

to Chapter X) have been posted on 

FinCEN’s Web site and others were 

formally rescinded.5 As stated in the 

preamble to the Administrative Ruling 

Final Rule, some of the administrative 

rulings included in Appendix A to 31 

CFR Part 103 remain FinCEN’s 

interpretation of the applicable rules 

and maintain their precedential value; 

therefore, those rulings have been 

posted to the FinCEN Web site. Because 

FinCEN has chosen to post 

administrative rulings on its public Web 

site, FinCEN will not be publishing the 

proposed Appendix D to Chapter X in 

this Final Rule. In the Administrative 

Ruling Final Rule, FinCEN did not 

indicate whether Administrative Ruling 

88–2 would be posted on the FinCEN 

public Web site or rescinded. 

Administrative Ruling 88–2 has been 

posted on the FinCEN public Web site. 

The disposition of this particular ruling 

was inadvertently omitted from the 

Administrative Ruling Final Rule. 

Appendix B to 31 CFR Part 103 

The requirement for a financial 

institution to provide FinCEN with the 

certification currently found in 

Appendix B to 31 CFR Part 103 

(Certification for Purposes of Section 

314(b) of the USA PATRIOT Act and 31 

CFR 103.110) prior to sharing 

information under 31 CFR 103.110 (new 

31 CFR 1010.540) was replaced in 

September 2002 with a requirement to 

provide notice to FinCEN prior to such 

information sharing.6 Although the 

certification requirement was replaced 

with a notice requirement, the 

Certification contained at Appendix B to 

31 CFR Part 103 was not removed from 

the CFR. FinCEN’s removal of the 

Certification in this Final Rule is a 

technical correction, rather than a 

substantive change. The Certification 

contained at Appendix B to 31 CFR Part 

103 will not be transferred to Chapter X 

and the Certification will not be made 

available on FinCEN’s public Web site. 

As indicated above, financial 

institutions providing notice to FinCEN 

prior to sharing information under new 

31 CFR 1010.540 shall continue to do so 

using the notice that is currently 

provided on FinCEN’s public Web site.7

Appendix C to 31 CFR Part 103 

For similar reasons, FinCEN is 

removing Appendix C to 31 CFR Part 

103 (proposed Appendix E to Chapter 

X). The interpretative guidance 

contained within Appendix C to 31 CFR 

Part 103 are posted on FinCEN’s public 

Web site and will not be published in 

the CFR.8

Appendix A to Subpart H of 31 CFR Part 

103 

Appendix A to Subpart H of 31 CFR 

Part 103 contains the Notice for 

Purposes of Subsection 314(b) of the 

USA Patriot Act and 31 CFR 103.110. 

This Notice is currently available on the 

FinCEN public Web site and will not be 

published in the Code of Federal 

Regulations as part of Chapter X. 


erowe on DSK5CLS3C1PROD with RULES3
65808 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

9Appendix A to Subpart I of 31 CFR Part 103 

(proposed as Appendix B to Chapter X) is the 

Certification Regarding Correspondent Accounts. 

Appendix B to Subpart I of 31 CFR Part 103 

(proposed as Appendix C to Chapter X) is the 

Recertification Regarding Correspondent Accounts 

for Foreign Banks. These Appendices will not 

appear in Chapter X. 

Financial institutions that are required 

to provide notice to FinCEN for 

purposes of the new 31 CFR 1010.540 

can access the notice via the FinCEN 

Web site. This notice will be made 

available by mail to any financial 

institution that specifically requests a 

paper copy of the notice. 

Appendix A and Appendix B to Subpart 

I of 31 CFR Part 103 

FinCEN is also removing Appendix A 

to Subpart I of 31 CFR Part 103 and 

Appendix B to Subpart I of 31 CFR Part 

103.9 The forms contained in Appendix 

A to Subpart I of 31 CFR Part 103 and 

Appendix B to Subpart I of 31 CFR Part 

103 will be provided to the public via 

FinCEN’s Web site in a manner that will 

be more easily accessible and usable 

than being printed in the CFR. 

D. Chapter X Distribution Table 

For convenience, FinCEN is providing 

a table summarizing the distribution of 

the 31 CFR Part 103 provisions to the 

final layout of Chapter X as follows: 

DISTRIBUTION TABLE

31 CFR Part 103 Section 31 CFR Parts 1000–1099 (Chapter X) Section 

103.11 ....................................................................................................... 1010.100. 

103.12 ....................................................................................................... 1010.301. 

103.15(a)–(g) ............................................................................................ 1024.320(a)–(g). 

103.16(a) .................................................................................................. Deleted. 

103.16(b)–(i) ............................................................................................. 1025.320(a)–(h). 

103.17(a)–(h) ............................................................................................ 1026.320(a)–(h). 

103.18(a)–(f) ............................................................................................. 1020.320(a)–(f). 

103.19(a)–(h) ............................................................................................ 1023.320(a)–(h). 

103.20(a)–(f) ............................................................................................. 1022.320(a)–(f). 

103.21(a)–(g) ............................................................................................ 1021.320(a)–(g). 

103.22(a) .................................................................................................. Deleted. 

103.22(b)(1) .............................................................................................. 1010.311. 

103.22(b)(2)(i)–(iii) .................................................................................... 1021.311(a)–(c). 

103.22(c)(1)&(2) ....................................................................................... 1010.313(a)&(b). 

103.22(c)(3) .............................................................................................. 1021.313. 

103.22(d)(1) Sentences 1 and 3 .............................................................. 1020.315(a). 

103.22(d)(1) Sentence 2 .......................................................................... 1010.315. 

103.22(d)(2)–(9) ........................................................................................ 1020.315(b)–(i). 

103.23(a)–(d) ............................................................................................ 1010.340(a)–(d). 

103.24 ....................................................................................................... 1010.350. 

103.25(a)–(e) ............................................................................................ 1010.360(a)–(e). 

103.26(a)–(d) ............................................................................................ 1010.370(a)–(d). 

103.27(a)(1) .............................................................................................. 1010.306(a)(1). 

103.27(a)(2) .............................................................................................. Deleted. 

103.27(a)(3)&(4) ....................................................................................... 1010.306(a)(2)&(3). 

103.27(b)–(e) ............................................................................................ 1010.306(b)–(e). 

103.28 ....................................................................................................... 1010.312. 

103.29(a)–(c) ............................................................................................ 1010.415(a)–(c). 

103.30(a)–(c) ............................................................................................ 1010.330(a)–(c). 

103.30(d)(1)(i)–(iv) .................................................................................... 1021.330(a)–(d). 

103.30(d)(2) .............................................................................................. 1010.330(d)(2). 

103.30(d)(3) .............................................................................................. 1010.330(d)(1). 

103.30(e) .................................................................................................. 1010.330(e). 

103.31 ....................................................................................................... 1010.401. 

103.32 ....................................................................................................... 1010.420. 

103.33(a)–(d) ............................................................................................ 1010.410(a)–(d). 

103.33(e) .................................................................................................. 1020.410(a). 

103.33(f)&(g) ............................................................................................. 1010.410(e)&(f). 

103.34(a)&(b) ............................................................................................ 1020.410(b)&(c). 

103.35(a)&(b) ............................................................................................ 1023.410(a)&(b). 

103.36(a)–(c) ............................................................................................ 1021.410(a)–(c). 

103.37(a)–(c) ............................................................................................ 1022.410(a)–(c). 

103.38(a)–(d) ............................................................................................ 1010.430(a)–(d). 

103.39 ....................................................................................................... 1010.440. 

103.41(a)–(f) ............................................................................................. 1022.380(a)–(f). 

103.51 ....................................................................................................... 1010.980. 

103.52(a)&(b) ............................................................................................ 1010.940(a)&(b). 

103.53(a)–(f) ............................................................................................. 1010.950(a)–(f). 

103.54 ....................................................................................................... 1010.960. 

103.55(a)–(c) ............................................................................................ 1010.970(a)–(c). 

103.56(a)–(g) ............................................................................................ 1010.810(a)–(g). 

103.57(a)–(h) ............................................................................................ 1010.820(a)–(h). 

103.58 ....................................................................................................... 1010.830. 

103.59(a)–(d) ............................................................................................ 1010.840(a)–(d). 

103.60(a)–(c) ............................................................................................ 1010.850(a)–(c). 

103.61 ....................................................................................................... 1010.920. 

103.62(a)–(c) ............................................................................................ 1010.930(a)–(c). 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65809 

DISTRIBUTION TABLE—Continued 

31 CFR Part 103 Section 31 CFR Parts 1000–1099 (Chapter X) Section 

103.63(a)–(c) ............................................................................................ 1010.314(a)–(c). 

103.64(a) .................................................................................................. 1021.210(b). 

103.64(b)(1) .............................................................................................. 1021.100(a). 

103.64(b)(2) .............................................................................................. 1021.100(b). 

103.64(b)(3) .............................................................................................. 1021.100(c). 

103.64(b)(4) .............................................................................................. 1021.100(d). 

103.64(b)(5) .............................................................................................. 1021.100(e). 

103.71 ....................................................................................................... 1010.911. 

103.72(a)–(c) ............................................................................................ 1010.912(a)–(c). 

103.73(a)&(b) ............................................................................................ 1010.913(a)&(b). 

103.74(a)–(c) ............................................................................................ 1010.914(a)–(c). 

103.75(a)–(c) ............................................................................................ 1010.915(a)–(c). 

103.76 ....................................................................................................... 1010.916. 

103.77 ....................................................................................................... 1010.917. 

103.80 ....................................................................................................... 1010.710. 

103.81(a)–(e) ............................................................................................ 1010.711(a)–(e). 

103.82 ....................................................................................................... 1010.712. 

103.83(a)&(b) ............................................................................................ 1010.713(a)&(b). 

103.84 ....................................................................................................... 1010.714. 

103.85 ....................................................................................................... 1010.715. 

103.86(a)–(d) ............................................................................................ 1010.716(a)–(d). 

103.87(a)&(b) ............................................................................................ 1010.717(a)&(b). 

103.90(a) .................................................................................................. 1010.505(b). 

103.90(b) .................................................................................................. 1010.505(c). 

103.90(c) ................................................................................................... 1010.505(a). 

103.90(d) .................................................................................................. 1010.505(d). 

103.100(a)(1) ............................................................................................ Deleted. 

103.100(a)(2) ............................................................................................ 1010.520(a)(1). 

103.100(a)(3) ............................................................................................ Deleted. 

103.100(a)(4) ............................................................................................ 1010.520(a)(2). 

103.100(b) ................................................................................................ 1010.520(b). 

103.110(a)(1) ............................................................................................ Deleted. 

103.110(a)(2)&(3) ..................................................................................... 1010.540(a)(1)&(2). 

103.110(b)–(d) .......................................................................................... 1010.540(b)–(d). 

103.120(a)(1) ............................................................................................ 1020.100(d)(1). 

1023.100(e)(1). 

103.120(a)(2) ............................................................................................ 1010.100(r). 

103.120(a)(3) ............................................................................................ 1010.100(tt). 

103.120(a)(4) ............................................................................................ Deleted. 

103.120(b) ................................................................................................ 1020.210. 

103.120(c)(1)&(2) ..................................................................................... 1023.210(a)&(b). 

1026.210(b)(1)&(2). 

103.120(d) ................................................................................................ 1021.210(a). 

103.121(a)(1) ............................................................................................ 1020.100(a). 

103.121(a)(2) ............................................................................................ 1020.100(b). 

103.121(a)(3) ............................................................................................ 1020.100(c). 

103.121(a)(4) ............................................................................................ Deleted. 

103.121(a)(5) ............................................................................................ 1020.100(d)(2). 

103.121(a)(6) ............................................................................................ 1010.100(yy). 

103.121(a)(7) ............................................................................................ 1010.100(iii). 

103.121(a)(8) ............................................................................................ 1010.100(iii). 

103.121(b)–(d) .......................................................................................... 1020.220(a)–(c). 

103.122(a)(1) ............................................................................................ 1023.100(a). 

103.122(a)(2) ............................................................................................ 1023.100(b). 

103.122(a)(3) ............................................................................................ 1023.100(c). 

103.122(a)(4) ............................................................................................ 1023.100(d). 

103.122(a)(5) ............................................................................................ Deleted. 

103.122(a)(6) ............................................................................................ 1023.100(e). 

103.122(a)(7) ............................................................................................ Deleted. 

103.122(a)(8) ............................................................................................ Deleted. 

103.122(a)(9) ............................................................................................ Deleted. 

103.122(b)–(d) .......................................................................................... 1023.220(a)–(c). 

103.123(a)(1) ............................................................................................ 1026.100(a). 

103.123(a)(2) ............................................................................................ Deleted. 

103.123(a)(3) ............................................................................................ 1026.100(b). 

103.123(a)(4) ............................................................................................ 1026.100(c). 

103.123(a)(5) ............................................................................................ 1026.100(d). 

103.123(a)(6) ............................................................................................ Deleted. 

103.123(a)(7) ............................................................................................ 1026.100(e). 

103.123(a)(8) ............................................................................................ 1026.100(f). 

103.123(a)(9) ............................................................................................ 1026.100(g). 

103.123(a)(10) .......................................................................................... 1026.100(h). 


erowe on DSK5CLS3C1PROD with RULES3
65810 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

DISTRIBUTION TABLE—Continued 

31 CFR Part 103 Section 31 CFR Parts 1000–1099 (Chapter X) Section 

103.123(a)(11) .......................................................................................... Deleted. 

103.123(a)(12) .......................................................................................... Deleted. 

103.123(a)(13) .......................................................................................... Deleted. 

103.123(b)–(d) .......................................................................................... 1026.220(a)–(c). 

103.125(a)–(e) .......................................................................................... 1022.210(a)–(e). 

103.130(a) ................................................................................................ Deleted. 

103.130(b)&(c) .......................................................................................... 1024.210(a)&(b). 

103.131(a)(1) ............................................................................................ 1024.100(a). 

103.131(a)(2) ............................................................................................ 1024.100(c). 

103.131(a)(3) ............................................................................................ 1010.100(r). 

103.131(a)(4) ............................................................................................ 1024.100(d). 

103.131(a)(5) ............................................................................................ 1010.100(gg). 

103.131(a)(6) ............................................................................................ 1010.100(iii). 

103.131(a)(7) ............................................................................................ 1010.100(yy). 

103.131(a)(8) ............................................................................................ 1010.100(iii). 

103.131(b)–(d) .......................................................................................... 1024.220(a)–(c). 

103.135(a)(1) ............................................................................................ 1028.100(e). 

103.135(a)(2) ............................................................................................ 1028.100(d). 

103.135(a)(3) ............................................................................................ 1028.100(a). 

103.135(a)(4) ............................................................................................ 1028.100(f). 

103.135(a)(5) ............................................................................................ 1028.100(b). 

103.135(a)(6) ............................................................................................ 1028.100(c). 

103.135(b)&(c) .......................................................................................... 1028.210(a)&(b). 

103.137(a)(1) ............................................................................................ 1025.100(a). 

103.137(a)(2) ............................................................................................ Deleted. 

103.137(a)(3) ............................................................................................ Deleted. 

103.137(a)(4) ............................................................................................ 1025.100(b). 

103.137(a)(5) ............................................................................................ 1025.100(c). 

103.137(a)(6) ............................................................................................ 1025.100(d). 

103.137(a)(7) ............................................................................................ 1025.100(e). 

103.137(a)(8) ............................................................................................ 1025.100(f). 

103.137(a)(9) ............................................................................................ 1025.100(g). 

103.137(a)(10) .......................................................................................... 1025.100(h). 

103.137(a)(11) .......................................................................................... Deleted. 

103.137(a)(12) .......................................................................................... Deleted. 

103.137(b)–(e) .......................................................................................... 1025.210(a)–(d). 

103.140(a)(1) ............................................................................................ 1027.100(a). 

103.140(a)(2) ............................................................................................ 1027.100(b). 

103.140(a)(3) ............................................................................................ 1027.100(c). 

103.140(a)(4) ............................................................................................ 1027.100(d). 

103.140(a)(5) ............................................................................................ 1027.100(e). 

103.140(a)(6) ............................................................................................ Deleted. 

103.140(a)(7) ............................................................................................ 1027.100(f). 

103.140(b)–(d) .......................................................................................... 1027.210(a)–(c). 

103.170(a)–(d) .......................................................................................... 1010.205(a)–(d). 

103.175(a) ................................................................................................ 1010.100(c). 

103.175(b) ................................................................................................ 1010.605(a). 

103.175(c) ................................................................................................. 1010.605(b). 

103.175(d) ................................................................................................ 1010.605(c). 

103.175(e) ................................................................................................ 1010.605(d). 

103.175(f) ................................................................................................. 1010.605(e). 

103.175(g) ................................................................................................ Deleted. 

103.175(h) ................................................................................................ 1010.605(f). 

103.175(i) .................................................................................................. 1010.605(g). 

103.175(j) .................................................................................................. 1010.605(h). 

103.175(k) ................................................................................................. 1010.605(i). 

103.175(l) .................................................................................................. 1010.605(j). 

103.175(m) ............................................................................................... 1010.605(k). 

103.175(n) ................................................................................................ 1010.605(l). 

103.175(o) ................................................................................................ 1010.605(m). 

103.175(p) ................................................................................................ 1010.605(n). 

103.175(q) ................................................................................................ 1010.605(o). 

103.175(r) ................................................................................................. 1010.605(p). 

103.175(s) ................................................................................................. Deleted. 

103.175(t) ................................................................................................. Deleted. 

103.176(a)–(g) .......................................................................................... 1010.610(a)–(g). 

103.177(a)–(f) ........................................................................................... 1010.630(a)–(f). 

103.178(a)–(e) .......................................................................................... 1010.620(a)–(e). 

103.185(a)–(f) ........................................................................................... 1010.670(a)–(f). 

103.186(a)(1) ............................................................................................ 1010.651(a)(2). 

103.186(a)(2) ............................................................................................ 1010.651(a)(3). 

103.186(a)(3) ............................................................................................ 1010.651(a)(1). 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65811 

DISTRIBUTION TABLE—Continued 

31 CFR Part 103 Section 31 CFR Parts 1000–1099 (Chapter X) Section 

103.186(b) ................................................................................................ 1010.651(b). 

103.187(a)(1) ............................................................................................ 1010.652(a)(2). 

103.187(a)(2) ............................................................................................ 1010.652(a)(3). 

103.187(a)(3) ............................................................................................ 1010.652(a)(4). 

103.187(a)(4) ............................................................................................ 1010.652(a)(1). 

103.187(b) ................................................................................................ 1010.652(b). 

103.188(a)(1) ............................................................................................ 1010.653(a)(1). 

103.188(a)(2) ............................................................................................ 1010.653(a)(2). 

103.188(a)(3) ............................................................................................ 1010.653(a)(3). 

103.188(a)(4) ............................................................................................ 1010.653(a)(4). 

103.188(b) ................................................................................................ 1010.653(b). 

103.192(a)(1) ............................................................................................ 1010.654(a)(1). 

103.192(a)(2) ............................................................................................ 1010.654(a)(2). 

103.192(a)(3) ............................................................................................ 1010.654(a)(3). 

103.192(a)(4) ............................................................................................ 1010.654(a)(4). 

103.192(b) ................................................................................................ 1010.654(b). 

103.193(a)(1) ............................................................................................ 1010.655(a)(1). 

103.193(a)(2) ............................................................................................ 1010.655(a)(2). 

103.193(a)(3) ............................................................................................ 1010.655(a)(3). 

103.193(a)(4) ............................................................................................ 1010.655(a)(4). 

103.193(b) ................................................................................................ 1010.655(b). 

Appendix A to Subpart H ......................................................................... Deleted. Notice is available on FinCEN’s public Web site. 

Appendix A to Subpart I ........................................................................... Deleted. Certification will be available on the FinCEN public Web site. 

Appendix B to Subpart I ........................................................................... Deleted. Re-certification will be available on the FinCEN public Web 

site. 

Appendix A to Part 103 ............................................................................ Deleted. Administrative Rulings with precedential value have been 

posted on the FinCEN public Web site. 

Appendix B to Part 103 ............................................................................ Deleted. Certification will no longer be available. 

Appendix C to Part 103 ............................................................................ Deleted. Interpretive guidance will be posted on the FinCEN public 

Web site. 

IV. Regulatory Matters 

A. Executive Order 12866 

It has been determined that this 

rulemaking is not a significant 

regulatory action for purposes of 

Executive Order 12866. Accordingly, a 

regulatory impact analysis is not 

required. 

B. Unfunded Mandates Reform Act of 

1995 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 

(‘‘Unfunded Mandates Act’’), Public Law 

104–4 (March 22, 1995), requires that an 

agency prepare a budgetary impact 

statement before promulgating a rule 

that may result in expenditure by state, 

local, and tribal governments, in the 

aggregate, or by the private sector, of 

$100 million or more in any one year. 

If a budgetary impact statement is 

required, section 202 of the Unfunded 

Mandates Act also requires an agency to 

identify and consider a reasonable 

number of regulatory alternatives before 

promulgating a rule. FinCEN has 

determined that it is not required to 

prepare a written statement under 

Section 202 and has concluded that on 

balance the rule provides the most costeffective and least burdensome 

alternative to achieve the objectives of 

the rule. 

C. Regulatory Flexibility Act 

Pursuant to the Regulatory Flexibility 

Act (RFA) (5 U.S.C. 602 et seq.), FinCEN 

certifies that this final regulation likely 

will not have a significant economic 

impact on a substantial number of small 

entities. The regulatory changes in this 

final rule merely restructure and recodify existing regulations and do not 

alter current regulatory obligations. 

FinCEN believes the costs that may 

arise as a result of restructuring these 

regulations will be confined to training, 

publication and computer programming. 

The new regulatory structure will 

require financial institution compliance 

personnel to be retrained to assure 

familiarity with the new numbering 

format but does not require changes to 

program, recordkeeping, or reporting 

requirements. FinCEN has attempted to 

mitigate any substantial costs of 

retraining by providing a Distribution 

Table. 

Publication costs incurred to 

reproduce informational materials 

supplied by financial institutions to 

customers and the public should be 

minimized by the time interval afforded 

between the proposed rule, analysis and 

publication of this final rule. 

FinCEN’s analysis of the small entities 

that are subject to this regulation 

indicates that the vast majority of such 

entities file paper reports with FinCEN. 

These entities should incur no 

additional filing costs because they will 

continue to obtain the most current 

copy of the form available on the 

FinCEN Web site to file a report. For 

financial institutions that file 

electronically using computer programs, 

the citation to Chapter X should not 

have an effect on completion of the 

required fields contained in FinCEN 

forms. As an example, FinCEN’s Form 

104, the Currency Transaction Report, 

will require the same completion of 

each field in the same order. While the 

underlying regulatory citations may be 

changing, the completion of FinCEN 

forms will not. 

D. Paperwork Reduction Act 

This regulation contains no new 

information collection requirements 

subject to review and approval by the 

Office of Management and Budget under 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3507(d) et seq.). The 

information collection requirements for 

the Bank Secrecy Act, currently codified 

at 31 CFR Part 103, were previously 

approved by the Office of Management 

and Budget under OMB Control 

numbers 1506–0001 through 1506– 

0046. Under the Paperwork Reduction 

Act, an agency may not conduct or 

sponsor and a person is not required to 

respond to a collection of information 


erowe on DSK5CLS3C1PROD with RULES3
65812 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

unless it displays a valid OMB control 

number. 

List of Subjects in 31 CFR Part 103 and 

31 CFR Parts 1010 and 1020 Through 

1028 

Administrative practice and 

procedure, Banks, banking, Brokers, 

Currency, Foreign banking, Foreign 

currencies, Gambling, Investigations, 

Penalties, Reporting and recordkeeping 

requirements, Securities, Terrorism. 

Department of the Treasury 

31 CFR Chapter I 

Authority and Issuance 

■ For the reasons set forth above, under 

the authority of 12 U.S.C. 1829b and 

1951–1959; 31 U.S.C. 5311–5314, 5316– 

5332; title III, sec. 314, Pub. L. 107–56, 

115 Stat. 307, Part 103 of Title 31 of the 

Code of Federal Regulations is removed. 

Department of the Treasury 

Financial Crimes Enforcement Network 

31 CFR Chapter X 

Authority and Issuance 

■ For the reasons set forth above, 

Chapter X, consisting of parts 1000 

through 1099, is added to Title 31 to 

read as follows: 

CHAPTER X—FINANCIAL CRIMES 

ENFORCEMENT NETWORK, DEPARTMENT 

OF THE TREASURY 

PARTS 1000–1009 [RESERVED] 

PART 1010—GENERAL PROVISIONS 

Subpart A—General Definitions 

Sec. 

1010.100 General definitions. 

Subpart B—Programs 

1010.200 General. 

1010.205 Exempted anti-money laundering 

programs for certain financial 

institutions. 

1010.210 Anti-money laundering programs. 

1010.220 Customer identification program 

requirements. 

Subpart C—Reports Required To Be Made 

1010.300 General. 

1010.301 Determination by the Secretary. 

1010.305 [Reserved] 

1010.306 Filing of reports. 

1010.310 Reports of transactions in 

currency. 

1010.311 Filing obligations for reports of 

transactions in currency. 

1010.312 Identification required. 

1010.313 Aggregation. 

1010.314 Structured transactions. 

1010.315 Exemptions for non-bank 

financial institutions. 

1010.320 Reports of suspicious 

transactions. 

1010.330 Reports relating to currency in 

excess of $10,000 received in a trade or 

business. 

1010.340 Reports of transportation of 

currency or monetary instruments. 

1010.350 Reports of foreign financial 

accounts. 

1010.360 Reports of transactions with 

foreign financial agencies. 

1010.370 Reports of certain domestic coin 

and currency transactions. 

Subpart D—Records Required To Be 

Maintained 

1010.400 General. 

1010.401 Determination by the Secretary. 

1010.405 [Reserved] 

1010.410 Records to be made and retained 

by financial institutions. 

1010.415 Purchases of bank checks and 

drafts, cashier’s checks, money orders 

and traveler’s checks. 

1010.420 Records to be made and retained 

by persons having financial interests in 

foreign financial accounts. 

1010.430 Nature of records and retention 

period. 

1010.440 Person outside the United States. 

Subpart E—Special Information Sharing 

Procedures To Deter Money Laundering 

and Terrorist Activity 

1010.500 General. 

1010.505 Definitions. 

1010.520 Information sharing between 

government agencies and financial 

institutions. 

1010.530 [Reserved] 

1010.540 Voluntary information sharing 

among financial institutions. 

Subpart F—Special Standards of Diligence; 

Prohibitions; and Special Measures 

1010.600 General. 

Special Due Diligence for Correspondent 

Accounts and Private Banking Accounts 

1010.605 Definitions. 

1010.610 Due diligence programs for 

correspondent accounts for foreign 

financial institutions. 

1010.620 Due diligence programs for 

private banking accounts. 

1010.630 Prohibition on correspondent 

accounts for foreign shell banks; records 

concerning owners of foreign banks and 

agents for service of legal process. 

1010.640 [Reserved] 

Special Measures Under Section 311 of the 

USA Patriot Act and Law Enforcement 

Access to Foreign Bank Records 

1010.651 Special measures against Burma. 

1010.652 Special measures against 

Myanmar Mayflower Bank and Asia 

Wealth Bank. 

1010.653 Special measures against 

Commercial Bank of Syria. 

1010.654 Special measures against VEF 

Bank. 

1010.655 Special measures against Banco 

Delta Asia. 

1010.670 Summons or subpoena of foreign 

bank records; Termination of 

correspondent relationship. 

Subpart G—Administrative Rulings 

1010.710 Scope. 

1010.711 Submitting requests. 

1010.712 Nonconforming requests. 

1010.713 Oral communications. 

1010.714 Withdrawing requests. 

1010.715 Issuing rulings. 

1010.716 Modifying or rescinding rulings. 

1010.717 Disclosing information. 

Subpart H—Enforcement; Penalties; and 

Forfeiture 

1010.810 Enforcement. 

1010.820 Civil penalty. 

1010.830 Forfeiture of currency or 

monetary instruments. 

1010.840 Criminal penalty. 

1010.850 Enforcement authority with 

respect to transportation of currency or 

monetary instruments. 

Subpart I—Summons 

1010.911 General. 

1010.912 Persons who may issue summons. 

1010.913 Contents of summons. 

1010.914 Service of summons. 

1010.915 Examination of witnesses and 

records. 

1010.916 Enforcement of summons. 

1010.917 Payment of expenses. 

Subpart J—Miscellaneous 

1010.920 Access to records. 

1010.930 Rewards for informants. 

1010.940 Photographic or other 

reproductions of Government 

obligations. 

1010.950 Availability of information. 

1010.960 Disclosure. 

1010.970 Exceptions, exemptions, and 

reports. 

1010.980 Dollars as including foreign 

currency. 

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

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

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

Subpart A—General Definitions 

§ 1010.100 General definitions. 

When used in this chapter and in 

forms prescribed under this chapter, 

where not otherwise distinctly 

expressed or manifestly incompatible 

with the intent thereof, terms shall have 

the meanings ascribed in this subpart. 

Terms applicable to a particular type of 

financial institution or specific part or 

subpart of this chapter are located in 

that part or subpart. Terms may have 

different meanings in different parts or 

subparts. 

(a) Accept. A receiving financial 

institution, other than the recipient’s 

financial institution, accepts a 

transmittal order by executing the 

transmittal order. A recipient’s financial 

institution accepts a transmittal order by 

paying the recipient, by notifying the 

recipient of the receipt of the order or 

by otherwise becoming obligated to 

carry out the order. 

(b) At one time. For purposes of 

§ 1010.340 of this part, a person who 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65813 

transports, mails, ships or receives; is 

about to or attempts to transport, mail 

or ship; or causes the transportation, 

mailing, shipment or receipt of 

monetary instruments, is deemed to do 

so ‘‘at one time’’ if: 

(1) That person either alone, in 

conjunction with or on behalf of others; 

(2) Transports, mails, ships or 

receives in any manner; is about to 

transport, mail or ship in any manner; 

or causes the transportation, mailing, 

shipment or receipt in any manner of; 

(3) Monetary instruments; 

(4) Into the United States or out of the 

United States; 

(5) Totaling more than $10,000; 

(6)(i) On one calendar day; or 

(ii) If for the purpose of evading the 

reporting requirements of § 1010.340, on 

one or more days. 

(c) Attorney General. The Attorney 

General of the United States. 

(d) Bank. Each agent, agency, branch 

or office within the United States of any 

person doing business in one or more of 

the capacities listed below: 

(1) A commercial bank or trust 

company organized under the laws of 

any State or of the United States; 

(2) A private bank; 

(3) A savings and loan association or 

a building and loan association 

organized under the laws of any State or 

of the United States; 

(4) An insured institution as defined 

in section 401 of the National Housing 

Act; 

(5) A savings bank, industrial bank or 

other thrift institution; 

(6) A credit union organized under 

the law of any State or of the United 

States; 

(7) Any other organization (except a 

money services business) chartered 

under the banking laws of any state and 

subject to the supervision of the bank 

supervisory authorities of a State; 

(8) A bank organized under foreign 

law; 

(9) Any national banking association 

or corporation acting under the 

provisions of section 25(a) of the Act of 

Dec. 23, 1913, as added by the Act of 

Dec. 24, 1919, ch. 18, 41 Stat. 378, as 

amended (12 U.S.C. 611–32). 

(e) Bank Secrecy Act. The Currency 

and Foreign Transactions Reporting Act, 

its amendments, and the other statutes 

relating to the subject matter of that Act, 

have come to be referred to as the Bank 

Secrecy Act. These statutes are codified 

at 12 U.S.C. 1829b, 12 U.S.C. 1951– 

1959, 18 U.S.C. 1956, 18 U.S.C. 1957, 18 

U.S.C. 1960, and 31 U.S.C. 5311–5314 

and 5316–5332 and notes thereto. 

(f) Beneficiary. The person to be paid 

by the beneficiary’s bank. 

(g) Beneficiary’s bank. The bank or 

foreign bank identified in a payment 

order in which an account of the 

beneficiary is to be credited pursuant to 

the order or which otherwise is to make 

payment to the beneficiary if the order 

does not provide for payment to an 

account. 

(h) Broker or dealer in securities. A 

broker or dealer in securities, registered 

or required to be registered with the 

Securities and Exchange Commission 

under the Securities Exchange Act of 

1934, except persons who register 

pursuant to section 15(b)(11) of the 

Securities Exchange Act of 1934. 

(i) Business day. As used in this 

chapter with respect to banks, business 

day means that day, as normally 

communicated to its depository 

customers, on which a bank routinely 

posts a particular transaction to its 

customer’s account. 

(j) Commodity. Any good, article, 

service, right, or interest described in 

section 1a(4) of the Commodity 

Exchange Act (‘‘CEA’’), 7 U.S.C. 1a(4). 

(k) Common carrier. Any person 

engaged in the business of transporting 

individuals or goods for a fee who holds 

himself out as ready to engage in such 

transportation for hire and who 

undertakes to do so indiscriminately for 

all persons who are prepared to pay the 

fee for the particular service offered. 

(l) Contract of sale. Any sale, 

agreement of sale, or agreement to sell 

as described in section 1a(7) of the CEA, 

7 U.S.C. 1a(7). 

(m) Currency. The coin and paper 

money of the United States or of any 

other country that is designated as legal 

tender and that circulates and is 

customarily used and accepted as a 

medium of exchange in the country of 

issuance. Currency includes U.S. silver 

certificates, U.S. notes and Federal 

Reserve notes. Currency also includes 

official foreign bank notes that are 

customarily used and accepted as a 

medium of exchange in a foreign 

country. 

(n) Deposit account. Deposit accounts 

include transaction accounts described 

in paragraph (ccc) of this section, 

savings accounts, and other time 

deposits. 

(o) Domestic. When used herein, 

refers to the doing of business within 

the United States, and limits the 

applicability of the provision where it 

appears to the performance by such 

institutions or agencies of functions 

within the United States. 

(p) Established customer. A person 

with an account with the financial 

institution, including a loan account or 

deposit or other asset account, or a 

person with respect to which the 

financial institution has obtained and 

maintains on file the person’s name and 

address, as well as taxpayer 

identification number (e.g., social 

security or employer identification 

number) or, if none, alien identification 

number or passport number and country 

of issuance, and to which the financial 

institution provides financial services 

relying on that information. 

(q) Execution date. The day on which 

the receiving financial institution may 

properly issue a transmittal order in 

execution of the sender’s order. The 

execution date may be determined by 

instruction of the sender but cannot be 

earlier than the day the order is 

received, and, unless otherwise 

determined, is the day the order is 

received. If the sender’s instruction 

states a payment date, the execution 

date is the payment date or an earlier 

date on which execution is reasonably 

necessary to allow payment to the 

recipient on the payment date. 

(r) Federal functional regulator. 

(1) The Board of Governors of the 

Federal Reserve System; 

(2) The Office of the Comptroller of 

the Currency; 

(3) The Board of Directors of the 

Federal Deposit Insurance Corporation; 

(4) The Office of Thrift Supervision; 

(5) The National Credit Union 

Administration; 

(6) The Securities and Exchange 

Commission; or 

(7) The Commodity Futures Trading 

Commission. 

(s) FinCEN. FinCEN means the 

Financial Crimes Enforcement Network, 

a bureau of the Department of the 

Treasury. 

(t) Financial institution. Each agent, 

agency, branch, or office within the 

United States of any person doing 

business, whether or not on a regular 

basis or as an organized business 

concern, in one or more of the capacities 

listed below: 

(1) A bank (except bank credit card 

systems); 

(2) A broker or dealer in securities; 

(3) A money services business as 

defined in paragraph (ff) of this section; 

(4) A telegraph company; 

(5)(i) Casino. A casino or gambling 

casino that: Is duly licensed or 

authorized to do business as such in the 

United States, whether under the laws 

of a State or of a Territory or Insular 

Possession of the United States, or 

under the Indian Gaming Regulatory Act 

or other Federal, State, or tribal law or 

arrangement affecting Indian lands 

(including, without limitation, a casino 

operating on the assumption or under 

the view that no such authorization is 

required for casino operation on Indian 

lands); and has gross annual gaming 

revenue in excess of $1 million. The 


erowe on DSK5CLS3C1PROD with RULES3
65814 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

term includes the principal 

headquarters and every domestic branch 

or place of business of the casino. 

(ii) For purposes of this paragraph 

(t)(5), ‘‘gross annual gaming revenue’’ 

means the gross gaming revenue 

received by a casino, during either the 

previous business year or the current 

business year of the casino. A casino or 

gambling casino which is a casino for 

purposes of this chapter solely because 

its gross annual gaming revenue exceeds 

$1,000,000 during its current business 

year, shall not be considered a casino 

for purposes of this chapter prior to the 

time in its current business year that its 

gross annual gaming revenue exceeds 

$1,000,000. 

(iii) Any reference in this chapter, 

other than in this paragraph (t)(5) and in 

paragraph (t)(6) of this section, to a 

casino shall also include a reference to 

a card club, unless the provision in 

question contains specific language 

varying its application to card clubs or 

excluding card clubs from its 

application; 

(6)(i) Card club. A card club, gaming 

club, card room, gaming room, or 

similar gaming establishment that is 

duly licensed or authorized to do 

business as such in the United States, 

whether under the laws of a State, of a 

Territory or Insular Possession of the 

United States, or of a political 

subdivision of any of the foregoing, or 

under the Indian Gaming Regulatory Act 

or other Federal, State, or tribal law or 

arrangement affecting Indian lands 

(including, without limitation, an 

establishment operating on the 

assumption or under the view that no 

such authorization is required for 

operation on Indian lands for an 

establishment of such type), and that 

has gross annual gaming revenue in 

excess of $1,000,000. The term includes 

the principal headquarters and every 

domestic branch or place of business of 

the establishment. The term ‘‘casino,’’ as 

used in this chapter shall include a 

reference to ‘‘card club’’ to the extent 

provided in paragraph (t)(5)(iii) of this 

section. 

(ii) For purposes of this paragraph 

(t)(6), ‘‘gross annual gaming revenue’’ 

means the gross revenue derived from or 

generated by customer gaming activity 

(whether in the form of per-game or pertable fees, however computed, rentals, 

or otherwise) and received by an 

establishment, during either the 

establishment’s previous business year 

or its current business year. A card club 

that is a financial institution for 

purposes of this chapter solely because 

its gross annual revenue exceeds 

$1,000,000 during its current business 

year, shall not be considered a financial 

institution for purposes of this chapter 

prior to the time in its current business 

year when its gross annual revenue 

exceeds $1,000,000; 

(7) A person subject to supervision by 

any state or Federal bank supervisory 

authority; 

(8) A futures commission merchant; 

(9) An introducing broker in 

commodities; or 

(10) A mutual fund. 

(u) Foreign bank. A bank organized 

under foreign law, or an agency, branch 

or office located outside the United 

States of a bank. The term does not 

include an agent, agency, branch or 

office within the United States of a bank 

organized under foreign law. 

(v) Foreign financial agency. A person 

acting outside the United States for a 

person (except for a country, a monetary 

or financial authority acting as a 

monetary or financial authority, or an 

international financial institution of 

which the United States Government is 

a member) as a financial institution, 

bailee, depository trustee, or agent, or 

acting in a similar way related to 

money, credit, securities, gold, or a 

transaction in money, credit, securities, 

or gold. 

(w) Funds transfer. The series of 

transactions, beginning with the 

originator’s payment order, made for the 

purpose of making payment to the 

beneficiary of the order. The term 

includes any payment order issued by 

the originator’s bank or an intermediary 

bank intended to carry out the 

originator’s payment order. A funds 

transfer is completed by acceptance by 

the beneficiary’s bank of a payment 

order for the benefit of the beneficiary 

of the originator’s payment order. Funds 

transfers governed by the Electronic 

Fund Transfer Act of 1978 (Title XX, 

Pub. L. 95–630, 92 Stat. 3728, 15 U.S.C. 

1693, et seq.), as well as any other funds 

transfers that are made through an 

automated clearinghouse, an automated 

teller machine, or a point-of-sale system, 

are excluded from this definition. 

(x) Futures commission merchant. 

Any person registered or required to be 

registered as a futures commission 

merchant with the Commodity Futures 

Trading Commission (‘‘CFTC’’) under 

the CEA, except persons who register 

pursuant to section 4f(a)(2) of the CEA, 

7 U.S.C. 6f(a)(2). 

(y) Indian Gaming Regulatory Act. 

The Indian Gaming Regulatory Act of 

1988, codified at 25 U.S.C. 2701–2721 

and 18 U.S.C. 1166–68. 

(z) Intermediary bank. A receiving 

bank other than the originator’s bank or 

the beneficiary’s bank. 

(aa) Intermediary financial institution. 

A receiving financial institution, other 

than the transmittor’s financial 

institution or the recipient’s financial 

institution. The term intermediary 

financial institution includes an 

intermediary bank. 

(bb) Introducing broker-commodities. 

Any person registered or required to be 

registered as an introducing broker with 

the CFTC under the CEA, except 

persons who register pursuant to section 

4f(a)(2) of the CEA, 7 U.S.C. 6f(a)(2). 

(cc) Investment security. An 

instrument which: 

(1) Is issued in bearer or registered 

form; 

(2) Is of a type commonly dealt in 

upon securities exchanges or markets or 

commonly recognized in any area in 

which it is issued or dealt in as a 

medium for investment; 

(3) Is either one of a class or series or 

by its terms is divisible into a class or 

series of instruments; and 

(4) Evidences a share, participation or 

other interest in property or in an 

enterprise or evidences an obligation of 

the issuer. 

(dd) Monetary instruments. (1) 

Monetary instruments include: 

(i) Currency; 

(ii) Traveler’s checks in any form; 

(iii) All negotiable instruments 

(including personal checks, business 

checks, official bank checks, cashier’s 

checks, third-party checks, promissory 

notes (as that term is defined in the 

Uniform Commercial Code), and money 

orders) that are either in bearer form, 

endorsed without restriction, made out 

to a fictitious payee (for the purposes of 

§ 1010.340), or otherwise in such form 

that title thereto passes upon delivery; 

(iv) Incomplete instruments 

(including personal checks, business 

checks, official bank checks, cashier’s 

checks, third-party checks, promissory 

notes (as that term is defined in the 

Uniform Commercial Code), and money 

orders) signed but with the payee’s 

name omitted; and 

(v) Securities or stock in bearer form 

or otherwise in such form that title 

thereto passes upon delivery. 

(2) Monetary instruments do not 

include warehouse receipts or bills of 

lading. 

(ee) [Reserved] 

(ff) Money services business. Each 

agent, agency, branch, or office within 

the United States of any person doing 

business, whether or not on a regular 

basis or as an organized business 

concern, in one or more of the capacities 

listed in paragraphs (ff)(1) through (ff)(6) 

of this section. Notwithstanding the 

preceding sentence, the term ‘‘money 

services business’’ shall not include a 

bank, nor shall it include a person 

registered with, and regulated or 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65815 

examined by, the Securities and 

Exchange Commission or the 

Commodity Futures Trading 

Commission. 

(1) Currency dealer or exchanger. A 

currency dealer or exchanger (other than 

a person who does not exchange 

currency in an amount greater than 

$1,000 in currency or monetary or other 

instruments for any person on any day 

in one or more transactions). 

(2) Check casher. A person engaged in 

the business of a check casher (other 

than a person who does not cash checks 

in an amount greater than $1,000 in 

currency or monetary or other 

instruments for any person on any day 

in one or more transactions). 

(3) Issuer of traveler’s checks, money 

orders, or stored value. An issuer of 

traveler’s checks, money orders, or, 

stored value (other than a person who 

does not issue such checks or money 

orders or stored value in an amount 

greater than $1,000 in currency or 

monetary or other instruments to any 

person on any day in one or more 

transactions). 

(4) Seller or redeemer of traveler’s 

checks, money orders, or stored value. A 

seller or redeemer of traveler’s checks, 

money orders, or stored value (other 

than a person who does not sell such 

checks or money orders or stored value 

in an amount greater than $1,000 in 

currency or monetary or other 

instruments to or redeem such 

instruments for an amount greater than 

$1,000 in currency or monetary or other 

instruments from, any person on any 

day in one or more transactions). 

(5) Money transmitter—(i) In general. 

Money transmitter: 

(A) Any person, whether or not 

licensed or required to be licensed, who 

engages as a business in accepting 

currency, or funds denominated in 

currency, and transmits the currency or 

funds, or the value of the currency or 

funds, by any means through a financial 

agency or institution, a Federal Reserve 

Bank or other facility of one or more 

Federal Reserve Banks, the Board of 

Governors of the Federal Reserve 

System, or both, or an electronic funds 

transfer network; or 

(B) Any other person engaged as a 

business in the transfer of funds. 

(ii) Facts and circumstance: 

Limitation. Whether a person ‘‘engages 

as a business’’ in the activities described 

in paragraph (ff)(5)(i) of this section is 

a matter of facts and circumstances. 

Generally, the acceptance and 

transmission of funds as an integral part 

of the execution and settlement of a 

transaction other than the funds 

transmission itself (for example, in 

connection with a bona fide sale of 

securities or other property), will not 

cause a person to be a money 

transmitter within the meaning of 

paragraph (ff)(5)(i) of this section. 

(6) U.S. Postal Service. The United 

States Postal Service, except with 

respect to the sale of postage or 

philatelic products. 

(gg) Mutual fund. An ‘‘investment 

company’’ (as the term is defined in 

section 3 of the Investment Company 

Act (15 U.S.C. 80a–3)) that is an ‘‘openend company’’ (as that term is defined 

in section 5 of the Investment Company 

Act (15 U.S.C. 80a–5)) that is registered 

or is required to register with the 

Commission under section 8 of the 

Investment Company Act (15 U.S.C. 

80a–8). 

(hh) Option on a commodity. Any 

agreement, contract, or transaction 

described in section 1a(26) of the CEA, 

7 U.S.C. 1a(26). 

(ii) Originator. The sender of the first 

payment order in a funds transfer. 

(jj) Originator’s bank. The receiving 

bank to which the payment order of the 

originator is issued if the originator is 

not a bank or foreign bank, or the 

originator if the originator is a bank or 

foreign bank. 

(kk) Payment date. The day on which 

the amount of the transmittal order is 

payable to the recipient by the 

recipient’s financial institution. The 

payment date may be determined by 

instruction of the sender, but cannot be 

earlier than the day the order is received 

by the recipient’s financial institution 

and, unless otherwise prescribed by 

instruction, is the date the order is 

received by the recipient’s financial 

institution. 

(ll) Payment order. An instruction of 

a sender to a receiving bank, transmitted 

orally, electronically, or in writing, to 

pay, or to cause another bank or foreign 

bank to pay, a fixed or determinable 

amount of money to a beneficiary if: 

(1) The instruction does not state a 

condition to payment to the beneficiary 

other than time of payment; 

(2) The receiving bank is to be 

reimbursed by debiting an account of, or 

otherwise receiving payment from, the 

sender; and 

(3) The instruction is transmitted by 

the sender directly to the receiving bank 

or to an agent, funds transfer system, or 

communication system for transmittal to 

the receiving bank. 

(mm) Person. An individual, a 

corporation, a partnership, a trust or 

estate, a joint stock company, an 

association, a syndicate, joint venture, 

or other unincorporated organization or 

group, an Indian Tribe (as that term is 

defined in the Indian Gaming 

Regulatory Act), and all entities 

cognizable as legal personalities. 

(nn) Receiving bank. The bank or 

foreign bank to which the sender’s 

instruction is addressed. 

(oo) Receiving financial institution. 

The financial institution or foreign 

financial agency to which the sender’s 

instruction is addressed. The term 

receiving financial institution includes a 

receiving bank. 

(pp) Recipient. The person to be paid 

by the recipient’s financial institution. 

The term recipient includes a 

beneficiary, except where the recipient’s 

financial institution is a financial 

institution other than a bank. 

(qq) Recipient’s financial institution. 

The financial institution or foreign 

financial agency identified in a 

transmittal order in which an account of 

the recipient is to be credited pursuant 

to the transmittal order or which 

otherwise is to make payment to the 

recipient if the order does not provide 

for payment to an account. The term 

recipient’s financial institution includes 

a beneficiary’s bank, except where the 

beneficiary is a recipient’s financial 

institution. 

(rr) Secretary. The Secretary of the 

Treasury or any person duly authorized 

by the Secretary to perform the function 

mentioned. 

(ss) Security. Security means any 

instrument or interest described in 

section 3(a)(10) of the Securities 

Exchange Act of 1934, 15 U.S.C. 

78c(a)(10). 

(tt) Self-regulatory organization: 

(1) Shall have the same meaning as 

provided in section 3(a)(26) of the 

Securities Exchange Act of 1934 (15 

U.S.C. 78c(a)(26)); and 

(2) Means a ‘‘registered entity’’ or a 

‘‘registered futures association’’ as 

provided in section 1a(29) or 17, 

respectively, of the Commodity 

Exchange Act (7 U.S.C. 1a(29), 21). 

(uu) Sender. The person giving the 

instruction to the receiving financial 

institution. 

(vv) State. The States of the United 

States and, wherever necessary to carry 

out the provisions of this chapter, the 

District of Columbia. 

(ww) Stored value. Funds or monetary 

value represented in digital electronics 

format (whether or not specially 

encrypted) and stored or capable of 

storage on electronic media in such a 

way as to be retrievable and transferable 

electronically. 

(xx) Structure (structuring). For 

purposes of § 1010.314, a person 

structures a transaction if that person, 

acting alone, or in conjunction with, or 

on behalf of, other persons, conducts or 

attempts to conduct one or more 


erowe on DSK5CLS3C1PROD with RULES3
65816 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

transactions in currency, in any amount, 

at one or more financial institutions, on 

one or more days, in any manner, for the 

purpose of evading the reporting 

requirements under §§ 1010.311, 

1010.313, 1020.315, 1021.311 and 

1021.313 of this chapter. ‘‘In any 

manner’’ includes, but is not limited to, 

the breaking down of a single sum of 

currency exceeding $10,000 into smaller 

sums, including sums at or below 

$10,000, or the conduct of a transaction, 

or series of currency transactions at or 

below $10,000. The transaction or 

transactions need not exceed the 

$10,000 reporting threshold at any 

single financial institution on any single 

day in order to constitute structuring 

within the meaning of this definition. 

(yy) Taxpayer Identification Number. 

Taxpayer Identification Number (‘‘TIN’’) 

is defined by section 6109 of the 

Internal Revenue Code of 1986 (26 

U.S.C. 6109) and the Internal Revenue 

Service regulations implementing that 

section (e.g., social security number or 

employer identification number). 

(zz) Territories and Insular 

Possessions. The Commonwealth of 

Puerto Rico, the United States Virgin 

Islands, Guam, the Commonwealth of 

the Northern Mariana Islands, and all 

other territories and possessions of the 

United States other than the Indian 

lands and the District of Columbia. 

(aaa) [Reserved] 

(bbb) Transaction. (1) Except as 

provided in paragraph (bbb)(2) of this 

section, transaction means a purchase, 

sale, loan, pledge, gift, transfer, delivery, 

or other disposition, and with respect to 

a financial institution includes a 

deposit, withdrawal, transfer between 

accounts, exchange of currency, loan, 

extension of credit, purchase or sale of 

any stock, bond, certificate of deposit, or 

other monetary instrument, security, 

contract of sale of a commodity for 

future delivery, option on any contract 

of sale of a commodity for future 

delivery, option on a commodity, 

purchase or redemption of any money 

order, payment or order for any money 

remittance or transfer, purchase or 

redemption of casino chips or tokens, or 

other gaming instruments or any other 

payment, transfer, or delivery by, 

through, or to a financial institution, by 

whatever means effected. 

(2) For purposes of §§ 1010.311, 

1010.313, 1020.315, 1021.311, 1021.313, 

and other provisions of this chapter 

relating solely to the report required by 

those sections, the term ‘‘transaction in 

currency’’ shall mean a transaction 

involving the physical transfer of 

currency from one person to another. A 

transaction which is a transfer of funds 

by means of bank check, bank draft, 

wire transfer, or other written order, and 

which does not include the physical 

transfer of currency, is not a transaction 

in currency for this purpose. 

(ccc) Transaction account. 

Transaction accounts include those 

accounts described in 12 U.S.C. 

461(b)(1)(C), money market accounts 

and similar accounts that take deposits 

and are subject to withdrawal by check 

or other negotiable order. 

(ddd) Transmittal of funds. A series of 

transactions beginning with the 

transmittor’s transmittal order, made for 

the purpose of making payment to the 

recipient of the order. The term includes 

any transmittal order issued by the 

transmittor’s financial institution or an 

intermediary financial institution 

intended to carry out the transmittor’s 

transmittal order. The term transmittal 

of funds includes a funds transfer. A 

transmittal of funds is completed by 

acceptance by the recipient’s financial 

institution of a transmittal order for the 

benefit of the recipient of the 

transmittor’s transmittal order. Funds 

transfers governed by the Electronic 

Fund Transfer Act of 1978 (Title XX, 

Pub. L. 95–630, 92 Stat. 3728, 15 U.S.C. 

1693, et seq.), as well as any other funds 

transfers that are made through an 

automated clearinghouse, an automated 

teller machine, or a point-of-sale system, 

are excluded from this definition. 

(eee) Transmittal order. The term 

transmittal order includes a payment 

order and is an instruction of a sender 

to a receiving financial institution, 

transmitted orally, electronically, or in 

writing, to pay, or cause another 

financial institution or foreign financial 

agency to pay, a fixed or determinable 

amount of money to a recipient if: 

(1) The instruction does not state a 

condition to payment to the recipient 

other than time of payment; 

(2) The receiving financial institution 

is to be reimbursed by debiting an 

account of, or otherwise receiving 

payment from, the sender; and 

(3) The instruction is transmitted by 

the sender directly to the receiving 

financial institution or to an agent or 

communication system for transmittal to 

the receiving financial institution. 

(fff) Transmittor. The sender of the 

first transmittal order in a transmittal of 

funds. The term transmittor includes an 

originator, except where the 

transmittor’s financial institution is a 

financial institution or foreign financial 

agency other than a bank or foreign 

bank. 

(ggg) Transmittor’s financial 

institution. The receiving financial 

institution to which the transmittal 

order of the transmittor is issued if the 

transmittor is not a financial institution 

or foreign financial agency, or the 

transmittor if the transmittor is a 

financial institution or foreign financial 

agency. The term transmittor’s financial 

institution includes an originator’s 

bank, except where the originator is a 

transmittor’s financial institution other 

than a bank or foreign bank. 

(hhh) United States. The States of the 

United States, the District of Columbia, 

the Indian lands (as that term is defined 

in the Indian Gaming Regulatory Act), 

and the Territories and Insular 

Possessions of the United States. 

(iii) U.S. person. (1) A United States 

citizen; or (2) A person other than an 

individual (such as a corporation, 

partnership or trust), that is established 

or organized under the laws of a State 

or the United States. Non-U.S. person 

means a person that is not a U.S. person. 

(jjj) U.S. Postal Service. The United 

States Postal Service, except with 

respect to the sale of postage or 

philatelic products. 

Subpart B—Programs 

§ 1010.200 General. 

Each financial institution (as defined 

in 31 U.S.C. 5312(a)(2) or (c)(1)) should 

refer to Subpart B of its Chapter X Part 

for any additional program 

requirements. Unless otherwise 

indicated, the program requirements 

contained in this Subpart B apply to all 

financial institutions (as defined in 31 

U.S.C. 5312(a)(2) or (c)(1)). 

§ 1010.205 Exempted anti-money 

laundering programs for certain financial 

institutions. 

(a) Exempt financial institutions. 

Subject to the provisions of paragraphs 

(c) and (d) of this section, the following 

financial institutions (as defined in 31 

U.S.C. 5312(a)(2) or (c)(1)) are exempt 

from the requirement in 31 U.S.C. 

5318(h)(1) concerning the establishment 

of anti-money laundering programs: 

(1) An agency of the United States 

Government, or of a State or local 

government, carrying out a duty or 

power of a business described in 31 

U.S.C. 5312(a)(2); and 

(2) [Reserved] 

(b) Temporary exemption for certain 

financial institutions. (1) Subject to the 

provisions of paragraphs (c) and (d) of 

this section, the following financial 

institutions (as defined in 31 U.S.C. 

5312(a)(2) or (c)(1)) are exempt from the 

requirement in 31 U.S.C. 5318(h)(1) 

concerning the establishment of antimoney laundering programs: 

(i) Pawnbroker; 

(ii) Loan or finance company; 

(iii) Travel agency; 

(iv) Telegraph company; 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65817 

(v) Seller of vehicles, including 

automobiles, airplanes, and boats; 

(vi) Person involved in real estate 

closings and settlements; 

(vii) Private banker; 

(viii) Commodity pool operator; 

(ix) Commodity trading advisor; or 

(x) Investment company. 

(2) Subject to the provisions of 

paragraphs (c) and (d) of this section, a 

bank (as defined in § 1010.100(d)) that 

is not subject to regulation by a Federal 

functional regulator (as defined in 

§ 1010.100(r)) is exempt from the 

requirement in 31 U.S.C. 5318(h)(1) 

concerning the establishment of antimoney laundering programs. 

(3) Subject to the provisions of 

paragraphs (c) and (d) of this section, a 

person described in § 1010.100(t)(7) is 

exempt from the requirement in 31 

U.S.C. 5318(h)(1) concerning the 

establishment of anti-money laundering 

programs. 

(c) Limitation on exemption. The 

exemptions described in paragraph (b) 

of this section shall not apply to any 

financial institution that is otherwise 

required to establish an anti-money 

laundering program by this chapter. 

(d) Compliance obligations of deferred 

financial institutions. Nothing in this 

section shall be deemed to relieve an 

exempt financial institution from its 

responsibility to comply with any other 

applicable requirement of law or 

regulation, including title 31 of the 

U.S.C. and this chapter. 

§ 1010.210 Anti-money laundering 

programs. 

Each financial institution (as defined 

in 31 U.S.C. 5312(a)(2) or (c)(1)) should 

refer to Subpart B of its Chapter X Part 

for any additional anti-money 

laundering program requirements. 

§ 1010.220 Customer identification 

program requirements. 

Each financial institution (as defined 

in 31 U.S.C. 5312(a)(2) or (c)(1)) should 

refer to Subpart B of its Chapter X Part 

for any additional customer 

identification program requirements. 

Subpart C—Reports Required To Be 

Made 

§ 1010.300 General. 

Each financial institution (as defined 

in 31 U.S.C. 5312(a)(2) or (c)(1)) should 

refer to its Chapter X Part for any 

additional reporting requirements. 

Unless otherwise indicated, the 

reporting requirements contained in this 

Subpart C apply to all financial 

institutions. 

§ 1010.301 Determination by the Secretary. 

The Secretary hereby determines that 

the reports required by this chapter have 

a high degree of usefulness in criminal, 

tax, or regulatory investigations or 

proceedings. 

§ 1010.305 [Reserved] 

§ 1010.306 Filing of reports. 

(a)(1) A report required by § 1010.311 

or § 1021.311, shall be filed by the 

financial institution within 15 days 

following the day on which the 

reportable transaction occurred. 

(2) A copy of each report filed 

pursuant to §§ 1010.311, 1010.313, 

1020.315, 1021.311 and 1021.313, shall 

be retained by the financial institution 

for a period of five years from the date 

of the report. 

(3) All reports required to be filed by 

§§ 1010.311, 1010.313, 1020.315, 

1021.311 and 1021.313, shall be filed 

with the Commissioner of Internal 

Revenue, unless otherwise specified. 

(b)(1) A report required by 

§ 1010.340(a) shall be filed at the time 

of entry into the United States or at the 

time of departure, mailing or shipping 

from the United States, unless otherwise 

specified by the Commissioner of 

Customs and Border Protection. 

(2) A report required by § 1010.340(b) 

shall be filed within 15 days after 

receipt of the currency or other 

monetary instruments. 

(3) All reports required by § 1010.340 

shall be filed with the Customs officer 

in charge at any port of entry or 

departure, or as otherwise specified by 

the Commissioner of Customs and 

Border Protection. Reports required by 

§ 1010.340(a) for currency or other 

monetary instruments not physically 

accompanying a person entering or 

departing from the United States, may 

be filed by mail on or before the date of 

entry, departure, mailing or shipping. 

All reports required by § 1010.340(b) 

may also be filed by mail. Reports filed 

by mail shall be addressed to the 

Commissioner of Customs and Border 

Protection, Attention: Currency 

Transportation Reports, Washington, DC 

20229. 

(c) Reports required to be filed by 

§ 1010.350 shall be filed with the 

Commissioner of Internal Revenue on or 

before June 30 of each calendar year 

with respect to foreign financial 

accounts exceeding $10,000 maintained 

during the previous calendar year. 

(d) Reports required by § 1010.311, 

§ 1010.313, § 1010.340, § 1010.350, 

§ 1020.315, § 1021.311 or § 1021.313 of 

this chapter shall be filed on forms 

prescribed by the Secretary. All 

information called for in such forms 

shall be furnished. 

(e) Forms to be used in making the 

reports required by § 1010.311, 

§ 1010.313, § 1010.350, § 1020.315, 

§ 1021.311 or § 1021.313 of this chapter 

may be obtained from the Internal 

Revenue Service. Forms to be used in 

making the reports required by 

§ 1010.340 may be obtained from the 

U.S. Customs and Border Protection. 

§ 1010.310 Reports of transactions in 

currency. 

Sections 1010.310 through 1010.314 

set forth the rules for the reporting by 

financial institutions of transactions in 

currency. Unless otherwise indicated, 

the transactions in currency reporting 

requirements in §§ 1010.310 through 

1010.314 apply to all financial 

institutions. Each financial institution 

should refer to Subpart C of its Chapter 

X Part for any additional transactions in 

currency reporting requirements. 

§ 1010.311 Filing obligations for reports of 

transactions in currency. 

Each financial institution other than a 

casino shall file a report of each deposit, 

withdrawal, exchange of currency or 

other payment or transfer, by, through, 

or to such financial institution which 

involves a transaction in currency of 

more than $10,000, except as otherwise 

provided in this section. In the case of 

the U.S. Postal Service, the obligation 

contained in the preceding sentence 

shall not apply to payments or transfers 

made solely in connection with the 

purchase of postage or philatelic 

products. 

§ 1010.312 Identification required. 

Before concluding any transaction 

with respect to which a report is 

required under § 1010.311, § 1010.313, 

§ 1020.315, § 1021.311 or § 1021.313 of 

this chapter, a financial institution shall 

verify and record the name and address 

of the individual presenting a 

transaction, as well as record the 

identity, account number, and the social 

security or taxpayer identification 

number, if any, of any person or entity 

on whose behalf such transaction is to 

be effected. Verification of the identity 

of an individual who indicates that he 

or she is an alien or is not a resident of 

the United States must be made by 

passport, alien identification card, or 

other official document evidencing 

nationality or residence (e.g., a 

Provincial driver’s license with 

indication of home address). 

Verification of identity in any other case 

shall be made by examination of a 

document, other than a bank signature 

card, that is normally acceptable within 

the banking community as a means of 

identification when cashing checks for 

nondepositors (e.g., a driver’s license or 

credit card). A bank signature card may 


erowe on DSK5CLS3C1PROD with RULES3
65818 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

be relied upon only if it was issued after 

documents establishing the identity of 

the individual were examined and 

notation of the specific information was 

made on the signature card. In each 

instance, the specific identifying 

information (i.e., the account number of 

the credit card, the driver’s license 

number, etc.) used in verifying the 

identity of the customer shall be 

recorded on the report, and the mere 

notation of ‘‘known customer’’ or ‘‘bank 

signature card on file’’ on the report is 

prohibited. 

§ 1010.313 Aggregation. 

(a) Multiple branches. A financial 

institution includes all of its domestic 

branch offices, and any recordkeeping 

facility, wherever located, that contains 

records relating to the transactions of 

the institution’s domestic offices, for 

purposes of the transactions in currency 

reporting requirements in this chapter. 

(b) Multiple transactions. In the case 

of financial institutions other than 

casinos, for purposes of the transactions 

in currency reporting requirements in 

this chapter, multiple currency 

transactions shall be treated as a single 

transaction if the financial institution 

has knowledge that they are by or on 

behalf of any person and result in either 

cash in or cash out totaling more than 

$10,000 during any one business day (or 

in the case of the U.S. Postal Service, 

any one day). Deposits made at night or 

over a weekend or holiday shall be 

treated as if received on the next 

business day following the deposit. 

§ 1010.314 Structured transactions. 

No person shall for the purpose of 

evading the transactions in currency 

reporting requirements of this chapter 

with respect to such transaction: 

(a) Cause or attempt to cause a 

domestic financial institution to fail to 

file a report required under the 

transactions in currency reporting 

requirements of this chapter; 

(b) Cause or attempt to cause a 

domestic financial institution to file a 

report required under the transactions 

in currency reporting requirements of 

this chapter that contains a material 

omission or misstatement of fact; or 

(c) Structure (as that term is defined 

in § 1010.100(xx)) or assist in 

structuring, or attempt to structure or 

assist in structuring, any transaction 

with one or more domestic financial 

institutions. 

§ 1010.315 Exemptions for non-bank 

financial institutions. 

A non-bank financial institution is not 

required to file a report otherwise 

required by § 1010.311 with respect to a 

transaction in currency between the 

institution and a commercial bank. 

§ 1010.320 Reports of suspicious 

transactions. 

Each financial institution (as defined 

in 31 U.S.C. 5312(a)(2) or (c)(1)) should 

refer to subpart C of its financial 

institution part in this Chapter for any 

additional suspicious transaction 

reporting requirements. 

§ 1010.330 Reports relating to currency in 

excess of $10,000 received in a trade or 

business. 

(a) Reporting requirement—(1) 

Reportable transactions—(i) In general. 

Any person (solely for purposes of 

section 5331 of title 31, United States 

Code and this section, ‘‘person’’ shall 

have the same meaning as under 26 

U.S.C.7701(a)(1)) who, in the course of 

a trade or business in which such 

person is engaged, receives currency in 

excess of $10,000 in 1 transaction (or 

2 or more related transactions) shall, 

except as otherwise provided, make a 

report of information with respect to the 

receipt of currency. This section does 

not apply to amounts received in a 

transaction reported under 31 U.S.C. 

5313 and §§ 1010.311, 1010.313, 

1020.315, 1021.311 or 1021.313 of this 

chapter. 

(ii) Certain financial transactions. 

Section 6050I of title 26 of the United 

States Code requires persons to report 

information about financial transactions 

to the IRS, and 31 U.S.C. 5331 requires 

persons to report similar information 

about certain transactions to FinCEN. 

This information shall be reported on 

the same form as prescribed by the 

Secretary. 

(2) Currency received for the account 

of another. Currency in excess of 

$10,000 received by a person for the 

account of another must be reported 

under this section. Thus, for example, a 

person who collects delinquent 

accounts receivable for an automobile 

dealer must report with respect to the 

receipt of currency in excess of $10,000 

from the collection of a particular 

account even though the proceeds of the 

collection are credited to the account of 

the automobile dealer (i.e., where the 

rights to the proceeds from the account 

are retained by the automobile dealer 

and the collection is made on a fee-forservice basis). 

(3) Currency received by agents— 

(i) General rule. Except as provided in 

paragraph (a)(3)(ii) of this section, a 

person who in the course of a trade or 

business acts as an agent (or in some 

other similar capacity) and receives 

currency in excess of $10,000 from a 

principal must report the receipt of 

currency under this section. 

(ii) Exception. An agent who receives 

currency from a principal and uses all 

of the currency within 15 days in a 

currency transaction (the ‘‘second 

currency transaction’’) which is 

reportable under section 5312 of title 31, 

or 31 U.S.C. 5331 and this section, and 

who discloses the name, address, and 

TIN of the principal to the recipient in 

the second currency transaction need 

not report the initial receipt of currency 

under this section. An agent will be 

deemed to have met the disclosure 

requirements of this paragraph (a)(3)(ii) 

if the agent discloses only the name of 

the principal and the agent knows that 

the recipient has the principal’s address 

and taxpayer identification number. 

(iii) Example. The following example 

illustrates the application of the rules in 

paragraphs (a)(3)(i) and (ii) of this 

section: 

Example. B, the principal, gives D, an 

attorney, $75,000 in currency to purchase 

real property on behalf of B. Within 15 days 

D purchases real property for currency from 

E, a real estate developer, and discloses to E, 

B’s name, address, and taxpayer 

identification number. Because the 

transaction qualifies for the exception 

provided in paragraph (a)(3)(ii) of this 

section, D need not report with respect to the 

initial receipt of currency under this section. 

The exception does not apply, however, if D 

pays E by means other than currency, or 

effects the purchase more than 15 days 

following receipt of the currency from B, or 

fails to disclose B’s name, address, and 

taxpayer identification number (assuming D 

does not know that E already has B’s address 

and taxpayer identification number), or 

purchases the property from a person whose 

sale of the property is not in the course of 

that person’s trade or business. In any such 

case, D is required to report the receipt of 

currency from B under this section. 

(b) Multiple payments. The receipt of 

multiple currency deposits or currency 

installment payments (or other similar 

payments or prepayments) relating to a 

single transaction (or two or more 

related transactions), is reported as set 

forth in paragraphs (b)(1) through (b)(3) 

of this section. 

(1) Initial payment in excess of 

$10,000. If the initial payment exceeds 

$10,000, the recipient must report the 

initial payment within 15 days of its 

receipt. 

(2) Initial payment of $10,000 or less. 

If the initial payment does not exceed 

$10,000, the recipient must aggregate 

the initial payment and subsequent 

payments made within one year of the 

initial payment until the aggregate 

amount exceeds $10,000, and report 

with respect to the aggregate amount 

within 15 days after receiving the 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65819 

payment that causes the aggregate 

amount to exceed $10,000. 

(3) Subsequent payments. In addition 

to any other required report, a report 

must be made each time that previously 

unreportable payments made within a 

12-month period with respect to a single 

transaction (or two or more related 

transactions), individually or in the 

aggregate, exceed $10,000. The report 

must be made within 15 days after 

receiving the payment in excess of 

$10,000 or the payment that causes the 

aggregate amount received in the 12- 

month period to exceed $10,000. (If 

more than one report would otherwise 

be required for multiple currency 

payments within a 15-day period that 

relate to a single transaction (or two or 

more related transactions), the recipient 

may make a single combined report 

with respect to the payments. The 

combined report must be made no later 

than the date by which the first of the 

separate reports would otherwise be 

required to be made.) 

(4) Example. The following example 

illustrates the application of the rules in 

paragraphs (b)(1) through (b)(3) of this 

section: 

Example. On January 10, Year 1, M 

receives an initial payment in currency of 

$11,000 with respect to a transaction. M 

receives subsequent payments in currency 

with respect to the same transaction of 

$4,000 on February 15, Year 1, $6,000 on 

March 20, Year 1, and $12,000 on May 15, 

Year 1. M must make a report with respect 

to the payment received on January 10, Year 

1, by January 25, Year 1. M must also make 

a report with respect to the payments totaling 

$22,000 received from February 15, Year 1, 

through May 15, Year 1. This report must be 

made by May 30, Year 1, that is, within 15 

days of the date that the subsequent 

payments, all of which were received within 

a 12-month period, exceeded $10,000. 

(c) Meaning of terms. The following 

definitions apply for purposes of this 

section— 

(1) Currency. Solely for purposes of 31 

U.S.C. 5331 and this section, currency 

means— 

(i) The coin and currency of the 

United States or of any other country, 

which circulate in and are customarily 

used and accepted as money in the 

country in which issued; and 

(ii) A cashier’s check (by whatever 

name called, including ‘‘treasurer’s 

check’’ and ‘‘bank check’’), bank draft, 

traveler’s check, or money order having 

a face amount of not more than 

$10,000— 

(A) Received in a designated reporting 

transaction as defined in paragraph 

(c)(2) of this section (except as provided 

in paragraphs (c)(3), (4), and (5) of this 

section), or 

(B) Received in any transaction in 

which the recipient knows that such 

instrument is being used in an attempt 

to avoid the reporting of the transaction 

under section 5331 and this section. 

(2) Designated reporting transaction. 

A designated reporting transaction is a 

retail sale (or the receipt of funds by a 

broker or other intermediary in 

connection with a retail sale) of— 

(i) A consumer durable, 

(ii) A collectible, or 

(iii) A travel or entertainment activity. 

(3) Exception for certain loans. A 

cashier’s check, bank draft, traveler’s 

check, or money order received in a 

designated reporting transaction is not 

treated as currency pursuant to 

paragraph (c)(1)(ii)(A) of this section if 

the instrument constitutes the proceeds 

of a loan from a bank. The recipient may 

rely on a copy of the loan document, a 

written statement from the bank, or 

similar documentation (such as a 

written lien instruction from the issuer 

of the instrument) to substantiate that 

the instrument constitutes loan 

proceeds. 

(4) Exception for certain installment 

sales. A cashier’s check, bank draft, 

traveler’s check, or money order 

received in a designated reporting 

transaction is not treated as currency 

pursuant to paragraph (c)(1)(ii)(A) of 

this section if the instrument is received 

in payment on a promissory note or an 

installment sales contract (including a 

lease that is considered to be a sale for 

Federal income tax purposes). However, 

the preceding sentence applies only if— 

(i) Promissory notes or installment 

sales contracts with the same or 

substantially similar terms are used in 

the ordinary course of the recipient’s 

trade or business in connection with 

sales to ultimate consumers; and 

(ii) The total amount of payments 

with respect to the sale that are received 

on or before the 60th day after the date 

of the sale does not exceed 50 percent 

of the purchase price of the sale. 

(5) Exception for certain down 

payment plans. A cashier’s check, bank 

draft, traveler’s check, or money order 

received in a designated reporting 

transaction is not treated as currency 

pursuant to paragraph (c)(1)(ii)(A) of 

this section if the instrument is received 

pursuant to a payment plan requiring 

one or more down payments and the 

payment of the balance of the purchase 

price by a date no later than the date of 

the sale (in the case of an item of travel 

or entertainment, a date no later than 

the earliest date that any item of travel 

or entertainment pertaining to the same 

trip or event is furnished). However, the 

preceding sentence applies only if— 

(i) The recipient uses payment plans 

with the same or substantially similar 

terms in the ordinary course of its trade 

or business in connection with sales to 

ultimate consumers; and 

(ii) The instrument is received more 

than 60 days prior to the date of the sale 

(in the case of an item of travel or 

entertainment, the date on which the 

final payment is due). 

(6) Examples. The following examples 

illustrate the definition of ‘‘currency’’ set 

forth in paragraphs (c)(1) through (c)(5) 

of this section: 

Example 1. D, an individual, purchases 

gold coins from M, a coin dealer, for $13,200. 

D tenders to M in payment United States 

currency in the amount of $6,200 and a 

cashier’s check in the face amount of $7,000 

which D had purchased. Because the sale is 

a designated reporting transaction, the 

cashier’s check is treated as currency for 

purposes of 31 U.S.C. 5331 and this section. 

Therefore, because M has received more than 

$10,000 in currency with respect to the 

transaction, M must make the report required 

by 31 U.S.C. 5331 and this section. 

Example 2. E, an individual, purchases an 

automobile from Q, an automobile dealer, for 

$11,500. E tenders to Q in payment United 

States currency in the amount of $2,000 and 

a cashier’s check payable to E and Q in the 

amount of $9,500. The cashier’s check 

constitutes the proceeds of a loan from the 

bank issuing the check. The origin of the 

proceeds is evident from provisions inserted 

by the bank on the check that instruct the 

dealer to cause a lien to be placed on the 

vehicle as security for the loan. The sale of 

the automobile is a designated reporting 

transaction. However, under paragraph (c)(3) 

of this section, because E has furnished Q 

documentary information establishing that 

the cashier’s check constitutes the proceeds 

of a loan from the bank issuing the check, the 

cashier’s check is not treated as currency 

pursuant to paragraph (c)(1)(ii)(A) of this 

section. 

Example 3. F, an individual, purchases an 

item of jewelry from S, a retail jeweler, for 

$12,000. F gives S traveler’s checks totaling 

$2,400 and pays the balance with a personal 

check payable to S in the amount of $9,600. 

Because the sale is a designated reporting 

transaction, the traveler’s checks are treated 

as currency for purposes of section 5331 and 

this section. However, because the personal 

check is not treated as currency for purposes 

of section 5331 and this section, S has not 

received more than $10,000 in currency in 

the transaction and no report is required to 

be filed under section 5331 and this section. 

Example 4. G, an individual, purchases a 

boat from T, a boat dealer, for $16,500. G 

pays T with a cashier’s check payable to T 

in the amount of $16,500. The cashier’s 

check is not treated as currency because the 

face amount of the check is more than 

$10,000. Thus, no report is required to be 

made by T under section 5331 and this 

section. 

Example 5. H, an individual, arranges with 

W, a travel agent, for the chartering of a 

passenger aircraft to transport a group of 


erowe on DSK5CLS3C1PROD with RULES3
65820 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

individuals to a sports event in another city. 

H also arranges with W for hotel 

accommodations for the group and for 

admission tickets to the sports event. In 

payment, H tenders to W money orders 

which H had previously purchased. The total 

amount of the money orders, none of which 

individually exceeds $10,000 in face amount, 

exceeds $10,000. Because the transaction is 

a designated reporting transaction, the money 

orders are treated as currency for purposes of 

section 5331 and this section. Therefore, 

because W has received more than $10,000 

in currency with respect to the transaction, 

W must make the report required by section 

5331 and this section. 

(7) Consumer durable. The term 

consumer durable means an item of 

tangible personal property of a type that 

is suitable under ordinary usage for 

personal consumption or use, that can 

reasonably be expected to be useful for 

at least 1 year under ordinary usage, and 

that has a sales price of more than 

$10,000. Thus, for example, a $20,000 

automobile is a consumer durable 

(whether or not it is sold for business 

use), but a $20,000 dump truck or a 

$20,000 factory machine is not. 

(8) Collectible. The term collectible 

means an item described in paragraphs 

(A) through (D) of section 408 (m)(2) of 

title 26 of the United States Code 

(determined without regard to section 

408 (m)(3) of title 26 of the United 

States Code). 

(9) Travel or entertainment activity. 

The term travel or entertainment 

activity means an item of travel or 

entertainment (within the meaning of 26 

CFR 1.274–2(b)(1)) pertaining to a single 

trip or event where the aggregate sales 

price of the item and all other items 

pertaining to the same trip or event that 

are sold in the same transaction (or 

related transactions) exceeds $10,000. 

(10) Retail sale. The term retail sale 

means any sale (whether for resale or for 

any other purpose) made in the course 

of a trade or business if that trade or 

business principally consists of making 

sales to ultimate consumers. 

(11) Trade or business. The term trade 

or business has the same meaning as 

under section 162 of title 26, United 

States Code. 

(12) Transaction. (i) Solely for 

purposes of 31 U.S.C. 5331 and this 

section, the term transaction means the 

underlying event precipitating the 

payer’s transfer of currency to the 

recipient. In this context, transactions 

include (but are not limited to) a sale of 

goods or services; a sale of real property; 

a sale of intangible property; a rental of 

real or personal property; an exchange 

of currency for other currency; the 

establishment or maintenance of or 

contribution to a custodial, trust, or 

escrow arrangement; a payment of a 

preexisting debt; a conversion of 

currency to a negotiable instrument; a 

reimbursement for expenses paid; or the 

making or repayment of a loan. A 

transaction may not be divided into 

multiple transactions in order to avoid 

reporting under this section. 

(ii) The term related transactions 

means any transaction conducted 

between a payer (or its agent) and a 

recipient of currency in a 24-hour 

period. Additionally, transactions 

conducted between a payer (or its agent) 

and a currency recipient during a period 

of more than 24 hours are related if the 

recipient knows or has reason to know 

that each transaction is one of a series 

of connected transactions. 

(iii) The following examples illustrate 

the definition of paragraphs (c)(12)(i) 

and (ii) of this section: 

Example 1. A person has a tacit agreement 

with a gold dealer to purchase $36,000 in 

gold bullion. The $36,000 purchase 

represents a single transaction under 

paragraph (c)(12)(i) of this section and the 

reporting requirements of this section cannot 

be avoided by recasting the single sales 

transaction into 4 separate $9,000 sales 

transactions. 

Example 2. An attorney agrees to represent 

a client in a criminal case with the attorney’s 

fee to be determined on an hourly basis. In 

the first month in which the attorney 

represents the client, the bill for the 

attorney’s services comes to $8,000 which the 

client pays in currency. In the second month 

in which the attorney represents the client, 

the bill for the attorney’s services comes to 

$4,000, which the client again pays in 

currency. The aggregate amount of currency 

paid ($12,000) relates to a single transaction 

as defined in paragraph (c)(12)(i) of this 

section, the sale of legal services relating to 

the criminal case, and the receipt of currency 

must be reported under this section. 

Example 3. A person intends to contribute 

a total of $45,000 to a trust fund, and the 

trustee of the fund knows or has reason to 

know of that intention. The $45,000 

contribution is a single transaction under 

paragraph (c)(12)(i) of this section and the 

reporting requirement of this section cannot 

be avoided by the grantor’s making five 

separate $9,000 contributions of currency to 

a single fund or by making five $9,000 

contributions of currency to five separate 

funds administered by a common trustee. 

Example 4. K, an individual, attends a one 

day auction and purchases for currency two 

items, at a cost of $9,240 and $1,732.50 

respectively (tax and buyer’s premium 

included). Because the transactions are 

related transactions as defined in paragraph 

(c)(12)(ii) of this section, the auction house 

is required to report the aggregate amount of 

currency received from the related sales 

($10,972.50), even though the auction house 

accounts separately on its books for each 

item sold and presents the purchaser with 

separate bills for each item purchased. 

Example 5. F, a coin dealer, sells for 

currency $9,000 worth of gold coins to an 

individual on three successive days. Under 

paragraph (c)(12)(ii) of this section the three 

$9,000 transactions are related transactions 

aggregating $27,000 if F knows, or has reason 

to know, that each transaction is one of a 

series of connected transactions. 

(13) Recipient. (i) The term recipient 

means the person receiving the 

currency. Except as provided in 

paragraph (c)(13)(ii) of this section, each 

store, division, branch, department, 

headquarters, or office (‘‘branch’’) 

(regardless of physical location) 

comprising a portion of a person’s trade 

or business shall for purposes of this 

section be deemed a separate recipient. 

(ii) A branch that receives currency 

payments will not be deemed a separate 

recipient if the branch (or a central unit 

linking such branch with other 

branches) would in the ordinary course 

of business have reason to know the 

identity of payers making currency 

payments to other branches of such 

person. 

(iii) Examples. The following 

examples illustrate the application of 

the rules in paragraphs (c)(13)(i) and (ii) 

of this section: 

Example 1. N, an individual, purchases 

regulated futures contracts at a cost of $7,500 

and $5,000, respectively, through two 

different branches of Commodities Broker X 

on the same day. N pays for each purchase 

with currency. Each branch of Commodities 

Broker X transmits the sales information 

regarding each of N’s purchases to a central 

unit of Commodities Broker X (which settles 

the transactions against N’s account). Under 

paragraph (c)(13)(ii) of this section the 

separate branches of Commodities Broker X 

are not deemed to be separate recipients; 

therefore, Commodities Broker X must report 

with respect to the two related regulated 

futures contracts sales in accordance with 

this section. 

Example 2. P, a corporation, owns and 

operates a racetrack. P’s racetrack contains 

100 betting windows at which pari-mutuel 

wagers may be made. R, an individual, places 

currency wagers of $3,000 each at five 

separate betting windows. Assuming that in 

the ordinary course of business each betting 

window (or a central unit linking windows) 

does not have reason to know the identity of 

persons making wagers at other betting 

windows, each betting window would be 

deemed to be a separate currency recipient 

under paragraph (c)(13)(i) of this section. As 

no individual recipient received currency in 

excess of $10,000, no report need be made by 

P under this section. 

(d) Exceptions to the reporting 

requirements of 31 U.S.C. 5331—(1) 

Receipt is made with respect to a foreign 

currency transaction—(i) In general. 

Generally, there is no requirement to 

report with respect to a currency 

transaction if the entire transaction 

occurs outside the United States (the 

fifty states and the District of Columbia). 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65821 

An entire transaction consists of both 

the transaction as defined in paragraph 

(c)(12)(i) of this section and the receipt 

of currency by the recipient. If, 

however, any part of an entire 

transaction occurs in the 

Commonwealth of Puerto Rico or a 

possession or territory of the United 

States and the recipient of currency in 

that transaction is subject to the general 

jurisdiction of the Internal Revenue 

Service under title 26 of the United 

States Code, the recipient is required to 

report the transaction under this 

section. 

(ii) Example. The following example 

illustrates the application of the rules in 

paragraph (d)(1)(i) of this section: 

Example. W, an individual engaged in the 

trade or business of selling aircraft, reaches 

an agreement to sell an airplane to a U.S. 

citizen living in Mexico. The agreement, no 

portion of which is formulated in the United 

States, calls for a purchase price of $125,000 

and requires delivery of and payment for the 

airplane to be made in Mexico. Upon 

delivery of the airplane in Mexico, W 

receives $125,000 in currency. W is not 

required to report under 31 U.S.C. 5331 or 

this section because the exception provided 

in paragraph (d)(1)(i) of this section (‘‘foreign 

transaction exception’’) applies. If, however, 

any part of the agreement to sell had been 

formulated in the United States, the foreign 

transaction exception would not apply and 

W would be required to report the receipt of 

currency under 31 U.S.C. 5331 and this 

section. 

(2) Receipt of currency not in the 

course of the recipient’s trade or 

business. The receipt of currency in 

excess of $10,000 by a person other than 

in the course of the person’s trade or 

business is not reportable under 31 

U.S.C. 5331. Thus, for example, F, an 

individual in the trade or business of 

selling real estate, sells a motorboat for 

$12,000, the purchase price of which is 

paid in currency. F did not use the 

motorboat in any trade or business in 

which F was engaged. F is not required 

to report under 31 U.S.C. 5331 or this 

section because the exception provided 

in this paragraph (d)(2) applies. 

(e) Time, manner, and form of 

reporting—(1) In general. The reports 

required by paragraph (a) of this section 

must be made by filing a Form 8300, as 

specified in 26 CFR 1.6050I–1(e)(2). The 

reports must be filed at the time and in 

the manner specified in 26 CFR 

1.6050I–1(e)(1) and (3) respectively. 

(2) Verification. A person making a 

report of information under this section 

must verify the identity of the person 

from whom the reportable currency is 

received. Verification of the identity of 

a person who purports to be an alien 

must be made by examination of such 

person’s passport, alien identification 

card, or other official document 

evidencing nationality or residence. 

Verification of the identity of any other 

person may be made by examination of 

a document normally acceptable as a 

means of identification when cashing or 

accepting checks (for example, a driver’s 

license or a credit card). In addition, a 

report will be considered incomplete if 

the person required to make a report 

knows (or has reason to know) that an 

agent is conducting the transaction for 

a principal, and the return does not 

identify both the principal and the 

agent. 

(3) Retention of reports. A person 

required to make a report under this 

section must keep a copy of each report 

filed for five years from the date of 

filing. 

§ 1010.340 Reports of transportation of 

currency or monetary instruments. 

(a) Each person who physically 

transports, mails, or ships, or causes to 

be physically transported, mailed, or 

shipped, or attempts to physically 

transport, mail or ship, or attempts to 

cause to be physically transported, 

mailed or shipped, currency or other 

monetary instruments in an aggregate 

amount exceeding $10,000 at one time 

from the United States to any place 

outside the United States, or into the 

United States from any place outside the 

United States, shall make a report 

thereof. A person is deemed to have 

caused such transportation, mailing or 

shipping when he aids, abets, counsels, 

commands, procures, or requests it to be 

done by a financial institution or any 

other person. 

(b) Each person who receives in the 

U.S. currency or other monetary 

instruments in an aggregate amount 

exceeding $10,000 at one time which 

have been transported, mailed, or 

shipped to such person from any place 

outside the United States with respect to 

which a report has not been filed under 

paragraph (a) of this section, whether or 

not required to be filed thereunder, shall 

make a report thereof, stating the 

amount, the date of receipt, the form of 

monetary instruments, and the person 

from whom received. 

(c) This section shall not require 

reports by: 

(1) A Federal Reserve; 

(2) A bank, a foreign bank, or a broker 

or dealer in securities, in respect to 

currency or other monetary instruments 

mailed or shipped through the postal 

service or by common carrier; 

(3) A commercial bank or trust 

company organized under the laws of 

any State or of the United States with 

respect to overland shipments of 

currency or monetary instruments 

shipped to or received from an 

established customer maintaining a 

deposit relationship with the bank, in 

amounts which the bank may 

reasonably conclude do not exceed 

amounts commensurate with the 

customary conduct of the business, 

industry or profession of the customer 

concerned; 

(4) A person who is not a citizen or 

resident of the United States in respect 

to currency or other monetary 

instruments mailed or shipped from 

abroad to a bank or broker or dealer in 

securities through the postal service or 

by common carrier; 

(5) A common carrier of passengers in 

respect to currency or other monetary 

instruments in the possession of its 

passengers; 

(6) A common carrier of goods in 

respect to shipments of currency or 

monetary instruments not declared to be 

such by the shipper; 

(7) A travelers’ check issuer or its 

agent in respect to the transportation of 

travelers’ checks prior to their delivery 

to selling agents for eventual sale to the 

public; 

(8) By a person with respect to a 

restrictively endorsed traveler’s check 

that is in the collection and 

reconciliation process after the traveler’s 

check has been negotiated; 

(9) Nor by a person engaged as a 

business in the transportation of 

currency, monetary instruments and 

other commercial papers with respect to 

the transportation of currency or other 

monetary instruments overland between 

established offices of banks or brokers or 

dealers in securities and foreign 

persons. 

(d) A transfer of funds through normal 

banking procedures which does not 

involve the physical transportation of 

currency or monetary instruments is not 

required to be reported by this section. 

This section does not require that more 

than one report be filed covering a 

particular transportation, mailing or 

shipping of currency or other monetary 

instruments with respect to which a 

complete and truthful report has been 

filed by a person. However, no person 

required by paragraph (a) or (b) of this 

section to file a report shall be excused 

from liability for failure to do so if, in 

fact, a complete and truthful report has 

not been filed. 

§ 1010.350 Reports of foreign financial 

accounts. 

Each person subject to the jurisdiction 

of the United States (except a foreign 

subsidiary of a U.S. person) having a 

financial interest in, or signature or 

other authority over, a bank, securities 

or other financial account in a foreign 


erowe on DSK5CLS3C1PROD with RULES3
65822 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

country shall report such relationship to 

the Commissioner of the Internal 

Revenue for each year in which such 

relationship exists, and shall provide 

such information as shall be specified in 

a reporting form prescribed by the 

Secretary to be filed by such persons. 

Persons having a financial interest in 25 

or more foreign financial accounts need 

only note that fact on the form. Such 

persons will be required to provide 

detailed information concerning each 

account when so requested by the 

Secretary or his delegate. 

§ 1010.360 Reports of transactions with 

foreign financial agencies. 

(a) Promulgation of reporting 

requirements. The Secretary, when he 

deems appropriate, may promulgate 

regulations requiring specified financial 

institutions to file reports of certain 

transactions with designated foreign 

financial agencies. If any such 

regulation is issued as a final rule 

without notice and opportunity for 

public comment, then a finding of good 

cause for dispensing with notice and 

comment in accordance with 5 U.S.C. 

553(b) will be included in the 

regulation. If any such regulation is not 

published in the Federal Register, then 

any financial institution subject to the 

regulation will be named and personally 

served or otherwise given actual notice 

in accordance with 5 U.S.C. 553(b). If a 

financial institution is given notice of a 

reporting requirement under this section 

by means other than publication in the 

Federal Register, the Secretary may 

prohibit disclosure of the existence or 

provisions of that reporting requirement 

to the designated foreign financial 

agency or agencies and to any other 

party. 

(b) Information subject to reporting 

requirements. A regulation promulgated 

pursuant to paragraph (a) of this section 

shall designate one or more of the 

following categories of information to be 

reported: 

(1) Checks or drafts, including 

traveler’s checks, received by 

respondent financial institution for 

collection or credit to the account of a 

foreign financial agency, sent by 

respondent financial institution to a 

foreign country for collection or 

payment, drawn by respondent financial 

institution on a foreign financial agency, 

drawn by a foreign financial agency on 

respondent financial institution— 

including the following information. 

(i) Name of maker or drawer; 

(ii) Name of drawee or drawee 

financial institution; 

(iii) Name of payee; 

(iv) Date and amount of instrument; 

(v) Names of all endorsers. 

(2) Transmittal orders received by a 

respondent financial institution from a 

foreign financial agency or sent by 

respondent financial institution to a 

foreign financial agency, including all 

information maintained by that 

institution pursuant to §§ 1010.410 and 

1020.410. 

(3) Loans made by respondent 

financial institution to or through a 

foreign financial agency—including the 

following information: 

(i) Name of borrower; 

(ii) Name of person acting for 

borrower; 

(iii) Date and amount of loan; 

(iv) Terms of repayment; 

(v) Name of guarantor; 

(vi) Rate of interest; 

(vii) Method of disbursing proceeds; 

(viii) Collateral for loan. 

(4) Commercial paper received or 

shipped by the respondent financial 

institution—including the following 

information: 

(i) Name of maker; 

(ii) Date and amount of paper; 

(iii) Due date; 

(iv) Certificate number; 

(v) Amount of transaction. 

(5) Stocks received or shipped by 

respondent financial institution— 

including the following information: 

(i) Name of corporation; 

(ii) Type of stock; 

(iii) Certificate number; 

(iv) Number of shares; 

(v) Date of certificate; 

(vi) Name of registered holder; 

(vii) Amount of transaction. 

(6) Bonds received or shipped by 

respondent financial institution— 

including the following information: 

(i) Name of issuer; 

(ii) Bond number; 

(iii) Type of bond series; 

(iv) Date issued; 

(v) Due date; 

(vi) Rate of interest; 

(vii) Amount of transaction; 

(viii) Name of registered holder. 

(7) Certificates of deposit received or 

shipped by respondent financial 

institution—including the following 

information: 

(i) Name and address of issuer; 

(ii) Date issued; 

(iii) Dollar amount; 

(iv) Name of registered holder; 

(v) Due date; 

(vi) Rate of interest; 

(vii) Certificate number; 

(viii) Name and address of issuing 

agent. 

(c) Scope of reports. In issuing 

regulations as provided in paragraph (a) 

of this section, the Secretary will 

prescribe: 

(1) A reasonable classification of 

financial institutions subject to or 

exempt from a reporting requirement; 

(2) A foreign country to which a 

reporting requirement applies if the 

Secretary decides that applying the 

requirement to all foreign countries is 

unnecessary or undesirable; 

(3) The magnitude of transactions 

subject to a reporting requirement; and 

(4) The kind of transaction subject to 

or exempt from a reporting requirement. 

(d) Form of reports. Regulations 

issued pursuant to paragraph (a) of this 

section may prescribe the manner in 

which the information is to be reported. 

However, the Secretary may authorize a 

designated financial institution to report 

in a different manner if the institution 

demonstrates to the Secretary that the 

form of the required report is 

unnecessarily burdensome on the 

institution as prescribed; that a report in 

a different form will provide all the 

information the Secretary deems 

necessary; and that submission of the 

information in a different manner will 

not unduly hinder the effective 

administration of this chapter. 

(e) Limitations. (1) In issuing 

regulations under paragraph (a) of this 

section, the Secretary shall consider the 

need to avoid impeding or controlling 

the export or import of monetary 

instruments and the need to avoid 

burdening unreasonably a person 

making a transaction with a foreign 

financial agency. 

(2) The Secretary shall not issue a 

regulation under paragraph (a) of this 

section for the purpose of obtaining 

individually identifiable account 

information concerning a customer, as 

defined by the Right to Financial 

Privacy Act (12 U.S.C. 3401 et seq.), 

where that customer is already the 

subject of an ongoing investigation for 

possible violation of the Currency and 

Foreign Transactions Reporting Act, or 

is known by the Secretary to be the 

subject of an investigation for possible 

violation of any other Federal law. 

(3) The Secretary may issue a 

regulation pursuant to paragraph (a) of 

this section requiring a financial 

institution to report transactions 

completed prior to the date it received 

notice of the reporting requirement. 

However, with respect to completed 

transactions, a financial institution may 

be required to provide information only 

from records required to be maintained 

pursuant to the requirements of this 

chapter, or any other provision of state 

or Federal law, or otherwise maintained 

in the regular course of business. 

§ 1010.370 Reports of certain domestic 

coin and currency transactions. 

(a) If the Secretary of the Treasury 

finds, upon the Secretary’s own 

initiative or at the request of an 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65823 

1For transmittals of funds effected through the 

Federal Reserve’s Fedwire funds transfer system by 

a domestic broker or dealers in securities, only one 

of the items is required to be retained, if received 

with the transmittal order, until such time as the 

bank that sends the order to the Federal Reserve 

Bank completes its conversion to the expanded 

Fedwire message format. 

appropriate Federal or State law 

enforcement official, that reasonable 

grounds exist for concluding that 

additional recordkeeping and/or 

reporting requirements are necessary to 

carry out the purposes of this chapter 

and to prevent persons from evading the 

reporting/recordkeeping requirements of 

this chapter, the Secretary may issue an 

order requiring any domestic financial 

institution or group of domestic 

financial institutions in a geographic 

area and any other person participating 

in the type of transaction to file a report 

in the manner and to the extent 

specified in such order. The order shall 

contain such information as the 

Secretary may describe concerning any 

transaction in which such financial 

institution is involved for the payment, 

receipt, or transfer of United States 

coins or currency (or such other 

monetary instruments as the Secretary 

may describe in such order) the total 

amounts or denominations of which are 

equal to or greater than an amount 

which the Secretary may prescribe. 

(b) An order issued under paragraph 

(a) of this section shall be directed to the 

Chief Executive Officer of the financial 

institution and shall designate one or 

more of the following categories of 

information to be reported: Each 

deposit, withdrawal, exchange of 

currency or other payment or transfer, 

by, through or to such financial 

institution specified in the order, which 

involves all or any class of transactions 

in currency and/or monetary 

instruments equal to or exceeding an 

amount to be specified in the order. 

(c) In issuing an order under 

paragraph (a) of this section, the 

Secretary will prescribe: 

(1) The dollar amount of transactions 

subject to the reporting requirement in 

the order; 

(2) The type of transaction or 

transactions subject to or exempt from a 

reporting requirement in the order; 

(3) The appropriate form for reporting 

the transactions required in the order; 

(4) The address to which reports 

required in the order are to be sent or 

from which they will be picked up; 

(5) The starting and ending dates by 

which such transactions specified in the 

order are to be reported; 

(6) The name of a Treasury official to 

be contacted for any additional 

information or questions; 

(7) The amount of time the reports 

and records of reports generated in 

response to the order will have to be 

retained by the financial institution; and 

(8) Any other information deemed 

necessary to carry out the purposes of 

the order. 

(d)(1) No order issued pursuant to 

paragraph (a) of this section shall 

prescribe a reporting period of more 

than 60 days unless renewed pursuant 

to the requirements of paragraph (a). 

(2) Any revisions to an order issued 

under this section will not be effective 

until made in writing by the Secretary. 

(3) Unless otherwise specified in the 

order, a bank receiving an order under 

this section may continue to use the 

exemptions granted under § 1020.315 of 

this chapter prior to the receipt of the 

order, but may not grant additional 

exemptions. 

(4) For purposes of this section, the 

term geographic area means any area in 

one or more States of the United States, 

the District of Columbia, the 

Commonwealth of Puerto Rico, the 

United States Virgin Islands, Guam, the 

Commonwealth of the Northern Mariana 

Islands, American Samoa, the Trust 

Territory of the Pacific Islands, the 

territories and possessions of the United 

States, and/or political subdivision or 

subdivisions thereof, as specified in an 

order issued pursuant to paragraph (a) 

of this section. 

Subpart D—Records Required To Be 

Maintained 

§ 1010.400 General. 

Each financial institution (as defined 

in 31 U.S.C. 5312(a)(2) or (c)(1)) should 

refer to its Chapter X Part for any 

additional recordkeeping requirements. 

Unless otherwise indicated, the 

recordkeeping requirements contained 

in this Subpart D apply to all financial 

institutions. 

§ 1010.401 Determination by the Secretary. 

The Secretary hereby determines that 

the records required to be kept by this 

chapter have a high degree of usefulness 

in criminal, tax, or regulatory 

investigations or proceedings. 

§ 1010.405 [Reserved] 

§ 1010.410 Records to be made and 

retained by financial institutions. 

Each financial institution shall retain 

either the original or a microfilm or 

other copy or reproduction of each of 

the following: 

(a) A record of each extension of 

credit in an amount in excess of 

$10,000, except an extension of credit 

secured by an interest in real property, 

which record shall contain the name 

and address of the person to whom the 

extension of credit is made, the amount 

thereof, the nature or purpose thereof, 

and the date thereof; 

(b) A record of each advice, request, 

or instruction received or given 

regarding any transaction resulting (or 

intended to result and later canceled if 

such a record is normally made) in the 

transfer of currency or other monetary 

instruments, funds, checks, investment 

securities, or credit, of more than 

$10,000 to or from any person, account, 

or place outside the United States. 

(c) A record of each advice, request, 

or instruction given to another financial 

institution or other person located 

within or without the United States, 

regarding a transaction intended to 

result in the transfer of funds, or of 

currency, other monetary instruments, 

checks, investment securities, or credit, 

of more than $10,000 to a person, 

account or place outside the United 

States. 

(d) A record of such information for 

such period of time as the Secretary may 

require in an order issued under 

§ 1010.370(a), not to exceed five years. 

(e) Nonbank financial institutions. 

Each agent, agency, branch, or office 

located within the United States of a 

financial institution other than a bank is 

subject to the requirements of this 

paragraph (e) with respect to a 

transmittal of funds in the amount of 

$3,000 or more: 

(1) Recordkeeping requirements. (i) 

For each transmittal order that it accepts 

as a transmittor’s financial institution, a 

financial institution shall obtain and 

retain either the original or a microfilm, 

other copy, or electronic record of the 

following information relating to the 

transmittal order: 

(A) The name and address of the 

transmittor; 

(B) The amount of the transmittal 

order; 

(C) The execution date of the 

transmittal order; 

(D) Any payment instructions 

received from the transmittor with the 

transmittal order; 

(E) The identity of the recipient’s 

financial institution; 

(F) As many of the following items as 

are received with the transmittal order: 1

(1) The name and address of the 

recipient; 

(2) The account number of the 

recipient; and 

(3) Any other specific identifier of the 

recipient; and 

(G) Any form relating to the 

transmittal of funds that is completed or 

signed by the person placing the 

transmittal order. 


erowe on DSK5CLS3C1PROD with RULES3
65824 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

(ii) For each transmittal order that it 

accepts as an intermediary financial 

institution, a financial institution shall 

retain either the original or a microfilm, 

other copy, or electronic record of the 

transmittal order. 

(iii) For each transmittal order that it 

accepts as a recipient’s financial 

institution, a financial institution shall 

retain either the original or a microfilm, 

other copy, or electronic record of the 

transmittal order. 

(2) Transmittors other than 

established customers. In the case of a 

transmittal order from a transmittor that 

is not an established customer, in 

addition to obtaining and retaining the 

information required in paragraph 

(e)(1)(i) of this section: 

(i) If the transmittal order is made in 

person, prior to acceptance the 

transmittor’s financial institution shall 

verify the identity of the person placing 

the transmittal order. If it accepts the 

transmittal order, the transmittor’s 

financial institution shall obtain and 

retain a record of the name and address, 

the type of identification reviewed, and 

the number of the identification 

document (e.g., driver’s license), as well 

as a record of the person’s taxpayer 

identification number (e.g., social 

security or employer identification 

number) or, if none, alien identification 

number or passport number and country 

of issuance, or a notation in the record 

of the lack thereof. If the transmittor’s 

financial institution has knowledge that 

the person placing the transmittal order 

is not the transmittor, the transmittor’s 

financial institution shall obtain and 

retain a record of the transmittor’s 

taxpayer identification number (e.g., 

social security or employer 

identification number) or, if none, alien 

identification number or passport 

number and country of issuance, if 

known by the person placing the order, 

or a notation in the record of the lack 

thereof. 

(ii) If the transmittal order accepted 

by the transmittor’s financial institution 

is not made in person, the transmittor’s 

financial institution shall obtain and 

retain a record of the name and address 

of the person placing the transmittal 

order, as well as the person’s taxpayer 

identification number (e.g., social 

security or employer identification 

number) or, if none, alien identification 

number or passport number and country 

of issuance, or a notation in the record 

of the lack thereof, and a copy or record 

of the method of payment (e.g., check or 

credit card transaction) for the 

transmittal of funds. If the transmittor’s 

financial institution has knowledge that 

the person placing the transmittal order 

is not the transmittor, the transmittor’s 

financial institution shall obtain and 

retain a record of the transmittor’s 

taxpayer identification number (e.g., 

social security or employer 

identification number) or, if none, alien 

identification number or passport 

number and country of issuance, if 

known by the person placing the order, 

or a notation in the record of the lack 

thereof. 

(3) Recipients other than established 

customers. For each transmittal order 

that it accepts as a recipient’s financial 

institution for a recipient that is not an 

established customer, in addition to 

obtaining and retaining the information 

required in paragraph (e)(1)(iii) of this 

section: 

(i) If the proceeds are delivered in 

person to the recipient or its 

representative or agent, the recipient’s 

financial institution shall verify the 

identity of the person receiving the 

proceeds and shall obtain and retain a 

record of the name and address, the type 

of identification reviewed, and the 

number of the identification document 

(e.g., driver’s license), as well as a 

record of the person’s taxpayer 

identification number (e.g., social 

security or employer identification 

number) or, if none, alien identification 

number or passport number and country 

of issuance, or a notation in the record 

of the lack thereof. If the recipient’s 

financial institution has knowledge that 

the person receiving the proceeds is not 

the recipient, the recipient’s financial 

institution shall obtain and retain a 

record of the recipient’s name and 

address, as well as the recipient’s 

taxpayer identification number (e.g., 

social security or employer 

identification number) or, if none, alien 

identification number or passport 

number and country of issuance, if 

known by the person receiving the 

proceeds, or a notation in the record of 

the lack thereof. 

(ii) If the proceeds are delivered other 

than in person, the recipient’s financial 

institution shall retain a copy of the 

check or other instrument used to effect 

payment, or the information contained 

thereon, as well as the name and 

address of the person to which it was 

sent. 

(4) Retrievability. The information 

that a transmittor’s financial institution 

must retain under paragraphs (e)(1)(i) 

and (e)(2) of this section shall be 

retrievable by the transmittor’s financial 

institution by reference to the name of 

the transmittor. If the transmittor is an 

established customer of the transmittor’s 

financial institution and has an account 

used for transmittals of funds, then the 

information also shall be retrievable by 

account number. The information that a 

recipient’s financial institution must 

retain under paragraphs (e)(1)(iii) and 

(e)(3) of this section shall be retrievable 

by the recipient’s financial institution 

by reference to the name of the 

recipient. If the recipient is an 

established customer of the recipient’s 

financial institution and has an account 

used for transmittals of funds, then the 

information also shall be retrievable by 

account number. This information need 

not be retained in any particular 

manner, so long as the financial 

institution is able to retrieve the 

information required by this paragraph, 

either by accessing transmittal of funds 

records directly or through reference to 

some other record maintained by the 

financial institution. 

(5) Verification. Where verification is 

required under paragraphs (e)(2) and 

(e)(3) of this section, a financial 

institution shall verify a person’s 

identity by examination of a document 

(other than a customer signature card), 

preferably one that contains the person’s 

name, address, and photograph, that is 

normally acceptable by financial 

institutions as a means of identification 

when cashing checks for persons other 

than established customers. Verification 

of the identity of an individual who 

indicates that he or she is an alien or is 

not a resident of the United States may 

be made by passport, alien 

identification card, or other official 

document evidencing nationality or 

residence (e.g., a foreign driver’s license 

with indication of home address). 

(6) Exceptions. The following 

transmittals of funds are not subject to 

the requirements of this section: 

(i) Transmittals of funds where the 

transmittor and the recipient are any of 

the following: 

(A) A bank; 

(B) A wholly-owned domestic 

subsidiary of a bank chartered in the 

United States; 

(C) A broker or dealer in securities; 

(D) A wholly-owned domestic 

subsidiary of a broker or dealer in 

securities; 

(E) A futures commission merchant or 

an introducing broker in commodities; 

(F) A wholly-owned domestic 

subsidiary of a futures commission 

merchant or an introducing broker in 

commodities; 

(G) The United States; 

(H) A state or local government; or 

(I) A Federal, State or local 

government agency or instrumentality; 

or 

(J) A mutual fund; and 

(ii) Transmittals of funds where both 

the transmittor and the recipient are the 

same person and the transmittor’s 

financial institution and the recipient’s 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65825 

2For transmittals of funds effected through the 

Federal Reserve’s Fedwire funds transfer system by 

a financial institution, only one of the items is 

required to be included in the transmittal order, if 

received with the sender’s transmittal order, until 

such time as the bank that sends the order to the 

Federal Reserve Bank completes its conversion to 

the expanded Fedwire message format. 

3For transmittals of funds effected through the 

Federal Reserve’s Fedwire funds transfer system by 

a financial institution, only one of the items is 

required to be included in the transmittal order, if 

received with the sender’s transmittal order, until 

such time as the bank that sends the order to the 

Federal Reserve Bank completes its conversion to 

the expanded Fedwire message format. 

financial institution are the same broker 

or dealer in securities. 

(f) Any transmittor’s financial 

institution or intermediary financial 

institution located within the United 

States shall include in any transmittal 

order for a transmittal of funds in the 

amount of $3,000 or more, information 

as required in this paragraph (f): 

(1) A transmittor’s financial 

institution shall include in a transmittal 

order, at the time it is sent to a receiving 

financial institution, the following 

information: 

(i) The name and, if the payment is 

ordered from an account, the account 

number of the transmittor; 

(ii) The address of the transmittor, 

except for a transmittal order through 

Fedwire until such time as the bank that 

sends the order to the Federal Reserve 

Bank completes its conversion to the 

expanded Fedwire format; 

(iii) The amount of the transmittal 

order; 

(iv) The execution date of the 

transmittal order; 

(v) The identity of the recipient’s 

financial institution; 

(vi) As many of the following items as 

are received with the transmittal order: 2

(A) The name and address of the 

recipient; 

(B) The account number of the 

recipient; 

(C) Any other specific identifier of the 

recipient; and 

(vii) Either the name and address or 

numerical identifier of the transmittor’s 

financial institution. 

(2) A receiving financial institution 

that acts as an intermediary financial 

institution, if it accepts a transmittal 

order, shall include in a corresponding 

transmittal order at the time it is sent to 

the next receiving financial institution, 

the following information, if received 

from the sender: 

(i) The name and the account number 

of the transmittor; 

(ii) The address of the transmittor, 

except for a transmittal order through 

Fedwire until such time as the bank that 

sends the order to the Federal Reserve 

Bank completes its conversion to the 

expanded Fedwire format; 

(iii) The amount of the transmittal 

order; 

(iv) The execution date of the 

transmittal order; 

(v) The identity of the recipient’s 

financial institution; 

(vi) As many of the following items as 

are received with the transmittal order: 3

(A) The name and address of the 

recipient; 

(B) The account number of the 

recipient; 

(C) Any other specific identifier of the 

recipient; and 

(vii) Either the name and address or 

numerical identifier of the transmittor’s 

financial institution. 

(3) Safe harbor for transmittals of 

funds prior to conversion to the 

expanded Fedwire message format. The 

following provisions apply to 

transmittals of funds effected through 

the Federal Reserve’s Fedwire funds 

transfer system or otherwise by a 

financial institution before the bank that 

sends the order to the Federal Reserve 

Bank or otherwise completes its 

conversion to the expanded Fedwire 

message format. 

(i) Transmittor’s financial institution. 

A transmittor’s financial institution will 

be deemed to be in compliance with the 

provisions of paragraph (f)(1) of this 

section if it: 

(A) Includes in the transmittal order, 

at the time it is sent to the receiving 

financial institution, the information 

specified in paragraphs (f)(1)(iii) 

through (v), and the information 

specified in paragraph (f)(1)(vi) of this 

section to the extent that such 

information has been received by the 

financial institution, and 

(B) Provides the information specified 

in paragraphs (f)(1)(i), (ii) and (vii) of 

this section to a financial institution 

that acted as an intermediary financial 

institution or recipient’s financial 

institution in connection with the 

transmittal order, within a reasonable 

time after any such financial institution 

makes a request therefor in connection 

with the requesting financial 

institution’s receipt of a lawful request 

for such information from a Federal, 

State, or local law enforcement or 

financial regulatory agency, or in 

connection with the requesting financial 

institution’s own Bank Secrecy Act 

compliance program. 

(ii) Intermediary financial institution. 

An intermediary financial institution 

will be deemed to be in compliance 

with the provisions of paragraph (f)(2) of 

this section if it: 

(A) Includes in the transmittal order, 

at the time it is sent to the receiving 

financial institution, the information 

specified in paragraphs (f)(2)(iii) 

through (f)(2)(vi) of this section, to the 

extent that such information has been 

received by the intermediary financial 

institution; and 

(B) Provides the information specified 

in paragraphs (f)(2)(i), (ii) and (vii) of 

this section, to the extent that such 

information has been received by the 

intermediary financial institution, to a 

financial institution that acted as an 

intermediary financial institution or 

recipient’s financial institution in 

connection with the transmittal order, 

within a reasonable time after any such 

financial institution makes a request 

therefor in connection with the 

requesting financial institution’s receipt 

of a lawful request for such information 

from a Federal, State, or local law 

enforcement or regulatory agency, or in 

connection with the requesting financial 

institution’s own Bank Secrecy Act 

compliance program. 

(iii) Obligation of requesting financial 

institution. Any information requested 

under paragraph (f)(3)(i)(B) or 

(f)(3)(ii)(B) of this section shall be 

treated by the requesting institution, 

once received, as if it had been included 

in the transmittal order to which such 

information relates. 

(4) Exceptions. The requirements of 

this paragraph (f) shall not apply to 

transmittals of funds that are listed in 

paragraph (e)(6) of this section or 

§ 1020.410(a)(6) of this chapter. 

§ 1010.415 Purchases of bank checks and 

drafts, cashier’s checks, money orders and 

traveler’s checks. 

(a) No financial institution may issue 

or sell a bank check or draft, cashier’s 

check, money order or traveler’s check 

for $3,000 or more in currency unless it 

maintains records of the following 

information, which must be obtained for 

each issuance or sale of one or more of 

these instruments to any individual 

purchaser which involves currency in 

amounts of $3,000–$10,000 inclusive: 

(1) If the purchaser has a deposit 

account with the financial institution: 

(i)(A) The name of the purchaser; 

(B) The date of purchase; 

(C) The type(s) of instrument(s) 

purchased; 

(D) The serial number(s) of each of the 

instrument(s) purchased; and 

(E) The amount in dollars of each of 

the instrument(s) purchased. 

(ii) In addition, the financial 

institution must verify that the 

individual is a deposit accountholder or 

must verify the individual’s identity. 

Verification may be either through a 

signature card or other file or record at 

the financial institution provided the 


erowe on DSK5CLS3C1PROD with RULES3
65826 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

deposit accountholder’s name and 

address were verified previously and 

that information was recorded on the 

signature card or other file or record; or 

by examination of a document which is 

normally acceptable within the banking 

community as a means of identification 

when cashing checks for nondepositors 

and which contains the name and 

address of the purchaser. If the deposit 

accountholder’s identity has not been 

verified previously, the financial 

institution shall verify the deposit 

accountholder’s identity by examination 

of a document which is normally 

acceptable within the banking 

community as a means of identification 

when cashing checks for nondepositors 

and which contains the name and 

address of the purchaser, and shall 

record the specific identifying 

information (e.g., State of issuance and 

number of driver’s license). 

(2) If the purchaser does not have a 

deposit account with the financial 

institution: 

(i)(A) The name and address of the 

purchaser; 

(B) The social security number of the 

purchaser, or if the purchaser is an alien 

and does not have a social security 

number, the alien identification 

number; 

(C) The date of birth of the purchaser; 

(D) The date of purchase; 

(E) The type(s) of instrument(s) 

purchased; 

(F) The serial number(s) of the 

instrument(s) purchased; and 

(G) The amount in dollars of each of 

the instrument(s) purchased. 

(ii) In addition, the financial 

institution shall verify the purchaser’s 

name and address by examination of a 

document which is normally acceptable 

within the banking community as a 

means of identification when cashing 

checks for nondepositors and which 

contains the name and address of the 

purchaser, and shall record the specific 

identifying information (e.g., State of 

issuance and number of driver’s 

license). 

(b) Contemporaneous purchases of the 

same or different types of instruments 

totaling $3,000 or more shall be treated 

as one purchase. Multiple purchases 

during one business day totaling $3,000 

or more shall be treated as one purchase 

if an individual employee, director, 

officer, or partner of the financial 

institution has knowledge that these 

purchases have occurred. 

(c) Records required to be kept shall 

be retained by the financial institution 

for a period of five years and shall be 

made available to the Secretary upon 

request at any time. 

§ 1010.420 Records to be made and 

retained by persons having financial 

interests in foreign financial accounts. 

Records of accounts required by 

§ 1010.350 to be reported to the 

Commissioner of Internal Revenue shall 

be retained by each person having a 

financial interest in or signature or other 

authority over any such account. Such 

records shall contain the name in which 

each such account is maintained, the 

number or other designation of such 

account, the name and address of the 

foreign bank or other person with whom 

such account is maintained, the type of 

such account, and the maximum value 

of each such account during the 

reporting period. Such records shall be 

retained for a period of 5 years and shall 

be kept at all times available for 

inspection as authorized by law. In the 

computation of the period of 5 years, 

there shall be disregarded any period 

beginning with a date on which the 

taxpayer is indicted or information 

instituted on account of the filing of a 

false or fraudulent Federal income tax 

return or failing to file a Federal income 

tax return, and ending with the date on 

which final disposition is made of the 

criminal proceeding. 

§ 1010.430 Nature of records and retention 

period. 

(a) Wherever it is required that there 

be retained either the original or a 

microfilm or other copy or reproduction 

of a check, draft, monetary instrument, 

investment security, or other similar 

instrument, there shall be retained a 

copy of both front and back of each such 

instrument or document, except that no 

copy need be retained of the back of any 

instrument or document which is 

entirely blank or which contains only 

standardized printed information, a 

copy of which is on file. 

(b) Records required by this chapter to 

be retained by financial institutions may 

be those made in the ordinary course of 

business by a financial institution. If no 

record is made in the ordinary course of 

business of any transaction with respect 

to which records are required to be 

retained by this chapter, then such a 

record shall be prepared in writing by 

the financial institution. 

(c) The rules and regulations issued 

by the Internal Revenue Service under 

26 U.S.C. 6109 determine what 

constitutes a taxpayer identification 

number and whose number shall be 

obtained in the case of an account 

maintained by one or more persons. 

(d) All records that are required to be 

retained by this chapter shall be 

retained for a period of five years. 

Records or reports required to be kept 

pursuant to an order issued under 

§ 1010.370 of this chapter shall be 

retained for the period of time specified 

in such order, not to exceed five years. 

All such records shall be filed or stored 

in such a way as to be accessible within 

a reasonable period of time, taking into 

consideration the nature of the record, 

and the amount of time expired since 

the record was made. 

§ 1010.440 Person outside the United 

States. 

For the purposes of this chapter, a 

remittance or transfer of funds, or of 

currency, other monetary instruments, 

checks, investment securities, or credit 

to the domestic account of a person 

whose address is known by the person 

making the remittance or transfer, to be 

outside the United States, shall be 

deemed to be a remittance or transfer to 

a person outside the United States, 

except that, unless otherwise directed 

by the Secretary, this section shall not 

apply to a transaction on the books of 

a domestic financial institution 

involving the account of a customer of 

such institution whose address is within 

approximately 50 miles of the location 

of the institution, or who is known to 

be temporarily outside the United 

States. 

Subpart E—Special Information 

Sharing Procedures To Deter Money 

Laundering and Terrorist Activity 

§ 1010.500 General. 

Sections 1010.505 through 1010.540 

of this Subpart E were issued pursuant 

to the requirements of section 314 of the 

USA PATRIOT Act. Each financial 

institution (as defined in 31 U.S.C. 

5312(a)(2) or (c)(1)) should refer to its 

Chapter X Part for any additional 

special information sharing procedures. 

§ 1010.505 Definitions. 

For purposes of this Subpart E, the 

following definitions apply: 

(a) Account means a formal banking 

or business relationship established to 

provide regular services, dealings, and 

other financial transactions, and 

includes, but is not limited to, a demand 

deposit, savings deposit, or other 

transaction or asset account and a credit 

account or other extension of credit. 

(b) Money laundering means an 

activity criminalized by 18 U.S.C. 1956 

or 1957, or an activity that would be 

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

if it occurred in the United States. 

(c) Terrorist activity means an act of 

domestic terrorism or international 

terrorism as those terms are defined in 

18 U.S.C. 2331. 

(d) Transaction. (1) Except as 

provided in paragraph (d)(2) of this 

section, the term ‘‘transaction’’ shall 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65827 

have the same meaning as provided in 

§ 1010.100(bbb). 

(2) For purposes of § 1010.520, a 

transaction shall not mean any 

transaction conducted through an 

account. 

§ 1010.520 Information sharing between 

government agencies and financial 

institutions. 

(a) Definitions. For purposes of this 

section: 

(1) Financial institution means any 

financial institution described in 31 

U.S.C. 5312(a)(2). 

(2) Law enforcement agency means a 

Federal, State, local, or foreign law 

enforcement agency with criminal 

investigative authority, provided that in 

the case of a foreign law enforcement 

agency, such agency is from a 

jurisdiction that is a party to a treaty 

that provides, or in the determination of 

FinCEN is from a jurisdiction that 

otherwise allows, law enforcement 

agencies in the United States reciprocal 

access to information comparable to that 

obtained under this section. 

(b) Information requests based on 

credible evidence concerning terrorist 

activity or money laundering—(1) In 

general. A law enforcement agency 

investigating terrorist activity or money 

laundering may request that FinCEN 

solicit, on the investigating agency’s 

behalf, certain information from a 

financial institution or a group of 

financial institutions. When submitting 

such a request to FinCEN, the law 

enforcement agency shall provide 

FinCEN with a written certification, in 

such form and manner as FinCEN may 

prescribe. At a minimum, such 

certification must: State that each 

individual, entity, or organization about 

which the law enforcement agency is 

seeking information is engaged in, or is 

reasonably suspected based on credible 

evidence of engaging in, terrorist 

activity or money laundering; include 

enough specific identifiers, such as date 

of birth, address, and social security 

number, that would permit a financial 

institution to differentiate between 

common or similar names; and identify 

one person at the agency who can be 

contacted with any questions relating to 

its request. Upon receiving the requisite 

certification from the requesting law 

enforcement agency, FinCEN may 

require any financial institution to 

search its records to determine whether 

the financial institution maintains or 

has maintained accounts for, or has 

engaged in transactions with, any 

specified individual, entity, or 

organization. 

(2) Requests from FinCEN. FinCEN 

may solicit, on its own behalf and on 

behalf of appropriate components of the 

Department of the Treasury, whether a 

financial institution or a group of 

financial institutions maintains or has 

maintained accounts for, or has engaged 

in transactions with, any specified 

individual, entity, or organization. 

Before an information request under this 

section is made to a financial 

institution, FinCEN or the appropriate 

Treasury component shall certify in 

writing in the same manner as a 

requesting law enforcement agency that 

each individual, entity or organization 

about which FinCEN or the appropriate 

Treasury component is seeking 

information is engaged in, or is 

reasonably suspected based on credible 

evidence of engaging in, terrorist 

activity or money laundering. The 

certification also must include enough 

specific identifiers, such as date of birth, 

address, and social security number, 

that would permit a financial institution 

to differentiate between common or 

similar names, and identify one person 

at FinCEN or the appropriate Treasury 

component who can be contacted with 

any questions relating to its request. 

(3) Obligations of a financial 

institution receiving an information 

request—(i) Record search. Upon 

receiving an information request from 

FinCEN under this section, a financial 

institution shall expeditiously search its 

records to determine whether it 

maintains or has maintained any 

account for, or has engaged in any 

transaction with, each individual, 

entity, or organization named in 

FinCEN’s request. A financial 

institution may contact the law 

enforcement agency, FinCEN or 

requesting Treasury component 

representative, or U.S. law enforcement 

attache ́ in the case of a request by a 

foreign law enforcement agency, which 

has been named in the information 

request provided to the institution by 

FinCEN with any questions relating to 

the scope or terms of the request. Except 

as otherwise provided in the 

information request, a financial 

institution shall only be required to 

search its records for: 

(A) Any current account maintained 

for a named suspect; 

(B) Any account maintained for a 

named suspect during the preceding 

twelve months; and 

(C) Any transaction, as defined by 

§ 1010.505(d), conducted by or on 

behalf of a named suspect, or any 

transmittal of funds conducted in which 

a named suspect was either the 

transmittor or the recipient, during the 

preceding six months that is required 

under law or regulation to be recorded 

by the financial institution or is 

recorded and maintained electronically 

by the institution. 

(ii) Report to FinCEN. If a financial 

institution identifies an account or 

transaction identified with any 

individual, entity, or organization 

named in a request from FinCEN, it 

shall report to FinCEN, in the manner 

and in the time frame specified in 

FinCEN’s request, the following 

information: 

(A) The name of such individual, 

entity, or organization; 

(B) The number of each such account, 

or in the case of a transaction, the date 

and type of each such transaction; and 

(C) Any Social Security number, 

taxpayer identification number, 

passport number, date of birth, address, 

or other similar identifying information 

provided by the individual, entity, or 

organization when each such account 

was opened or each such transaction 

was conducted. 

(iii) Designation of contact person. 

Upon receiving an information request 

under this section, a financial 

institution shall designate one person to 

be the point of contact at the institution 

regarding the request and to receive 

similar requests for information from 

FinCEN in the future. When requested 

by FinCEN, a financial institution shall 

provide FinCEN with the name, title, 

mailing address, e-mail address, 

telephone number, and facsimile 

number of such person, in such manner 

as FinCEN may prescribe. A financial 

institution that has provided FinCEN 

with contact information must promptly 

notify FinCEN of any changes to such 

information. 

(iv) Use and security of information 

request. (A) A financial institution shall 

not use information provided by 

FinCEN pursuant to this section for any 

purpose other than: 

(1) Reporting to FinCEN as provided 

in this section; 

(2) Determining whether to establish 

or maintain an account, or to engage in 

a transaction; or 

(3) Assisting the financial institution 

in complying with any requirement of 

this chapter. 

(B)(1) A financial institution shall not 

disclose to any person, other than 

FinCEN or the requesting Treasury 

component, the law enforcement agency 

on whose behalf FinCEN is requesting 

information, or U.S. law enforcement 

attache ́ in the case of a request by a 

foreign law enforcement agency, which 

has been named in the information 

request, the fact that FinCEN has 

requested or has obtained information 

under this section, except to the extent 

necessary to comply with such an 

information request. 


erowe on DSK5CLS3C1PROD with RULES3
65828 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

(2) Notwithstanding paragraph 

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

institution authorized to share 

information under § 1010.540 may share 

information concerning an individual, 

entity, or organization named in a 

request from FinCEN in accordance 

with the requirements of such section. 

However, such sharing shall not 

disclose the fact that FinCEN has 

requested information concerning such 

individual, entity, or organization. 

(C) Each financial institution shall 

maintain adequate procedures to protect 

the security and confidentiality of 

requests from FinCEN for information 

under this section. The requirements of 

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

deemed satisfied to the extent that a 

financial institution applies to such 

information procedures that the 

institution has established to satisfy the 

requirements of section 501 of the 

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

6801), and applicable regulations issued 

thereunder, with regard to the 

protection of its customers’ nonpublic 

personal information. 

(v) No other action required. Nothing 

in this section shall be construed to 

require a financial institution to take 

any action, or to decline to take any 

action, with respect to an account 

established for, or a transaction engaged 

in with, an individual, entity, or 

organization named in a request from 

FinCEN, or to decline to establish an 

account for, or to engage in a transaction 

with, any such individual, entity, or 

organization. Except as otherwise 

provided in an information request 

under this section, such a request shall 

not require a financial institution to 

report on future account opening 

activity or transactions or to treat a 

suspect list received under this section 

as a government list for purposes of 

section 326 of Public Law 107–56. 

(4) Relation to the Right to Financial 

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

financial institution is required to report 

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

section is information required to be 

reported in accordance with a Federal 

statute or rule promulgated thereunder, 

for purposes of subsection 3413(d) of 

the Right to Financial Privacy Act (12 

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

of the Gramm-Leach-Bliley Act (15 

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

(5) No effect on law enforcement or 

regulatory investigations. Nothing in 

this subpart affects the authority of a 

Federal, State, or local law enforcement 

agency or officer, or FinCEN or another 

component of the Department of the 

Treasury, to obtain information directly 

from a financial institution. 

§ 1010.530 [Reserved] 

§ 1010.540 Voluntary information sharing 

among financial institutions. 

(a) Definitions. For purposes of this 

section: 

(1) Financial institution. (i) Except as 

provided in paragraph (a)(1)(ii) of this 

section, the term ‘‘financial institution’’ 

means any financial institution 

described in 31 U.S.C. 5312(a)(2) that is 

required under this chapter to establish 

and maintain an anti-money laundering 

program, or is treated under this chapter 

as having satisfied the requirements of 

31 U.S.C. 5318(h)(1). 

(ii) For purposes of this section, a 

financial institution shall not mean any 

institution included within a class of 

financial institutions that FinCEN has 

designated as ineligible to share 

information under this section. 

(2) Association of financial 

institutions means a group or 

organization the membership of which 

is comprised entirely of financial 

institutions as defined in paragraph 

(a)(1) of this section. 

(b) Voluntary information sharing 

among financial institutions—(1) In 

general. Subject to paragraphs (b)(2), 

(b)(3), and (b)(4) of this section, a 

financial institution or an association of 

financial institutions may, under the 

protection of the safe harbor from 

liability described in paragraph (b)(5) of 

this section, transmit, receive, or 

otherwise share information with any 

other financial institution or association 

of financial institutions regarding 

individuals, entities, organizations, and 

countries for purposes of identifying 

and, where appropriate, reporting 

activities that the financial institution or 

association suspects may involve 

possible terrorist activity or money 

laundering. 

(2) Notice requirement. A financial 

institution or association of financial 

institutions that intends to share 

information as described in paragraph 

(b)(1) of this section shall submit to 

FinCEN a notice described on FinCEN’s 

Internet Web site, http:// 

www.fincen.gov. Each notice provided 

pursuant to this paragraph (b)(2) shall 

be effective for the one year period 

beginning on the date of the notice. In 

order to continue to engage in the 

sharing of information after the end of 

the one year period, a financial 

institution or association of financial 

institutions must submit a new notice. 

Completed notices may be submitted to 

FinCEN by accessing FinCEN’s Internet 

Web site, http://www.fincen.gov., and 

entering the appropriate information as 

directed, or, if a financial institution 

does not have Internet access, by mail 

to: FinCEN, P.O. Box 39, Vienna, VA 

22183. 

(3) Verification requirement. Prior to 

sharing information as described in 

paragraph (b)(1) of this section, a 

financial institution or an association of 

financial institutions must take 

reasonable steps to verify that the other 

financial institution or association of 

financial institutions with which it 

intends to share information has 

submitted to FinCEN the notice required 

by paragraph (b)(2) of this section. A 

financial institution or an association of 

financial institutions may satisfy this 

paragraph (b)(3) by confirming that the 

other financial institution or association 

of financial institutions appears on a list 

that FinCEN will periodically make 

available to financial institutions or 

associations of financial institutions that 

have filed a notice with it, or by 

confirming directly with the other 

financial institution or association of 

financial institutions that the requisite 

notice has been filed. 

(4) Use and security of information. (i) 

Information received by a financial 

institution or an association of financial 

institutions pursuant to this section 

shall not be used for any purpose other 

than: 

(A) Identifying and, where 

appropriate, reporting on money 

laundering or terrorist activities; 

(B) Determining whether to establish 

or maintain an account, or to engage in 

a transaction; or 

(C) Assisting the financial institution 

in complying with any requirement of 

this chapter. 

(ii) Each financial institution or 

association of financial institutions that 

engages in the sharing of information 

pursuant to this section shall maintain 

adequate procedures to protect the 

security and confidentiality of such 

information. The requirements of this 

paragraph (b)(4)(ii) shall be deemed 

satisfied to the extent that a financial 

institution applies to such information 

procedures that the institution has 

established to satisfy the requirements 

of section 501 of the Gramm-LeachBliley Act (15 U.S.C. 6801), and 

applicable regulations issued 

thereunder, with regard to the 

protection of its customers’ nonpublic 

personal information. 

(5) Safe harbor from certain liability— 

(i) In general. A financial institution or 

association of financial institutions that 

shares information pursuant to 

paragraph (b) of this section shall be 

protected from liability for such sharing, 

or for any failure to provide notice of 

such sharing, to an individual, entity, or 

organization that is identified in such 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65829 

sharing, to the full extent provided in 

subsection 314(b) of Public Law 107–56. 

(ii) Limitation. Paragraph (b)(5)(i) of 

this section shall not apply to a 

financial institution or association of 

financial institutions to the extent such 

institution or association fails to comply 

with paragraphs (b)(2), (b)(3), or (b)(4) of 

this section. 

(c) Information sharing between 

financial institutions and the Federal 

Government. If, as a result of 

information shared pursuant to this 

section, a financial institution knows, 

suspects, or has reason to suspect that 

an individual, entity, or organization is 

involved in, or may be involved in 

terrorist activity or money laundering, 

and such institution is subject to a 

suspicious activity reporting 

requirement under this chapter or other 

applicable regulations, the institution 

shall file a Suspicious Activity Report in 

accordance with those regulations. In 

situations involving violations requiring 

immediate attention, such as when a 

reportable violation involves terrorist 

activity or is ongoing, the financial 

institution shall immediately notify, by 

telephone, an appropriate law 

enforcement authority and financial 

institution supervisory authorities in 

addition to filing timely a Suspicious 

Activity Report. A financial institution 

that is not subject to a suspicious 

activity reporting requirement is not 

required to file a Suspicious Activity 

Report or otherwise to notify law 

enforcement of suspicious activity that 

is detected as a result of information 

shared pursuant to this section. Such a 

financial institution is encouraged, 

however, to voluntarily report such 

activity to FinCEN. 

(d) No effect on financial institution 

reporting obligations. Nothing in this 

subpart affects the obligation of a 

financial institution to file a Suspicious 

Activity Report pursuant to this chapter 

or any other applicable regulations, or to 

otherwise contact directly a Federal 

agency concerning individuals or 

entities suspected of engaging in 

terrorist activity or money laundering. 

Subpart F—Special Standards of 

Diligence; Prohibitions; and Special 

Measures 

§ 1010.600 General. 

Each financial institution (as defined 

in 31 U.S.C. 5312(a)(2) or (c)(1)) should 

refer to its Chapter X Part for any 

additional special standards of 

diligence; prohibitions; and special 

measures requirements. 

Special Due Diligence for 

Correspondent Accounts and Private 

Banking Accounts 

§ 1010.605 Definitions. 

Except as otherwise provided, the 

following definitions apply for purposes 

of §§ 1010.610 through 1010.630 and 

§ 1010.670: 

(a) Beneficial owner of an account 

means an individual who has a level of 

control over, or entitlement to, the funds 

or assets in the account that, as a 

practical matter, enables the individual, 

directly or indirectly, to control, manage 

or direct the account. The ability to fund 

the account or the entitlement to the 

funds of the account alone, however, 

without any corresponding authority to 

control, manage or direct the account 

(such as in the case of a minor child 

beneficiary), does not cause the 

individual to be a beneficial owner. 

(b) Certification and recertification 

mean the certification and 

recertification forms regarding 

correspondent accounts for foreign 

banks located on FinCEN’s Internet Web 

site, http://www.fincen.gov. 

(c) Correspondent account. (1) The 

term correspondent account means: 

(i) For purposes of § 1010.610(a), (d) 

and (e), an account established for a 

foreign financial institution to receive 

deposits from, or to make payments or 

other disbursements on behalf of, the 

foreign financial institution, or to 

handle other financial transactions 

related to such foreign financial 

institution; and 

(ii) For purposes of §§ 1010.610(b) 

and (c), 1010.630 and 1010.670, an 

account established for a foreign bank to 

receive deposits from, or to make 

payments or other disbursements on 

behalf of, the foreign bank, or to handle 

other financial transactions related to 

such foreign bank. 

(2) For purposes of this definition, the 

term account: 

(i) As applied to banks (as set forth in 

paragraphs (e)(1)(i) through (vii) of this 

section): 

(A) Means any formal banking or 

business relationship established by a 

bank to provide regular services, 

dealings, and other financial 

transactions; and 

(B) Includes a demand deposit, 

savings deposit, or other transaction or 

asset account and a credit account or 

other extension of credit; 

(ii) As applied to brokers or dealers in 

securities (as set forth in paragraph 

(e)(1)(viii) of this section) means any 

formal relationship established with a 

broker or dealer in securities to provide 

regular services to effect transactions in 

securities, including, but not limited to, 

the purchase or sale of securities and 

securities loaned and borrowed activity, 

and to hold securities or other assets for 

safekeeping or as collateral; 

(iii) As applied to futures commission 

merchants and introducing brokers (as 

set forth in paragraph (e)(1)(ix) of this 

section) means any formal relationship 

established by a futures commission 

merchant to provide regular services, 

including, but not limited to, those 

established to effect transactions in 

contracts of sale of a commodity for 

future delivery, options on any contract 

of sale of a commodity for future 

delivery, or options on a commodity; 

and 

(iv) As applied to mutual funds (as set 

forth in paragraph (e)(1)(x) of this 

section) means any contractual or other 

business relationship established 

between a person and a mutual fund to 

provide regular services to effect 

transactions in securities issued by the 

mutual fund, including the purchase or 

sale of securities. 

(d) Correspondent relationship has 

the same meaning as correspondent 

account for purposes of §§ 1010.630 and 

1010.670. 

(e) Covered financial institution 

means: (1) For purposes of § 1010.610 

and 1010.620: 

(i) An insured bank (as defined in 

section 3(h) of the Federal Deposit 

Insurance Act (12 U.S.C. 1813(h))); 

(ii) A commercial bank; 

(iii) An agency or branch of a foreign 

bank in the United States; 

(iv) A federally insured credit union; 

(v) A savings association; 

(vi) A corporation acting under 

section 25A of the Federal Reserve Act 

(12 U.S.C. 611 et seq.); 

(vii) A trust bank or trust company 

that is federally regulated and is subject 

to an anti-money laundering program 

requirement; 

(viii) A broker or dealer in securities 

registered, or required to be registered, 

with the Securities and Exchange 

Commission under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.), except persons who register 

pursuant to section 15(b)(11) of the 

Securities Exchange Act of 1934; 

(ix) A futures commission merchant 

or an introducing broker registered, or 

required to be registered, with the 

Commodity Futures Trading 

Commission under the Commodity 

Exchange Act (7 U.S.C. 1 et seq.), except 

persons who register pursuant to section 

4(f)(a)(2) of the Commodity Exchange 

Act; and 

(x) A mutual fund; 

(2) For purposes of §§ 1010.630 and 

1010.670: 


erowe on DSK5CLS3C1PROD with RULES3
65830 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

(i) An insured bank (as defined in 

section 3(h) of the Federal Deposit 

Insurance Act (12 U.S.C. 1813(h))); 

(ii) A commercial bank or trust 

company; 

(iii) A private banker; 

(iv) An agency or branch of a foreign 

bank in the United States; 

(v) A credit union; 

(vi) A savings association; 

(vii) A corporation acting under 

section 25A of the Federal Reserve Act 

(12 U.S.C. 611 et seq.); and 

(viii) A broker or dealer in securities 

registered, or required to be registered, 

with the Securities and Exchange 

Commission under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.), except persons who register 

pursuant to section 15(b)(11) of the 

Securities Exchange Act of 1934. 

(f) Foreign financial institution. (1) 

The term foreign financial institution 

means: 

(i) A foreign bank; 

(ii) Any branch or office located 

outside the United States of any covered 

financial institution described in 

paragraphs (e)(1)(viii) through (x) of this 

section; 

(iii) Any other person organized 

under foreign law (other than a branch 

or office of such person in the United 

States) that, if it were located in the 

United States, would be a covered 

financial institution described in 

paragraphs (e)(1)(viii) through (x) of this 

section; and 

(iv) Any person organized under 

foreign law (other than a branch or 

office of such person in the United 

States) that is engaged in the business 

of, and is readily identifiable as: 

(A) A currency dealer or exchanger; or 

(B) A money transmitter. 

(2) For purposes of paragraph (f)(1)(iv) 

of this section, a person is not ‘‘engaged 

in the business’’ of a currency dealer, a 

currency exchanger or a money 

transmitter if such transactions are 

merely incidental to the person’s 

business. 

(g) Foreign shell bank means a foreign 

bank without a physical presence in any 

country. 

(h) Non-United States person or nonU.S. person means a natural person who 

is neither a United States citizen nor is 

accorded the privilege of residing 

permanently in the United States 

pursuant to title 8 of the United States 

Code. For purposes of this paragraph 

(h), the definition of person in 

§ 1010.100(mm) does not apply, 

notwithstanding paragraph (k) of this 

section. 

(i) Offshore banking license means a 

license to conduct banking activities 

that prohibits the licensed entity from 

conducting banking activities with the 

citizens of, or in the local currency of, 

the jurisdiction that issued the license. 

(j) Owner. (1) The term owner means 

any person who, directly or indirectly: 

(i) Owns, controls, or has the power 

to vote 25 percent or more of any class 

of voting securities or other voting 

interests of a foreign bank; or 

(ii) Controls in any manner the 

election of a majority of the directors (or 

individuals exercising similar functions) 

of a foreign bank. 

(2) For purposes of this definition: 

(i) Members of the same family shall 

be considered to be one person. 

(ii) The term same family means 

parents, spouses, children, siblings, 

uncles, aunts, grandparents, 

grandchildren, first cousins, 

stepchildren, stepsiblings, parents-inlaw, and spouses of any of the foregoing. 

(iii) Each member of the same family 

who has an ownership interest in a 

foreign bank must be identified if the 

family is an owner as a result of 

aggregating the ownership interests of 

the members of the family. In 

determining the ownership interests of 

the same family, any voting interest of 

any family member shall be taken into 

account. 

(iv) Voting securities or other voting 

interests means securities or other 

interests that entitle the holder to vote 

for or to select directors (or individuals 

exercising similar functions). 

(k) Person has the meaning provided 

in § 1010.100(mm). 

(l) Physical presence means a place of 

business that: 

(1) Is maintained by a foreign bank; 

(2) Is located at a fixed address (other 

than solely an electronic address or a 

post-office box) in a country in which 

the foreign bank is authorized to 

conduct banking activities, at which 

location the foreign bank: 

(i) Employs one or more individuals 

on a full-time basis; and 

(ii) Maintains operating records 

related to its banking activities; and 

(3) Is subject to inspection by the 

banking authority that licensed the 

foreign bank to conduct banking 

activities. 

(m) Private banking account means an 

account (or any combination of 

accounts) maintained at a covered 

financial institution that: 

(1) Requires a minimum aggregate 

deposit of funds or other assets of not 

less than $1,000,000; 

(2) Is established on behalf of or for 

the benefit of one or more non-U.S. 

persons who are direct or beneficial 

owners of the account; and 

(3) Is assigned to, or is administered 

or managed by, in whole or in part, an 

officer, employee, or agent of a covered 

financial institution acting as a liaison 

between the covered financial 

institution and the direct or beneficial 

owner of the account. 

(n) Regulated affiliate. (1) The term 

regulated affiliate means a foreign shell 

bank that: 

(i) Is an affiliate of a depository 

institution, credit union, or foreign bank 

that maintains a physical presence in 

the United States or a foreign country, 

as applicable; and 

(ii) Is subject to supervision by a 

banking authority in the country 

regulating such affiliated depository 

institution, credit union, or foreign 

bank. 

(2) For purposes of this definition: 

(i) Affiliate means a foreign bank that 

is controlled by, or is under common 

control with, a depository institution, 

credit union, or foreign bank. 

(ii) Control means: 

(A) Ownership, control, or power to 

vote 50 percent or more of any class of 

voting securities or other voting 

interests of another company; or 

(B) Control in any manner the election 

of a majority of the directors (or 

individuals exercising similar functions) 

of another company. 

(o) Secretary means the Secretary of 

the Treasury. 

(p) Senior foreign political figure. (1) 

The term senior foreign political figure 

means: 

(i) A current or former: 

(A) Senior official in the executive, 

legislative, administrative, military, or 

judicial branches of a foreign 

government (whether elected or not); 

(B) Senior official of a major foreign 

political party; or 

(C) Senior executive of a foreign 

government-owned commercial 

enterprise; 

(ii) A corporation, business, or other 

entity that has been formed by, or for 

the benefit of, any such individual; 

(iii) An immediate family member of 

any such individual; and 

(iv) A person who is widely and 

publicly known (or is actually known by 

the relevant covered financial 

institution) to be a close associate of 

such individual. 

(2) For purposes of this definition: 

(i) Senior official or executive means 

an individual with substantial authority 

over policy, operations, or the use of 

government-owned resources; and 

(ii) Immediate family member means 

spouses, parents, siblings, children and 

a spouse’s parents and siblings. 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65831 

§ 1010.610 Due diligence programs for 

correspondent accounts for foreign 

financial institutions. 

(a) In general. A covered financial 

institution shall establish a due 

diligence program that includes 

appropriate, specific, risk-based, and, 

where necessary, enhanced policies, 

procedures, and controls that are 

reasonably designed to enable the 

covered financial institution to detect 

and report, on an ongoing basis, any 

known or suspected money laundering 

activity conducted through or involving 

any correspondent account established, 

maintained, administered, or managed 

by such covered financial institution in 

the United States for a foreign financial 

institution. The due diligence program 

required by this section shall be a part 

of the anti-money laundering program 

otherwise required by this chapter. Such 

policies, procedures, and controls shall 

include: 

(1) Determining whether any such 

correspondent account is subject to 

paragraph (b) of this section; 

(2) Assessing the money laundering 

risk presented by such correspondent 

account, based on a consideration of all 

relevant factors, which shall include, as 

appropriate: 

(i) The nature of the foreign financial 

institution’s business and the markets it 

serves; 

(ii) The type, purpose, and anticipated 

activity of such correspondent account; 

(iii) The nature and duration of the 

covered financial institution’s 

relationship with the foreign financial 

institution (and any of its affiliates); 

(iv) The anti-money laundering and 

supervisory regime of the jurisdiction 

that issued the charter or license to the 

foreign financial institution, and, to the 

extent that information regarding such 

jurisdiction is reasonably available, of 

the jurisdiction in which any company 

that is an owner of the foreign financial 

institution is incorporated or chartered; 

and 

(v) Information known or reasonably 

available to the covered financial 

institution about the foreign financial 

institution’s anti-money laundering 

record; and 

(3) Applying risk-based procedures 

and controls to each such correspondent 

account reasonably designed to detect 

and report known or suspected money 

laundering activity, including a periodic 

review of the correspondent account 

activity sufficient to determine 

consistency with information obtained 

about the type, purpose, and anticipated 

activity of the account. 

(b) Enhanced due diligence for certain 

foreign banks. In the case of a 

correspondent account established, 

maintained, administered, or managed 

in the United States for a foreign bank 

described in paragraph (c) of this 

section, the due diligence program 

required by paragraph (a) of this section 

shall include enhanced due diligence 

procedures designed to ensure that the 

covered financial institution, at a 

minimum, takes reasonable steps to: 

(1) Conduct enhanced scrutiny of 

such correspondent account to guard 

against money laundering and to 

identify and report any suspicious 

transactions in accordance with 

applicable law and regulation. This 

enhanced scrutiny shall reflect the risk 

assessment of the account and shall 

include, as appropriate: 

(i) Obtaining and considering 

information relating to the foreign 

bank’s anti-money laundering program 

to assess the risk of money laundering 

presented by the foreign bank’s 

correspondent account; 

(ii) Monitoring transactions to, from, 

or through the correspondent account in 

a manner reasonably designed to detect 

money laundering and suspicious 

activity; and 

(iii)(A) Obtaining information from 

the foreign bank about the identity of 

any person with authority to direct 

transactions through any correspondent 

account that is a payable-through 

account, and the sources and beneficial 

owner of funds or other assets in the 

payable-through account. 

(B) For purposes of paragraph 

(b)(1)(iii)(A) of this section, a payablethrough account means a correspondent 

account maintained by a covered 

financial institution for a foreign bank 

by means of which the foreign bank 

permits its customers to engage, either 

directly or through a subaccount, in 

banking activities usual in connection 

with the business of banking in the 

United States. 

(2) Determine whether the foreign 

bank for which the correspondent 

account is established or maintained in 

turn maintains correspondent accounts 

for other foreign banks that use the 

foreign correspondent account 

established or maintained by the 

covered financial institution and, if so, 

take reasonable steps to obtain 

information relevant to assess and 

mitigate money laundering risks 

associated with the foreign bank’s 

correspondent accounts for other foreign 

banks, including, as appropriate, the 

identity of those foreign banks. 

(3)(i) Determine, for any 

correspondent account established or 

maintained for a foreign bank whose 

shares are not publicly traded, the 

identity of each owner of the foreign 

bank and the nature and extent of each 

owner’s ownership interest. 

(ii) For purposes of paragraph (b)(3)(i) 

of this section: 

(A) Owner means any person who 

directly or indirectly owns, controls, or 

has the power to vote 10 percent or 

more of any class of securities of a 

foreign bank. For purposes of this 

paragraph (b)(3)(ii)(A): 

(1) Members of the same family shall 

be considered to be one person; and 

(2) Same family has the meaning 

provided in § 1010.605(j)(2)(ii). 

(B) Publicly traded means shares that 

are traded on an exchange or an 

organized over-the-counter market that 

is regulated by a foreign securities 

authority as defined in section 3(a)(50) 

of the Securities Exchange Act of 1934 

(15 U.S.C. 78c(a)(50)). 

(c) Foreign banks to be accorded 

enhanced due diligence. The due 

diligence procedures described in 

paragraph (b) of this section are required 

for any correspondent account 

maintained for a foreign bank that 

operates under: 

(1) An offshore banking license; 

(2) A banking license issued by a 

foreign country that has been designated 

as non-cooperative with international 

anti-money laundering principles or 

procedures by an intergovernmental 

group or organization of which the 

United States is a member and with 

which designation the U.S. 

representative to the group or 

organization concurs; or 

(3) A banking license issued by a 

foreign country that has been designated 

by the Secretary as warranting special 

measures due to money laundering 

concerns. 

(d) Special procedures when due 

diligence or enhanced due diligence 

cannot be performed. The due diligence 

program required by paragraphs (a) and 

(b) of this section shall include 

procedures to be followed in 

circumstances in which a covered 

financial institution cannot perform 

appropriate due diligence or enhanced 

due diligence with respect to a 

correspondent account, including when 

the covered financial institution should 

refuse to open the account, suspend 

transaction activity, file a suspicious 

activity report, or close the account. 

(e) Applicability rules for general due 

diligence. The provisions of paragraph 

(a) of this section apply to covered 

financial institutions as follows: 

(1) General rules—(i) Correspondent 

accounts established on or after July 5, 

2006. Effective July 5, 2006, the 

requirements of paragraph (a) of this 

section shall apply to each 


erowe on DSK5CLS3C1PROD with RULES3
65832 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

correspondent account established on or 

after that date. 

(ii) Correspondent accounts 

established before July 5, 2006. Effective 

October 2, 2006, the requirements of 

paragraph (a) of this section shall apply 

to each correspondent account 

established before July 5, 2006. 

(2) Special rules for certain banks. 

Until the requirements of paragraph (a) 

of this section become applicable as set 

forth in paragraph (e)(1) of this section, 

the due diligence requirements of 31 

U.S.C. 5318(i)(1) shall continue to apply 

to any covered financial institution 

listed in § 1010.605(e)(1)(i) through (vi). 

(3) Special rules for all other covered 

financial institutions. The due diligence 

requirements of 31 U.S.C. 5318(i)(1) 

shall not apply to a covered financial 

institution listed in § 1010.605(e)(1)(vii) 

through (x) until the requirements of 

paragraph (a) of this section become 

applicable as set forth in paragraph 

(e)(1) of this section. 

(f) Applicability rules for enhanced 

due diligence. The provisions of 

paragraph (b) of this section apply to 

covered financial institutions as follows: 

(1) General rules—(i) Correspondent 

accounts established on or after 

February 5, 2008. Effective February 5, 

2008, the requirements of paragraph (b) 

of this section shall apply to each 

correspondent account established on or 

after such date. 

(ii) Correspondent accounts 

established before February 5, 2008. 

Effective May 5, 2008, the requirements 

of paragraph (b) of this section shall 

apply to each correspondent account 

established before February 5, 2008. 

(2) Special rules for certain banks. 

Until the requirements of paragraph (b) 

of this section become applicable as set 

forth in paragraph (f)(1) of this section, 

the enhanced due diligence 

requirements of 31 U.S.C. 5318(i)(2) 

shall continue to apply to any covered 

financial institutions listed in 

§ 1010.605(e)(1)(i) through (vi). 

(3) Special rules for all other covered 

financial institutions. The enhanced due 

diligence requirements of 31 U.S.C. 

5318(i)(2) shall not apply to a covered 

financial institution listed in 

§ 1010.605(e)(1)(vii) through (x) until 

the requirements of paragraph (b) of this 

section become applicable, as set forth 

in paragraph (f)(1) of this section. 

(g) Exemptions—(1) Exempt financial 

institutions. Except as provided in this 

section, a financial institution defined 

in 31 U.S.C. 5312(a)(2) or (c)(1), or 

§ 1010.100(t) is exempt from the 

requirements of 31 U.S.C. 5318(i)(1) and 

(i)(2) pertaining to correspondent 

accounts. 

(2) Other compliance obligations of 

financial institutions unaffected. 

Nothing in paragraph (g) of this section 

shall be construed to relieve a financial 

institution from its responsibility to 

comply with any other applicable 

requirement of law or regulation, 

including title 31, United States Code, 

and this chapter. 

§ 1010.620 Due diligence programs for 

private banking accounts. 

(a) In general. A covered financial 

institution shall maintain a due 

diligence program that includes 

policies, procedures, and controls that 

are reasonably designed to detect and 

report any known or suspected money 

laundering or suspicious activity 

conducted through or involving any 

private banking account that is 

established, maintained, administered, 

or managed in the United States by such 

financial institution. The due diligence 

program required by this section shall 

be a part of the anti-money laundering 

program otherwise required by this 

chapter. 

(b) Minimum requirements. The due 

diligence program required by 

paragraph (a) of this section shall be 

designed to ensure, at a minimum, that 

the financial institution takes reasonable 

steps to: 

(1) Ascertain the identity of all 

nominal and beneficial owners of a 

private banking account; 

(2) Ascertain whether any person 

identified under paragraph (b)(1) of this 

section is a senior foreign political 

figure; 

(3) Ascertain the source(s) of funds 

deposited into a private banking 

account and the purpose and expected 

use of the account; and 

(4) Review the activity of the account 

to ensure that it is consistent with the 

information obtained about the client’s 

source of funds, and with the stated 

purpose and expected use of the 

account, as needed to guard against 

money laundering, and to report, in 

accordance with applicable law and 

regulation, any known or suspected 

money laundering or suspicious activity 

conducted to, from, or through a private 

banking account. 

(c) Special requirements for senior 

foreign political figures. (1) In the case 

of a private banking account for which 

a senior foreign political figure is a 

nominal or beneficial owner, the due 

diligence program required by 

paragraph (a) of this section shall 

include enhanced scrutiny of such 

account that is reasonably designed to 

detect and report transactions that may 

involve the proceeds of foreign 

corruption. 

(2) For purposes of this paragraph (c), 

the term proceeds of foreign corruption 

means any asset or property that is 

acquired by, through, or on behalf of a 

senior foreign political figure through 

misappropriation, theft, or 

embezzlement of public funds, the 

unlawful conversion of property of a 

foreign government, or through acts of 

bribery or extortion, and shall include 

any other property into which any such 

assets have been transformed or 

converted. 

(d) Special procedures when due 

diligence cannot be performed. The due 

diligence program required by 

paragraph (a) of this section shall 

include procedures to be followed in 

circumstances in which a covered 

financial institution cannot perform 

appropriate due diligence with respect 

to a private banking account, including 

when the covered financial institution 

should refuse to open the account, 

suspend transaction activity, file a 

suspicious activity report, or close the 

account. 

(e) Applicability rules. The provisions 

of this section apply to covered 

financial institutions as follows: 

(1) General rules—(i) Private banking 

accounts established on or after July 5, 

2006. Effective July 5, 2006, the 

requirements of this section shall apply 

to each private banking account 

established on or after such date. 

(ii) Private banking accounts 

established before July 5, 2006. Effective 

October 2, 2006, the requirements of 

this section shall apply to each private 

banking account established before July 

5, 2006. 

(2) Special rules for certain banks and 

for brokers or dealers in securities, 

futures commission merchants, and 

introducing brokers. Until the 

requirements of this section become 

applicable as set forth in paragraph 

(e)(1) of this section, the requirements of 

31 U.S.C. 5318(i)(3) shall continue to 

apply to a covered financial institution 

listed in § 1010.605(e)(1)(i) through (vi), 

(viii), or (ix). 

(3) Special rules for federally 

regulated trust banks or trust 

companies, and mutual funds. Until the 

requirements of this section become 

applicable as set forth in paragraph 

(e)(1) of this section, the requirements of 

31 U.S.C. 5318(i)(3) shall not apply to a 

covered financial institution listed in 

§ 1010.605(e)(1)(vii) or (x). 

(4) Exemptions—(i) Exempt financial 

institutions. Except as provided in this 

section, a financial institution defined 

in 31 U.S.C. 5312(a)(2) or (c)(1) or 

§ 1010.100(t) is exempt from the 

requirements of 31 U.S.C. 5318(i)(3) 

pertaining to private banking accounts. 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65833 

(ii) Other compliance obligations of 

financial institutions unaffected. 

Nothing in paragraph (e)(4) of this 

section shall be construed to relieve a 

financial institution from its 

responsibility to comply with any other 

applicable requirement of law or 

regulation, including title 31, United 

States Code, and this chapter. 

§ 1010.630 Prohibition on correspondent 

accounts for foreign shell banks; records 

concerning owners of foreign banks and 

agents for service of legal process. 

(a) Requirements for covered financial 

institutions—(1) Prohibition on 

correspondent accounts for foreign shell 

banks. (i) A covered financial institution 

shall not establish, maintain, 

administer, or manage a correspondent 

account in the United States for, or on 

behalf of, a foreign shell bank. 

(ii) A covered financial institution 

shall take reasonable steps to ensure 

that any correspondent account 

established, maintained, administered, 

or managed by that covered financial 

institution in the United States for a 

foreign bank is not being used by that 

foreign bank to indirectly provide 

banking services to a foreign shell bank. 

(iii) Nothing in paragraph (a)(1) of this 

section prohibits a covered financial 

institution from providing a 

correspondent account or banking 

services to a regulated affiliate. 

(2) Records of owners and agents. (i) 

Except as provided in paragraph 

(a)(2)(ii) of this section, a covered 

financial institution that maintains a 

correspondent account in the United 

States for a foreign bank shall maintain 

records in the United States identifying 

the owners of each such foreign bank 

whose shares are not publicly traded 

and the name and street address of a 

person who resides in the United States 

and is authorized, and has agreed to be 

an agent to accept service of legal 

process for records regarding each such 

account. 

(ii) A covered financial institution 

need not maintain records of the owners 

of any foreign bank that is required to 

have on file with the Federal Reserve 

Board a Form FR Y–7 that identifies the 

current owners of the foreign bank as 

required by such form. 

(iii) For purposes of paragraph (a)(2)(i) 

of this section, publicly traded refers to 

shares that are traded on an exchange or 

on an organized over-the-counter market 

that is regulated by a foreign securities 

authority as defined in section 3(a)(50) 

of the Securities Exchange Act of 1934 

(15 U.S.C. 78c(a)(50)). 

(b) Safe harbor. Subject to paragraphs 

(c) and (d) of this section, a covered 

financial institution will be deemed to 

be in compliance with the requirements 

of paragraph (a) of this section with 

respect to a foreign bank if the covered 

financial institution obtains, at least 

once every three years, a certification or 

recertification from the foreign bank. 

(c) Interim verification. If at any time 

a covered financial institution knows, 

suspects, or has reason to suspect, that 

any information contained in a 

certification or recertification provided 

by a foreign bank, or otherwise relied 

upon by the covered financial 

institution for purposes of this section, 

is no longer correct, the covered 

financial institution shall request that 

the foreign bank verify or correct such 

information, or shall take other 

appropriate measures to ascertain the 

accuracy of the information or to obtain 

correct information, as appropriate. See 

paragraph (d)(3) of this section for 

additional requirements if a foreign 

bank fails to verify or correct the 

information or if a covered financial 

institution cannot ascertain the accuracy 

of the information or obtain correct 

information. 

(d) Closure of correspondent 

accounts—(1) Accounts existing on 

October 28, 2002. In the case of any 

correspondent account that was in 

existence on October 28, 2002, if the 

covered financial institution has not 

obtained a certification (or 

recertification) from the foreign bank, or 

has not otherwise obtained 

documentation of the information 

required by such certification (or 

recertification), on or before March 31, 

2003, and at least once every three years 

thereafter, the covered financial 

institution shall close all correspondent 

accounts with such foreign bank within 

a commercially reasonable time, and 

shall not permit the foreign bank to 

establish any new positions or execute 

any transaction through any such 

account, other than transactions 

necessary to close the account. 

(2) Accounts established after October 

28, 2002. In the case of any 

correspondent account established after 

October 28, 2002, if the covered 

financial institution has not obtained a 

certification (or recertification), or has 

not otherwise obtained documentation 

of the information required by such 

certification (or recertification) within 

30 calendar days after the date the 

account is established, and at least once 

every three years thereafter, the covered 

financial institution shall close all 

correspondent accounts with such 

foreign bank within a commercially 

reasonable time, and shall not permit 

the foreign bank to establish any new 

positions or execute any transaction 

through any such account, other than 

transactions necessary to close the 

account. 

(3) Verification of previously provided 

information. In the case of a foreign 

bank with respect to which the covered 

financial institution undertakes to verify 

information pursuant to paragraph (c) of 

this section, if the covered financial 

institution has not obtained, from the 

foreign bank or otherwise, verification 

of the information or corrected 

information within 90 calendar days 

after the date of undertaking the 

verification, the covered financial 

institution shall close all correspondent 

accounts with such foreign bank within 

a commercially reasonable time, and 

shall not permit the foreign bank to 

establish any new positions or execute 

any transaction through any such 

account, other than transactions 

necessary to close the account. 

(4) Reestablishment of closed 

accounts and establishment of new 

accounts. A covered financial 

institution shall not reestablish any 

account closed pursuant to this 

paragraph (d), and shall not establish 

any other correspondent account with 

the concerned foreign bank, until it 

obtains from the foreign bank the 

certification or the recertification, as 

appropriate. 

(5) Limitation on liability. A covered 

financial institution shall not be liable 

to any person in any court or arbitration 

proceeding for terminating a 

correspondent account in accordance 

with this paragraph (d). 

(e) Recordkeeping requirement. A 

covered financial institution shall retain 

the original of any document provided 

by a foreign bank, and the original or a 

copy of any document otherwise relied 

upon by the covered financial 

institution, for purposes of this section, 

for at least 5 years after the date that the 

covered financial institution no longer 

maintains any correspondent account 

for such foreign bank. A covered 

financial institution shall retain such 

records with respect to any foreign bank 

for such longer period as the Secretary 

may direct. 

(f) Special rules concerning 

information requested prior to October 

28, 2002—(1) Definition. For purposes 

of this paragraph (f) the term ‘‘Interim 

Guidance’’ means: 

(i) The Interim Guidance of the 

Department of the Treasury dated 

November 20, 2001 and published in 

the Federal Register on November 27, 

2001; or 

(ii) The guidance issued in a 

document published in the Federal 

Register on December 28, 2001. 

(2) Use of Interim Guidance 

certification. In the case of a 


erowe on DSK5CLS3C1PROD with RULES3
65834 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

correspondent account in existence on 

October 28, 2002, the term 

‘‘certification’’ as used in paragraphs (b), 

(c), (d)(1), and (d)(3) of this section shall 

also include the certification appended 

to the Interim Guidance, provided that 

such certification was requested prior to 

October 28, 2002 and obtained by the 

covered financial institution on or 

before December 26, 2002. 

(3) Recordkeeping requirement. 

Paragraph (e) of this section shall apply 

to any document provided by a foreign 

bank, or otherwise relied upon by a 

covered financial institution, for 

purposes of the Interim Guidance. 

§ 1010.640 [Reserved] 

Special Measures Under Section 311 of 

the USA Patriot Act and Law 

Enforcement Access to Foreign Bank 

Records 

§ 1010.651 Special measures against 

Burma. 

(a) Definitions. For purposes of this 

section: 

(1) Burmese banking institution 

means any foreign bank, as that term is 

defined in § 1010.100(u), chartered or 

licensed by Burma, including branches 

and offices located outside Burma. 

(2) Correspondent account has the 

same meaning as provided in 

§ 1010.605(c). 

(3) Covered financial institution has 

the same meaning as provided in 

§ 1010.605(e)(2) and also includes the 

following: 

(i) A futures commission merchant or 

an introducing broker registered, or 

required to register, with the 

Commodity Futures Trading 

Commission under the Commodity 

Exchange Act (7 U.S.C. 1 et seq.); and 

(ii) An investment company (as 

defined in section 3 of the Investment 

Company Act of 1940 (15 U.S.C. 80a–5)) 

that is an open-end company (as defined 

in section 5 of the Investment Company 

Act (15 U.S.C. 80a–5)) and that is 

registered, or required to register, with 

the Securities and Exchange 

Commission pursuant to that Act. 

(b) Requirements for covered financial 

institutions—(1) Prohibition on 

correspondent accounts. A covered 

financial institution shall terminate any 

correspondent account that is 

established, maintained, administered, 

or managed in the United States for, or 

on behalf of, a Burmese banking 

institution. 

(2) Prohibition on indirect 

correspondent accounts. (i) If a covered 

financial institution has or obtains 

knowledge that a correspondent account 

established, maintained, administered, 

or managed by that covered financial 

institution in the United States for a 

foreign bank is being used by the foreign 

bank to provide banking services 

indirectly to a Burmese banking 

institution, the covered financial 

institution shall ensure that the 

correspondent account is no longer used 

to provide such services, including, 

where necessary, terminating the 

correspondent account; and 

(ii) A covered financial institution 

required to terminate an account 

pursuant to paragraph (b)(2)(i) of this 

section: 

(A) Shall do so within a commercially 

reasonable time, and shall not permit 

the foreign bank to establish any new 

positions or execute any transactions 

through such account, other than those 

necessary to close the account; and 

(B) May reestablish an account closed 

pursuant to this paragraph if it 

determines that the account will not be 

used to provide banking services 

indirectly to a Burmese banking 

institution. 

(3) Exception. The provisions of 

paragraphs (b)(1) and (2) of this section 

shall not apply to a correspondent 

account provided that the operation of 

such account is not prohibited by 

Executive Order 13310 and the 

transactions involving Burmese banking 

institutions that are conducted through 

the correspondent account are limited 

solely to transactions that are exempted 

from, or otherwise authorized by 

regulation, order, directive, or license 

pursuant to, Executive Order 13310. 

(4) Reporting and recordkeeping not 

required. Nothing in this section shall 

require a covered financial institution to 

maintain any records, obtain any 

certification, or report any information 

not otherwise required by law or 

regulation. 

§ 1010.652 Special measures against 

Myanmar Mayflower Bank and Asia Wealth 

Bank. 

(a) Definitions. For purposes of this 

section: 

(1) Asia Wealth Bank means all 

headquarters, branches, and offices of 

Asia Wealth Bank operating in Burma or 

in any jurisdiction. 

(2) Correspondent account has the 

same meaning as provided in 

§ 1010.605(c). 

(3) Covered financial institution has 

the same meaning as provided in 

§ 1010.605(e)(2) and also includes the 

following: 

(i) A futures commission merchant or 

an introducing broker registered, or 

required to register, with the 

Commodity Futures Trading 

Commission under the Commodity 

Exchange Act (7 U.S.C. 1 et seq.); and 

(ii) An investment company (as 

defined in section 3 of the Investment 

Company Act of 1940 (15 U.S.C. 80a–5)) 

that is an open-end company (as defined 

in section 5 of the Investment Company 

Act (15 U.S.C. 80a–5)) and that is 

registered, or required to register, with 

the Securities and Exchange 

Commission pursuant to that Act. 

(4) Myanmar Mayflower Bank means 

all headquarters, branches, and offices 

of Myanmar Mayflower Bank operating 

in Burma or in any jurisdiction. 

(b) Requirements for covered financial 

institutions—(1) Prohibition on 

correspondent accounts. A covered 

financial institution shall terminate any 

correspondent account that is 

established, maintained, administered, 

or managed in the United States for, or 

on behalf of, Myanmar Mayflower Bank 

or Asia Wealth Bank. 

(2) Prohibition on indirect 

correspondent accounts. (i) If a covered 

financial institution has or obtains 

knowledge that a correspondent account 

established, maintained, administered, 

or managed by that covered financial 

institution in the United States for a 

foreign bank is being used by the foreign 

bank to provide banking services 

indirectly to Myanmar Mayflower Bank 

or Asia Wealth Bank, the covered 

financial institution shall ensure that 

the correspondent account is no longer 

used to provide such services, 

including, where necessary, terminating 

the correspondent account; and 

(ii) A covered financial institution 

required to terminate an account 

pursuant to paragraph (b)(2)(i) of this 

section: 

(A) Shall do so within a commercially 

reasonable time, and shall not permit 

the foreign bank to establish any new 

positions or execute any transactions 

through such account, other than those 

necessary to close the account; and 

(B) May reestablish an account closed 

pursuant to this paragraph if it 

determines that the account will not be 

used to provide banking services 

indirectly to Myanmar Mayflower Bank 

or Asia Wealth Bank. 

(3) Reporting and recordkeeping not 

required. Nothing in this section shall 

require a covered financial institution to 

maintain any records, obtain any 

certification, or to report any 

information not otherwise required by 

law or regulation. 

§ 1010.653 Special measures against 

Commercial Bank of Syria. 

(a) Definitions. For purposes of this 

section: 

(1) Commercial Bank of Syria means 

any branch, office, or subsidiary of 

Commercial Bank of Syria operating in 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65835 

Syria or in any other jurisdiction, 

including Syrian Lebanese Commercial 

Bank. 

(2) Correspondent account has the 

same meaning as provided in 

§ 1010.605(c)(1)(ii). 

(3) Covered financial institution 

includes: 

(i) An insured bank (as defined in 

section 3(h) of the Federal Deposit 

Insurance Act (12 U.S.C. 1813(h))); 

(ii) A commercial bank; 

(iii) An agency or branch of a foreign 

bank in the United States; 

(iv) A federally insured credit union; 

(v) A savings association; 

(vi) A corporation acting under 

section 25A of the Federal Reserve Act 

(12 U.S.C. 611 et seq.); 

(vii) A trust bank or trust company 

that is federally regulated and is subject 

to an anti-money laundering program 

requirement; 

(viii) A broker or dealer in securities 

registered, or required to be registered, 

with the Securities and Exchange 

Commission under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.), except persons who register 

pursuant to section 15(b)(11) of the 

Securities Exchange Act of 1934; 

(ix) A futures commission merchant 

or an introducing broker registered, or 

required to be registered, with the 

Commodity Futures Trading 

Commission under the Commodity 

Exchange Act (7 U.S.C. 1 et seq.), except 

persons who register pursuant to section 

4(f)(a)(2) of the Commodity Exchange 

Act; and 

(x) A mutual fund, which means an 

investment company (as defined in 

section 3(a)(1) of the Investment 

Company Act of 1940 ((‘‘Investment 

Company Act’’) (15 U.S.C. 80a–3(a)(1))) 

that is an open-end company (as defined 

in section 5(a)(1) of the Investment 

Company Act (15 U.S.C. 80a–5(a)(1))) 

and that is registered, or is required to 

register with the Securities and 

Exchange Commission pursuant to the 

Investment Company Act. 

(4) Subsidiary means a company of 

which more than 50 percent of the 

voting stock or analogous equity interest 

is owned by another company. 

(b) Requirements for covered financial 

institutions—(1) Prohibition on direct 

use of correspondent accounts. A 

covered financial institution shall 

terminate any correspondent account 

that is open or maintained in the United 

States for, or on behalf of, Commercial 

Bank of Syria. 

(2) Due diligence of correspondent 

accounts to prohibit indirect use. (i) A 

covered financial institution shall apply 

due diligence to its correspondent 

accounts that is reasonably designed to 

guard against their indirect use by 

Commercial Bank of Syria. At a 

minimum, that due diligence must 

include: 

(A) Notifying correspondent account 

holders that the correspondent account 

may not be used to provide Commercial 

Bank of Syria with access to the covered 

financial institution; and 

(B) Taking reasonable steps to identify 

any indirect use of its correspondent 

accounts by Commercial Bank of Syria, 

to the extent that such indirect use can 

be determined from transactional 

records maintained in the covered 

financial institution’s normal course of 

business. 

(ii) A covered financial institution 

shall take a risk-based approach when 

deciding what, if any, additional due 

diligence measures it should adopt to 

guard against the indirect use of its 

correspondent accounts by Commercial 

Bank of Syria. 

(iii) A covered financial institution 

that obtains knowledge that a 

correspondent account is being used by 

the foreign bank to provide indirect 

access to Commercial Bank of Syria 

shall take all appropriate steps to 

prevent such indirect access, including, 

where necessary, terminating the 

correspondent account. 

(iv) A covered financial institution 

required to terminate a correspondent 

account pursuant to paragraph (b)(2)(iii) 

of this section: 

(A) Should do so within a 

commercially reasonable time, and 

should not permit the foreign bank to 

establish any new positions or execute 

any transaction through such 

correspondent account, other than those 

necessary to close the correspondent 

account; and 

(B) May reestablish a correspondent 

account closed pursuant to this 

paragraph if it determines that the 

correspondent account will not be used 

to provide banking services indirectly to 

Commercial Bank of Syria. 

(3) Recordkeeping and reporting. (i) A 

covered financial institution is required 

to document its compliance with the 

notice requirement set forth in 

paragraph (b)(2)(i)(A) of this section. 

(ii) Nothing in this section shall 

require a covered financial institution to 

report any information not otherwise 

required to be reported by law or 

regulation. 

§ 1010.654 Special measures against VEF 

Bank. 

(a) Definitions. For purposes of this 

section: 

(1) Correspondent account has the 

same meaning as provided in 

§ 1010.605(c)(1)(ii). 

(2) Covered financial institution 

includes: 

(i) An insured bank (as defined in 

section 3(h) of the Federal Deposit 

Insurance Act (12 U.S.C. 1813(h))); 

(ii) A commercial bank; 

(iii) An agency or branch of a foreign 

bank in the United States; 

(iv) A federally insured credit union; 

(v) A savings association; 

(vi) A corporation acting under 

section 25A of the Federal Reserve Act 

(12 U.S.C. 611 et seq.); 

(vii) A trust bank or trust company 

that is federally regulated and is subject 

to an anti-money laundering program 

requirement; 

(viii) A broker or dealer in securities 

registered, or required to be registered, 

with the U.S. Securities and Exchange 

Commission under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.), except persons who register 

pursuant to section 15(b)(11) of the 

Securities Exchange Act of 1934; 

(ix) A futures commission merchant 

or an introducing broker registered, or 

required to be registered, with the 

Commodity Futures Trading 

Commission under the Commodity 

Exchange Act (7 U.S.C. 1 et seq.), except 

persons who register pursuant to section 

4(f)(a)(2) of the Commodity Exchange 

Act; and 

(x) A mutual fund, which means an 

investment company (as defined in 

section 3(a)(1) of the Investment 

Company Act of 1940 ((‘‘Investment 

Company Act’’) (15 U.S.C. 80a–3(a)(1))) 

that is an open-end company (as defined 

in section 5(a)(1) of the Investment 

Company Act (15 U.S.C. 80a–5(a)(1))) 

and that is registered, or is required to 

register with the Securities and 

Exchange Commission pursuant to the 

Investment Company Act. 

(3) Subsidiary means a company of 

which more than 50 percent of the 

voting stock or analogous equity interest 

is owned by another company. 

(4) VEF Bank means any branch, 

office, or subsidiary of joint stock 

company VEF Banka operating in the 

Republic of Latvia or in any other 

jurisdiction. The one known VEF Bank 

subsidiary, Veiksmes lı ̄zings, and any 

branches or offices, are included in the 

definition. 

(b) Requirements for covered financial 

institutions—(1) Prohibition on direct 

use of correspondent accounts. A 

covered financial institution shall 

terminate any correspondent account 

that is opened or maintained in the 

United States for, or on behalf of, VEF 

Bank. 

(2) Due diligence of correspondent 

accounts to prohibit indirect use. (i) A 

covered financial institution shall apply 


erowe on DSK5CLS3C1PROD with RULES3
65836 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

due diligence to its correspondent 

accounts that is reasonably designed to 

guard against their indirect use by VEF 

Bank. At a minimum, that due diligence 

must include: 

(A) Notifying correspondent 

accountholders that the correspondent 

account may not be used to provide VEF 

Bank with access to the covered 

financial institution; and 

(B) Taking reasonable steps to identify 

any indirect use of its correspondent 

accounts by VEF Bank, to the extent that 

such indirect use can be determined 

from transactional records maintained 

in the covered financial institution’s 

normal course of business. 

(ii) A covered financial institution 

shall take a risk-based approach when 

deciding what, if any, additional due 

diligence measures it should adopt to 

guard against the indirect use of its 

correspondent accounts by VEF Bank. 

(iii) A covered financial institution 

that obtains knowledge that a 

correspondent account is being used by 

the foreign bank to provide indirect 

access to VEF Bank shall take all 

appropriate steps to prevent such 

indirect access, including, where 

necessary, terminating the 

correspondent account. 

(iv) A covered financial institution 

required to terminate a correspondent 

account pursuant to paragraph (b)(2)(iii) 

of this section: 

(A) Should do so within a 

commercially reasonable time, and 

should not permit the foreign bank to 

establish any new positions or execute 

any transaction through such 

correspondent account, other than those 

necessary to close the correspondent 

account; and 

(B) May reestablish a correspondent 

account closed pursuant to this 

paragraph if it determines that the 

correspondent account will not be used 

to provide banking services indirectly to 

VEF Bank. 

(3) Recordkeeping and reporting. (i) A 

covered financial institution is required 

to document its compliance with the 

notice requirement set forth in 

paragraph (b)(2)(i)(A) of this section. 

(ii) Nothing in this section shall 

require a covered financial institution to 

report any information not otherwise 

required to be reported by law or 

regulation. 

§ 1010.655 Special measures against 

Banco Delta Asia. 

(a) Definitions. For purposes of this 

section: 

(1) Banco Delta Asia means all 

branches, offices, and subsidiaries of 

Banco Delta Asia operating in any 

jurisdiction, including its subsidiaries 

Delta Asia Credit Limited and Delta 

Asia Insurance Limited. 

(2) Correspondent account has the 

same meaning as provided in 

§ 1010.605(c)(1)(ii). 

(3) Covered financial institution 

includes: 

(i) An insured bank (as defined in 

section 3(h) of the Federal Deposit 

Insurance Act (12 U.S.C. 1813(h))); 

(ii) A commercial bank; 

(iii) An agency or branch of a foreign 

bank in the United States; 

(iv) A federally insured credit union; 

(v) A savings association; 

(vi) A corporation acting under 

section 25A of the Federal Reserve Act 

(12 U.S.C. 611 et seq.); 

(vii) A trust bank or trust company 

that is federally regulated and is subject 

to an anti-money laundering program 

requirement; 

(viii) A broker or dealer in securities 

registered, or required to be registered, 

with the U.S. Securities and Exchange 

Commission under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.), except persons who register 

pursuant to section 15(b)(11) of the 

Securities Exchange Act of 1934; 

(ix) A futures commission merchant 

or an introducing broker registered, or 

required to register, with the 

Commodity Futures Trading 

Commission under the Commodity 

Exchange Act (7 U.S.C. 1 et seq.), except 

persons who register pursuant to section 

4(f)(a)(2) of the Commodity Exchange 

Act; and 

(x) A mutual fund, which means an 

investment company (as defined in 

section 3(a)(1) of the Investment 

Company Act of 1940 ((‘‘Investment 

Company Act’’) (15 U.S.C. 80a–3(a)(1))) 

that is an open-end company (as defined 

in section 5(a)(1) of the Investment 

Company Act (15 U.S.C. 80a–5(a)(1))) 

and that is registered, or is required to 

register with the Securities and 

Exchange Commission pursuant to the 

Investment Company Act. 

(4) Subsidiary means a company of 

which more than 50 percent of the 

voting stock or analogous equity interest 

is owned by another company. 

(b) Requirements for covered financial 

institutions—(1) Prohibition on direct 

use of correspondent accounts. A 

covered financial institution shall 

terminate any correspondent account 

that is established, maintained, 

administered, or managed in the United 

States for, or on behalf of, Banco Delta 

Asia. 

(2) Due diligence of correspondent 

accounts to prohibit indirect use. 

(i) A covered financial institution 

shall apply due diligence to its 

correspondent accounts that is 

reasonably designed to guard against 

their indirect use by Banco Delta Asia. 

At a minimum, that due diligence must 

include: 

(A) Notifying correspondent 

accountholders the correspondent 

account may not be used to provide 

Banco Delta Asia with access to the 

covered financial institution; and 

(B) Taking reasonable steps to identify 

any indirect use of its correspondent 

accounts by Banco Delta Asia, to the 

extent that such indirect use can be 

determined from transactional records 

maintained in the covered financial 

institution’s normal course of business. 

(ii) A covered financial institution 

shall take a risk-based approach when 

deciding what, if any, additional due 

diligence measures it should adopt to 

guard against the indirect use of its 

correspondent accounts by Banco Delta 

Asia. 

(iii) A covered financial institution 

that obtains knowledge that a 

correspondent account is being used by 

the foreign bank to provide indirect 

access to Banco Delta Asia shall take all 

appropriate steps to prevent such 

indirect access, including, where 

necessary, terminating the 

correspondent account. 

(iv) A covered financial institution 

required to terminate a correspondent 

account pursuant to paragraph (b)(2)(iii) 

of this section: 

(A) Should do so within a 

commercially reasonable time, and 

should not permit the foreign bank to 

establish any new positions or execute 

any transaction through such 

correspondent account, other than those 

necessary to close the correspondent 

account; and 

(B) May reestablish a correspondent 

account closed pursuant to this 

paragraph if it determines that the 

correspondent account will not be used 

to provide banking services indirectly to 

Banco Delta Asia. 

(3) Recordkeeping and reporting. (i) A 

covered financial institution is required 

to document its compliance with the 

notice requirement set forth in 

paragraph (b)(2)(i)(A) of this section. 

(ii) Nothing in this section shall 

require a covered financial institution to 

report any information not otherwise 

required to be reported by law or 

regulation. 

§ 1010.670 Summons or subpoena of 

foreign bank records; Termination of 

correspondent relationship. 

(a) Definitions. The definitions in 

§ 1010.605 apply to this section. 

(b) Issuance to foreign banks. The 

Secretary or the Attorney General may 

issue a summons or subpoena to any 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65837 

foreign bank that maintains a 

correspondent account in the United 

States and may request records related 

to such correspondent account, 

including records maintained outside of 

the United States relating to the deposit 

of funds into the foreign bank. The 

summons or subpoena may be served on 

the foreign bank in the United States if 

the foreign bank has a representative in 

the United States, or in a foreign 

country pursuant to any mutual legal 

assistance treaty, multilateral 

agreement, or other request for 

international law enforcement 

assistance. 

(c) Issuance to covered financial 

institutions. Upon receipt of a written 

request from a Federal law enforcement 

officer for information required to be 

maintained by a covered financial 

institution under paragraph (a)(2) of 

§ 1010.630, the covered financial 

institution shall provide the information 

to the requesting officer not later than 7 

days after receipt of the request. 

(d) Termination upon receipt of 

notice. A covered financial institution 

shall terminate any correspondent 

relationship with a foreign bank not 

later than 10 business days after receipt 

of written notice from the Secretary or 

the Attorney General (in each case, after 

consultation with the other) that the 

foreign bank has failed: 

(1) To comply with a summons or 

subpoena issued under paragraph (b) of 

this section; or 

(2) To initiate proceedings in a United 

States court contesting such summons 

or subpoena. 

(e) Limitation on liability. A covered 

financial institution shall not be liable 

to any person in any court or arbitration 

proceeding for terminating a 

correspondent relationship in 

accordance with paragraph (d) of this 

section. 

(f) Failure to terminate relationship. 

Failure to terminate a correspondent 

relationship in accordance with this 

section shall render the covered 

financial institution liable for a civil 

penalty of up to $10,000 per day until 

the correspondent relationship is so 

terminated. 

Subpart G—Administrative Rulings 

§ 1010.710 Scope. 

This subpart provides that the 

Director, FinCEN, or his designee, either 

unilaterally or upon request, may issue 

administrative rulings interpreting the 

application of this chapter. 

§ 1010.711 Submitting requests. 

(a) Each request for an administrative 

ruling must be in writing and contain 

the following information: 

(1) A complete description of the 

situation for which the ruling is 

requested, 

(2) A complete statement of all 

material facts related to the subject 

transaction, 

(3) A concise and unambiguous 

question to be answered, 

(4) A statement certifying, to the best 

of the requestor’s knowledge and belief, 

that the question to be answered is not 

applicable to any ongoing state or 

Federal investigation, litigation, grand 

jury proceeding, or proceeding before 

any other governmental body involving 

either the requestor, any other party to 

the subject transaction, or any other 

party with whom the requestor has an 

agency relationship, 

(5) A statement identifying any 

information in the request that the 

requestor considers to be exempt from 

disclosure under the Freedom of 

Information Act, 5 U.S.C. 552, and the 

reason therefor, 

(6) If the subject situation is 

hypothetical, a statement justifying why 

the particular situation described 

warrants the issuance of a ruling, 

(7) The signature of the person 

making the request, or 

(8) If an agent makes the request, the 

signature of the agent and a statement 

certifying the authority under which the 

request is made. 

(b) A request filed by a corporation 

shall be signed by a corporate officer 

and a request filed by a partnership 

shall be signed by a partner. 

(c) A request may advocate a 

particular proposed interpretation and 

may set forth the legal and factual basis 

for that interpretation. 

(d) Requests shall be addressed to: 

Director, Financial Crimes Enforcement 

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

22183. 

(e) The requester shall advise the 

Director, FinCEN, immediately in 

writing of any subsequent change in any 

material fact or statement submitted 

with a ruling request in conformity with 

paragraph (a) of this section. 

§ 1010.712 Nonconforming requests. 

The Director, FinCEN, or his designee 

shall notify the requester if the ruling 

request does not conform with the 

requirements of § 1010.711. The notice 

shall be in writing and shall describe 

the requirements that have not been 

met. A request that is not brought into 

conformity with such requirements 

within 30 days from the date of such 

notice, unless extended for good cause 

by FinCEN, shall be treated as though it 

were withdrawn. 

§ 1010.713 Oral communications. 

(a) The Director of FinCEN or his 

designee will not issue administrative 

rulings in response to oral requests. Oral 

opinions or advice by Treasury, 

Customs and Border Protection, the 

Internal Revenue Service, the Office of 

the Comptroller of the Currency, or any 

other bank supervisory agency 

personnel, regarding the interpretation 

and application of this chapter, do not 

bind FinCEN and carry no precedential 

value. 

(b) A person who has made a ruling 

request in conformity with § 1010.711 

may request an opportunity for oral 

discussion of the issues presented in the 

request. The request should be made to 

the Director, FinCEN, and any decision 

to grant such a conference is wholly 

within the discretion of the Director. 

Personal conferences or telephone 

conferences may be scheduled only for 

the purpose of affording the requester an 

opportunity to discuss freely and openly 

the matters set forth in the 

administrative ruling request. 

Accordingly, the conferees will not be 

bound by any argument or position 

advocated or agreed to, expressly or 

impliedly, during the conference. Any 

new arguments or facts put forth by the 

requester at the meeting must be 

reduced to writing by the requester and 

submitted in conformity with 

§ 1010.711 before they may be 

considered in connection with the 

request. 

§ 1010.714 Withdrawing requests. 

A person may withdraw a request for 

an administrative ruling at any time 

before the ruling has been issued. 

§ 1010.715 Issuing rulings. 

The Director, FinCEN, or his designee 

may issue a written ruling interpreting 

the relationship between this chapter 

and each situation for which such a 

ruling has been requested in conformity 

with § 1010.711. A ruling issued under 

this section shall bind FinCEN only in 

the event that the request describes a 

specifically identified actual situation. 

A ruling issued under this section shall 

have precedential value, and hence may 

be relied upon by others similarly 

situated, only if FinCEN makes it 

available to the public through 

publication on the FinCEN Web site 

under the heading ‘‘Administrative 

rulings’’ or other appropriate forum. All 

rulings with precedential value will be 

available by mail to any person upon 

written request specifically identifying 

the ruling sought. FinCEN will make 

every effort to respond to each requestor 

within 90 days of receiving a request. 


erowe on DSK5CLS3C1PROD with RULES3
65838 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

(Approved by the Office of Management 

and Budget under control number 1506– 

0009) 

§ 1010.716 Modifying or rescinding 

rulings. 

(a) The Director, FinCEN, or his 

designee may modify or rescind any 

ruling made pursuant to § 1010.715: 

(1) When, in light of changes in the 

statute or regulations, the ruling no 

longer sets forth the interpretation of the 

Director, FinCEN with respect to the 

described situation, 

(2) When any fact or statement 

submitted in the original ruling request 

is found to be materially inaccurate or 

incomplete, or 

(3) For other good cause. 

(b) Any person may submit to the 

Director, FinCEN a written request that 

an administrative ruling be modified or 

rescinded. The request should conform 

to the requirements of § 1010.711, 

explain why rescission or modification 

is warranted, and refer to any reasons in 

paragraph (a) of this section that are 

relevant. The request may advocate an 

alternative interpretation and may set 

forth the legal and factual basis for that 

interpretation. 

(c) FinCEN shall modify an existing 

administrative ruling by issuing a new 

ruling that rescinds the relevant prior 

ruling. Once rescinded, an 

administrative ruling shall no longer 

have any precedential value. 

(d) An administrative ruling may be 

modified or rescinded retroactively with 

respect to one or more parties to the 

original ruling request if the Director, 

FinCEN, determines that: 

(1) A fact or statement in the original 

ruling request was materially inaccurate 

or incomplete, 

(2) The requestor failed to notify in 

writing FinCEN of a material change to 

any fact or statement in the original 

request, or 

(3) A party to the original request 

acted in bad faith when relying upon 

the ruling. 

§ 1010.717 Disclosing information. 

(a) Any part of any administrative 

ruling, including names, addresses, or 

information related to the business 

transactions of private parties, may be 

disclosed pursuant to a request under 

the Freedom of Information Act, 5 

U.S.C. 552. If the request for an 

administrative ruling contains 

information which the requestor wishes 

to be considered for exemption from 

disclosure under the Freedom of 

Information Act, the requestor should 

clearly identify such portions of the 

request and the reasons why such 

information should be exempt from 

disclosure. 

(b) A requestor claiming an exemption 

from disclosure will be notified, at least 

10 days before the administrative ruling 

is issued, of a decision not to exempt 

any of such information from disclosure 

so that the underlying request for an 

administrative ruling can be withdrawn 

if the requestor so chooses. 

Subpart H—Enforcement; Penalties; 

and Forfeiture 

§ 1010.810 Enforcement. 

(a) Overall authority for enforcement 

and compliance, including coordination 

and direction of procedures and 

activities of all other agencies exercising 

delegated authority under this chapter, 

is delegated to the Director, FinCEN. 

(b) Authority to examine institutions 

to determine compliance with the 

requirements of this chapter is delegated 

as follows: 

(1) To the Comptroller of the Currency 

with respect to those financial 

institutions regularly examined for 

safety and soundness by national bank 

examiners; 

(2) To the Board of Governors of the 

Federal Reserve System with respect to 

those financial institutions regularly 

examined for safety and soundness by 

Federal Reserve bank examiners; 

(3) To the Federal Deposit Insurance 

Corporation with respect to those 

financial institutions regularly 

examined for safety and soundness by 

FDIC bank examiners; 

(4) To the Federal Home Loan Bank 

Board with respect to those financial 

institutions regularly examined for 

safety and soundness by FHLBB bank 

examiners; 

(5) To the Chairman of the Board of 

the National Credit Union 

Administration with respect to those 

financial institutions regularly 

examined for safety and soundness by 

NCUA examiners. 

(6) To the Securities and Exchange 

Commission with respect to brokers and 

dealers in securities and investment 

companies as that term is defined in the 

Investment Company Act of 1940 (15 

U.S.C. 80–1 et seq.); 

(7) To the Commissioner of Customs 

and Border Protection with respect to 

§§ 1010.340 and 1010.830; 

(8) To the Commissioner of Internal 

Revenue with respect to all financial 

institutions, except brokers or dealers in 

securities, mutual funds, futures 

commission merchants, introducing 

brokers in commodities, and commodity 

trading advisors, not currently 

examined by Federal bank supervisory 

agencies for soundness and safety; and 

(9) To the Commodity Futures 

Trading Commission with respect to 

futures commission merchants, 

introducing brokers in commodities, 

and commodity trading advisors. 

(c) Authority for investigating 

criminal violations of this chapter is 

delegated as follows: 

(1) To the Commissioner of Customs 

and Border Protection with respect to 

§ 1010.340; 

(2) To the Commissioner of Internal 

Revenue except with respect to 

§ 1010.340. 

(d) Authority for the imposition of 

civil penalties for violations of this 

chapter lies with the Director of 

FinCEN. 

(e) Periodic reports shall be made to 

the Director, FinCEN by each agency to 

which compliance authority has been 

delegated under paragraph (b) of this 

section. These reports shall be in such 

a form and submitted at such intervals 

as the Director, FinCEN may direct. 

Evidence of specific violations of any of 

the requirements of this chapter may be 

submitted to the Director, FinCEN at 

any time. 

(f) The Director, FinCEN or his 

delegate, and any agency to which 

compliance has been delegated under 

paragraph (b) of this section, may 

examine any books, papers, records, or 

other data of domestic financial 

institutions relevant to the 

recordkeeping or reporting requirements 

of this chapter. 

(g) The authority to enforce the 

provisions of 31 U.S.C. 5314 and 

§§ 1010.350 and 1010.420 of this 

chapter has been redelegated from 

FinCEN to the Commissioner of Internal 

Revenue by means of a Memorandum of 

Agreement between FinCEN and IRS. 

Such authority includes, with respect to 

31 U.S.C. 5314 and 1010.350 and 

1010.420 of this chapter, the authority 

to: assess and collect civil penalties 

under 31 U.S.C. 5321 and 31 CFR 

1010.820; investigate possible civil 

violations of these provisions (in 

addition to the authority already 

provided at paragraph (c)(2)) of this 

section); employ the summons power of 

subpart I of this part 1010; issue 

administrative rulings under subpart G 

of this part 1010; and take any other 

action reasonably necessary for the 

enforcement of these and related 

provisions, including pursuit of 

injunctions. 

§ 1010.820 Civil penalty. 

(a) For any willful violation, 

committed on or before October 12, 

1984, of any reporting requirement for 

financial institutions under this chapter 

or of any recordkeeping requirements of 

§§ 1010.311, 1010.313, 1020.315, 

1021.311 or 1021.313, the Secretary may 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65839 

assess upon any domestic financial 

institution, and upon any partner, 

director, officer, or employee thereof 

who willfully participates in the 

violation, a civil penalty not to exceed 

$1,000. 

(b) For any willful violation 

committed after October 12, 1984 and 

before October 28, 1986, of any 

reporting requirement for financial 

institutions under this chapter or of the 

recordkeeping requirements of 

§ 1010.420, the Secretary may assess 

upon any domestic financial institution, 

and upon any partner, director, officer, 

or employee thereof who willfully 

participates in the violation, a civil 

penalty not to exceed $10,000. 

(c) For any willful violation of any 

recordkeeping requirement for financial 

institutions, except violations of 

§ 1010.420, under this chapter, the 

Secretary may assess upon any domestic 

financial institution, and upon any 

partner, director, officer, or employee 

thereof who willfully participates in the 

violation, a civil penalty not to exceed 

$1,000. 

(d) For any failure to file a report 

required under § 1010.340 or for filing 

such a report containing any material 

omission or misstatement, the Secretary 

may assess a civil penalty up to the 

amount of the currency or monetary 

instruments transported, mailed or 

shipped, less any amount forfeited 

under § 1010.830. 

(e) For any willful violation of 

§ 1010.314 committed after January 26, 

1987, the Secretary may assess upon any 

person a civil penalty not to exceed the 

amount of coins and currency involved 

in the transaction with respect to which 

such penalty is imposed. The amount of 

any civil penalty assessed under this 

paragraph shall be reduced by the 

amount of any forfeiture to the United 

States in connection with the 

transaction for which the penalty was 

imposed. 

(f) For any willful violation 

committed after October 27, 1986, of 

any reporting requirement for financial 

institutions under this chapter (except 

§ 1010.350, § 1010.360 or § 1010.420), 

the Secretary may assess upon any 

domestic financial institution, and upon 

any partner, director, officer, or 

employee thereof who willfully 

participates in the violation, a civil 

penalty not to exceed the greater of the 

amount (not to exceed $100,000) 

involved in the transaction or $25,000. 

(g) For any willful violation 

committed after October 27, 1986, of 

any requirement of § 1010.350, 

§ 1010.360 or § 1010.420, the Secretary 

may assess upon any person, a civil 

penalty: 

(1) In the case of a violation of 

§ 1010.360 involving a transaction, a 

civil penalty not to exceed the greater of 

the amount (not to exceed $100,000) of 

the transaction, or $25,000; and 

(2) In the case of a violation of 

§ 1010.350 or § 1010.420 involving a 

failure to report the existence of an 

account or any identifying information 

required to be provided with respect to 

such account, a civil penalty not to 

exceed the greater of the amount (not to 

exceed $100,000) equal to the balance in 

the account at the time of the violation, 

or $25,000. 

(h) For each negligent violation of any 

requirement of this chapter, committed 

after October 27, 1986, the Secretary 

may assess upon any financial 

institution a civil penalty not to exceed 

$500. 

§ 1010.830 Forfeiture of currency or 

monetary instruments. 

Any currency or other monetary 

instruments which are in the process of 

any transportation with respect to 

which a report is required under 

§ 1010.340 are subject to seizure and 

forfeiture to the United States if such 

report has not been filed as required in 

§ 1010.360, or contains material 

omissions or misstatements. The 

Secretary may, in his sole discretion, 

remit or mitigate any such forfeiture in 

whole or in part upon such terms and 

conditions as he deems reasonable. 

§ 1010.840 Criminal penalty. 

(a) Any person who willfully violates 

any provision of Title I of Public Law 

91–508, or of this chapter authorized 

thereby may, upon conviction thereof, 

be fined not more than $1,000 or be 

imprisoned not more than 1 year, or 

both. Such person may in addition, if 

the violation is of any provision 

authorized by Title I of Public Law 91– 

508 and if the violation is committed in 

furtherance of the commission of any 

violation of Federal law punishable by 

imprisonment for more than 1 year, be 

fined not more than $10,000 or be 

imprisoned not more than 5 years, or 

both. 

(b) Any person who willfully violates 

any provision of Title II of Public Law 

91–508, or of this chapter authorized 

thereby, may, upon conviction thereof, 

be fined not more than $250,000 or be 

imprisoned not more than 5 years, or 

both. 

(c) Any person who willfully violates 

any provision of Title II of Public Law 

91–508, or of this chapter authorized 

thereby, where the violation is either 

(1) Committed while violating another 

law of the United States, or 

(2) Committed as part of a pattern of 

any illegal activity involving more than 

$100,000 in any 12-month period, may, 

upon conviction thereof, be fined not 

more than $500,000 or be imprisoned 

not more than 10 years, or both. 

(d) Any person who knowingly makes 

any false, fictitious or fraudulent 

statement or representation in any 

report required by this chapter may, 

upon conviction thereof, be fined not 

more than $10,000 or be imprisoned not 

more than 5 years, or both. 

§ 1010.850 Enforcement authority with 

respect to transportation of currency or 

monetary instruments. 

(a) If a customs officer has reasonable 

cause to believe that there is a monetary 

instrument being transported without 

the filing of the report required by 

§§ 1010.340 and 1010.360 of this 

chapter, he may stop and search, 

without a search warrant, a vehicle, 

vessel, aircraft, or other conveyance, 

envelope or other container, or person 

entering or departing from the United 

States with respect to which or whom 

the officer reasonably believes is 

transporting such instrument. 

(b) If the Secretary has reason to 

believe that currency or monetary 

instruments are in the process of 

transportation and with respect to 

which a report required under 

§ 1010.340 has not been filed or 

contains material omissions or 

misstatements, he may apply to any 

court of competent jurisdiction for a 

search warrant. Upon a showing of 

probable cause, the court may issue a 

warrant authorizing the search of any or 

all of the following: 

(1) One or more designated persons. 

(2) One or more designated or 

described places or premises. 

(3) One or more designated or 

described letters, parcels, packages, or 

other physical objects. 

(4) One or more designated or 

described vehicles. Any application for 

a search warrant pursuant to this section 

shall be accompanied by allegations of 

fact supporting the application. 

(c) This section is not in derogation of 

the authority of the Secretary under any 

other law or regulation. 

Subpart I—Summons 

§ 1010.911 General. 

For any investigation for the purpose 

of civil enforcement of violations of the 

Bank Secrecy Act, or any regulation 

issued pursuant to the Bank Secrecy 

Act, the Secretary or delegate of the 

Secretary may summon a financial 

institution or an officer or employee of 

a financial institution (including a 


erowe on DSK5CLS3C1PROD with RULES3
65840 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

former officer or employee), or any 

person having possession, custody, or 

care of any of the records and reports 

required under the Bank Secrecy Act or 

this chapter to appear before the 

Secretary or his delegate, at a time and 

place named in the summons, and to 

give testimony, under oath, and be 

examined, and to produce such books, 

papers, records, or other data as may be 

relevant or material to such 

investigation. 

§ 1010.912 Persons who may issue 

summons. 

For purposes of this chapter, the 

following officials are hereby designated 

as delegates of the Secretary who are 

authorized to issue a summons under 

§ 1010.911, solely for the purposes of 

civil enforcement of this chapter: 

(a) FinCEN. The Director, FinCEN. 

(b) Internal Revenue Service. Except 

with respect to § 1010.340 of this 

chapter, the Commissioner, the Deputy 

Commissioner, or a delegate of either 

official, and, for the purposes of 

perfecting seizures and forfeitures 

related to civil enforcement of this 

chapter, the Chief (Criminal 

Investigation) or a delegate. 

(c) Customs and Border Protection. 

With respect to § 1010.340 of this 

chapter, the Commissioner, the Deputy 

Commissioner, the Assistant 

Commissioner (Enforcement), Regional 

Commissioners, Assistant Regional 

Commissioners (Enforcement), and 

Special Agents in Charge. 

§ 1010.913 Contents of summons. 

(a) Summons for testimony. Any 

summons issued under § 1010.911 of 

this chapter to compel the appearance 

and testimony of a person shall state: 

(1) The name, title, address, and 

telephone number of the person before 

whom the appearance shall take place 

(who may be a person other than the 

persons who are authorized to issue 

such a summons under § 1010.912 of 

this chapter); 

(2) The address to which the person 

summoned shall report for the 

appearance; 

(3) The date and time of the 

appearance; and 

(4) The name, title, address, and 

telephone number of the person who 

has issued the summons. 

(b) Summons of books, papers, 

records, or data. Any summons issued 

under § 1010.911 of this chapter to 

require the production of books, papers, 

records, or other data shall describe the 

materials to be produced with 

reasonable specificity, and shall state: 

(1) The name, title, address, and 

telephone number of the person to 

whom the materials shall be produced 

(who may be a person other than the 

persons who are authorized to issue 

such a summons under § 1010.912 of 

this chapter); 

(2) The address at which the person 

summoned shall produce the materials, 

not to exceed 500 miles from any place 

where the financial institution operates 

or conducts business in the United 

States; 

(3) The specific manner of 

production, whether by personal 

delivery, by mail, or by messenger 

service; 

(4) The date and time for production; 

and 

(5) The name, title, address, and 

telephone number of the person who 

has issued the summons. 

§ 1010.914 Service of summons. 

(a) Who may serve. Any delegate of 

the Secretary authorized under 

§ 1010.912 of this chapter to issue a 

summons, or any other person 

authorized by law to serve summonses 

or other process, is hereby authorized to 

serve a summons issued under this 

chapter. 

(b) Manner of service. Service of a 

summons may be made— 

(1) Upon any person, by registered 

mail, return receipt requested, directed 

to the person summoned; 

(2) Upon a natural person by personal 

delivery; or 

(3) Upon any other person by delivery 

to an officer, managing or general agent, 

or any other agent authorized to receive 

service of process. 

(c) Certificate of service. The 

summons shall contain a certificate of 

service to be signed by the server of the 

summons. On the hearing of an 

application for enforcement of the 

summons, the certificate of service 

signed by the person serving the 

summons shall be evidence of the facts 

it states. 

§ 1010.915 Examination of witnesses and 

records. 

(a) General. Any delegate of the 

Secretary authorized under § 1010.912 

of this chapter to issue a summons, or 

any officer or employee of the Treasury 

Department or any component thereof 

who is designated by that person 

(whether in the summons or otherwise), 

is hereby authorized to receive evidence 

and to examine witnesses pursuant to 

the summons. Any person authorized by 

law may administer any oaths and 

affirmations that may be required under 

this subpart. 

(b) Testimony taken under oath. 

Testimony of any person under this 

chapter may be taken under oath, and 

shall be taken down in writing by the 

person examining the person 

summoned or shall be otherwise 

transcribed. After the testimony of a 

witness has been transcribed, a copy of 

that transcript shall be made available to 

the witness upon request, unless for 

good cause the person issuing the 

summons determines, under 5 U.S.C. 

555, that a copy should not be provided. 

If such a determination has been made, 

the witness shall be limited to 

inspection of the official transcript of 

the testimony. 

(c) Disclosure of summons, testimony, 

or records. Unless the Secretary or a 

delegate of the Secretary listed under 

§ 1010.912(a) of this chapter so 

authorizes in writing, or it is otherwise 

required by law, no delegate of the 

Secretary listed under § 1010.912 (b) or 

(c) of this chapter or other officer or 

employee of the Treasury Department or 

any component thereof shall— 

(1) Make public the name of any 

person to whom a summons has been 

issued under this chapter, or release any 

information to the public concerning 

that person or the issuance of a 

summons to that person prior to the 

time and date set for that person’s 

appearance or production of records; or 

(2) Disclose any testimony taken 

(including the name of the witness) or 

material presented pursuant to the 

summons, to any person other than an 

officer or employee of the Treasury 

Department or of any component 

thereof. Nothing in the preceding 

sentence shall preclude a delegate of the 

Secretary, or other officer or employee 

of the Treasury Department or any 

component thereof, from disclosing 

testimony taken, or material presented 

pursuant to a summons issued under 

this chapter, to any person in order to 

obtain necessary information for 

investigative purposes relating to the 

performance of official duties, or to any 

officer or employee of the Department of 

Justice in connection with a possible 

violation of Federal law. 

§ 1010.916 Enforcement of summons. 

In the case of contumacy by, or refusal 

to obey a summons issued to, any 

person under this chapter, the Secretary 

or any delegate of the Secretary listed 

under § 1010.912 of this chapter shall 

refer the matter to the Attorney General 

or delegate of the Attorney General 

(including any United States Attorney 

or Assistant United States Attorney, as 

appropriate), who may bring an action 

to compel compliance with the 

summons in any court of the United 

States within the jurisdiction of which 

the investigation which gave rise to the 

summons being or has been carried on, 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65841 

the jurisdiction in which the person 

summoned is a resident, or the 

jurisdiction in which the person 

summoned carries on business or may 

be found. When a referral is made by a 

delegate of the Secretary other than a 

delegate named in § 1010.912(a) of this 

chapter, prompt notification of the 

referral must be made to the Director, 

FinCEN. The court may issue an order 

requiring the person summoned to 

appear before the Secretary or delegate 

of the Secretary to produce books, 

papers, records, or other data, to give 

testimony as may be necessary in order 

to explain how such material was 

compiled and maintained, and to pay 

the costs of the proceeding. Any failure 

to obey the order of the court may be 

punished by the court as a contempt 

thereof. All process in any case under 

this section may be served in any 

judicial district in which such person 

may be found. 

§ 1010.917 Payment of expenses. 

Persons summoned under this chapter 

shall be paid the same fees and mileage 

for travel in the United States that are 

paid witnesses in the courts of the 

United States. The United States shall 

not be liable for any other expense 

incurred in connection with the 

production of books, papers, records, or 

other data under this chapter. 

Subpart J—Miscellaneous 

§ 1010.920 Access to records. 

Except as provided in 

§§ 1020.410(b)(1), 1021.410(a), and 

1023.410(a)(1), and except for the 

purpose of assuring compliance with 

the recordkeeping and reporting 

requirements of this chapter, this 

chapter does not authorize the Secretary 

or any other person to inspect or review 

the records required to be maintained by 

this chapter. Other inspection, review or 

access to such records is governed by 

other applicable law. 

§ 1010.930 Rewards for informants. 

(a) If an individual provides original 

information which leads to a recovery of 

a criminal fine, civil penalty, or 

forfeiture, which exceeds $50,000, for a 

violation of the provisions of the Bank 

Secrecy Act or of this chapter, the 

Secretary may pay a reward to that 

individual. 

(b) The Secretary shall determine the 

amount of the reward to be paid under 

this section; however, any reward paid 

may not be more than 25 percent of the 

net amount of the fine, penalty or 

forfeiture collected, or $150,000, 

whichever is less. 

(c) An officer or employee of the 

United States, a State, or a local 

government who provides original 

information described in paragraph (a) 

in the performance of official duties is 

not eligible for a reward under this 

section. 

§ 1010.940 Photographic or other 

reproductions of Government obligations. 

Nothing herein contained shall 

require or authorize the microfilming or 

other reproduction of: 

(a) Currency or other obligation or 

security of the United States as defined 

in 18 U.S.C. 8, or 

(b) Any obligation or other security of 

any foreign government, the 

reproduction of which is prohibited by 

law. 

§ 1010.950 Availability of information. 

(a) The Secretary may within his 

discretion disclose information reported 

under this chapter for any reason 

consistent with the purposes of the 

Bank Secrecy Act, including those set 

forth in paragraphs (b) through (d) of 

this section. 

(b) The Secretary may make any 

information set forth in any report 

received pursuant to this chapter 

available to another agency of the 

United States, to an agency of a state or 

local government or to an agency of a 

foreign government, upon the request of 

the head of such department or agency 

made in writing and stating the 

particular information desired, the 

criminal, tax or regulatory purpose for 

which the information is sought, and 

the official need for the information. 

(c) The Secretary may make any 

information set forth in any report 

received pursuant to this chapter 

available to the Congress, or any 

committee or subcommittee thereof, 

upon a written request stating the 

particular information desired, the 

criminal, tax or regulatory purpose for 

which the information is sought, and 

the official need for the information. 

(d) The Secretary may make any 

information set forth in any report 

received pursuant to this chapter 

available to any other department or 

agency of the United States that is a 

member of the Intelligence Community, 

as defined by Executive Order 12333 or 

any succeeding executive order, upon 

the request of the head of such 

department or agency made in writing 

and stating the particular information 

desired, the national security matter 

with which the information is sought 

and the official need therefor. 

(e) Any information made available 

under this section to other department 

or agencies of the United States, any 

state or local government, or any foreign 

government shall be received by them in 

confidence, and shall not be disclosed 

to any person except for official 

purposes relating to the investigation, 

proceeding or matter in connection with 

which the information is sought. 

(f) The Secretary may require that a 

State or local government department or 

agency requesting information under 

paragraph (b) of this section pay fees to 

reimburse the Department of the 

Treasury for costs incidental to such 

disclosure. The amount of such fees will 

be set in accordance with the statute on 

fees for government services, 31 U.S.C. 

9701. 

§ 1010.960 Disclosure. 

All reports required under this 

chapter and all records of such reports 

are specifically exempted from 

disclosure under section 552 of Title 5, 

United States Code. 

§ 1010.970 Exceptions, exemptions, and 

reports. 

(a) The Secretary, in his sole 

discretion, may by written order or 

authorization make exceptions to or 

grant exemptions from the requirements 

of this chapter. Such exceptions or 

exemptions may be conditional or 

unconditional, may apply to particular 

persons or to classes of persons, and 

may apply to particular transactions or 

classes of transactions. They shall, 

however, be applicable only as 

expressly Stated in the order of 

authorization, and they shall be 

revocable in the sole discretion of the 

Secretary. 

(b) The Secretary shall have authority 

to further define all terms used herein. 

(c)(1) The Secretary may, as an 

alternative to the reporting and 

recordkeeping requirements for casinos 

in §§ 1010.306(a), 1021.311, and 

1021.410, grant exemptions to the 

casinos in any State whose regulatory 

system substantially meets the reporting 

and recordkeeping requirements of this 

chapter. 

(2) In order for a State regulatory 

system to qualify for an exemption on 

behalf of its casinos, the State must 

provide: 

(i) That the Treasury Department be 

allowed to evaluate the effectiveness of 

the State’s regulatory system by periodic 

oversight review of that system; 

(ii) That the reports required under 

the State’s regulatory system be 

submitted to the Treasury Department 

within 15 days of receipt by the State; 

(iii) That any records required to be 

maintained by the casinos relevant to 

any matter under this chapter and to 

which the State has access or maintains 

under its regulatory system be made 

available to the Treasury Department 

within 30 days of request; 


erowe on DSK5CLS3C1PROD with RULES3
65842 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

(iv) That the Treasury Department be 

provided with periodic status reports on 

the State’s compliance efforts and 

findings; 

(v) That all but minor violations of the 

State requirements be reported to 

Treasury within 15 days of discovery; 

and 

(vi) That the State will initiate 

compliance examinations of specific 

institutions at the request of Treasury 

within a reasonable time, not to exceed 

90 days where appropriate, and will 

provide reports of these examinations to 

Treasury within 15 days of completion 

or periodically during the course of the 

examination upon the request of the 

Secretary. If for any reason the State 

were not able to conduct an 

investigation within a reasonable time, 

the State will permit Treasury to 

conduct the investigation. 

(3) Revocation of any exemption 

under this subsection shall be in the 

sole discretion of the Secretary. 

§ 1010.980 Dollars as including foreign 

currency. 

Wherever in this chapter an amount is 

Stated in dollars, it shall be deemed to 

mean also the equivalent amount in any 

foreign currency. 

PARTS 1011–1019 [RESERVED] 

Part 1020—RULE FOR BANKS 

Subpart A—Definitions 

Sec. 

1020.100 Definitions. 

Subpart B—Programs 

1020.200 General. 

1020.210 Anti-money laundering program 

requirements for financial institutions 

regulated only by a Federal functional 

regulator, including banks, savings 

associations, and credit unions. 

1020.220 Customer Identification Programs 

for banks, savings associations, credit 

unions, and certain non-Federally 

regulated banks. 

Subpart C—Reports Required To Be Made 

by Banks 

1020.300 General. 

1020.310 Reports of transactions in 

currency. 

1020.311 Filing obligations. 

1020.312 Identification required. 

1020.313 Aggregation. 

1020.314 Structured transactions. 

1020.315 Transactions of exempt persons. 

1020.320 Reports by banks of suspicious 

transactions. 

Subpart D—Records Required To Be 

Maintained by Banks 

1020.400 General. 

1020.410 Records to be made and retained 

by banks. 

Subpart E—Special Information Sharing 

Procedures To Deter Money Laundering 

and Terrorist Activity 

1020.500 General. 

1020.520 Special information sharing 

procedures to deter money laundering 

and terrorist activity for banks. 

1020.530 [Reserved]. 

1020.540 Voluntary information sharing 

among financial institutions. 

Subpart F—Special Standards of Diligence; 

Prohibitions, and Special Measures for 

Banks 

1020.600 General. 

1020.610 Due diligence programs for 

correspondent accounts for foreign 

financial institutions. 

1020.620 Due diligence programs for 

private banking accounts. 

1020.630 Prohibition on correspondent 

accounts for foreign shell banks; records 

concerning owners of foreign banks and 

agents for service of legal process. 

1020.640 [Reserved]. 

1020.670 Summons or subpoena of foreign 

bank records; Termination of 

correspondent relationship. 

Subpart A—Definitions 

§ 1020.100 Definitions. 

Refer to § 1010.100 of this Chapter for 

general definitions not noted herein. To 

the extent there is a differing definition 

in § 1010.100 of this Chapter, the 

definition in this Section is what 

applies to Part 1020. Unless otherwise 

indicated, for purposes of this Part: 

(a) Account. For purposes of 

§ 1020.220: 

(1) Account means a formal banking 

relationship established to provide or 

engage in services, dealings, or other 

financial transactions including a 

deposit account, a transaction or asset 

account, a credit account, or other 

extension of credit. Account also 

includes a relationship established to 

provide a safety deposit box or other 

safekeeping services, or cash 

management, custodian, and trust 

services. 

(2) Account does not include: 

(i) A product or service where a 

formal banking relationship is not 

established with a person, such as 

check-cashing, wire transfer, or sale of 

a check or money order; 

(ii) An account that the bank acquires 

through an acquisition, merger, 

purchase of assets, or assumption of 

liabilities; or 

(iii) An account opened for the 

purpose of participating in an employee 

benefit plan established under the 

Employee Retirement Income Security 

Act of 1974. 

(b) Bank. For the purposes of 

§ 1020.220, means: 

(1) A bank, as that term is defined in 

§ 1010.100(d), that is subject to 

regulation by a Federal functional 

regulator; and 

(2) A credit union, private bank, and 

trust company, as set forth in 

§ 1010.100(d) of this Chapter, that does 

not have a Federal functional regulator. 

(c) Customer. For the purposes of 

§ 1020.220: 

(1) Customer means: 

(i) A person that opens a new account; 

and 

(ii) An individual who opens a new 

account for: 

(A) An individual who lacks legal 

capacity, such as a minor; or 

(B) An entity that is not a legal 

person, such as a civic club. 

(2) Customer does not include: 

(i) A financial institution regulated by 

a Federal functional regulator or a bank 

regulated by a State bank regulator; 

(ii) A person described in 

§ 1020.315(b)(2) through (b)(4); or 

(iii) A person that has an existing 

account with the bank, provided that 

the bank has a reasonable belief that it 

knows the true identity of the person. 

(d) Financial institution means: 

(1) For the purposes of § 1020.210, a 

financial institution defined in 31 

U.S.C. 5312(a)(2) or (c)(1) that is subject 

to regulation by a Federal functional 

regulator or a self-regulatory 

organization. 

(2) For the purposes of § 1020.220, 

financial institution is defined at 31 

U.S.C. 5312(a)(2) and (c)(1). 

Subpart B—Programs 

§ 1020.200 General. 

Banks are subject to the program 

requirements set forth and cross 

referenced in this subpart. Banks should 

also refer to Subpart B of Part 1010 of 

this Chapter for program requirements 

contained in that subpart which apply 

to banks. 

§ 1020.210 Anti-money laundering 

program requirements for financial 

institutions regulated only by a Federal 

functional regulator, including banks, 

savings associations, and credit unions. 

A financial institution regulated by a 

Federal functional regulator that is not 

subject to the regulations of a self 

regulatory organization shall be deemed 

to satisfy the requirements of 31 U.S.C. 

5318(h)(1) if it implements and 

maintains an anti-money laundering 

program that complies with the 

requirements of §§ 1010.610 and 

1010.620 and the regulation of its 

Federal functional regulator governing 

such programs. 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65843 

§ 1020.220 Customer Identification 

Programs for banks, savings associations, 

credit unions, and certain non-Federally 

regulated banks. 

(a) Customer Identification Program: 

minimum requirements—(1) In general. 

A bank must implement a written 

Customer Identification Program (CIP) 

appropriate for its size and type of 

business that, at a minimum, includes 

each of the requirements of paragraphs 

(a)(1) through (5) of this section. If a 

bank is required to have an anti-money 

laundering compliance program under 

the regulations implementing 31 U.S.C. 

5318(h), 12 U.S.C. 1818(s), or 12 U.S.C. 

1786(q)(1), then the CIP must be a part 

of the anti-money laundering 

compliance program. Until such time as 

credit unions, private banks, and trust 

companies without a Federal functional 

regulator are subject to such a program, 

their CIPs must be approved by their 

boards of directors. 

(2) Identity verification procedures. 

The CIP must include risk-based 

procedures for verifying the identity of 

each customer to the extent reasonable 

and practicable. The procedures must 

enable the bank to form a reasonable 

belief that it knows the true identity of 

each customer. These procedures must 

be based on the bank’s assessment of the 

relevant risks, including those presented 

by the various types of accounts 

maintained by the bank, the various 

methods of opening accounts provided 

by the bank, the various types of 

identifying information available, and 

the bank’s size, location, and customer 

base. At a minimum, these procedures 

must contain the elements described in 

this paragraph (a)(2). 

(i) Customer information required— 

(A) In general. The CIP must contain 

procedures for opening an account that 

specify the identifying information that 

will be obtained from each customer. 

Except as permitted by paragraphs 

(a)(2)(i)(B) and (C) of this section, the 

bank must obtain, at a minimum, the 

following information from the 

customer prior to opening an account: 

(1) Name; 

(2) Date of birth, for an individual; 

(3) Address, which shall be: 

(i) For an individual, a residential or 

business street address; 

(ii) For an individual who does not 

have a residential or business street 

address, an Army Post Office (APO) or 

Fleet Post Office (FPO) box number, or 

the residential or business street address 

of next of kin or of another contact 

individual; or 

(iii) For a person other than an 

individual (such as a corporation, 

partnership, or trust), a principal place 

of business, local office, or other 

physical location; and 

(4) Identification number, which shall 

be: 

(i) For a U.S. person, a taxpayer 

identification number; or 

(ii) For a non-U.S. person, one or more 

of the following: A taxpayer 

identification number; passport number 

and country of issuance; alien 

identification card number; or number 

and country of issuance of any other 

government-issued document 

evidencing nationality or residence and 

bearing a photograph or similar 

safeguard. 

Note to Paragraph(a)(2)(i)(A)(4)(ii): When 

opening an account for a foreign business or 

enterprise that does not have an 

identification number, the bank must request 

alternative government-issued 

documentation certifying the existence of the 

business or enterprise. 

(B) Exception for persons applying for 

a taxpayer identification number. 

Instead of obtaining a taxpayer 

identification number from a customer 

prior to opening the account, the CIP 

may include procedures for opening an 

account for a customer that has applied 

for, but has not received, a taxpayer 

identification number. In this case, the 

CIP must include procedures to confirm 

that the application was filed before the 

customer opens the account and to 

obtain the taxpayer identification 

number within a reasonable period of 

time after the account is opened. 

(C) Credit card accounts. In 

connection with a customer who opens 

a credit card account, a bank may obtain 

the identifying information about a 

customer required under paragraph 

(a)(2)(i)(A) by acquiring it from a thirdparty source prior to extending credit to 

the customer. 

(ii) Customer verification. The CIP 

must contain procedures for verifying 

the identity of the customer, using 

information obtained in accordance 

with paragraph (a)(2)(i) of this section, 

within a reasonable time after the 

account is opened. The procedures must 

describe when the bank will use 

documents, non-documentary methods, 

or a combination of both methods as 

described in this paragraph (a)(2)(ii). 

(A) Verification through documents. 

For a bank relying on documents, the 

CIP must contain procedures that set 

forth the documents that the bank will 

use. These documents may include: 

(1) For an individual, unexpired 

government-issued identification 

evidencing nationality or residence and 

bearing a photograph or similar 

safeguard, such as a driver’s license or 

passport; and 

(2) For a person other than an 

individual (such as a corporation, 

partnership, or trust), documents 

showing the existence of the entity, 

such as certified articles of 

incorporation, a government-issued 

business license, a partnership 

agreement, or trust instrument. 

(B) Verification through nondocumentary methods. For a bank 

relying on non-documentary methods, 

the CIP must contain procedures that 

describe the non-documentary methods 

the bank will use. 

(1) These methods may include 

contacting a customer; independently 

verifying the customer’s identity 

through the comparison of information 

provided by the customer with 

information obtained from a consumer 

reporting agency, public database, or 

other source; checking references with 

other financial institutions; and 

obtaining a financial statement. 

(2) The bank’s non-documentary 

procedures must address situations 

where an individual is unable to present 

an unexpired government-issued 

identification document that bears a 

photograph or similar safeguard; the 

bank is not familiar with the documents 

presented; the account is opened 

without obtaining documents; the 

customer opens the account without 

appearing in person at the bank; and 

where the bank is otherwise presented 

with circumstances that increase the 

risk that the bank will be unable to 

verify the true identity of a customer 

through documents. 

(C) Additional verification for certain 

customers. The CIP must address 

situations where, based on the bank’s 

risk assessment of a new account 

opened by a customer that is not an 

individual, the bank will obtain 

information about individuals with 

authority or control over such account, 

including signatories, in order to verify 

the customer’s identity. This 

verification method applies only when 

the bank cannot verify the customer’s 

true identity using the verification 

methods described in paragraphs 

(a)(2)(ii)(A) and (B) of this section. 

(iii) Lack of verification. The CIP must 

include procedures for responding to 

circumstances in which the bank cannot 

form a reasonable belief that it knows 

the true identity of a customer. These 

procedures should describe: 

(A) When the bank should not open 

an account; 

(B) The terms under which a customer 

may use an account while the bank 

attempts to verify the customer’s 

identity; 


erowe on DSK5CLS3C1PROD with RULES3
65844 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

(C) When the bank should close an 

account, after attempts to verify a 

customer’s identity have failed; and 

(D) When the bank should file a 

Suspicious Activity Report in 

accordance with applicable law and 

regulation. 

(3) Recordkeeping. The CIP must 

include procedures for making and 

maintaining a record of all information 

obtained under the procedures 

implementing paragraph (a) of this 

section. 

(i) Required records. At a minimum, 

the record must include: 

(A) All identifying information about 

a customer obtained under paragraph 

(a)(2)(i) of this section; 

(B) A description of any document 

that was relied on under paragraph 

(a)(2)(ii)(A) of this section noting the 

type of document, any identification 

number contained in the document, the 

place of issuance and, if any, the date 

of issuance and expiration date; 

(C) A description of the methods and 

the results of any measures undertaken 

to verify the identity of the customer 

under paragraph (a)(2)(ii)(B) or (C) of 

this section; and 

(D) A description of the resolution of 

any substantive discrepancy discovered 

when verifying the identifying 

information obtained. 

(ii) Retention of records. The bank 

must retain the information in 

paragraph (a)(3)(i)(A) of this section for 

five years after the date the account is 

closed or, in the case of credit card 

accounts, five years after the account is 

closed or becomes dormant. The bank 

must retain the information in 

paragraphs (a)(3)(i)(B), (C), and (D) of 

this section for five years after the 

record is made. 

(4) Comparison with government lists. 

The CIP must include procedures for 

determining whether the customer 

appears on any list of known or 

suspected terrorists or terrorist 

organizations issued by any Federal 

government agency and designated as 

such by Treasury in consultation with 

the Federal functional regulators. The 

procedures must require the bank to 

make such a determination within a 

reasonable period of time after the 

account is opened, or earlier, if required 

by another Federal law or regulation or 

Federal directive issued in connection 

with the applicable list. The procedures 

must also require the bank to follow all 

Federal directives issued in connection 

with such lists. 

(5)(i) Customer notice. The CIP must 

include procedures for providing bank 

customers with adequate notice that the 

bank is requesting information to verify 

their identities. 

(ii) Adequate notice. Notice is 

adequate if the bank generally describes 

the identification requirements of this 

section and provides the notice in a 

manner reasonably designed to ensure 

that a customer is able to view the 

notice, or is otherwise given notice, 

before opening an account. For example, 

depending upon the manner in which 

the account is opened, a bank may post 

a notice in the lobby or on its Web site, 

include the notice on its account 

applications, or use any other form of 

written or oral notice. 

(iii) Sample notice. If appropriate, a 

bank may use the following sample 

language to provide notice to its 

customers: 

Important Information About Procedures for 

Opening a New Account 

To help the government fight the funding 

of terrorism and money laundering activities, 

Federal law requires all financial institutions 

to obtain, verify, and record information that 

identifies each person who opens an account. 

What this means for you: When you open 

an account, we will ask for your name, 

address, date of birth, and other information 

that will allow us to identify you. We may 

also ask to see your driver’s license or other 

identifying documents. 

(6) Reliance on another financial 

institution. The CIP may include 

procedures specifying when a bank will 

rely on the performance by another 

financial institution (including an 

affiliate) of any procedures of the bank’s 

CIP, with respect to any customer of the 

bank that is opening, or has opened, an 

account or has established a similar 

formal banking or business relationship 

with the other financial institution to 

provide or engage in services, dealings, 

or other financial transactions, provided 

that: 

(i) Such reliance is reasonable under 

the circumstances; 

(ii) The other financial institution is 

subject to a rule implementing 31 U.S.C. 

5318(h) and is regulated by a Federal 

functional regulator; and 

(iii) The other financial institution 

enters into a contract requiring it to 

certify annually to the bank that it has 

implemented its anti-money laundering 

program, and that it will perform (or its 

agent will perform) the specified 

requirements of the bank’s CIP. 

(b) Exemptions. The appropriate 

Federal functional regulator, with the 

concurrence of the Secretary, may, by 

order or regulation, exempt any bank or 

type of account from the requirements 

of this section. The Federal functional 

regulator and the Secretary shall 

consider whether the exemption is 

consistent with the purposes of the 

Bank Secrecy Act and with safe and 

sound banking, and may consider other 

appropriate factors. The Secretary will 

make these determinations for any bank 

or type of account that is not subject to 

the authority of a Federal functional 

regulator. 

(c) Other requirements unaffected. 

Nothing in this section relieves a bank 

of its obligation to comply with any 

other provision in this chapter, 

including provisions concerning 

information that must be obtained, 

verified, or maintained in connection 

with any account or transaction. 

Subpart C—Reports Required To Be 

Made By Banks 

§ 1020.300 General. 

Banks are subject to the reporting 

requirements set forth and cross 

referenced in this subpart. Banks should 

also refer to Subpart C of Part 1010 of 

this Chapter for reporting requirements 

contained in that subpart which apply 

to banks. 

§ 1020.310 Reports of transactions in 

currency. 

The reports of transactions in 

currency requirements for banks are 

located in subpart C of Part 1010 of this 

Chapter and this subpart. 

§ 1020.311 Filing obligations. 

Refer to § 1010.311 of this Chapter for 

reports of transactions in currency filing 

obligations for banks. 

§ 1020.312 Identification required. 

Refer to § 1010.312 of this Chapter for 

identification requirements for reports 

of transactions in currency filed by 

banks. 

§ 1020.313 Aggregation. 

Refer to § 1010.313 of this Chapter for 

reports of transactions in currency 

aggregation requirements for banks. 

§ 1020.314 Structured transactions. 

Refer to § 1010.314 of this Chapter for 

rules regarding structured transactions 

for banks. 

§ 1020.315 Transactions of exempt 

persons. 

(a) General. No bank is required to file 

a report otherwise required by 

§ 1010.311 with respect to any 

transaction in currency between an 

exempt person and such bank, or, to the 

extent provided in paragraph (e)(6) of 

this section, between such exempt 

person and other banks affiliated with 

such bank. (A limitation on the 

exemption described in this paragraph 

(a) is set forth in paragraph (f) of this 

section.) 

(b) Exempt person. For purposes of 

this section, an exempt person is: 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65845 

(1) A bank, to the extent of such 

bank’s domestic operations; 

(2) A department or agency of the 

United States, of any State, or of any 

political subdivision of any State; 

(3) Any entity established under the 

laws of the United States, of any State, 

or of any political subdivision of any 

State, or under an interstate compact 

between two or more States, that 

exercises governmental authority on 

behalf of the United States or any such 

State or political subdivision; 

(4) Any entity, other than a bank, 

whose common stock or analogous 

equity interests are listed on the New 

York Stock Exchange or the American 

Stock Exchange or whose common stock 

or analogous equity interests have been 

designated as a NASDAQ National 

Market Security listed on the NASDAQ 

Stock Market (except stock or interests 

listed under the separate ‘‘NASDAQ 

Capital Markets Companies’’ heading), 

provided that, for purposes of this 

paragraph (b)(4), a person that is a 

financial institution, other than a bank, 

is an exempt person only to the extent 

of its domestic operations; 

(5) Any subsidiary, other than a bank, 

of any entity described in paragraph 

(b)(4) of this section (a ‘‘listed entity’’) 

that is organized under the laws of the 

United States or of any State and at least 

51 percent of whose common stock or 

analogous equity interest is owned by 

the listed entity, provided that, for 

purposes of this paragraph (b)(5), a 

person that is a financial institution, 

other than a bank, is an exempt person 

only to the extent of its domestic 

operations; 

(6) To the extent of its domestic 

operations and only with respect to 

transactions conducted through its 

exemptible accounts, any other 

commercial enterprise (for purposes of 

this section, a ‘‘non-listed business’’), 

other than an enterprise specified in 

paragraph (e)(8) of this section, that: 

(i) Maintains a transaction account, as 

defined in paragraph (e)(9) of this 

section, at the bank for at least two 

months, except as provided in 

paragraph (c)(2)(ii) of this section; 

(ii) Frequently engages in transactions 

in currency with the bank in excess of 

$10,000; and 

(iii) Is incorporated or organized 

under the laws of the United States or 

a State, or is registered as and eligible 

to do business within the United States 

or a State; or 

(7) With respect solely to withdrawals 

for payroll purposes from existing 

exemptible accounts, any other person 

(for purposes of this section, a ‘‘payroll 

customer’’) that: 

(i) Maintains a transaction account, as 

defined in paragraph (e)(9) of this 

section, at the bank for at least two 

months, except as provided in 

paragraph (c)(2)(ii) of this section; 

(ii) Operates a firm that regularly 

withdraws more than $10,000 in order 

to pay its United States employees in 

currency; and 

(iii) Is incorporated or organized 

under the laws of the United States or 

a State, or is registered as and eligible 

to do business within the United States 

or a State. 

(c) Designation of certain exempt 

persons—(1) General. Except as 

provided in paragraph (c)(2) of this 

section, a bank must designate an 

exempt person by filing FinCEN Form 

110. Such designation must occur by the 

close of the 30-calendar day period 

beginning after the day of the first 

reportable transaction in currency with 

that person sought to be exempted from 

reporting under the terms of this 

section. The designation must be made 

separately by each bank that treats the 

customer as an exempt person, except as 

provided in paragraph (e)(6) of this 

section. 

(2) Special rules. 

(i) A bank is not required to file a 

FinCEN Form 110 with respect to the 

transfer of currency to or from: 

(A) Any of the twelve Federal Reserve 

Banks; or 

(B) Any exempt person as described 

in paragraphs (b)(1) to (3) of this section. 

(ii) Notwithstanding subparagraphs 

(b)(6)(i) and (b)(7)(i) of this section, and 

if the requirements under this section 

are otherwise satisfied, a bank may 

designate a non-listed business or a 

payroll customer, as described in 

paragraphs (b)(6) and (7) of this section, 

as an exempt person before the 

customer has maintained a transaction 

account at the bank for at least two 

months if the bank conducts and 

documents a risk-based assessment of 

the customer and forms a reasonable 

belief that the customer has a legitimate 

business purpose for conducting 

frequent transactions in currency. 

(d) Annual review. At least once each 

year, a bank must review the eligibility 

of an exempt person described in 

paragraphs (b)(4) to (7) of this section to 

determine whether such person remains 

eligible for an exemption. As part of its 

annual review, a bank must review the 

application of the monitoring system 

required to be maintained by paragraph 

(h)(2) of this section to each existing 

account of an exempt person described 

in paragraphs (b)(6) or (b)(7) of this 

section. 

(e) Operating rules—(1) General rule. 

Subject to the specific rules of this 

section, a bank must take such steps to 

assure itself that a person is an exempt 

person (within the meaning of the 

applicable provision of paragraph (b) of 

this section), to document the basis for 

its conclusions, and document its 

compliance, with the terms of this 

section, that a reasonable and prudent 

bank would take and document to 

protect itself from loan or other fraud or 

loss based on misidentification of a 

person’s status, and in the case of the 

monitoring system requirement set forth 

in paragraph (h)(2) of this section, such 

steps that a reasonable and prudent 

bank would take and document to 

identify suspicious transactions as 

required by paragraph (h)(2) of this 

section. 

(2) Governmental departments and 

agencies. A bank may treat a person as 

a governmental department, agency, or 

entity if the name of such person 

reasonably indicates that it is described 

in paragraph (b)(2) or (b)(3) of this 

section, or if such person is known 

generally in the community to be a 

State, the District of Columbia, a tribal 

government, a Territory or Insular 

Possession of the United States, or a 

political subdivision or a wholly-owned 

agency or instrumentality of any of the 

foregoing. An entity generally exercises 

governmental authority on behalf of the 

United States, a State, or a political 

subdivision, for purposes of paragraph 

(b)(3) of this section, only if its 

authorities include one or more of the 

powers to tax, to exercise the authority 

of eminent domain, or to exercise police 

powers with respect to matters within 

its jurisdiction. Examples of entities that 

exercise governmental authority 

include, but are not limited to, the New 

Jersey Turnpike Authority and the Port 

Authority of New York and New Jersey. 

(3) Stock exchange listings. In 

determining whether a person is 

described in paragraph (b)(4) of this 

section, a bank may rely on any New 

York, American, or NASDAQ Stock 

Market listing published in a newspaper 

of general circulation, on any commonly 

accepted or published stock symbol 

guide, on any information contained in 

the Securities and Exchange 

Commission ‘‘EDGAR’’ System, or on 

any information contained on an 

Internet site or sites maintained by the 

New York Stock Exchange, the 

American Stock Exchange, or the 

NASDAQ. 

(4) Listed company subsidiaries. In 

determining whether a person is 

described in paragraph (b)(5) of this 

section, a bank may rely upon: 

(i) Any reasonably authenticated 

corporate officer’s certificate; 


erowe on DSK5CLS3C1PROD with RULES3
65846 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

(ii) Any reasonably authenticated 

photocopy of Internal Revenue Service 

Form 851 (Affiliation Schedule) or the 

equivalent thereof for the appropriate 

tax year; or 

(iii) A person’s Annual Report or 

Form 10–K, as filed in each case with 

the Securities and Exchange 

Commission. 

(5) Aggregated accounts. In 

determining the qualification of a 

customer as a non-listed business or a 

payroll customer, a bank may treat all 

exemptible accounts of the customer as 

a single account. If a bank elects to treat 

all exemptible accounts of a customer as 

a single account, the bank must 

continue to treat such accounts 

consistently as a single account for 

purposes of determining the 

qualification of the customer as a nonlisted business or payroll customer. 

(6) Affiliated banks. The designation 

required by paragraph (c) of this section 

may be made by a parent bank holding 

company or one of its bank subsidiaries 

on behalf of all bank subsidiaries of the 

holding company, so long as the 

designation lists each bank subsidiary to 

which the designation shall apply. 

(7) Sole proprietorships. A sole 

proprietorship may be treated as a nonlisted business if it otherwise meets the 

requirements of paragraph (b)(6) of this 

section, as applicable. In addition, a sole 

proprietorship may be treated as a 

payroll customer if it otherwise meets 

the requirements of paragraph (b)(7) of 

this section, as applicable. 

(8) Ineligible businesses. A business 

engaged primarily in one or more of the 

following activities may not be treated 

as a non-listed business for purposes of 

this section: Serving as financial 

institutions or agents of financial 

institutions of any type; purchase or sale 

to customers of motor vehicles of any 

kind, vessels, aircraft, farm equipment 

or mobile homes; the practice of law, 

accountancy, or medicine; auctioning of 

goods; chartering or operation of ships, 

buses, or aircraft; gaming of any kind 

(other than licensed parimutuel betting 

at race tracks); investment advisory 

services or investment banking services; 

real estate brokerage; pawn brokerage; 

title insurance and real estate closing; 

trade union activities; and any other 

activities that may be specified by 

FinCEN. A business that engages in 

multiple business activities may be 

treated as a non-listed business so long 

as no more than 50% of its gross 

revenues are derived from one or more 

of the ineligible business activities 

listed in this paragraph (e)(8). 

(9) Exemptible accounts of a nonlisted business or payroll customer. The 

exemptible accounts of a non-listed 

business or payroll customer include 

transaction accounts and money market 

deposit accounts. However, money 

market deposit accounts maintained 

other than in connection with a 

commercial enterprise are not 

exemptible accounts. A transaction 

account, for purposes of this section, is 

any account described in section 

19(b)(1)(C) of the Federal Reserve Act, 

12 U.S.C. 461(b)(1)(C), and its 

implementing regulations (12 CFR part 

204). A money market deposit account, 

for purposes of this section, is any 

interest-bearing account that is 

described as a money market deposit 

account in 12 CFR 204.2(d)(2). 

(10) Documentation. The records 

maintained by a bank to document its 

compliance with and administration of 

the rules of this section shall be 

maintained in accordance with the 

provisions of § 1010.430. 

(f) Limitation on exemption. A 

transaction carried out by an exempt 

person as an agent for another person 

who is the beneficial owner of the funds 

that are the subject of a transaction in 

currency is not subject to the exemption 

from reporting contained in paragraph 

(a) of this section. 

(g) Limitation on liability. (1) No bank 

shall be subject to penalty under this 

chapter for failure to file a report 

required by § 1010.311 with respect to a 

transaction in currency by an exempt 

person with respect to which the 

requirements of this section have been 

satisfied, unless the bank: 

(i) Knowingly files false or incomplete 

information with respect to the 

transaction or the customer engaging in 

the transaction; or 

(ii) Has reason to believe that the 

customer does not meet the criteria 

established by this section for treatment 

of the transactor as an exempt person or 

that the transaction is not a transaction 

of the exempt person. 

(2) Subject to the specific terms of this 

section, and absent any specific 

knowledge of information indicating 

that a customer no longer meets the 

requirements of an exempt person, a 

bank satisfies the requirements of this 

section to the extent it continues to treat 

that customer as an exempt person until 

the completion of that customer’s next 

required periodic review, which as 

required by paragraph (d) of this section 

for an exempt person described in 

paragraph (b)(4) to (7) of this section, 

shall occur no less than once each year. 

(3) A bank that files a report with 

respect to a currency transaction by an 

exempt person rather than treating such 

person as exempt shall remain subject, 

with respect to each such report, to the 

rules for filing reports, and the penalties 

for filing false or incomplete reports that 

are applicable to reporting of 

transactions in currency by persons 

other than exempt persons. 

(h) Obligations to file suspicious 

activity reports and maintain system for 

monitoring transactions in currency. (1) 

Nothing in this section relieves a bank 

of the obligation, or reduces in any way 

such bank’s obligation, to file a report 

required by § 1020.320 with respect to 

any transaction, including any 

transaction in currency that a bank 

knows, suspects, or has reason to 

suspect is a transaction or attempted 

transaction that is described in 

§ 1020.320(a)(2)(i), (ii), or (iii), or 

relieves a bank of any reporting or 

recordkeeping obligation imposed by 

this chapter (except the obligation to 

report transactions in currency pursuant 

to this chapter to the extent provided in 

this section). Thus, for example, a sharp 

increase from one year to the next in the 

gross total of currency transactions 

made by an exempt customer, or 

similarly anomalous transactions trends 

or patterns, may trigger the obligation of 

a bank under § 1020.320. 

(2) Consistent with its annual review 

obligations under paragraph (d) of this 

section, a bank shall establish and 

maintain a monitoring system that is 

reasonably designed to detect, for each 

account of a non-listed business or 

payroll customer, those transactions in 

currency involving such account that 

would require a bank to file a suspicious 

transaction report. The statement in the 

preceding sentence with respect to 

accounts of non-listed business and 

payroll customers does not limit the 

obligation of banks generally to take the 

steps necessary to satisfy the terms of 

paragraph (h)(1) of this section and 

§ 1020.320 with respect to all exempt 

persons. 

(i) Revocation. Without any action on 

the part of the Department of the 

Treasury and subject to the limitation 

on liability contained in paragraph (g)(2) 

of this section: 

(1) The status of an entity as an 

exempt person under paragraph (b)(4) of 

this section ceases once such entity 

ceases to be listed on the applicable 

stock exchange; and 

(2) The status of a subsidiary as an 

exempt person under paragraph (b)(5) of 

this section ceases once such subsidiary 

ceases to have at least 51 per cent of its 

common stock or analogous equity 

interest owned by a listed entity. 

(Approved by the Office of Management 

and Budget under control number 1506– 

0012) 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65847 

1For funds transfers effected through the Federal 

Reserve’s Fedwire funds transfer system, only one 

of the items is required to be retained, if received 

with the payment order, until such time as the bank 

that sends the order to the Federal Reserve Bank 

completes its conversion to the expanded Fedwire 

message format. 

§ 1020.320 Reports by banks of suspicious 

transactions. 

(a) General. (1) Every bank shall file 

with the Treasury Department, to the 

extent and in the manner required by 

this section, a report of any suspicious 

transaction relevant to a possible 

violation of law or regulation. A bank 

may also file with the Treasury 

Department by using the Suspicious 

Activity Report specified in paragraph 

(b)(1) of this section or otherwise, a 

report of any suspicious transaction that 

it believes is relevant to the possible 

violation of any law or regulation but 

whose reporting is not required by this 

section. 

(2) A transaction requires reporting 

under the terms of this section if it is 

conducted or attempted by, at, or 

through the bank, it involves or 

aggregates at least $5,000 in funds or 

other assets, and the bank knows, 

suspects, or has reason to suspect that: 

(i) The transaction involves funds 

derived from illegal activities or is 

intended or conducted in order to hide 

or disguise funds or assets derived from 

illegal activities (including, without 

limitation, the ownership, nature, 

source, location, or control of such 

funds or assets) as part of a plan to 

violate or evade any Federal law or 

regulation or to avoid any transaction 

reporting requirement under Federal 

law or regulation; 

(ii) The transaction is designed to 

evade any requirements of this chapter 

or of any other regulations promulgated 

under the Bank Secrecy Act; or 

(iii) The transaction has no business 

or apparent lawful purpose or is not the 

sort in which the particular customer 

would normally be expected to engage, 

and the bank knows of no reasonable 

explanation for the transaction after 

examining the available facts, including 

the background and possible purpose of 

the transaction. 

(b) Filing procedures—(1) What to file. 

A suspicious transaction shall be 

reported by completing a Suspicious 

Activity Report (‘‘SAR’’), and collecting 

and maintaining supporting 

documentation as required by paragraph 

(d) of this section. 

(2) Where to file. The SAR shall be 

filed with FinCEN in a central location, 

to be determined by FinCEN, as 

indicated in the instructions to the SAR. 

(3) When to file. A bank is required to 

file a SAR no later than 30 calendar 

days after the date of initial detection by 

the bank of facts that may constitute a 

basis for filing a SAR. If no suspect was 

identified on the date of the detection of 

the incident requiring the filing, a bank 

may delay filing a SAR for an additional 

30 calendar days to identify a suspect. 

In no case shall reporting be delayed 

more than 60 calendar days after the 

date of initial detection of a reportable 

transaction. In situations involving 

violations that require immediate 

attention, such as, for example, ongoing 

money laundering schemes, the bank 

shall immediately notify, by telephone, 

an appropriate law enforcement 

authority in addition to filing timely a 

SAR. 

(c) Exceptions. A bank is not required 

to file a SAR for a robbery or burglary 

committed or attempted that is reported 

to appropriate law enforcement 

authorities, or for lost, missing, 

counterfeit, or stolen securities with 

respect to which the bank files a report 

pursuant to the reporting requirements 

of 17 CFR 240.17f–1. 

(d) Retention of records. A bank shall 

maintain a copy of any SAR filed and 

the original or business record 

equivalent of any supporting 

documentation for a period of five years 

from the date of filing the SAR. 

Supporting documentation shall be 

identified, and maintained by the bank 

as such, and shall be deemed to have 

been filed with the SAR. A bank shall 

make all supporting documentation 

available to FinCEN and any 

appropriate law enforcement agencies or 

bank supervisory agencies upon request. 

(e) Confidentiality of reports; 

limitation of liability. No bank or other 

financial institution, and no director, 

officer, employee, or agent of any bank 

or other financial institution, who 

reports a suspicious transaction under 

this chapter, may notify any person 

involved in the transaction that the 

transaction has been reported. Thus, any 

person subpoenaed or otherwise 

requested to disclose a SAR or the 

information contained in a SAR, except 

where such disclosure is requested by 

FinCEN or an appropriate law 

enforcement or bank supervisory 

agency, shall decline to produce the 

SAR or to provide any information that 

would disclose that a SAR has been 

prepared or filed, citing this paragraph 

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

notify FinCEN of any such request and 

its response thereto. A bank, and any 

director, officer, employee, or agent of 

such bank, that makes a report pursuant 

to this section (whether such report is 

required by this section or is made 

voluntarily) shall be protected from 

liability for any disclosure contained in, 

or for failure to disclose the fact of such 

report, or both, to the full extent 

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

(f) Compliance. Compliance with this 

section shall be audited by the 

Department of the Treasury, through 

FinCEN or its delegees under the terms 

of the Bank Secrecy Act. Failure to 

satisfy the requirements of this section 

may be a violation of the reporting rules 

of the Bank Secrecy Act and of this 

chapter. Such failure may also violate 

provisions of Title 12 of the Code of 

Federal Regulations. 

Subpart D—Records Required To Be 

Maintained By Banks 

§ 1020.400 General. 

Banks are subject to the recordkeeping 

requirements set forth and cross 

referenced in this subpart. Banks should 

also refer to Subpart D of Part 1010 of 

this Chapter for recordkeeping 

requirements contained in that subpart 

which apply to banks. 

§ 1020.410 Records to be made and 

retained by banks. 

(a) Each agent, agency, branch, or 

office located within the United States 

of a bank is subject to the requirements 

of this paragraph (a) with respect to a 

funds transfer in the amount of $3,000 

or more, and is required to retain either 

the original or a microfilm or other copy 

or reproduction of each of the following: 

(1) Recordkeeping requirements. (i) 

For each payment order that it accepts 

as an originator’s bank, a bank shall 

obtain and retain either the original or 

a microfilm, other copy, or electronic 

record of the following information 

relating to the payment order: 

(A) The name and address of the 

originator; 

(B) The amount of the payment order; 

(C) The execution date of the payment 

order; 

(D) Any payment instructions 

received from the originator with the 

payment order; 

(E) The identity of the beneficiary’s 

bank; and 

(F) As many of the following items as 

are received with the payment order: 1

(1) The name and address of the 

beneficiary; 

(2) The account number of the 

beneficiary; and 

(3) Any other specific identifier of the 

beneficiary. 

(ii) For each payment order that it 

accepts as an intermediary bank, a bank 

shall retain either the original or a 

microfilm, other copy, or electronic 

record of the payment order. 

(iii) For each payment order that it 

accepts as a beneficiary’s bank, a bank 

shall retain either the original or a 


erowe on DSK5CLS3C1PROD with RULES3
65848 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

microfilm, other copy, or electronic 

record of the payment order. 

(2) Originators other than established 

customers. In the case of a payment 

order from an originator that is not an 

established customer, in addition to 

obtaining and retaining the information 

required in paragraph (a)(1)(i) of this 

section: 

(i) If the payment order is made in 

person, prior to acceptance the 

originator’s bank shall verify the 

identity of the person placing the 

payment order. If it accepts the payment 

order, the originator’s bank shall obtain 

and retain a record of the name and 

address, the type of identification 

reviewed, the number of the 

identification document (e.g., driver’s 

license), as well as a record of the 

person’s taxpayer identification number 

(e.g., social security or employer 

identification number) or, if none, alien 

identification number or passport 

number and country of issuance, or a 

notation in the record of the lack 

thereof. If the originator’s bank has 

knowledge that the person placing the 

payment order is not the originator, the 

originator’s bank shall obtain and retain 

a record of the originator’s taxpayer 

identification number (e.g., social 

security or employer identification 

number) or, if none, alien identification 

number or passport number and country 

of issuance, if known by the person 

placing the order, or a notation in the 

record of the lack thereof. 

(ii) If the payment order accepted by 

the originator’s bank is not made in 

person, the originator’s bank shall 

obtain and retain a record of name and 

address of the person placing the 

payment order, as well as the person’s 

taxpayer identification number (e.g., 

social security or employer 

identification number) or, if none, alien 

identification number or passport 

number and country of issuance, or a 

notation in the record of the lack 

thereof, and a copy or record of the 

method of payment (e.g., check or credit 

card transaction) for the funds transfer. 

If the originator’s bank has knowledge 

that the person placing the payment 

order is not the originator, the 

originator’s bank shall obtain and retain 

a record of the originator’s taxpayer 

identification number (e.g., social 

security or employer identification 

number) or, if none, alien identification 

number or passport number and country 

of issuance, if known by the person 

placing the order, or a notation in the 

record of the lack thereof. 

(3) Beneficiaries other than 

established customers. For each 

payment order that it accepts as a 

beneficiary’s bank for a beneficiary that 

is not an established customer, in 

addition to obtaining and retaining the 

information required in paragraph 

(a)(1)(iii) of this section: 

(i) If the proceeds are delivered in 

person to the beneficiary or its 

representative or agent, the beneficiary’s 

bank shall verify the identity of the 

person receiving the proceeds and shall 

obtain and retain a record of the name 

and address, the type of identification 

reviewed, and the number of the 

identification document (e.g., driver’s 

license), as well as a record of the 

person’s taxpayer identification number 

(e.g., social security or employer 

identification number) or, if none, alien 

identification number or passport 

number and country of issuance, or a 

notation in the record of the lack 

thereof. If the beneficiary’s bank has 

knowledge that the person receiving the 

proceeds is not the beneficiary, the 

beneficiary’s bank shall obtain and 

retain a record of the beneficiary’s name 

and address, as well as the beneficiary’s 

taxpayer identification number (e.g., 

social security or employer 

identification number) or, if none, alien 

identification number or passport 

number and country of issuance, if 

known by the person receiving the 

proceeds, or a notation in the record of 

the lack thereof. 

(ii) If the proceeds are delivered other 

than in person, the beneficiary’s bank 

shall retain a copy of the check or other 

instrument used to effect payment, or 

the information contained thereon, as 

well as the name and address of the 

person to which it was sent. 

(4) Retrievability. The information 

that an originator’s bank must retain 

under paragraphs (a)(1)(i) and (a)(2) of 

this section shall be retrievable by the 

originator’s bank by reference to the 

name of the originator. If the originator 

is an established customer of the 

originator’s bank and has an account 

used for funds transfers, then the 

information also shall be retrievable by 

account number. The information that a 

beneficiary’s bank must retain under 

paragraphs (a)(1)(iii) and (a)(3) of this 

section shall be retrievable by the 

beneficiary’s bank by reference to the 

name of the beneficiary. If the 

beneficiary is an established customer of 

the beneficiary’s bank and has an 

account used for funds transfers, then 

the information also shall be retrievable 

by account number. This information 

need not be retained in any particular 

manner, so long as the bank is able to 

retrieve the information required by this 

paragraph, either by accessing funds 

transfer records directly or through 

reference to some other record 

maintained by the bank. 

(5) Verification. Where verification is 

required under paragraphs (a)(2) and 

(a)(3) of this section, a bank shall verify 

a person’s identity by examination of a 

document (other than a bank signature 

card), preferably one that contains the 

person’s name, address, and 

photograph, that is normally acceptable 

by financial institutions as a means of 

identification when cashing checks for 

persons other than established 

customers. Verification of the identity of 

an individual who indicates that he or 

she is an alien or is not a resident of the 

United States may be made by passport, 

alien identification card, or other 

official document evidencing 

nationality or residence (e.g., a foreign 

driver’s license with indication of home 

address). 

(6) Exceptions. The following funds 

transfers are not subject to the 

requirements of this section: 

(i) Funds transfers where the 

originator and beneficiary are any of the 

following: 

(A) A bank; 

(B) A wholly owned domestic 

subsidiary of a bank chartered in the 

United States; 

(C) A broker or dealer in securities; 

(D) A wholly owned domestic 

subsidiary of a broker or dealer in 

securities; 

(E) A futures commission merchant or 

an introducing broker in commodities; 

(F) A wholly owned domestic 

subsidiary of a futures commission 

merchant or an introducing broker in 

commodities; 

(G) The United States; 

(H) A state or local government; 

(I) A Federal, State or local 

government agency or instrumentality; 

or 

(J) A mutual fund; and 

(ii) Funds transfers where both the 

originator and the beneficiary are the 

same person and the originator’s bank 

and the beneficiary’s bank are the same 

bank. 

(b)(1) With respect to each certificate 

of deposit sold or redeemed after May 

31, 1978, and before October 1, 2003, or 

each deposit or share account opened 

with a bank after June 30, 1972, and 

before October 1, 2003, a bank shall, 

within 30 days from the date such a 

transaction occurs or an account is 

opened, secure and maintain a record of 

the taxpayer identification number of 

the customer involved; or where the 

account or certificate is in the names of 

two or more persons, the bank shall 

secure the taxpayer identification 

number of a person having a financial 

interest in the certificate or account. In 

the event that a bank has been unable 

to secure, within the 30-day period 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65849 

specified, the required identification, it 

shall nevertheless not be deemed to be 

in violation of this section if it has made 

a reasonable effort to secure such 

identification, and it maintains a list 

containing the names, addresses, and 

account numbers of those persons from 

whom it has been unable to secure such 

identification, and makes the names, 

addresses, and account numbers of 

those persons available to the Secretary 

as directed by him. A bank acting as an 

agent for another person in the purchase 

or redemption of a certificate of deposit 

issued by another bank is responsible 

for obtaining and recording the required 

taxpayer identification, as well as for 

maintaining the records referred to in 

paragraphs (c)(11) and (12) of this 

section. The issuing bank can satisfy the 

recordkeeping requirement by recording 

the name and address of the agent 

together with a description of the 

instrument and the date of the 

transaction. Where a person is a nonresident alien, the bank shall also record 

the person’s passport number or a 

description of some other government 

document used to verify his identity. 

(2) The 30-day period provided for in 

paragraph (b)(1) of this section shall be 

extended where the person opening the 

account has applied for a taxpayer 

identification or social security number 

on Form SS–4 or SS–5, until such time 

as the person maintaining the account 

has had a reasonable opportunity to 

secure such number and furnish it to the 

bank. 

(3) A taxpayer identification number 

required under paragraph (b)(1) of this 

section need not be secured for accounts 

or transactions with the following: 

(i) Agencies and instrumentalities of 

Federal, State, local or foreign 

governments; 

(ii) Judges, public officials, or clerks 

of courts of record as custodians of 

funds in controversy or under the 

control of the court; 

(iii) Aliens who are ambassadors, 

ministers, career diplomatic or consular 

officers, or naval, military or other 

attache ́s of foreign embassies and 

legations, and for the members of their 

immediate families; 

(iv) Aliens who are accredited 

representatives of international 

organizations which are entitled to 

enjoy privileges, exemptions and 

immunities as an international 

organization under the International 

Organization Immunities Act of 

December 29, 1945 (22 U.S.C. 288), and 

the members of their immediate 

families; 

(v) Aliens temporarily residing in the 

United States for a period not to exceed 

180 days; 

(vi) Aliens not engaged in a trade or 

business in the United States who are 

attending a recognized college or 

university or any training program, 

supervised or conducted by any agency 

of the Federal Government; 

(vii) Unincorporated subordinate 

units of a tax exempt central 

organization which are covered by a 

group exemption letter, 

(viii) A person under 18 years of age 

with respect to an account opened as a 

part of a school thrift savings program, 

provided the annual interest is less than 

$10; 

(ix) A person opening a Christmas 

club, vacation club and similar 

installment savings programs, provided 

the annual interest is less than $10; and 

(x) Non-resident aliens who are not 

engaged in a trade or business in the 

United States. 

(4) In instances described in 

paragraphs (b)(3)(viii) and (ix) of this 

section, the bank shall, within 15 days 

following the end of any calendar year 

in which the interest accrued in that 

year is $10 or more use its best effort to 

secure and maintain the appropriate 

taxpayer identification number or 

application form therefor. 

(5) The rules and regulations issued 

by the Internal Revenue Service under 

section 6109 of the Internal Revenue 

Code of 1954 shall determine what 

constitutes a taxpayer identification 

number and whose number shall be 

obtained in the case of an account 

maintained by one or more persons. 

(c) Each bank shall, in addition, retain 

either the original or a microfilm or 

other copy or reproduction of each of 

the following: 

(1) Each document granting signature 

authority over each deposit or share 

account, including any notations, if 

such are normally made, of specific 

identifying information verifying the 

identity of the signer (such as a driver’s 

license number or credit card number); 

(2) Each statement, ledger card or 

other record on each deposit or share 

account, showing each transaction in, or 

with respect to, that account; 

(3) Each check, clean draft, or money 

order drawn on the bank or issued and 

payable by it, except those drawn for 

$100 or less or those drawn on accounts 

which can be expected to have drawn 

on them an average of at least 100 

checks per month over the calendar year 

or on each occasion on which such 

checks are issued, and which are: 

(i) Dividend checks, 

(ii) Payroll checks, 

(iii) Employee benefit checks, 

(iv) Insurance claim checks, 

(v) Medical benefit checks, 

(vi) Checks drawn on government 

agency accounts, 

(vii) Checks drawn by brokers or 

dealers in securities, 

(viii) Checks drawn on fiduciary 

accounts, 

(ix) Checks drawn on other financial 

institutions, or 

(x) Pension or annuity checks; 

(4) Each item in excess of $100 (other 

than bank charges or periodic charges 

made pursuant to agreement with the 

customer), comprising a debit to a 

customer’s deposit or share account, not 

required to be kept, and not specifically 

exempted, under paragraph (c)(3) of this 

section; 

(5) Each item, including checks, 

drafts, or transfers of credit, of more 

than $10,000 remitted or transferred to 

a person, account or place outside the 

United States; 

(6) A record of each remittance or 

transfer of funds, or of currency, other 

monetary instruments, checks, 

investment securities, or credit, of more 

than $10,000 to a person, account or 

place outside the United States; 

(7) Each check or draft in an amount 

in excess of $10,000 drawn on or issued 

by a foreign bank which the domestic 

bank has paid or presented to a nonbank 

drawee for payment; 

(8) Each item, including checks, drafts 

or transfers of credit, of more than 

$10,000 received directly and not 

through a domestic financial institution, 

by letter, cable or any other means, from 

a bank, broker or dealer in foreign 

exchange outside the United States; 

(9) A record of each receipt of 

currency, other monetary instruments, 

investment securities or checks, and of 

each transfer of funds or credit, of more 

than $10,000 received on any one 

occasion directly and not through a 

domestic financial institution, from a 

bank, broker or dealer in foreign 

exchange outside the United States; and 

(10) Records prepared or received by 

a bank in the ordinary course of 

business, which would be needed to 

reconstruct a transaction account and to 

trace a check in excess of $100 

deposited in such account through its 

domestic processing system or to supply 

a description of a deposited check in 

excess of $100. This subparagraph shall 

be applicable only with respect to 

demand deposits. 

(11) A record containing the name, 

address, and taxpayer identification 

number as determined under section 

6109 of the Internal Revenue Code of 

1986, if available, of the purchaser of 

each certificate of deposit, as well as a 

description of the instrument, a notation 

of the method of payment, and the date 

of the transaction. 

(12) A record containing the name, 

address and taxpayer identification 


erowe on DSK5CLS3C1PROD with RULES3
65850 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

number as determined under section 

6109 of the Internal Revenue Code of 

1986, if available, of any person 

presenting a certificate of deposit for 

payment, as well as a description of the 

instrument and the date of the 

transaction. 

(13) Each deposit slip or credit ticket 

reflecting a transaction in excess of $100 

or the equivalent record for direct 

deposit or other wire transfer deposit 

transactions. The slip or ticket shall 

record the amount of any currency 

involved. 

Subpart E—Special Information 

Sharing Procedures To Deter Money 

Laundering and Terrorist Activity 

§ 1020.500 General. 

Banks are subject to the special 

information sharing procedures to deter 

money laundering and terrorist activity 

requirements set forth and cross 

referenced in this subpart. Banks should 

also refer to Subpart E of Part 1010 of 

this Chapter for special information 

sharing procedures to deter money 

laundering and terrorist activity 

contained in that subpart which apply 

to banks. 

§ 1020.520 Special information sharing 

procedures to deter money laundering and 

terrorist activity for banks. 

(a) Refer to § 1010.520 of this Chapter. 

(b) [Reserved] 

§ 1020.530 [Reserved] 

§ 1020.540 Voluntary information sharing 

among financial institutions. 

(a) Refer to § 1010.540 of this Chapter. 

(b) [Reserved] 

Subpart F—Special Standards of 

Diligence; Prohibitions; and Special 

Measures 

§ 1020.600 General. 

Banks are subject to the special 

standards of diligence; prohibitions; and 

special measures requirements set forth 

and cross referenced in this subpart. 

Banks should also refer to Subpart F of 

Part 1010 of this Chapter for special 

standards of diligence; prohibitions; and 

special measures contained in that 

subpart which apply to banks. 

§ 1020.610 Due diligence programs for 

correspondent accounts for foreign 

financial institutions. 

(a) Refer to § 1010.610 of this Chapter. 

(b) [Reserved] 

§ 1020.620 Due diligence programs for 

private banking accounts. 

(a) Refer to § 1010.620 of this Chapter. 

(b) [Reserved] 

§ 1020.630 Prohibition on correspondent 

accounts for foreign shell banks; records 

concerning owners of foreign banks and 

agents for service of legal process. 

(a) Refer to § 1010.630 of this Chapter. 

(b) [Reserved] 

§ 1020.640 [Reserved] 

§ 1020.670 Summons or subpoena of 

foreign bank records; Termination of 

correspondent relationship. 

(a) Refer to § 1010.670 of this Chapter. 

(b) [Reserved] 

PART 1021—RULES FOR CASINOS 

AND CARD CLUBS 

Subpart A—Definitions 

Sec. 

1021.100 Definitions. 

Subpart B—Programs 

1021.200 General. 

1021.210 Anti-money laundering program 

requirements for casinos. 

Subpart C—Reports Required To Be Made 

By Casinos and Card Clubs 

1021.300 General. 

1021.310 Reports of transactions in 

currency. 

1021.311 Filing obligations. 

1021.312 Identification required. 

1021.313 Aggregation. 

1021.314 Structured transactions. 

1021.315 Exemptions. 

1021.320 Reports by casinos of suspicious 

transactions. 

1021.330 Exceptions to the reporting 

requirements of 31 U.S.C. 5331. 

Subpart D—Records Required To Be 

Maintained By Casinos and Card Clubs 

1021.400 General. 

1021.410 Additional records to be made 

and retained by casinos. 

Subpart E—Special Information Sharing 

Procedures To Deter Money Laundering 

and Terrorist Activity for Casinos and Card 

Clubs 

1021.500 General. 

1021.520 Special information sharing 

procedures to deter money laundering 

and terrorist activity for casinos and card 

clubs. 

1021.530 [Reserved] 

1021.540 Voluntary information sharing 

among financial institutions. 

Subpart F—Special Standards of Diligence; 

Prohibitions, and Special Measures for 

Casinos and Card Clubs 

1021.600 General. 

1021.610 Due diligence programs for 

correspondent accounts for foreign 

financial institutions. 

1021.620 Due diligence programs for 

private banking accounts. 

1021.630 Prohibition on correspondent 

accounts for foreign shell banks; records 

concerning owners of foreign banks and 

agents for service of legal process. 

1021.640 [Reserved] 

1021.670 Summons or subpoena of foreign 

bank records; Termination of 

correspondent relationship. 

Subpart A—Definitions 

§ 1021.100 Definitions. 

Refer to § 1010.100 of this Chapter for 

general definitions not noted herein. To 

the extent there is a differing definition 

in § 1010.100 of this Chapter, the 

definition in this Section is what 

applies to Part 1021. Unless otherwise 

indicated, for purposes of this Part: 

(a) Business year means the annual 

accounting period, such as a calendar or 

fiscal year, by which a casino maintains 

its books and records for purposes of 

subtitle A of title 26 of the United States 

Code. 

(b) Casino account number means any 

and all numbers by which a casino 

identifies a customer. 

(c) Customer includes every person 

which is involved in a transaction to 

which this chapter applies with a 

casino, whether or not that person 

participates, or intends to participate, in 

the gaming activities offered by that 

casino. 

(d) Gaming day means the normal 

business day of a casino. For a casino 

that offers 24 hour gaming, the term 

means that 24 hour period by which the 

casino keeps its books and records for 

business, accounting, and tax purposes. 

For purposes of the regulations 

contained in this chapter, each casino 

may have only one gaming day, 

common to all of its divisions. 

(e) Machine-readable means capable 

of being read by an automated data 

processing system. 

Subpart B—Programs 

§ 1021.200 General. 

Casinos and card clubs are subject to 

the program requirements set forth and 

cross referenced in this subpart. Casinos 

and card clubs should also refer to 

Subpart B of Part 1010 of this Chapter 

for program requirements contained in 

that subpart which apply to casinos and 

card clubs. 

§ 1021.210 Anti-money laundering 

program requirements for casinos. 

(a) Requirements for casinos. A casino 

shall be deemed to satisfy the 

requirements of 31 U.S.C. 5318(h)(1) if 

it implements and maintains a 

compliance program described in 

paragraph (b) of this section. 

(b) Compliance programs. (1) Each 

casino shall develop and implement a 

written program reasonably designed to 

assure and monitor compliance with the 

requirements set forth in 31 U.S.C. 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65851 

chapter 53, subchapter II and the 

regulations contained in this chapter. 

(2) At a minimum, each compliance 

program shall provide for: 

(i) A system of internal controls to 

assure ongoing compliance; 

(ii) Internal and/or external 

independent testing for compliance. The 

scope and frequency of the testing shall 

be commensurate with the money 

laundering and terrorist financing risks 

posed by the products and services 

provided by the casino; 

(iii) Training of casino personnel, 

including training in the identification 

of unusual or suspicious transactions, to 

the extent that the reporting of such 

transactions is required by this chapter, 

by other applicable law or regulation, or 

by the casino’s own administrative and 

compliance policies; 

(iv) An individual or individuals to 

assure day-to-day compliance; 

(v) Procedures for using all available 

information to determine: 

(A) When required by this chapter, 

the name, address, social security 

number, and other information, and 

verification of the same, of a person; 

(B) The occurrence of any transactions 

or patterns of transactions required to be 

reported pursuant to § 1021.320; 

(C) Whether any record as described 

in subpart D of Part 1010 of this Chapter 

or subpart D of this Part 1021 must be 

made and retained; and 

(vi) For casinos that have automated 

data processing systems, the use of 

automated programs to aid in assuring 

compliance. 

Subpart C—Reports Required To Be 

Made By Casinos and Card Clubs 

§ 1021.300 General. 

Casinos and card clubs are subject to 

the reporting requirements set forth and 

cross referenced in this subpart. Casinos 

and card clubs should also refer to 

Subpart C of Part 1010 of this Chapter 

for reporting requirements contained in 

that subpart which apply to casinos and 

card clubs. 

§ 1021.310 Reports of transactions in 

currency. 

The reports of transactions in 

currency requirements for casinos are 

located in subpart C of Part 1010 of this 

Chapter and this subpart. 

§ 1021.311 Filing obligations. 

Each casino shall file a report of each 

transaction in currency, involving either 

cash in or cash out, of more than 

$10,000. 

(a) Transactions in currency involving 

cash in include, but are not limited to: 

(1) Purchases of chips, tokens, and 

other gaming instruments; 

(2) Front money deposits; 

(3) Safekeeping deposits; 

(4) Payments on any form of credit, 

including markers and counter checks; 

(5) Bets of currency, including money 

plays; 

(6) Currency received by a casino for 

transmittal of funds through wire 

transfer for a customer; 

(7) Purchases of a casino’s check; 

(8) Exchanges of currency for 

currency, including foreign currency; 

and 

(9) Bills inserted into electronic 

gaming devices. 

(b) Transactions in currency involving 

cash out include, but are not limited to: 

(1) Redemptions of chips, tokens, 

tickets, and other gaming instruments; 

(2) Front money withdrawals; 

(3) Safekeeping withdrawals; 

(4) Advances on any form of credit, 

including markers and counter checks; 

(5) Payments on bets; 

(6) Payments by a casino to a 

customer based on receipt of funds 

through wire transfers; 

(7) Cashing of checks or other 

negotiable instruments; 

(8) Exchanges of currency for 

currency, including foreign currency; 

(9) Travel and complimentary 

expenses and gaming incentives; and 

(10) Payment for tournament, 

contests, and other promotions. 

(c) Other provisions of this chapter 

notwithstanding, casinos are exempted 

from the reporting obligations found in 

this section and § 1021.313 for the 

following transactions in currency or 

currency transactions: 

(1) Transactions between a casino and 

a currency dealer or exchanger, or 

between a casino and a check casher, as 

those terms are defined in § 1010.100(ff) 

of this Chapter, so long as such 

transactions are conducted pursuant to 

a contractual or other arrangement with 

a casino covering the financial services 

in paragraphs (a)(8), (b)(7), and (b)(8) of 

this section; 

(2) Cash out transactions to the extent 

the currency is won in a money play 

and is the same currency the customer 

wagered in the money play, or cash in 

transactions to the extent the currency 

is the same currency the customer 

previously wagered in a money play on 

the same table game without leaving the 

table; 

(3) Bills inserted into electronic 

gaming devices in multiple transactions 

(unless a casino has knowledge 

pursuant to § 1021.313 in which case 

this exemption would not apply); and 

(4) Jackpots from slot machines or 

video lottery terminals. 

§ 1021.312 Identification required. 

Refer to § 1010.312 of this Chapter for 

identification requirements for reports 

of transaction in currency filed by 

casinos and card clubs. 

§ 1021.313 Aggregation. 

In the case of a casino, multiple 

currency transactions shall be treated as 

a single transaction if the casino has 

knowledge that they are by or on behalf 

of any person and result in either cash 

in or cash out totaling more than 

$10,000 during any gaming day. For 

purposes of this section, a casino shall 

be deemed to have the knowledge 

described in the preceding sentence, if: 

Any sole proprietor, partner, officer, 

director, or employee of the casino, 

acting within the scope of his or her 

employment, has knowledge that such 

multiple currency transactions have 

occurred, including knowledge from 

examining the books, records, logs, 

information retained on magnetic disk, 

tape or other machine-readable media, 

or in any manual system, and similar 

documents and information, which the 

casino maintains pursuant to any law or 

regulation or within the ordinary course 

of its business, and which contain 

information that such multiple currency 

transactions have occurred. 

§ 1021.314 Structured transactions. 

Refer to § 1010.314 of this Chapter for 

rules regarding structured transactions 

for casinos. 

§ 1021.315 Exemptions. 

Refer to § 1010.315 of this Chapter for 

exemptions from the obligation to file 

reports of transactions in currency for 

casinos. 

§ 1021.320 Reports by casinos of 

suspicious transactions. 

(a) General. (1) Every casino shall file 

with FinCEN, to the extent and in the 

manner required by this section, a 

report of any suspicious transaction 

relevant to a possible violation of law or 

regulation. A casino may also file with 

FinCEN, by using the form specified in 

paragraph (b)(1) of this section, or 

otherwise, a report of any suspicious 

transaction that it believes is relevant to 

the possible violation of any law or 

regulation but whose reporting is not 

required by this section. 

(2) A transaction requires reporting 

under the terms of this section if it is 

conducted or attempted by, at, or 

through a casino, and involves or 

aggregates at least $5,000 in funds or 

other assets, and the casino knows, 

suspects, or has reason to suspect that 

the transaction (or a pattern of 

transactions of which the transaction is 

a part): 


erowe on DSK5CLS3C1PROD with RULES3
65852 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

(i) Involves funds derived from illegal 

activity or is intended or conducted in 

order to hide or disguise funds or assets 

derived from illegal activity (including, 

without limitation, the ownership, 

nature, source, location, or control of 

such funds or assets) as part of a plan 

to violate or evade any Federal law or 

regulation or to avoid any transaction 

reporting requirement under Federal 

law or regulation; 

(ii) Is designed, whether through 

structuring or other means, to evade any 

requirements of this chapter or of any 

other regulations promulgated under the 

Bank Secrecy Act; 

(iii) Has no business or apparent 

lawful purpose or is not the sort in 

which the particular customer would 

normally be expected to engage, and the 

casino knows of no reasonable 

explanation for the transaction after 

examining the available facts, including 

the background and possible purpose of 

the transaction; or 

(iv) Involves use of the casino to 

facilitate criminal activity. 

(b) Filing procedures—(1) What to file. 

A suspicious transaction shall be 

reported by completing a Suspicious 

Activity Report by Casinos (‘‘SARC’’), 

and collecting and maintaining 

supporting documentation as required 

by paragraph (d) of this section. 

(2) Where to file. The SARC shall be 

filed with FinCEN in a central location, 

to be determined by FinCEN, as 

indicated in the instructions to the 

SARC. 

(3) When to file. A SARC shall be filed 

no later than 30 calendar days after the 

date of the initial detection by the 

casino of facts that may constitute a 

basis for filing a SARC under this 

section. If no suspect is identified on the 

date of such initial detection, a casino 

may delay filing a SARC for an 

additional 30 calendar days to identify 

a suspect, but in no case shall reporting 

be delayed more than 60 calendar days 

after the date of such initial detection. 

In situations involving violations that 

require immediate attention, such as 

ongoing money laundering schemes, the 

casino shall immediately notify by 

telephone an appropriate law 

enforcement authority in addition to 

filing timely a SARC. Casinos wishing 

voluntarily to report suspicious 

transactions that may relate to terrorist 

activity may call FinCEN’s Financial 

Institutions Hotline at 1–866–556–3974 

in addition to filing timely a SARC if 

required by this section. 

(c) Exceptions. A casino is not 

required to file a SARC for a robbery or 

burglary committed or attempted that is 

reported to appropriate law enforcement 

authorities. 

(d) Retention of records. A casino 

shall maintain a copy of any SARC filed 

and the original or business record 

equivalent of any supporting 

documentation for a period of five years 

from the date of filing the SARC. 

Supporting documentation shall be 

identified as such and maintained by 

the casino, and shall be deemed to have 

been filed with the SARC. A casino 

shall make all supporting 

documentation available to FinCEN, any 

other appropriate law enforcement 

agencies or Federal, State, local, or tribal 

gaming regulators upon request. 

(e) Confidentiality of reports; 

limitation of liability. No casino, and no 

director, officer, employee, or agent of 

any casino, who reports a suspicious 

transaction under this chapter, may 

notify any person involved in the 

transaction that the transaction has been 

reported. Thus, any person subpoenaed 

or otherwise requested to disclose a 

SARC or the information contained in a 

SARC, except where such disclosure is 

requested by FinCEN or another 

appropriate law enforcement or 

regulatory agency, shall decline to 

produce the SARC or to provide any 

information that would disclose that a 

SARC has been prepared or filed, citing 

this paragraph (e) and 31 U.S.C. 

5318(g)(2), and shall notify FinCEN of 

any such request and its response 

thereto. A casino, and any director, 

officer, employee, or agent of such 

casino, that makes a report pursuant to 

this section (whether such report is 

required by this section or made 

voluntarily) shall be protected from 

liability for any disclosure contained in, 

or for failure to disclose the fact of, such 

report, or both, to the extent provided 

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

(f) Compliance. Compliance with this 

section shall be audited by the 

Department of the Treasury, through 

FinCEN or its delegees, under the terms 

of the Bank Secrecy Act. Failure to 

satisfy the requirements of this section 

may constitute a violation of the 

reporting rules of the Bank Secrecy Act 

and of this chapter. 

(g) Applicability date. This section 

applies to transactions occurring after 

March 25, 2003. 

§ 1021.330 Exceptions to the reporting 

requirements of 31 U.S.C. 5331. 

(a) Receipt of currency by certain 

casinos having gross annual gaming 

revenue in excess of $1,000,000—In 

general. If a casino receives currency in 

excess of $10,000 and is required to 

report the receipt of such currency 

directly to the Treasury Department 

under § 1010.306, § 1021.311, or 

§ 1021.313 and is subject to the 

recordkeeping requirements of 

§ 1021.410, then the casino is not 

required to make a report with respect 

to the receipt of such currency under 31 

U.S.C. 5331 and this section. 

(b) Casinos exempt under 

§ 1010.970(c). Pursuant to § 1010.970, 

the Secretary may exempt from the 

reporting and recordkeeping 

requirements under § 1010.306, 

§ 1021.311, § 1021.313 or § 1021.410 

casinos in any state whose regulatory 

system substantially meets the reporting 

and recordkeeping requirements of this 

chapter. Such casinos shall not be 

required to report receipt of currency 

under 31 U.S.C. 5331 and this section. 

(c) Reporting of currency received in 

a non-gaming business. Non-gaming 

businesses (such as shops, restaurants, 

entertainment, and hotels) at casino 

hotels and resorts are separate trades or 

businesses in which the receipt of 

currency in excess of $10,000 is 

reportable under section 5331 and these 

regulations. Thus, a casino exempt 

under paragraph (a) or (b) of this section 

must report with respect to currency in 

excess of $10,000 received in its nongaming businesses. 

(d) Example. The following example 

illustrates the application of the rules in 

paragraphs (a) and (c) of this section: 

Example. A and B are casinos having gross 

annual gaming revenue in excess of 

$1,000,000. C is a casino with gross annual 

gaming revenue of less than $1,000,000. 

Casino A receives $15,000 in currency from 

a customer with respect to a gaming 

transaction which the casino reports to the 

Treasury Department under §§ 1010.306, 

1021.311, and 1021.313. Casino B receives 

$15,000 in currency from a customer in 

payment for accommodations provided to 

that customer at Casino B’s hotel. Casino C 

receives $15,000 in currency from a customer 

with respect to a gaming transaction. Casino 

A is not required to report the transaction 

under 31 U.S.C. 5331 or this section because 

the exception for certain casinos provided in 

paragraph (a) of this section (‘‘the casino 

exception’’) applies. Casino B is required to 

report under 31 U.S.C. 5331 and this section 

because the casino exception does not apply 

to the receipt of currency from a nongaming 

activity. Casino C is required to report under 

31 U.S.C. 5331 and this section because the 

casino exception does not apply to casinos 

having gross annual gaming revenue of 

$1,000,000 or less which do not have to 

report to the Treasury Department under 

§§ 1010.306, 1021.311, and 1021.313. 

Subpart D—Records Required To Be 

Maintained By Casinos and Card Clubs 

§ 1021.400 General. 

Casinos and card clubs are subject to 

the recordkeeping requirements set forth 

and cross referenced in this subpart. 

Casinos and card clubs should also refer 

to Subpart D of Part 1010 of this Chapter 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65853 

for recordkeeping requirements 

contained in that subpart which apply 

to casinos and card clubs. 

§ 1021.410 Additional records to be made 

and retained by casinos. 

(a) With respect to each deposit of 

funds, account opened or line of credit 

extended after the effective date of these 

regulations, a casino shall, at the time 

the funds are deposited, the account is 

opened or credit is extended, secure and 

maintain a record of the name, 

permanent address, and social security 

number of the person involved. Where 

the deposit, account or credit is in the 

names of two or more persons, the 

casino shall secure the name, permanent 

address, and social security number of 

each person having a financial interest 

in the deposit, account or line of credit. 

The name and address of such person 

shall be verified by the casino at the 

time the deposit is made, account 

opened, or credit extended. The 

verification shall be made by 

examination of a document of the type 

described in § 1010.312 of this Chapter, 

and the specific identifying information 

shall be recorded in the manner 

described in § 1010.312 of this Chapter. 

In the event that a casino has been 

unable to secure the required social 

security number, it shall not be deemed 

to be in violation of this section if it has 

made a reasonable effort to secure such 

number and it maintains a list 

containing the names and permanent 

addresses of those persons from who it 

has been unable to obtain social security 

numbers and makes the names and 

addresses of those persons available to 

the Secretary upon request. Where a 

person is a nonresident alien, the casino 

shall also record the person’s passport 

number or a description of some other 

government document used to verify his 

identity. 

(b) In addition, each casino shall 

retain either the original or a microfilm 

or other copy or reproduction of each of 

the following: 

(1) A record of each receipt (including 

but not limited to funds for safekeeping 

or front money) of funds by the casino 

for the account (credit or deposit) of any 

person. The record shall include the 

name, permanent address and social 

security number of the person from 

whom the funds were received, as well 

as the date and amount of the funds 

received. If the person from whom the 

funds were received is a non-resident 

alien, the person’s passport number or 

a description of some other government 

document used to verify the person’s 

identity shall be obtained and recorded; 

(2) A record of each bookkeeping 

entry comprising a debit or credit to a 

customer’s deposit account or credit 

account with the casino; 

(3) Each statement, ledger card or 

other record of each deposit account or 

credit account with the casino, showing 

each transaction (including deposits, 

receipts, withdrawals, disbursements or 

transfers) in or with respect to, a 

customer’s deposit account or credit 

account with the casino; 

(4) A record of each extension of 

credit in excess of $2,500, the terms and 

conditions of such extension of credit, 

and repayments. The record shall 

include the customer’s name, 

permanent address, social security 

number, and the date and amount of the 

transaction (including repayments). If 

the customer or person for whom the 

credit extended is a non-resident alien, 

his passport number or description of 

some other government document used 

to verify his identity shall be obtained 

and recorded; 

(5) A record of each advice, request or 

instruction received or given by the 

casino for itself or another person with 

respect to a transaction involving a 

person, account or place outside the 

United States (including but not limited 

to communications by wire, letter, or 

telephone). If the transfer outside the 

United States is on behalf of a third 

party, the record shall include the third 

party’s name, permanent address, social 

security number, signature, and the date 

and amount of the transaction. If the 

transfer is received from outside the 

United States on behalf of a third party, 

the record shall include the third party’s 

name, permanent address, social 

security number, signature, and the date 

and amount of the transaction. If the 

person for whom the transaction is 

being made is a non-resident alien the 

record shall also include the person’s 

name, his passport number or a 

description of some other government 

document used to verify his identity; 

(6) Records prepared or received by 

the casino in the ordinary course of 

business which would be needed to 

reconstruct a person’s deposit account 

or credit account with the casino or to 

trace a check deposited with the casino 

through the casino’s records to the bank 

of deposit; 

(7) All records, documents or manuals 

required to be maintained by a casino 

under state and local laws or 

regulations, regulations of any 

governing Indian tribe or tribal 

government, or terms of (or any 

regulations issued under) any TribalState compacts entered into pursuant to 

the Indian Gaming Regulatory Act, with 

respect to the casino in question. 

(8) All records which are prepared or 

used by a casino to monitor a customer’s 

gaming activity. 

(9)(i) A separate record containing a 

list of each transaction between the 

casino and its customers involving the 

following types of instruments having a 

face value of $3,000 or more: 

(A) Personal checks (excluding 

instruments which evidence credit 

granted by a casino strictly for gaming, 

such as markers); 

(B) Business checks (including casino 

checks); 

(C) Official bank checks; 

(D) Cashier’s checks; 

(E) Third-party checks; 

(F) Promissory notes; 

(G) Traveler’s checks; and 

(H) Money orders. 

(ii) The list will contain the time, 

date, and amount of the transaction; the 

name and permanent address of the 

customer; the type of instrument; the 

name of the drawee or issuer of the 

instrument; all reference numbers (e.g., 

casino account number, personal check 

number, etc.); and the name or casino 

license number of the casino employee 

who conducted the transaction. 

Applicable transactions will be placed 

on the list in the chronological order in 

which they occur. 

(10) A copy of the compliance 

program described in § 1021.210(b). 

(11) In the case of card clubs only, 

records of all currency transactions by 

customers, including without limitation, 

records in the form of currency 

transaction logs and multiple currency 

transaction logs, and records of all 

activity at cages or similar facilities, 

including, without limitation, cage 

control logs. 

(c)(1) Casinos which input, store, or 

retain, in whole or in part, for any 

period of time, any record required to be 

maintained by § 1010.410 of this 

Chapter or this section on computer 

disk, tape, or other machine-readable 

media shall retain the same on 

computer disk, tape, or machinereadable media. 

(2) All indexes, books, programs, 

record layouts, manuals, formats, 

instructions, file descriptions, and 

similar materials which would enable a 

person readily to access and review the 

records that are described in § 1010.410 

of this Chapter and this section and that 

are input, stored, or retained on 

computer disk, tape, or other machinereadable media shall be retained for the 

period of time such records are required 

to be retained. 


erowe on DSK5CLS3C1PROD with RULES3
65854 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

Subpart E—Special Information 

Sharing Procedures To Deter Money 

Laundering and Terrorist Activity for 

Casinos and Card Clubs 

§ 1021.500 General. 

Casinos and card clubs are subject to 

the special information sharing 

procedures to deter money laundering 

and terrorist activity requirements set 

forth and cross referenced in this 

subpart. Casinos and card clubs should 

also refer to Subpart E of Part 1010 of 

this Chapter for special information 

sharing procedures to deter money 

laundering and terrorist activity 

contained in that subpart which apply 

to casinos and card clubs. 

§ 1021.520 Special information sharing 

procedures to deter money laundering and 

terrorist activity for casinos and card clubs. 

(a) Refer to § 1010.520 of this Chapter. 

(b) [Reserved] 

§ 1021.530 [Reserved] 

§ 1021.540 Voluntary information sharing 

among financial institutions. 

(a) Refer to § 1010.540 of this Chapter. 

(b) [Reserved] 

Subpart F—Special Standards of 

Diligence; Prohibitions; and Special 

Measures for Casinos and Card Clubs 

§ 1021.600 General. 

Casinos and card clubs are subject to 

the special standards of diligence; 

prohibitions; and special measures 

requirements set forth and cross 

referenced in this subpart. Casinos and 

card clubs should also refer to Subpart 

F of Part 1010 of this Chapter for special 

standards of diligence; prohibitions; and 

special measures contained in that 

subpart which apply to casinos and card 

clubs. 

§ 1021.610 Due diligence programs for 

correspondent accounts for foreign 

financial institutions. 

(a) Refer to § 1010.610 of this Chapter. 

(b) [Reserved] 

§ 1021.620 Due diligence programs for 

private banking accounts. 

(a) Refer to § 1010.620 of this Chapter. 

(b) [Reserved] 

§ 1021.630 Prohibition on correspondent 

accounts for foreign shell banks; records 

concerning owners of foreign banks and 

agents for service of legal process. 

(a) Refer to § 1010.630 of this Chapter. 

(b) [Reserved] 

§ 1021.640 [Reserved] 

§ 1021.670 Summons or subpoena of 

foreign bank records; Termination of 

correspondent relationship. 

(a) Refer to § 1010.670 of this Chapter. 

(b) [Reserved] 

PART 1022—RULES FOR MONEY 

SERVICES BUSINESSES 

Subpart A—Definitions 

Sec. 

1022.100 Definitions. 

Subpart B—Programs 

1022.200 General. 

1022.210 Anti-money laundering programs 

for money services businesses. 

Subpart C—Reports Required To Be Made 

By Money Services Businesses 

1022.300 General. 

1022.310 Reports of transactions in 

currency. 

1022.311 Filing obligations. 

1022.312 Identification required. 

1022.313 Aggregation. 

1022.314 Structured transactions. 

1022.315 Exemptions. 

1022.320 Reports by money services 

businesses of suspicious transactions. 

1022.380 Registration of money services 

businesses. 

Subpart D—Records Required To Be 

Maintained By Money Services Businesses 

1022.400 General. 

1022.410 Additional records to be made 

and retained by currency dealers or 

exchangers. 

Subpart E—Special Information Sharing 

Procedures To Deter Money Laundering 

and Terrorist Activity 

1022.500 General. 

1022.520 Special information sharing 

procedures to deter money laundering 

and terrorist activity for money services 

businesses. 

1022.530 [Reserved] 

1022.540 Voluntary information sharing 

among financial institutions. 

Subpart F—Special Standards of Diligence; 

Prohibitions, and Special Measures for 

Money Services Businesses 

1022.600 General. 

1022.610 [Reserved] 

1022.620 [Reserved] 

1022.630 [Reserved] 

1022.640 [Reserved] 

1022.670 [Reserved] 

Subpart A—Definitions 

§ 1022.100 Definitions. 

Refer to § 1010.100 of this Chapter for 

general definitions not noted herein. 

Subpart B—Programs 

§ 1022.200 General. 

Money services businesses are subject 

to the program requirements set forth 

and cross referenced in this subpart. 

Money services businesses should also 

refer to Subpart B of Part 1010 of this 

Chapter for program requirements 

contained in that subpart which apply 

to money services businesses. 

§ 1022.210 Anti-money laundering 

programs for money services businesses. 

(a) Each money services business, as 

defined by § 1010.100(ff) of this 

Chapter, shall develop, implement, and 

maintain an effective anti-money 

laundering program. An effective antimoney laundering program is one that is 

reasonably designed to prevent the 

money services business from being 

used to facilitate money laundering and 

the financing of terrorist activities. 

(b) The program shall be 

commensurate with the risks posed by 

the location and size of, and the nature 

and volume of the financial services 

provided by, the money services 

business. 

(c) The program shall be in writing, 

and a money services business shall 

make copies of the anti-money 

laundering program available for 

inspection to the Department of the 

Treasury upon request. 

(d) At a minimum, the program shall: 

(1) Incorporate policies, procedures, 

and internal controls reasonably 

designed to assure compliance with this 

chapter. 

(i) Policies, procedures, and internal 

controls developed and implemented 

under this section shall include 

provisions for complying with the 

requirements of this chapter including, 

to the extent applicable to the money 

services business, requirements for: 

(A) Verifying customer identification; 

(B) Filing reports; 

(C) Creating and retaining records; 

and 

(D) Responding to law enforcement 

requests. 

(ii) Money services businesses that 

have automated data processing systems 

should integrate their compliance 

procedures with such systems. 

(iii) A person that is a money services 

business solely because it is an agent for 

another money services business as set 

forth in § 1022.380(a)(2), and the money 

services business for which it serves as 

agent, may by agreement allocate 

between them responsibility for 

development of policies, procedures, 

and internal controls required by this 

paragraph (d)(1). Each money services 

business shall remain solely responsible 

for implementation of the requirements 

set forth in this section, and nothing in 

this paragraph (d)(1) relieves any money 

services business from its obligation to 

establish and maintain an effective antimoney laundering program. 

(2) Designate a person to assure day 

to day compliance with the program and 

this chapter. The responsibilities of 

such person shall include assuring that: 

(i) The money services business 

properly files reports, and creates and 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65855 

retains records, in accordance with 

applicable requirements of this chapter; 

(ii) The compliance program is 

updated as necessary to reflect current 

requirements of this chapter, and related 

guidance issued by the Department of 

the Treasury; and 

(iii) The money services business 

provides appropriate training and 

education in accordance with paragraph 

(d)(3) of this section. 

(3) Provide education and/or training 

of appropriate personnel concerning 

their responsibilities under the program, 

including training in the detection of 

suspicious transactions to the extent 

that the money services business is 

required to report such transactions 

under this chapter. 

(4) Provide for independent review to 

monitor and maintain an adequate 

program. The scope and frequency of 

the review shall be commensurate with 

the risk of the financial services 

provided by the money services 

business. Such review may be 

conducted by an officer or employee of 

the money services business so long as 

the reviewer is not the person 

designated in paragraph (d)(2) of this 

section. 

(e) Compliance date. A money 

services business must develop and 

implement an anti-money laundering 

program that complies with the 

requirements of this section on or before 

the later of July 24, 2002, and the end 

of the 90-day period beginning on the 

day following the date the business is 

established. 

Subpart C—Reports Required To Be 

Made By Money Services Businesses 

§ 1022.300 General. 

Money services businesses are subject 

to the reporting requirements set forth 

and cross referenced in this subpart. 

Money services businesses should also 

refer to Subpart C of Part 1010 of this 

Chapter for reporting requirements 

contained in that subpart which apply 

to money services businesses. 

§ 1022.310 Reports of transactions in 

currency. 

The reports of transactions in 

currency requirements for money 

services businesses are located in 

subpart C of Part 1010 of this Chapter 

and this subpart. 

§ 1022.311 Filing obligations. 

Refer to § 1010.311 of this Chapter for 

reports of transactions in currency filing 

obligations for money services 

businesses. 

§ 1022.312 Identification required. 

Refer to § 1010.312 of this Chapter for 

identification requirements for reports 

of transactions in currency filed by 

money services businesses. 

§ 1022.313 Aggregation. 

Refer to § 1010.313 of this Chapter for 

reports of transactions in currency 

aggregation requirements for money 

services businesses. 

§ 1022.314 Structured transactions. 

Refer to § 1010.314 of this Chapter for 

rules regarding structured transactions 

for money services businesses. 

§ 1022.315 Exemptions. 

Refer to § 1010.315 of this Chapter for 

exemptions from the obligation to file 

reports of transactions in currency for 

money services businesses. 

§ 1022.320 Reports by money services 

businesses of suspicious transactions. 

(a) General. (1) Every money services 

business, described in § 1010.100(ff) (1), 

(3), (4), (5), or (6) of this Chapter, shall 

file with the Treasury Department, to 

the extent and in the manner required 

by this section, a report of any 

suspicious transaction relevant to a 

possible violation of law or regulation. 

Any money services business may also 

file with the Treasury Department, by 

using the form specified in paragraph 

(b)(1) of this section, or otherwise, a 

report of any suspicious transaction that 

it believes is relevant to the possible 

violation of any law or regulation but 

whose reporting is not required by this 

section. 

(2) A transaction requires reporting 

under the terms of this section if it is 

conducted or attempted by, at, or 

through a money services business, 

involves or aggregates funds or other 

assets of at least $2,000 (except as 

provided in paragraph (a)(3) of this 

section), and the money services 

business knows, suspects, or has reason 

to suspect that the transaction (or a 

pattern of transactions of which the 

transaction is a part): 

(i) Involves funds derived from illegal 

activity or is intended or conducted in 

order to hide or disguise funds or assets 

derived from illegal activity (including, 

without limitation, the ownership, 

nature, source, location, or control of 

such funds or assets) as part of a plan 

to violate or evade any Federal law or 

regulation or to avoid any transaction 

reporting requirement under Federal 

law or regulation; 

(ii) Is designed, whether through 

structuring or other means, to evade any 

requirements of this chapter or of any 

other regulations promulgated under the 

Bank Secrecy Act; or 

(iii) Serves no business or apparent 

lawful purpose, and the reporting 

money services business knows of no 

reasonable explanation for the 

transaction after examining the available 

facts, including the background and 

possible purpose of the transaction. 

(iv) Involves use of the money 

services business to facilitate criminal 

activity. 

(3) To the extent that the 

identification of transactions required to 

be reported is derived from a review of 

clearance records or other similar 

records of money orders or traveler’s 

checks that have been sold or processed, 

an issuer of money orders or traveler’s 

checks shall only be required to report 

a transaction or pattern of transactions 

that involves or aggregates funds or 

other assets of at least $5,000. 

(4) The obligation to identify and 

properly and timely to report a 

suspicious transaction rests with each 

money services business involved in the 

transaction, provided that no more than 

one report is required to be filed by the 

money services businesses involved in a 

particular transaction (so long as the 

report filed contains all relevant facts). 

Whether, in addition to any liability on 

its own for failure to report, a money 

services business that issues the 

instrument or provides the funds 

transfer service involved in the 

transaction may be liable for the failure 

of another money services business 

involved in the transaction to report that 

transaction depends upon the nature of 

the contractual or other relationship 

between the businesses, and the legal 

effect of the facts and circumstances of 

the relationship and transaction 

involved, under general principles of 

the law of agency. 

(5) Notwithstanding the provisions of 

this section, a transaction that involves 

solely the issuance, or facilitation of the 

transfer of stored value, or the issuance, 

sale, or redemption of stored value, 

shall not be subject to reporting under 

this paragraph (a), until the 

promulgation of rules specifically 

relating to such reporting. 

(b) Filing procedures—(1) What to file. 

A suspicious transaction shall be 

reported by completing a Suspicious 

Activity Report-MSB (‘‘SAR–MSB’’), and 

collecting and maintaining supporting 

documentation as required by paragraph 

(c) of this section. 

(2) Where to file. The SAR–MSB shall 

be filed in a central location to be 

determined by FinCEN, as indicated in 

the instructions to the SAR–MSB. 

(3) When to file. A money services 

business subject to this section is 

required to file each SAR–MSB no later 

than 30 calendar days after the date of 


erowe on DSK5CLS3C1PROD with RULES3
65856 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

the initial detection by the money 

services business of facts that may 

constitute a basis for filing a SAR–MSB 

under this section. In situations 

involving violations that require 

immediate attention, such as ongoing 

money laundering schemes, the money 

services business shall immediately 

notify by telephone an appropriate law 

enforcement authority in addition to 

filing a SAR–MSB. Money services 

businesses wishing voluntarily to report 

suspicious transactions that may relate 

to terrorist activity may call FinCEN’s 

Financial Institutions Hotline at 1–866– 

556–3974 in addition to filing timely a 

SAR–MSB if required by this section. 

(c) Retention of records. A money 

services business shall maintain a copy 

of any SAR–MSB filed and the original 

or business record equivalent of any 

supporting documentation for a period 

of five years from the date of filing the 

SAR–MSB. Supporting documentation 

shall be identified as such and 

maintained by the money services 

business, and shall be deemed to have 

been filed with the SAR–MSB. A money 

services business shall make all 

supporting documentation available to 

FinCEN and any other appropriate law 

enforcement agencies or supervisory 

agencies upon request. 

(d) Confidentiality of reports; 

limitation of liability. No financial 

institution, and no director, officer, 

employee, or agent of any financial 

institution, who reports a suspicious 

transaction under this chapter, may 

notify any person involved in the 

transaction that the transaction has been 

reported. Thus, any person subpoenaed 

or otherwise requested to disclose a 

SAR–MSB or the information contained 

in a SAR–MSB, except where such 

disclosure is requested by FinCEN or an 

appropriate law enforcement or 

supervisory agency, shall decline to 

produce the SAR–MSB or to provide 

any information that would disclose 

that a SAR–MSB has been prepared or 

filed, citing this paragraph (d) and 31 

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

FinCEN of any such request and its 

response thereto. A reporting money 

services business, and any director, 

officer, employee, or agent of such 

reporting money services business, that 

makes a report pursuant to this section 

(whether such report is required by this 

section or made voluntarily) shall be 

protected from liability for any 

disclosure contained in, or for failure to 

disclose the fact of, such report, or both, 

to the extent provided by 31 U.S.C. 

5318(g)(3). 

(e) Compliance. Compliance with this 

section shall be audited by the 

Department of the Treasury, through 

FinCEN or its delegees under the terms 

of the Bank Secrecy Act. Failure to 

satisfy the requirements of this section 

may constitute a violation of the 

reporting rules of the Bank Secrecy Act 

and of this chapter. 

(f) Applicability date. This section 

applies to transactions occurring after 

December 31, 2001. 

§ 1022.380 Registration of money services 

businesses. 

(a) Registration requirement—(1) In 

general. Except as provided in 

paragraph (a)(2) of this section, relating 

to agents, each money services business 

(whether or not licensed as a money 

services business by any State) must 

register with the Department of the 

Treasury and, as part of that registration, 

maintain a list of its agents as required 

by 31 U.S.C. 5330 and this section. This 

section does not apply to the U.S. Postal 

Service, to agencies of the United States, 

of any State, or of any political 

subdivision of a State, or to a person to 

the extent that the person is an issuer, 

seller, or redeemer of stored value. 

(2) Agents. A person that is a money 

services business solely because that 

person serves as an agent of another 

money services business, see 

§ 1010.100(ff) of this Chapter, is not 

required to register under this section, 

but a money services business that 

engages in activities described in 

§ 1010.100(ff) of this Chapter both on its 

own behalf and as an agent for others 

must register under this section. For 

example, a supermarket corporation that 

acts as an agent for an issuer of money 

orders and performs no other services of 

a nature and value that would cause the 

corporation to be a money services 

business, is not required to register; the 

answer would be the same if the 

supermarket corporation served as an 

agent both of a money order issuer and 

of a money transmitter. However, 

registration would be required if the 

supermarket corporation, in addition to 

acting as an agent of an issuer of money 

orders, cashed checks or exchanged 

currencies (other than as an agent for 

another business) in an amount greater 

than $1,000 in currency or monetary or 

other instruments for any person on any 

day, in one or more transactions. 

(3) Agency status. The determination 

whether a person is an agent depends 

on all the facts and circumstances. 

(b) Registration procedures—(1) In 

general. (i) A money services business 

must be registered by filing such form 

as FinCEN may specify with the 

Enterprise Computing Center in Detroit 

of the Internal Revenue Service (or such 

other location as the form may specify). 

The information required by 31 U.S.C. 

5330(b) and any other information 

required by the form must be reported 

in the manner and to the extent required 

by the form. 

(ii) A branch office of a money 

services business is not required to file 

its own registration form. A money 

services business must, however, report 

information about its branch locations 

or offices as provided by the 

instructions to the registration form. 

(iii) A money services business must 

retain a copy of any registration form 

filed under this section and any 

registration number that may be 

assigned to the business at a location in 

the United States and for the period 

specified in § 1010.430(d) of this 

Chapter. 

(2) Registration period. A money 

services business must be registered for 

the initial registration period and each 

renewal period. The initial registration 

period is the two-calendar-year period 

beginning with the calendar year in 

which the money services business is 

first required to be registered. However, 

the initial registration period for a 

money services business required to 

register by December 31, 2001 (see 

paragraph (b)(3) of this section) is the 

two-calendar year period beginning 

2002. Each two-calendar-year period 

following the initial registration period 

is a renewal period. 

(3) Due date. The registration form for 

the initial registration period must be 

filed on or before the later of December 

31, 2001, and the end of the 180-day 

period beginning on the day following 

the date the business is established. The 

registration form for a renewal period 

must be filed on or before the last day 

of the calendar year preceding the 

renewal period. 

(4) Events requiring re-registration. If 

a money services business registered as 

such under the laws of any State 

experiences a change in ownership or 

control that requires the business to be 

re-registered under State law, the money 

services business must also be reregistered under this section. In 

addition, if there is a transfer of more 

than 10 percent of the voting power or 

equity interests of a money services 

business (other than a money services 

business that must report such transfer 

to the Securities and Exchange 

Commission), the money services 

business must be re-registered under 

this section. Finally, if a money services 

business experiences a more than 50-per 

cent increase in the number of its agents 

during any registration period, the 

money services business must be reregistered under this section. The 

registration form must be filed not later 

than 180 days after such change in 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65857 

ownership, transfer of voting power or 

equity interests, or increase in agents. 

The calendar year in which the change, 

transfer, or increase occurs is treated as 

the first year of a new two-year 

registration period. 

(c) Persons required to file the 

registration form. Under 31 U.S.C. 

5330(a), any person who owns or 

controls a money services business is 

responsible for registering the business; 

however, only one registration form is 

required to be filed for each registration 

period. A person is treated as owning or 

controlling a money services business 

for purposes of filing the registration 

form only to the extent provided by the 

form. If more than one person owns or 

controls a money services business, the 

owning or controlling persons may enter 

into an agreement designating one of 

them to register the business. The 

failure of the designated person to 

register the money services business 

does not, however, relieve any of the 

other persons who own or control the 

business of liability for the failure to 

register the business. See paragraph (e) 

of this section, relating to consequences 

of the failure to comply with 31 U.S.C. 

5330 or this section. 

(d) List of agents—(1) In general. A 

money services business must prepare 

and maintain a list of its agents. The 

initial list of agents must be prepared by 

January 1, 2002, and must be revised 

each January 1, for the immediately 

preceding 12 month period; for money 

services businesses established after 

December 31, 2001, the initial agent list 

must be prepared by the due date of the 

initial registration form and must be 

revised each January 1 for the 

immediately preceding 12-month 

period. The list is not filed with the 

registration form but must be 

maintained at the location in the United 

States reported on the registration form 

under paragraph (b)(1) of this section. 

Upon request, a money services 

business must make its list of agents 

available to FinCEN and any other 

appropriate law enforcement agency 

(including, without limitation, the 

examination function of the Internal 

Revenue Service in its capacity as 

delegee of Bank Secrecy Act 

examination authority). Requests for 

information made pursuant to the 

preceding sentence shall be coordinated 

through FinCEN in the manner and to 

the extent determined by FinCEN. The 

original list of agents and any revised 

list must be retained for the period 

specified in § 1010.430(d) of this 

Chapter. 

(2) Information included on the list of 

agents—(i) In general. Except as 

provided in paragraph (d)(2)(ii) of this 

section, a money services business must 

include the following information with 

respect to each agent on the list 

(including any revised list) of its 

agents— 

(A) The name of the agent, including 

any trade names or doing-business-as 

names; 

(B) The address of the agent, 

including street address, city, state, and 

ZIP code; 

(C) The telephone number of the 

agent; 

(D) The type of service or services 

(money orders, traveler’s checks, check 

sales, check cashing, currency exchange, 

and money transmitting) the agent 

provides; 

(E) A listing of the months in the 12 

months immediately preceding the date 

of the most recent agent list in which 

the gross transaction amount of the 

agent with respect to financial products 

or services issued by the money services 

business maintaining the agent list 

exceeded $100,000. For this purpose, 

the money services gross transaction 

amount is the agent’s gross amount 

(excluding fees and commissions) 

received from transactions of one or 

more businesses described in 

§ 1010.100(ff) of this Chapter; 

(F) The name and address of any 

depository institution at which the 

agent maintains a transaction account 

(as defined in 12 U.S.C. 461(b)(1)(C)) for 

all or part of the funds received in or for 

the financial products or services issued 

by the money services business 

maintaining the list, whether in the 

agent’s or the business principal’s name; 

(G) The year in which the agent first 

became an agent of the money services 

business; and 

(H) The number of branches or 

subagents the agent has. 

(ii) Special rules. Information about 

agent volume must be current within 45 

days of the due date of the agent list. 

The information described by 

paragraphs (d)(2)(i)(G) and (d)(2)(i)(H) of 

this section is not required to be 

included in an agent list with respect to 

any person that is an agent of the money 

services business maintaining the list 

before the first day of the month 

beginning after February 16, 2000 so 

long as the information described by 

paragraphs (d)(2)(i)(G) and (d)(2)(i)(H) of 

this section is made available upon the 

request of FinCEN and any other 

appropriate law enforcement agency 

(including, without limitation, the 

examination function of the Internal 

Revenue Service in its capacity as 

delegee of Bank Secrecy Act 

examination authority). 

(e) Consequences of failing to comply 

with 31 U.S.C. 5330 or the regulations 

thereunder. It is unlawful to do business 

without complying with 31 U.S.C. 5330 

and this section. A failure to comply 

with the requirements of 31 U.S.C. 5330 

or this section includes the filing of 

false or materially incomplete 

information in connection with the 

registration of a money services 

business. Any person who fails to 

comply with any requirement of 31 

U.S.C. 5330 or this section shall be 

liable for a civil penalty of $5,000 for 

each violation. Each day a violation of 

31 U.S.C. 5330 or this section continues 

constitutes a separate violation. In 

addition, under 31 U.S.C. 5320, the 

Secretary of the Treasury may bring a 

civil action to enjoin the violation. See 

18 U.S.C. 1960 for a criminal penalty for 

failure to comply with the registration 

requirements of 31 U.S.C. 5330 or this 

section. 

(f) Applicability date. This section is 

applicable as of September 20, 1999. 

Registration of money services 

businesses under this section will not be 

required prior to December 31, 2001. 

Subpart D—Records Required To Be 

Maintained By Money Services 

Businesses 

§ 1022.400 General. 

Money services businesses are subject 

to the recordkeeping requirements set 

forth and cross referenced in this 

subpart. Money services businesses 

should also refer to Subpart D of Part 

1010 of this Chapter for recordkeeping 

requirements contained in that subpart 

which apply to money services 

businesses. 

§ 1022.410 Additional records to be made 

and retained by currency dealers or 

exchangers. 

(a)(1) After July 7, 1987, each 

currency dealer or exchanger shall 

secure and maintain a record of the 

taxpayer identification number of each 

person for whom a transaction account 

is opened or a line of credit is extended 

within 30 days after such account is 

opened or credit line extended. Where 

a person is a non-resident alien, the 

currency dealer or exchanger shall also 

record the person’s passport number or 

a description of some other government 

document used to verify his identity. 

Where the account or credit line is in 

the names of two or more persons, the 

currency dealer or exchanger shall 

secure the taxpayer identification 

number of a person having a financial 

interest in the account or credit line. In 

the event that a currency dealer or 

exchanger has been unable to secure the 

identification required within the 30- 

day period specified, it shall 


erowe on DSK5CLS3C1PROD with RULES3
65858 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

nevertheless not be deemed to be in 

violation of this section if: 

(i) It has made a reasonable effort to 

secure such identification, and 

(ii) It maintains a list containing the 

names, addresses, and account or credit 

line numbers of those persons from 

whom it has been unable to secure such 

identification, and makes the names, 

addresses, and account or credit line 

numbers of those persons available to 

the Secretary as directed by him. 

(2) The 30-day period provided for in 

paragraph (a)(1) of this section shall be 

extended where the person opening the 

account or credit line has applied for a 

taxpayer identification or social security 

number on Form SS–4 or SS–5, until 

such time as the person maintaining the 

account or credit line has had a 

reasonable opportunity to secure such 

number and furnish it to the currency 

dealer or exchanger. 

(3) A taxpayer identification number 

for an account or credit line required 

under paragraph (a)(1) of this section 

need not be secured in the following 

instances: 

(i) Accounts for public funds opened 

by agencies and instrumentalities of 

Federal, state, local or foreign 

governments, 

(ii) Accounts for aliens who are— 

(A) Ambassadors, ministers, career 

diplomatic or consular officers, or 

(B) Naval, military or other attaches of 

foreign embassies, and legations, and for 

members of their immediate families, 

(iii) Accounts for aliens who are 

accredited representatives to 

international organizations which are 

entitled to enjoy privileges, exemptions, 

and immunities as an international 

organization under the International 

Organizations Immunities Act of 

December 29, 1945 (22 U.S.C. 288), and 

for the members of their immediate 

families, 

(iv) Aliens temporarily residing in the 

United States for a period not to exceed 

180 days, 

(v) Aliens not engaged in a trade or 

business in the United States who are 

attending a recognized college or any 

training program, supervised or 

conducted by any agency of the Federal 

Government, and 

(vi) Unincorporated subordinate units 

of a tax exempt central organization 

which are covered by a group 

exemption letter. 

(b) Each currency dealer or exchanger 

shall retain either the original or a 

microfilm or other copy or reproduction 

of each of the following: 

(1) Statements of accounts from 

banks, including paid checks, charges or 

other debit entry memoranda, deposit 

slips and other credit memoranda 

representing the entries reflected on 

such statements; 

(2) Daily work records, including 

purchase and sales slips or other 

memoranda needed to identify and 

reconstruct currency transactions with 

customers and foreign banks; 

(3) A record of each exchange of 

currency involving transactions in 

excess of $1000, including the name and 

address of the customer (and passport 

number or taxpayer identification 

number unless received by mail or 

common carrier) date and amount of the 

transaction and currency name, country, 

and total amount of each foreign 

currency; 

(4) Signature cards or other 

documents evidencing signature 

authority over each deposit or security 

account, containing the name of the 

depositor, street address, taxpayer 

identification number (TIN) or employer 

identification number (EIN) and the 

signature of the depositor or of a person 

authorized to sign on the account (if 

customer accounts are maintained in a 

code name, a record of the actual owner 

of the account); 

(5) Each item, including checks, 

drafts, or transfers of credit, of more 

than $10,000 remitted or transferred to 

a person, account or place outside the 

United States; 

(6) A record of each receipt of 

currency, other monetary instruments, 

investment securities and checks, and of 

each transfer of funds or credit, or more 

than $10,000 received on any one 

occasion directly and not through a 

domestic financial institution, from any 

person, account or place outside the 

United States; 

(7) Records prepared or received by a 

dealer in the ordinary course of 

business, that would be needed to 

reconstruct an account and trace a check 

in excess of $100 deposited in such 

account through its internal 

recordkeeping system to its depository 

institution, or to supply a description of 

a deposited check in excess of $100; 

(8) A record maintaining the name, 

address and taxpayer identification 

number, if available, of any person 

presenting a certificate of deposit for 

payment, as well as a description of the 

instrument and date of transaction; 

(9) A system of books and records that 

will enable the currency dealer or 

exchanger to prepare an accurate 

balance sheet and income statement. 

(c) This section does not apply to 

banks that offer services in dealing or 

changing currency to their customers as 

an adjunct to their regular service. 

Subpart E—Special Information 

Sharing Procedures To Deter Money 

Laundering and Terrorist Activity 

§ 1022.500 General. 

Money services businesses are subject 

to the special information sharing 

procedures to deter money laundering 

and terrorist activity requirements set 

forth and cross referenced in this 

subpart. Money services businesses 

should also refer to Subpart E of Part 

1010 of this Chapter for special 

information sharing procedures to deter 

money laundering and terrorist activity 

contained in that subpart which apply 

to money services businesses. 

§ 1022.520 Special information sharing 

procedures to deter money laundering and 

terrorist activity for money services 

businesses. 

(a) Refer to § 1010.520 of this Chapter. 

(b) [Reserved] 

§ 1022.530 [Reserved] 

§ 1022.540 Voluntary information sharing 

among financial institutions. 

(a) Refer to § 1010.540 of this Chapter. 

(b) [Reserved] 

Subpart F—Special Standards of 

Diligence; Prohibitions; and Special 

Measures for Money Services 

Businesses 

§ 1022.600 General. 

Money services businesses are subject 

to the special standards of diligence; 

prohibitions; and special measures 

requirements set forth and cross 

referenced in this subpart. Money 

services businesses should also refer to 

Subpart F of Part 1010 of this Chapter 

for special standards of diligence; 

prohibitions; and special measures 

contained in that subpart which apply 

to money services businesses. 

§ 1022.610 [Reserved] 

§ 1022.620 [Reserved] 

§ 1022.630 [Reserved] 

§ 1022.640 [Reserved] 

§ 1022.670 [Reserved] 

PART 1023—RULES FOR BROKERS 

OR DEALERS IN SECURITIES 

Subpart A—Definitions 

Sec. 

1023.100 Definitions. 

Subpart B—Programs 

1023.200 General. 

1023.210 Anti-money laundering program 

requirements for brokers or dealers in 

securities. 

1023.220 Customer identification programs 

for broker-dealers. 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65859 

Subpart C—Reports Required To Be Made 

By Brokers or Dealers in Securities 

1023.300 General. 

1023.310 Reports of transactions in 

currency. 

1023.311 Filing obligations. 

1023.312 Identification required. 

1023.313 Aggregation. 

1023.314 Structured transactions. 

1023.315 Exemptions 

1023.320 Reports by brokers or dealers in 

securities of suspicious transactions. 

Subpart D—Records Required To Be 

Maintained By Brokers or Dealers in 

Securities 

1023.400 General. 

1023.410 Additional records to be made 

and retained by brokers or dealers in 

securities. 

Subpart E—Special Information Sharing 

Procedures To Deter Money Laundering 

and Terrorist Activity 

1023.500 General. 

1023.520 Special information sharing 

procedures to deter money laundering 

and terrorist activity for brokers or 

dealers in securities. 

1023.530 [Reserved] 

1023.540 Voluntary information sharing 

among financial institutions. 

Subpart F—Special Standards of Diligence; 

Prohibitions, and Special Measures for 

Brokers or Dealers in Securities 

1023.600 General. 

1023.610 Due diligence programs for 

correspondent accounts for foreign 

financial institutions. 

1023.620 Due diligence programs for 

private banking accounts. 

1023.630 Prohibition on correspondent 

accounts for foreign shell banks; records 

concerning owners of foreign banks and 

agents for service of legal process. 

1023.640 [Reserved] 

1023.670 Summons or subpoena of foreign 

bank account records; Termination of 

correspondent relationship. 

Subpart A—Definitions 

§ 1023.100 Definitions. 

Refer to § 1010.100 of this Chapter for 

general definitions not noted herein. To 

the extent there is a differing definition 

in § 1010.100 of this Chapter, the 

definition in this Section is what 

applies to Part 1023. Unless otherwise 

indicated, for purposes of this Part: 

(a) Account. For purposes of 

§ 1023.220: 

(1) Account means a formal 

relationship with a broker-dealer 

established to effect transactions in 

securities, including, but not limited to, 

the purchase or sale of securities and 

securities loaned and borrowed activity, 

and to hold securities or other assets for 

safekeeping or as collateral. 

(2) Account does not include: 

(i) An account that the broker-dealer 

acquires through any acquisition, 

merger, purchase of assets, or 

assumption of liabilities; or 

(ii) An account opened for the 

purpose of participating in an employee 

benefit plan established under the 

Employee Retirement Income Security 

Act of 1974. 

(b) Broker-dealer means a person 

registered or required to be registered as 

a broker or dealer with the Commission 

under the Securities Exchange Act of 

1934 (15 U.S.C. 77a et seq.), except 

persons who register pursuant to 15 

U.S.C. 78o(b)(11). 

(c) Commission means, for the 

purposes of § 1023.220, the United 

States Securities and Exchange 

Commission. 

(d) Customer. For purposes of 

§ 1023.220: 

(1) Customer means: 

(i) A person that opens a new account; 

and 

(ii) An individual who opens a new 

account for: 

(A) An individual who lacks legal 

capacity; or 

(B) An entity that is not a legal 

person. 

(2) Customer does not include: 

(i) A financial institution regulated by 

a Federal functional regulator or a bank 

regulated by a state bank regulator; 

(ii) A person described in 

§ 1020.315(b)(2) through (4) of this 

Chapter; or 

(iii) A person that has an existing 

account with the broker-dealer, 

provided the broker-dealer has a 

reasonable belief that it knows the true 

identity of the person. 

(e) Financial institution is defined at 

31 U.S.C. 5312(a)(2) and (c)(1). 

Subpart B—Programs 

§ 1023.200 General. 

Brokers or dealers in securities are 

subject to the program requirements set 

forth and cross referenced in this 

subpart. Brokers or dealers in securities 

should also refer to Subpart B of Part 

1010 of this Chapter for program 

requirements contained in that subpart 

which apply to brokers or dealers in 

securities. 

§ 1023.210 Anti-money laundering 

program requirements for brokers or 

dealers in securities. 

A financial institution regulated by a 

self-regulatory organization shall be 

deemed to satisfy the requirements of 31 

U.S.C. 5318(h)(1) if: 

(a) The financial institution complies 

with the requirements of §§ 1010.610 of 

this Chapter and 1010.620 and any 

applicable regulation of its Federal 

functional regulator governing the 

establishment and implementation of 

anti-money laundering programs; and 

(b)(1) The financial institution 

implements and maintains an antimoney laundering program that 

complies with the rules, regulations, or 

requirements of its self-regulatory 

organization governing such programs; 

and 

(2) The rules, regulations, or 

requirements of the self-regulatory 

organization have been approved, if 

required, by the appropriate Federal 

functional regulator. 

§ 1023.220 Customer identification 

programs for broker-dealers. 

(a) Customer identification program: 

minimum requirements—(1) In general. 

A broker-dealer must establish, 

document, and maintain a written 

Customer Identification Program (‘‘CIP’’) 

appropriate for its size and business 

that, at a minimum, includes each of the 

requirements of paragraphs (a)(1) 

through (a)(5) of this section. The CIP 

must be a part of the broker-dealer’s 

anti-money laundering compliance 

program required under 31 U.S.C. 

5318(h). 

(2) Identity verification procedures. 

The CIP must include risk-based 

procedures for verifying the identity of 

each customer to the extent reasonable 

and practicable. The procedures must 

enable the broker-dealer to form a 

reasonable belief that it knows the true 

identity of each customer. The 

procedures must be based on the brokerdealer’s assessment of the relevant risks, 

including those presented by the 

various types of accounts maintained by 

the broker-dealer, the various methods 

of opening accounts provided by the 

broker-dealer, the various types of 

identifying information available and 

the broker-dealer’s size, location and 

customer base. At a minimum, these 

procedures must contain the elements 

described in this paragraph (a)(2). 

(i)(A) Customer information required. 

The CIP must contain procedures for 

opening an account that specify 

identifying information that will be 

obtained from each customer. Except as 

permitted by paragraph (a)(2)(i)(B) of 

this section, the broker-dealer must 

obtain, at a minimum, the following 

information prior to opening an 

account: 

(1) Name; 

(2) Date of birth, for an individual; 

(3) Address, which shall be: 

(i) For an individual, a residential or 

business street address; 

(ii) for an individual who does not 

have a residential or business street 

address, an Army Post Office (APO) or 

Fleet Post Office (FPO) box number, or 


erowe on DSK5CLS3C1PROD with RULES3
65860 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

the residential or business street address 

of a next of kin or another contact 

individual; or 

(iii) for a person other than an 

individual (such as a corporation, 

partnership or trust), a principal place 

of business, local office or other 

physical location; and 

(4) Identification number, which shall 

be: 

(i) For a U.S. person, a taxpayer 

identification number; or 

(ii) for a non-U.S. person, one or more 

of the following: A taxpayer 

identification number, a passport 

number and country of issuance, an 

alien identification card number, or the 

number and country of issuance of any 

other government-issued document 

evidencing nationality or residence and 

bearing a photograph or similar 

safeguard. 

Note to Paragraph (a)(2)(i)(A)(4)(ii): When 

opening an account for a foreign business or 

enterprise that does not have an 

identification number, the broker-dealer must 

request alternative government-issued 

documentation certifying the existence of the 

business or enterprise. 

(B) Exception for persons applying for 

a taxpayer identification number. 

Instead of obtaining a taxpayer 

identification number from a customer 

prior to opening an account, the CIP 

may include procedures for opening an 

account for a customer that has applied 

for, but has not received, a taxpayer 

identification number. In this case, the 

CIP must include procedures to confirm 

that the application was filed before the 

customer opens the account and to 

obtain the taxpayer identification 

number within a reasonable period of 

time after the account is opened. 

(ii) Customer verification. The CIP 

must contain procedures for verifying 

the identity of each customer, using 

information obtained in accordance 

with paragraph (a)(2)(i) of this section, 

within a reasonable time before or after 

the customer’s account is opened. The 

procedures must describe when the 

broker-dealer will use documents, nondocumentary methods, or a combination 

of both methods, as described in this 

paragraph (a)(2)(ii). 

(A) Verification through documents. 

For a broker-dealer relying on 

documents, the CIP must contain 

procedures that set forth the documents 

the broker-dealer will use. These 

documents may include: 

(1) For an individual, an unexpired 

government-issued identification 

evidencing nationality or residence and 

bearing a photograph or similar 

safeguard, such as a driver’s license or 

passport; and 

(2) For a person other than an 

individual (such as a corporation, 

partnership or trust), documents 

showing the existence of the entity, 

such as certified articles of 

incorporation, a government-issued 

business license, a partnership 

agreement, or a trust instrument. 

(B) Verification through nondocumentary methods. For a brokerdealer relying on non-documentary 

methods, the CIP must contain 

procedures that set forth the nondocumentary methods the broker-dealer 

will use. 

(1) These methods may include 

contacting a customer; independently 

verifying the customer’s identity 

through the comparison of information 

provided by the customer with 

information obtained from a consumer 

reporting agency, public database, or 

other source; checking references with 

other financial institutions; or obtaining 

a financial statement. 

(2) The broker-dealer’s nondocumentary procedures must address 

situations where an individual is unable 

to present an unexpired governmentissued identification document that 

bears a photograph or similar safeguard; 

the broker-dealer is not familiar with the 

documents presented; the account is 

opened without obtaining documents; 

the customer opens the account without 

appearing in person at the broker-dealer; 

and where the broker-dealer is 

otherwise presented with circumstances 

that increase the risk that the brokerdealer will be unable to verify the true 

identity of a customer through 

documents. 

(C) Additional verification for certain 

customers. The CIP must address 

situations where, based on the brokerdealer’s risk assessment of a new 

account opened by a customer that is 

not an individual, the broker-dealer will 

obtain information about individuals 

with authority or control over such 

account. This verification method 

applies only when the broker-dealer 

cannot verify the customer’s true 

identity using the verification methods 

described in paragraphs (a)(2)(ii)(A) and 

(B) of this section. 

(iii) Lack of verification. The CIP must 

include procedures for responding to 

circumstances in which the brokerdealer cannot form a reasonable belief 

that it knows the true identity of a 

customer. These procedures should 

describe: 

(A) When the broker-dealer should 

not open an account; 

(B) The terms under which a customer 

may conduct transactions while the 

broker-dealer attempts to verify the 

customer’s identity; 

(C) When the broker-dealer should 

close an account after attempts to verify 

a customer’s identity fail; and 

(D) When the broker-dealer should 

file a Suspicious Activity Report in 

accordance with applicable law and 

regulation. 

(3) Recordkeeping. The CIP must 

include procedures for making and 

maintaining a record of all information 

obtained under procedures 

implementing paragraph (a) of this 

section. 

(i) Required records. At a minimum, 

the record must include: 

(A) All identifying information about 

a customer obtained under paragraph 

(a)(2)(i) of this section, 

(B) A description of any document 

that was relied on under paragraph 

(a)(2)(ii)(A) of this section noting the 

type of document, any identification 

number contained in the document, the 

place of issuance, and if any, the date 

of issuance and expiration date; 

(C) A description of the methods and 

the results of any measures undertaken 

to verify the identity of a customer 

under paragraphs (a)(2)(ii)(B) and (C) of 

this section; and 

(D) A description of the resolution of 

each substantive discrepancy 

discovered when verifying the 

identifying information obtained. 

(ii) Retention of records. The brokerdealer must retain the records made 

under paragraph (a)(3)(i)(A) of this 

section for five years after the account 

is closed and the records made under 

paragraphs (a)(3)(i)(B), (C) and (D) of 

this section for five years after the 

record is made. In all other respects, the 

records must be maintained pursuant to 

the provisions of 17 CFR 240.17a–4. 

(4) Comparison with government lists. 

The CIP must include procedures for 

determining whether a customer 

appears on any list of known or 

suspected terrorists or terrorist 

organizations issued by any Federal 

government agency and designated as 

such by Treasury in consultation with 

the Federal functional regulators. The 

procedures must require the brokerdealer to make such a determination 

within a reasonable period of time after 

the account is opened, or earlier if 

required by another Federal law or 

regulation or Federal directive issued in 

connection with the applicable list. The 

procedures also must require the brokerdealer to follow all Federal directives 

issued in connection with such lists. 

(5)(i) Customer notice. The CIP must 

include procedures for providing 

customers with adequate notice that the 

broker-dealer is requesting information 

to verify their identities. 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65861 

(ii) Adequate notice. Notice is 

adequate if the broker-dealer generally 

describes the identification 

requirements of this section and 

provides such notice in a manner 

reasonably designed to ensure that a 

customer is able to view the notice, or 

is otherwise given notice, before 

opening an account. For example, 

depending upon the manner in which 

the account is opened, a broker-dealer 

may post a notice in the lobby or on its 

Web site, include the notice on its 

account applications or use any other 

form of oral or written notice. 

(iii) Sample notice. If appropriate, a 

broker-dealer may use the following 

sample language to provide notice to its 

customers: 

Important Information About Procedures for 

Opening a New Account 

To help the government fight the funding 

of terrorism and money laundering activities, 

Federal law requires all financial institutions 

to obtain, verify, and record information that 

identifies each person who opens an account. 

What this means for you: When you open 

an account, we will ask for your name, 

address, date of birth and other information 

that will allow us to identify you. We may 

also ask to see your driver’s license or other 

identifying documents. 

(6) Reliance on another financial 

institution. The CIP may include 

procedures specifying when the brokerdealer will rely on the performance by 

another financial institution (including 

an affiliate) of any procedures of the 

broker-dealer’s CIP, with respect to any 

customer of the broker-dealer that is 

opening an account or has established 

an account or similar business 

relationship with the other financial 

institution to provide or engage in 

services, dealings, or other financial 

transactions, provided that: 

(i) Such reliance is reasonable under 

the circumstances; 

(ii) The other financial institution is 

subject to a rule implementing 31 U.S.C. 

5318(h), and regulated by a Federal 

functional regulator; and 

(iii) The other financial institution 

enters into a contract requiring it to 

certify annually to the broker-dealer that 

it has implemented its anti-money 

laundering program, and that it will 

perform (or its agent will perform) 

specified requirements of the brokerdealer’s CIP. 

(b) Exemptions. The Commission, 

with the concurrence of the Secretary, 

may by order or regulation exempt any 

broker-dealer that registers with the 

Commission pursuant to 15 U.S.C. 78o 

or 15 U.S.C. 78o–4 or any type of 

account from the requirements of this 

section. The Secretary, with the 

concurrence of the Commission, may 

exempt any broker-dealer that registers 

with the Commission pursuant to 15 

U.S.C. 78o–5. In issuing such 

exemptions, the Commission and the 

Secretary shall consider whether the 

exemption is consistent with the 

purposes of the Bank Secrecy Act, and 

in the public interest, and may consider 

other necessary and appropriate factors. 

(c) Other requirements unaffected. 

Nothing in this section relieves a brokerdealer of its obligation to comply with 

any other provision of this chapter, 

including provisions concerning 

information that must be obtained, 

verified, or maintained in connection 

with any account or transaction. 

Subpart C—Reports Required To Be 

Made By Brokers or Dealers in 

Securities 

§ 1023.300 General. 

Brokers or dealers in securities are 

subject to the reporting requirements set 

forth and cross referenced in this 

subpart. Brokers or dealers in securities 

should also refer to Subpart C of Part 

1010 of this Chapter for reporting 

requirements contained in that subpart 

which apply to brokers or dealers in 

securities. 

§ 1023.310 Reports of transactions in 

currency. 

The reports of transactions in 

currency requirements for brokers or 

dealers in securities are located in 

subpart C of Part 1010 of this Chapter 

and this subpart. 

§ 1023.311 Filing obligations. 

Refer to § 1010.311 of this Chapter for 

reports of transactions in currency filing 

obligations for brokers or dealers in 

securities. 

§ 1023.312 Identification required. 

Refer to § 1010.312 of this Chapter for 

identification requirements for reports 

of transactions in currency filed by 

brokers or dealers in securities. 

§ 1023.313 Aggregation. 

Refer to § 1010.313 of this Chapter for 

reports of transactions in currency 

aggregation requirements for brokers or 

dealers in securities. 

§ 1023.314 Structured transactions. 

Refer to § 1010.314 of this Chapter for 

rules regarding structured transactions 

for brokers or dealers in securities. 

§ 1023.315 Exemptions. 

Refer to § 1010.315 of this Chapter for 

exemptions from the obligation to file 

reports of transactions in currency for 

brokers or dealers in securities. 

§ 1023.320 Reports by brokers or dealers 

in securities of suspicious transactions. 

(a) General. (1) Every broker or dealer 

in securities within the United States 

(for purposes of this section, a ‘‘brokerdealer’’) shall file with FinCEN, to the 

extent and in the manner required by 

this section, a report of any suspicious 

transaction relevant to a possible 

violation of law or regulation. A brokerdealer may also file with FinCEN a 

report of any suspicious transaction that 

it believes is relevant to the possible 

violation of any law or regulation but 

whose reporting is not required by this 

section. Filing a report of a suspicious 

transaction does not relieve a brokerdealer from the responsibility of 

complying with any other reporting 

requirements imposed by the Securities 

and Exchange Commission or a selfregulatory organization (‘‘SRO’’) (as 

defined in section 3(a)(26) of the 

Securities Exchange Act of 1934, 15 

U.S.C. 78c(a)(26)). 

(2) A transaction requires reporting 

under the terms of this section if it is 

conducted or attempted by, at, or 

through a broker-dealer, it involves or 

aggregates funds or other assets of at 

least $5,000, and the broker-dealer 

knows, suspects, or has reason to 

suspect that the transaction (or a pattern 

of transactions of which the transaction 

is a part): 

(i) Involves funds derived from illegal 

activity or is intended or conducted in 

order to hide or disguise funds or assets 

derived from illegal activity (including, 

without limitation, the ownership, 

nature, source, location, or control of 

such funds or assets) as part of a plan 

to violate or evade any Federal law or 

regulation or to avoid any transaction 

reporting requirement under Federal 

law or regulation; 

(ii) Is designed, whether through 

structuring or other means, to evade any 

requirements of this chapter or of any 

other regulations promulgated under the 

Bank Secrecy Act; 

(iii) Has no business or apparent 

lawful purpose or is not the sort in 

which the particular customer would 

normally be expected to engage, and the 

broker-dealer knows of no reasonable 

explanation for the transaction after 

examining the available facts, including 

the background and possible purpose of 

the transaction; or 

(iv) Involves use of the broker-dealer 

to facilitate criminal activity. 

(3) The obligation to identify and 

properly and timely to report a 

suspicious transaction rests with each 

broker-dealer involved in the 

transaction, provided that no more than 

one report is required to be filed by the 

broker-dealers involved in a particular 


erowe on DSK5CLS3C1PROD with RULES3
65862 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

transaction (so long as the report filed 

contains all relevant facts). 

(b) Filing procedures—(1) What to file. 

A suspicious transaction shall be 

reported by completing a Suspicious 

Activity Report by the Securities and 

Futures Industry (‘‘SAR–SF’’), and 

collecting and maintaining supporting 

documentation as required by paragraph 

(d) of this section. 

(2) Where to file. The SAR–SF shall be 

filed with FinCEN in a central location, 

to be determined by FinCEN, as 

indicated in the instructions to the 

SAR–SF. 

(3) When to file. A SAR–SF shall be 

filed no later than 30 calendar days after 

the date of the initial detection by the 

reporting broker-dealer of facts that may 

constitute a basis for filing a SAR–SF 

under this section. If no suspect is 

identified on the date of such initial 

detection, a broker-dealer may delay 

filing a SAR–SF for an additional 30 

calendar days to identify a suspect, but 

in no case shall reporting be delayed 

more than 60 calendar days after the 

date of such initial detection. In 

situations involving violations that 

require immediate attention, such as 

terrorist financing or ongoing money 

laundering schemes, the broker-dealer 

shall immediately notify by telephone 

an appropriate law enforcement 

authority in addition to filing timely a 

SAR–SF. Broker-dealers wishing 

voluntarily to report suspicious 

transactions that may relate to terrorist 

activity may call FinCEN’s Financial 

Institutions Hotline at 1–866–556–3974 

in addition to filing timely a SAR–SF if 

required by this section. The brokerdealer may also, but is not required to, 

contact the Securities and Exchange 

Commission to report in such situations. 

(c) Exceptions. (1) A broker-dealer is 

not required to file a SAR–SF to report: 

(i) A robbery or burglary committed or 

attempted of the broker-dealer that is 

reported to appropriate law enforcement 

authorities, or for lost, missing, 

counterfeit, or stolen securities with 

respect to which the broker-dealer files 

a report pursuant to the reporting 

requirements of 17 CFR 240.17f–1; 

(ii) A violation otherwise required to 

be reported under this section of any of 

the Federal securities laws or rules of an 

SRO by the broker-dealer or any of its 

officers, directors, employees, or other 

registered representatives, other than a 

violation of 17 CFR 240.17a–8 or 17 CFR 

405.4, so long as such violation is 

appropriately reported to the SEC or an 

SRO. 

(2) A broker-dealer may be required to 

demonstrate that it has relied on an 

exception in paragraph (c)(1) of this 

section, and must maintain records of 

its determinations to do so for the 

period specified in paragraph (d) of this 

section. To the extent that a Form RE– 

3, Form U–4, or Form U–5 concerning 

the transaction is filed consistent with 

the SRO rules, a copy of that form will 

be a sufficient record for purposes of 

this paragraph (c)(2). 

(3) For the purposes of this paragraph 

(c) the term ‘‘Federal securities laws’’ 

means the ‘‘securities laws,’’ as that term 

is defined in section 3(a)(47) of the 

Securities Exchange Act of 1934, 15 

U.S.C. 78c(a)(47), and the rules and 

regulations promulgated by the 

Securities and Exchange Commission 

under such laws. 

(d) Retention of records. A brokerdealer shall maintain a copy of any 

SAR–SF filed and the original or 

business record equivalent of any 

supporting documentation for a period 

of five years from the date of filing the 

SAR–SF. Supporting documentation 

shall be identified as such and 

maintained by the broker-dealer, and 

shall be deemed to have been filed with 

the SAR–SF. A broker-dealer shall make 

all supporting documentation available 

to FinCEN, any other appropriate law 

enforcement agencies or Federal or State 

securities regulators, and for purposes of 

paragraph (g) of this section, to an SRO 

registered with the Securities and 

Exchange Commission, upon request. 

(e) Confidentiality of reports. No 

financial institution, and no director, 

officer, employee, or agent of any 

financial institution, who reports a 

suspicious transaction under this 

chapter, may notify any person involved 

in the transaction that the transaction 

has been reported, except to the extent 

permitted by paragraph (a)(3) of this 

section. Thus, any person subpoenaed 

or otherwise requested to disclose a 

SAR–SF or the information contained in 

a SAR–SF, except where such 

disclosure is requested by FinCEN, the 

Securities and Exchange Commission, 

or another appropriate law enforcement 

or regulatory agency, or for purposes of 

paragraph (g) of this section, an SRO 

registered with the Securities and 

Exchange Commission, shall decline to 

produce the SAR–SF or to provide any 

information that would disclose that a 

SAR–SF has been prepared or filed, 

citing this paragraph (e) and 31 U.S.C. 

5318(g)(2), and shall notify FinCEN of 

any such request and its response 

thereto. 

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

employee, or agent of such brokerdealer, that makes a report of any 

possible violation of law or regulation 

pursuant to this section or any other 

authority (or voluntarily) shall not be 

liable to any person under any law or 

regulation of the United States (or 

otherwise to the extent also provided in 

31 U.S.C. 5318(g)(3), including in any 

arbitration proceeding) for any 

disclosure contained in, or for failure to 

disclose the fact of, such report. 

(g) Examination and enforcement. 

Compliance with this section shall be 

examined by the Department of the 

Treasury, through FinCEN or its 

delegees, under the terms of the Bank 

Secrecy Act. Reports filed under this 

section shall be made available to an 

SRO registered with the Securities and 

Exchange Commission examining a 

broker-dealer for compliance with the 

requirements of this section. Failure to 

satisfy the requirements of this section 

may constitute a violation of the 

reporting rules of the Bank Secrecy Act 

and of this chapter. 

(h) Applicability date. This section 

applies to transactions occurring after 

December 30, 2002. 

Subpart D—Records Required To Be 

Maintained by Brokers or Dealers in 

Securities 

§ 1023.400 General. 

Brokers or dealers in securities are 

subject to the recordkeeping 

requirements set forth and cross 

referenced in this subpart. Brokers or 

dealers in securities should also refer to 

Subpart D of Part 1010 of this Chapter 

for recordkeeping requirements 

contained in that subpart which apply 

to brokers or dealers in securities. 

§ 1023.410 Additional records to be made 

and retained by brokers or dealers in 

securities. 

(a)(1) With respect to each brokerage 

account opened with a broker or dealer 

in securities after June 30, 1972, and 

before October 1, 2003, by a person 

residing or doing business in the United 

States or a citizen of the United States, 

such broker or dealer shall within 30 

days from the date such account is 

opened, secure and maintain a record of 

the taxpayer identification number of 

the person maintaining the account; or 

in the case of an account of one or more 

individuals, such broker or dealer shall 

secure and maintain a record of the 

social security number of an individual 

having a financial interest in that 

account. In the event that a broker or 

dealer has been unable to secure the 

identification required within the 30- 

day period specified, it shall 

nevertheless not be deemed to be in 

violation of this section if: It has made 

a reasonable effort to secure such 

identification, and it maintains a list 

containing the names, addresses, and 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65863 

account numbers of those persons from 

whom it has been unable to secure such 

identification, and makes the names, 

addresses, and account numbers of 

those persons available to the Secretary 

as directed by him. Where a person is 

a non-resident alien, the broker or 

dealer in securities shall also record the 

person’s passport number or a 

description of some other government 

document used to verify his identity. 

(2) The 30-day period provided for in 

paragraph (a)(1) of this section shall be 

extended where the person opening the 

account has applied for a taxpayer 

identification or social security number 

on Form SS–4 or SS–5, until such time 

as the person maintaining the account 

has had a reasonable opportunity to 

secure such number and furnish it to the 

broker or dealer. 

(3) A taxpayer identification number 

for a deposit or share account required 

under paragraph (a)(1) of this section 

need not be secured in the following 

instances: 

(i) Accounts for public funds opened 

by agencies and instrumentalities of 

Federal, state, local, or foreign 

governments, 

(ii) Accounts for aliens who are 

ambassadors, ministers, career 

diplomatic or consular officers, or naval, 

military or other attaches of foreign 

embassies, and legations, and for the 

members of their immediate families, 

(iii) Accounts for aliens who are 

accredited representatives to 

international organizations which are 

entitled to enjoy privileges, exemptions, 

and immunities as an international 

organization under the International 

Organizations Immunities Act of 

December 29, 1945 (22 U.S.C. 288), and 

for the members of their immediate 

families, 

(iv) Aliens temporarily residing in the 

United States for a period not to exceed 

180 days, 

(v) Aliens not engaged in a trade or 

business in the United States who are 

attending a recognized college or 

university or any training program, 

supervised or conducted by any agency 

of the Federal Government, and 

(vi) Unincorporated subordinate units 

of a tax exempt central organization 

which are covered by a group 

exemption letter. 

(b) Every broker or dealer in securities 

shall, in addition, retain either the 

original or a microfilm or other copy or 

reproduction of each of the following: 

(1) Each document granting signature 

or trading authority over each 

customer’s account; 

(2) Each record described in 17 CFR 

240.17a–3(a)(1), (2), (3), (5), (6), (7), (8), 

and (9); 

(3) A record of each remittance or 

transfer of funds, or of currency, checks, 

other monetary instruments, investment 

securities, or credit, of more than 

$10,000 to a person, account, or place, 

outside the United States; 

(4) A record of each receipt of 

currency, other monetary instruments, 

checks, or investment securities and of 

each transfer of funds or credit, of more 

than $10,000 received on any one 

occasion directly and not through a 

domestic financial institution, from any 

person, account or place outside the 

United States. 

Subpart E—Special Information 

Sharing Procedures To Deter Money 

Laundering and Terrorist Activity 

§ 1023.500 General. 

Brokers or dealers in securities are 

subject to the special information 

sharing procedures to deter money 

laundering and terrorist activity 

requirements set forth and cross 

referenced in this subpart. Brokers or 

dealers in securities should also refer to 

Subpart E of Part 1010 of this Chapter 

for special information sharing 

procedures to deter money laundering 

and terrorist activity contained in that 

subpart which apply to brokers or 

dealers in securities. 

§ 1023.520 Special information sharing 

procedures to deter money laundering and 

terrorist activity for brokers or dealers in 

securities. 

(a) Refer to § 1010.520 of this Chapter. 

(b) [Reserved] 

§ 1023.530 [Reserved] 

§ 1023.540 Voluntary information sharing 

among financial institutions. 

(a) Refer to § 1010.540 of this Chapter. 

(b) [Reserved] 

Subpart F—Special Standards of 

Diligence; Prohibitions; and Special 

Measures for Brokers or Dealers in 

Securities 

§ 1023.600 General. 

Brokers or dealers in securities are 

subject to the special standards of 

diligence; prohibitions; and special 

measures requirements set forth and 

cross referenced in this subpart. Brokers 

or dealers in securities should also refer 

to Subpart F of Part 1010 of this Chapter 

for special standards of diligence; 

prohibitions; and special measures 

contained in that subpart which apply 

to brokers or dealers in securities. 

§ 1023.610 Due diligence programs for 

correspondent accounts for foreign 

financial institutions. 

(a) Refer to § 1010.610 of this Chapter. 

(b) [Reserved] 

§ 1023.620 Due diligence programs for 

private banking accounts. 

(a) Refer to § 1010.620 of this Chapter. 

(b) [Reserved] 

§ 1023.630 Prohibition on correspondent 

accounts for foreign shell banks; records 

concerning owners of foreign banks and 

agents for service of legal process. 

(a) Refer to § 1010.630 of this Chapter. 

(b) [Reserved] 

§ 1023.640 [Reserved] 

§ 1023.670 Summons or subpoena of 

foreign bank records; termination of 

correspondent relationship. 

(a) Refer to § 1010.670 of this Chapter. 

(b) [Reserved] 

PART 1024—RULES FOR MUTUAL 

FUNDS 

Subpart A—Definitions 

Sec. 

1024.100 Definitions. 

Subpart B—Programs 

1024.200 General. 

1024.210 Anti-money laundering programs 

for mutual funds. 

1024.220 Customer identification programs 

for mutual funds. 

Subpart C—Reports Required To Be Made 

By Mutual Funds 

1024.300 General. 

1024.310 Reports of transactions in 

currency. 

1024.311 Filing obligations. 

1024.312 Identification required. 

1024.313 Aggregation. 

1024.314 Structured transactions. 

1024.315 Exemptions 

1024.320 Reports by mutual funds of 

suspicious transactions. 

Subpart D—Records Required To Be 

Maintained By Mutual Funds 

1024.400 General. 

1024.410 Recordkeeping. 

Subpart E—Special Information Sharing 

Procedures To Deter Money Laundering 

and Terrorist Activity 

1024.500 General. 

1024.520 Special information sharing 

procedures to deter money laundering 

and terrorist activity for mutual funds. 

1024.530 [Reserved] 

1024.540 Voluntary information sharing 

among financial institutions. 

Subpart F—Special Standards of Diligence; 

Prohibitions, and Special Measures for 

Mutual Funds 

1024.600 General. 

1024.610 Due diligence programs for 

correspondent accounts for foreign 

financial institutions. 

1024.620 Due diligence programs for 

private banking accounts. 

1024.630 Prohibition on correspondent 

accounts for foreign shell banks; records 


erowe on DSK5CLS3C1PROD with RULES3
65864 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

concerning owners of foreign banks and 

agents for service of legal process. 

1024.640 [Reserved] 

1024.670 [Reserved] 

Subpart A—Definitions 

§ 1024.100 Definitions. 

Refer to § 1010.100 of this Chapter for 

general definitions not noted herein. To 

the extent there is a differing definition 

in § 1010.100 of this Chapter, the 

definition in this Section is what 

applies to Part 1024. Unless otherwise 

indicated, for purposes of this Part: 

(a) Account. For purposes of 

§ 1024.220: 

(1) Account means any contractual or 

other business relationship between a 

person and a mutual fund established to 

effect transactions in securities issued 

by the mutual fund, including the 

purchase or sale of securities. 

(2) Account does not include: 

(i) An account that a mutual fund 

acquires through any acquisition, 

merger, purchase of assets, or 

assumption of liabilities; or 

(ii) An account opened for the 

purpose of participating in an employee 

benefit plan established under the 

Employee Retirement Income Security 

Act of 1974. 

(b) Commission means the United 

States Securities and Exchange 

Commission. 

(c) Customer. For purposes of 

§ 1024.220: 

(1) Customer means: 

(i) A person that opens a new account; 

and 

(ii) An individual who opens a new 

account for: 

(A) An individual who lacks legal 

capacity, such as a minor; or 

(B) An entity that is not a legal 

person, such as a civic club. 

(2) Customer does not include: 

(i) A financial institution regulated by 

a Federal functional regulator or a bank 

regulated by a State bank regulator; 

(ii) A person described in 

§ 1020.315(b)(2) through (4) of this 

Chapter; or 

(iii) A person that has an existing 

account with the mutual fund, provided 

that the mutual fund has a reasonable 

belief that it knows the true identity of 

the person. 

(d) Financial institution is defined at 

31 U.S.C. 5312(a)(2) and (c)(1). 

Subpart B—Programs 

§ 1024.200 General. 

Mutual funds are subject to the 

program requirements set forth and 

cross referenced in this subpart. Mutual 

funds should also refer to Subpart B of 

Part 1010 of this Chapter for program 

requirements contained in that subpart 

which apply to mutual funds. 

§ 1024.210 Anti-money laundering 

programs for mutual funds. 

(a) Effective July 24, 2002, each 

mutual fund shall develop and 

implement a written anti-money 

laundering program reasonably 

designed to prevent the mutual fund 

from being used for money laundering 

or the financing of terrorist activities 

and to achieve and monitor compliance 

with the applicable requirements of the 

Bank Secrecy Act (31 U.S.C. 5311, et 

seq.), and the implementing regulations 

promulgated thereunder by the 

Department of the Treasury. Each 

mutual fund’s anti-money laundering 

program must be approved in writing by 

its board of directors or trustees. A 

mutual fund shall make its anti-money 

laundering program available for 

inspection by the Commission. 

(b) The anti-money laundering 

program shall at a minimum: 

(1) Establish and implement policies, 

procedures, and internal controls 

reasonably designed to prevent the 

mutual fund from being used for money 

laundering or the financing of terrorist 

activities and to achieve compliance 

with the applicable provisions of the 

Bank Secrecy Act and the implementing 

regulations thereunder; 

(2) Provide for independent testing for 

compliance to be conducted by the 

mutual fund’s personnel or by a 

qualified outside party; 

(3) Designate a person or persons 

responsible for implementing and 

monitoring the operations and internal 

controls of the program; and 

(4) Provide ongoing training for 

appropriate persons. 

§ 1024.220 Customer identification 

programs for mutual funds. 

(a) Customer identification program: 

minimum requirements—(1) In general. 

A mutual fund must implement a 

written Customer Identification Program 

(‘‘CIP’’) appropriate for its size and type 

of business that, at a minimum, includes 

each of the requirements of paragraphs 

(a)(1) through (5) of this section. The 

CIP must be a part of the mutual fund’s 

anti-money laundering program 

required under the regulations 

implementing 31 U.S.C. 5318(h). 

(2) Identity verification procedures. 

The CIP must include risk-based 

procedures for verifying the identity of 

each customer to the extent reasonable 

and practicable. The procedures must 

enable the mutual fund to form a 

reasonable belief that it knows the true 

identity of each customer. The 

procedures must be based on the mutual 

fund’s assessment of the relevant risks, 

including those presented by the 

manner in which accounts are opened, 

fund shares are distributed, and 

purchases, sales and exchanges are 

effected, the various types of accounts 

maintained by the mutual fund, the 

various types of identifying information 

available, and the mutual fund’s 

customer base. At a minimum, these 

procedures must contain the elements 

described in this paragraph (a)(2). 

(i) Customer information required— 

(A) In general. The CIP must contain 

procedures for opening an account that 

specify the identifying information that 

will be obtained with respect to each 

customer. Except as permitted by 

paragraph (a)(2)(i)(B) of this section, a 

mutual fund must obtain, at a 

minimum, the following information 

prior to opening an account: 

(1) Name; 

(2) Date of birth, for an individual; 

(3) Address, which shall be: 

(i) For an individual, a residential or 

business street address; 

(ii) For an individual who does not 

have a residential or business street 

address, an Army Post Office (APO) or 

Fleet Post Office (FPO) box number, or 

the residential or business street address 

of next of kin or of another contact 

individual; or 

(iii) For a person other than an 

individual (such as a corporation, 

partnership, or trust), a principal place 

of business, local office or other 

physical location; and 

(4) Identification number, which shall 

be: 

(i) For a U.S. person, a taxpayer 

identification number; or 

(ii) For a non-U.S. person, one or more 

of the following: a taxpayer 

identification number; passport number 

and country of issuance; alien 

identification card number; or number 

and country of issuance of any other 

government-issued document 

evidencing nationality or residence and 

bearing a photograph or similar 

safeguard. 

Note to Paragraph (a)(2)(i)(A)(4)(ii): When 

opening an account for a foreign business or 

enterprise that does not have an 

identification number, the mutual fund must 

request alternative government-issued 

documentation certifying the existence of the 

business or enterprise. 

(B) Exception for persons applying for 

a taxpayer identification number. 

Instead of obtaining a taxpayer 

identification number from a customer 

prior to opening an account, the CIP 

may include procedures for opening an 

account for a person that has applied 

for, but has not received, a taxpayer 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65865 

identification number. In this case, the 

CIP must include procedures to confirm 

that the application was filed before the 

person opens the account and to obtain 

the taxpayer identification number 

within a reasonable period of time after 

the account is opened. 

(ii) Customer verification. The CIP 

must contain procedures for verifying 

the identity of the customer, using the 

information obtained in accordance 

with paragraph (a)(2)(i) of this section, 

within a reasonable time after the 

account is opened. The procedures must 

describe when the mutual fund will use 

documents, non-documentary methods, 

or a combination of both methods as 

described in this paragraph (a)(2)(ii). 

(A) Verification through documents. 

For a mutual fund relying on 

documents, the CIP must contain 

procedures that set forth the documents 

that the mutual fund will use. These 

documents may include: 

(1) For an individual, unexpired 

government-issued identification 

evidencing nationality or residence and 

bearing a photograph or similar 

safeguard, such as a driver’s license or 

passport; and 

(2) For a person other than an 

individual (such as a corporation, 

partnership, or trust), documents 

showing the existence of the entity, 

such as certified articles of 

incorporation, a government-issued 

business license, a partnership 

agreement, or trust instrument. 

(B) Verification through nondocumentary methods. For a mutual 

fund relying on non-documentary 

methods, the CIP must contain 

procedures that describe the nondocumentary methods the mutual fund 

will use. 

(1) These methods may include 

contacting a customer; independently 

verifying the customer’s identity 

through the comparison of information 

provided by the customer with 

information obtained from a consumer 

reporting agency, public database, or 

other source; checking references with 

other financial institutions; and 

obtaining a financial statement. 

(2) The mutual fund’s nondocumentary procedures must address 

situations where an individual is unable 

to present an unexpired governmentissued identification document that 

bears a photograph or similar safeguard; 

the mutual fund is not familiar with the 

documents presented; the account is 

opened without obtaining documents; 

the customer opens the account without 

appearing in person; and where the 

mutual fund is otherwise presented 

with circumstances that increase the 

risk that the mutual fund will be unable 

to verify the true identity of a customer 

through documents. 

(C) Additional verification for certain 

customers. The CIP must address 

situations where, based on the mutual 

fund’s risk assessment of a new account 

opened by a customer that is not an 

individual, the mutual fund will obtain 

information about individuals with 

authority or control over such account, 

including persons authorized to effect 

transactions in the shareholder of 

record’s account, in order to verify the 

customer’s identity. This verification 

method applies only when the mutual 

fund cannot verify the customer’s true 

identity using the verification methods 

described in paragraphs (a)(2)(ii)(A) and 

(B) of this section. 

(iii) Lack of verification. The CIP must 

include procedures for responding to 

circumstances in which the mutual fund 

cannot form a reasonable belief that it 

knows the true identity of a customer. 

These procedures should describe: 

(A) When the mutual fund should not 

open an account; 

(B) The terms under which a customer 

may use an account while the mutual 

fund attempts to verify the customer’s 

identity; 

(C) When the mutual fund should file 

a Suspicious Activity Report in 

accordance with applicable law and 

regulation; and 

(D) When the mutual fund should 

close an account, after attempts to verify 

a customer’s identity have failed. 

(3) Recordkeeping. The CIP must 

include procedures for making and 

maintaining a record of all information 

obtained under paragraph (a) of this 

section. 

(i) Required records. At a minimum, 

the record must include: 

(A) All identifying information about 

a customer obtained under paragraph 

(a)(2)(i) of this section; 

(B) A description of any document 

that was relied on under paragraph 

(a)(2)(ii)(A) of this section noting the 

type of document, any identification 

number contained in the document, the 

place of issuance, and if any, the date 

of issuance and expiration date; 

(C) A description of the methods and 

the results of any measures undertaken 

to verify the identity of the customer 

under paragraph (a)(2)(ii)(B) or (C) of 

this section; and 

(D) A description of the resolution of 

any substantive discrepancy discovered 

when verifying the identifying 

information obtained. 

(ii) Retention of records. The mutual 

fund must retain the information in 

paragraph (a)(3)(i)(A) of this section for 

five years after the date the account is 

closed. The mutual fund must retain the 

information in paragraphs (a)(3)(i)(B), 

(C), and (D) of this section for five years 

after the record is made. 

(4) Comparison with government lists. 

The CIP must include procedures for 

determining whether the customer 

appears on any list of known or 

suspected terrorists or terrorist 

organizations issued by any Federal 

government agency and designated as 

such by the Department of the Treasury 

in consultation with the Federal 

functional regulators. The procedures 

must require the mutual fund to make 

such a determination within a 

reasonable period of time after the 

account is opened, or earlier, if required 

by another Federal law or regulation or 

Federal directive issued in connection 

with the applicable list. The procedures 

must also require the mutual fund to 

follow all Federal directives issued in 

connection with such lists. 

(5)(i) Customer notice. The CIP must 

include procedures for providing 

mutual fund customers with adequate 

notice that the mutual fund is 

requesting information to verify their 

identities. 

(ii) Adequate notice. Notice is 

adequate if the mutual fund generally 

describes the identification 

requirements of this section and 

provides the notice in a manner 

reasonably designed to ensure that a 

customer is able to view the notice, or 

is otherwise given notice, before 

opening an account. For example, 

depending on the manner in which the 

account is opened, a mutual fund may 

post a notice on its Web site, include the 

notice on its account applications, or 

use any other form of written or oral 

notice. 

(iii) Sample notice. If appropriate, a 

mutual fund may use the following 

sample language to provide notice to its 

customers: 

Important Information About Procedures for 

Opening a New Account 

To help the government fight the funding 

of terrorism and money laundering activities, 

Federal law requires all financial institutions 

to obtain, verify, and record information that 

identifies each person who opens an account. 

What this means for you: When you open 

an account, we will ask for your name, 

address, date of birth, and other information 

that will allow us to identify you. We may 

also ask to see your driver’s license or other 

identifying documents. 

(6) Reliance on other financial 

institutions. The CIP may include 

procedures specifying when a mutual 

fund will rely on the performance by 

another financial institution (including 

an affiliate) of any procedures of the 

mutual fund’s CIP, with respect to any 

customer of the mutual fund that is 


erowe on DSK5CLS3C1PROD with RULES3
65866 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

opening, or has opened, an account or 

has established a similar formal 

business relationship with the other 

financial institution to provide or 

engage in services, dealings, or other 

financial transactions, provided that: 

(i) Such reliance is reasonable under 

the circumstances; 

(ii) The other financial institution is 

subject to a rule implementing 31 U.S.C. 

5318(h) and is regulated by a Federal 

functional regulator; and 

(iii) The other financial institution 

enters into a contract requiring it to 

certify annually to the mutual fund that 

it has implemented its anti-money 

laundering program, and that it (or its 

agent) will perform the specific 

requirements of the mutual fund’s CIP. 

(b) Exemptions. The Commission, 

with the concurrence of the Secretary, 

may, by order or regulation, exempt any 

mutual fund or type of account from the 

requirements of this section. The 

Commission and the Secretary shall 

consider whether the exemption is 

consistent with the purposes of the 

Bank Secrecy Act and is in the public 

interest, and may consider other 

appropriate factors. 

(c) Other requirements unaffected. 

Nothing in this section relieves a mutual 

fund of its obligation to comply with 

any other provision in this chapter, 

including provisions concerning 

information that must be obtained, 

verified, or maintained in connection 

with any account or transaction. 

Subpart C—Reports Required To Be 

Made By Mutual Funds 

§ 1024.300 General. 

Mutual funds are subject to the 

reporting requirements set forth and 

cross referenced in this subpart. Mutual 

funds should also refer to Subpart C of 

Part 1010 of this Chapter for reporting 

requirements contained in that subpart 

which apply to mutual funds. 

§ 1024.310 Reports of transactions in 

currency. 

The reports of transactions in 

currency requirements for mutual funds 

are located in subpart C of Part 1010 of 

this Chapter and this subpart. 

§ 1024.311 Filing obligations. 

Refer to § 1010.311 of this Chapter for 

reports of transactions in currency filing 

obligations for mutual funds. 

§ 1024.312 Identification required. 

Refer to § 1010.312 of this Chapter for 

identification requirements for reports 

of transactions in currency filed by 

mutual funds. 

§ 1024.313 Aggregation. 

Refer to § 1010.313 of this Chapter for 

reports of transactions in currency 

aggregation requirements for mutual 

funds. 

§ 1024.314 Structured transactions. 

Refer to § 1010.314 of this Chapter for 

rules regarding structured transactions 

for mutual funds. 

§ 1024.315 Exemptions. 

Refer to § 1010.315 of this Chapter for 

exemptions from the obligation to file 

reports of transactions in currency for 

mutual funds. 

§ 1024.320 Reports by mutual funds of 

suspicious transactions. 

(a) General. (1) Every investment 

company (as defined in section 3 of the 

Investment Company Act of 1940 (15 

U.S.C. 80a–3) (‘‘Investment Company 

Act’’) that is an open-end company (as 

defined in section 5 of the Investment 

Company Act (15 U.S.C. 80a–5)) and 

that is registered, or is required to 

register, with the Securities and 

Exchange Commission pursuant to that 

Act (for purposes of this section, a 

‘‘mutual fund’’), shall file with the 

Financial Crimes Enforcement Network, 

to the extent and in the manner required 

by this section, a report of any 

suspicious transaction relevant to a 

possible violation of law or regulation. 

A mutual fund may also file with the 

Financial Crimes Enforcement Network 

a report of any suspicious transaction 

that it believes is relevant to the 

possible violation of any law or 

regulation, but whose reporting is not 

required by this section. Filing a report 

of a suspicious transaction does not 

relieve a mutual fund from the 

responsibility of complying with any 

other reporting requirements imposed 

by the Securities and Exchange 

Commission. 

(2) A transaction requires reporting 

under this section if it is conducted or 

attempted by, at, or through a mutual 

fund, it involves or aggregates funds or 

other assets of at least $5,000, and the 

mutual fund knows, suspects, or has 

reason to suspect that the transaction (or 

a pattern of transactions of which the 

transaction is a part): 

(i) Involves funds derived from illegal 

activity or is intended or conducted in 

order to hide or disguise funds or assets 

derived from illegal activity (including, 

without limitation, the ownership, 

nature, source, location, or control of 

such funds or assets) as part of a plan 

to violate or evade any Federal law or 

regulation or to avoid any transaction 

reporting requirement under Federal 

law or regulation; 

(ii) Is designed, whether through 

structuring or other means, to evade any 

requirements of this chapter or any 

other regulations promulgated under the 

Bank Secrecy Act; 

(iii) Has no business or apparent 

lawful purpose or is not the sort in 

which the particular customer would 

normally be expected to engage, and the 

mutual fund knows of no reasonable 

explanation for the transaction after 

examining the available facts, including 

the background and possible purpose of 

the transaction; or 

(iv) Involves use of the mutual fund 

to facilitate criminal activity. 

(3) More than one mutual fund may 

have an obligation to report the same 

transaction under this section, and other 

financial institutions may have separate 

obligations to report suspicious activity 

with respect to the same transaction 

pursuant to other provisions of this 

chapter. In those instances, no more 

than one report is required to be filed 

by the mutual fund(s) and other 

financial institution(s) involved in the 

transaction, provided that the report 

filed contains all relevant facts, 

including the name of each financial 

institution and the words ‘‘joint filing’’ 

in the narrative section, and each 

institution maintains a copy of the 

report filed, along with any supporting 

documentation. 

(b) Filing and notification 

procedures—(1) What to file. A 

suspicious transaction shall be reported 

by completing a Suspicious Activity 

Report by Securities and Futures 

Industries (‘‘SAR–SF’’), and collecting 

and maintaining supporting 

documentation as required by paragraph 

(c) of this section. 

(2) Where to file. Form SAR–SF shall 

be filed with the Financial Crimes 

Enforcement Network in accordance 

with the instructions to the Form 

SAR–SF. 

(3) When to file. A Form SAR–SF 

shall be filed no later than 30 calendar 

days after the date of the initial 

detection by the reporting mutual fund 

of facts that may constitute a basis for 

filing a Form SAR–SF under this 

section. If no suspect is identified on the 

date of such initial detection, a mutual 

fund may delay filing a Form SAR–SF 

for an additional 30 calendar days to 

identify a suspect, but in no case shall 

reporting be delayed more than 60 

calendar days after the date of such 

initial detection. 

(4) Mandatory notification to law 

enforcement. In situations involving 

violations that require immediate 

attention, such as suspected terrorist 

financing or ongoing money laundering 

schemes, a mutual fund shall 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65867 

immediately notify by telephone an 

appropriate law enforcement authority 

in addition to filing timely a Form 

SAR–SF. 

(5) Voluntary notification to the 

Financial Crimes Enforcement Network 

or the Securities and Exchange 

Commission. Mutual funds wishing 

voluntarily to report suspicious 

transactions that may relate to terrorist 

activity may call the Financial Crimes 

Enforcement Network’s Financial 

Institutions Hotline at 1–866–556–3974 

in addition to filing timely a Form 

SAR–SF if required by this section. The 

mutual fund may also, but is not 

required to, contact the Securities and 

Exchange Commission to report in such 

situations. 

(c) Retention of records. A mutual 

fund shall maintain a copy of any Form 

SAR–SF filed by the fund or on its 

behalf (including joint reports), and the 

original (or business record equivalent) 

of any supporting documentation 

concerning any Form SAR–SF that it 

files (or is filed on its behalf), for a 

period of five years from the date of 

filing the Form SAR–SF. Supporting 

documentation shall be identified as 

such and maintained by the mutual 

fund, and shall be deemed to have been 

filed with the Form SAR–SF. The 

mutual fund shall make all supporting 

documentation available to the 

Financial Crimes Enforcement Network, 

any other appropriate law enforcement 

agencies or Federal or state securities 

regulators, and for purposes of an 

examination of a broker-dealer pursuant 

to § 1023.320(g) of this chapter 

regarding a joint report, to a selfregulatory organization (as defined in 

section 3(a)(26) of the Securities 

Exchange Act of 1934, 15 U.S.C. 

78c(a)(26)) registered with the Securities 

and Exchange Commission, upon 

request. 

(d) Confidentiality of reports. No 

mutual fund, and no director, officer, 

employee, or agent of any mutual fund, 

who reports a suspicious transaction 

under this chapter (whether such a 

report is required by this section or 

made voluntarily), may notify any 

person involved in the transaction that 

the transaction has been reported, 

except to the extent permitted by 

paragraph (a)(3) of this section. Any 

person subpoenaed or otherwise 

required to disclose a Form SAR–SF or 

the information contained in a Form 

SAR–SF, including a Form SAR–SF 

filed jointly with another financial 

institution involved in the same 

transaction (except where such 

disclosure is requested by the Financial 

Crimes Enforcement Network, the 

Securities and Exchange Commission, 

another appropriate law enforcement or 

regulatory agency, or, in the case of a 

joint report involving a broker-dealer, a 

self-regulatory organization registered 

with the Securities and Exchange 

Commission conducting an examination 

of such broker-dealer pursuant to 

§ 1023.320(g) of this chapter), shall 

decline to produce Form SAR–SF or to 

provide any information that would 

disclose that a Form SAR–SF has been 

prepared or filed, citing this paragraph 

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

notify the Financial Crimes Enforcement 

Network of any such request and its 

response thereto. 

(e) Limitation of liability. A mutual 

fund, and any director, officer, 

employee, or agent of such mutual fund, 

that makes a report of any possible 

violation of law or regulation pursuant 

to this section, including a joint report 

(whether such report is required by this 

section or made voluntarily) shall be 

protected from liability for any 

disclosure contained in, or for failure to 

disclose the fact of, such report, or both, 

to the extent provided in 31 U.S.C. 

5318(g)(3). 

(f) Examinations and enforcement. 

Compliance with this section shall be 

examined by the Department of the 

Treasury, through the Financial Crimes 

Enforcement Network or its delegees, 

under the terms of the Bank Secrecy 

Act. Failure to satisfy the requirements 

of this section may constitute a violation 

of the reporting rules of the Bank 

Secrecy Act and of this chapter. 

(g) Applicability date. This section 

applies to transactions occurring after 

October 31, 2006. 

Subpart D—Records Required To Be 

Maintained By Mutual Funds 

§ 1024.400 General. 

Mutual funds are subject to the 

recordkeeping requirements set forth 

and cross referenced in this subpart. 

Mutual funds should also refer to 

Subpart D of Part 1010 of this Chapter 

for recordkeeping requirements 

contained in that subpart which apply 

to mutual funds. 

§ 1024.410 Recordkeeping. 

Refer to § 1010.410 of this Chapter. 

Subpart E—Special Information 

Sharing Procedures To Deter Money 

Laundering and Terrorist Activity 

§ 1024.500 General. 

Mutual funds are subject to the 

special information sharing procedures 

to deter money laundering and terrorist 

activity requirements set forth and cross 

referenced in this subpart. Mutual funds 

should also refer to Subpart E of Part 

1010 of this Chapter for special 

information sharing procedures to deter 

money laundering and terrorist activity 

contained in that subpart which apply 

to mutual funds. 

§ 1024.520 Special information sharing 

procedures to deter money laundering and 

terrorist activity for mutual funds. 

(a) Refer to § 1010.520 of this Chapter. 

(b) [Reserved] 

§ 1024.530 [Reserved] 

§ 1024.540 Voluntary information sharing 

among financial institutions. 

(a) Refer to § 1010.540 of this Chapter. 

(b) [Reserved] 

Subpart F—Special Standards of 

Diligence; Prohibitions; and Special 

Measures for Mutual Funds 

§ 1024.600 General. 

Mutual funds are subject to the 

special standards of diligence; 

prohibitions; and special measures 

requirements set forth and cross 

referenced in this subpart. Mutual funds 

should also refer to Subpart F of Part 

1010 of this Chapter for special 

standards of diligence; prohibitions; and 

special measures contained in that 

subpart which apply to mutual funds. 

§ 1024.610 Due diligence programs for 

correspondent accounts for foreign 

financial institutions. 

(a) Refer to § 1010.610 of this Chapter. 

(b) [Reserved] 

§ 1024.620 Due diligence programs for 

private banking accounts. 

(a) Refer to § 1010.620 of this Chapter. 

(b) [Reserved] 

§ 1024.630 Prohibition on correspondent 

accounts for foreign shell banks; records 

concerning owners of foreign banks and 

agents for service of legal process. 

(a) Refer to § 1010.630 of this Chapter. 

(b) [Reserved] 

§ 1024.640 [Reserved] 

§ 1024.670 [Reserved] 

PART 1025—RULES FOR INSURANCE 

COMPANIES 

Subpart A—Definitions 

Sec. 

1025.100 Definitions. 

Subpart B—Programs 

1025.200 General. 

1025.210 Anti-money laundering programs 

for insurance companies. 

Subpart C—Reports Required To Be Made 

By Insurance Companies 

1025.300 General. 

1025.310 [Reserved] 

1025.315 [Reserved] 


erowe on DSK5CLS3C1PROD with RULES3
65868 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

1025.320 Reports by insurance companies 

of suspicious transactions. 

1025.330 Reports relating to currency in 

excess of $10,000 received in a trade or 

business. 

Subpart D—Records Required To Be 

Maintained By Insurance Companies 

1025.400 General. 

1025.410 Recordkeeping. 

Subpart E—Special Information Sharing 

Procedures To Deter Money Laundering 

and Terrorist Activity 

1025.500 General. 

1025.520 Special information sharing 

procedures to deter money laundering 

and terrorist activity for insurance 

companies. 

1025.530 [Reserved] 

1025.540 Voluntary information sharing 

among financial institutions. 

Subpart F—Special Standards of Diligence; 

Prohibitions, and Special Measures for 

Insurance Companies 

1025.600 [Reserved] 

1025.610 [Reserved] 

1025.620 [Reserved] 

1025.630 [Reserved] 

1025.640 [Reserved] 

1025.670 [Reserved] 

Subpart A—Definitions 

§ 1025.100 Definitions. 

Refer to § 1010.100 of this Chapter for 

general definitions not noted herein. To 

the extent there is a differing definition 

in § 1010.100 of this Chapter, the 

definition in this Section is what 

applies to Part 1025. Unless otherwise 

indicated, for purposes of this Part: 

(a) Annuity contract means any 

agreement between the insurer and the 

contract owner whereby the insurer 

promises to pay out a fixed or variable 

income stream for a period of time. 

(b) Covered product means: 

(1) A permanent life insurance policy, 

other than a group life insurance policy; 

(2) An annuity contract, other than a 

group annuity contract; or 

(3) Any other insurance product with 

features of cash value or investment. 

(c) Group annuity contract means a 

master contract providing annuities to a 

group of persons under a single 

contract. 

(d) Group life insurance policy means 

any life insurance policy under which a 

number of persons and their 

dependents, if appropriate, are insured 

under a single policy. 

(e) Insurance agent means a sales and/ 

or service representative of an insurance 

company. The term ‘‘insurance agent’’ 

encompasses any person that sells, 

markets, distributes, or services an 

insurance company’s covered products, 

including, but not limited to, a person 

who represents only one insurance 

company, a person who represents more 

than one insurance company, and a 

bank or broker-dealer in securities that 

sells any covered product of an 

insurance company. 

(f) Insurance broker means a person 

who, by acting as the customer’s 

representative, arranges and/or services 

covered products on behalf of the 

customer. 

(g) Insurance company or insurer. (1) 

Except as provided in paragraph (g)(2) 

of this section, the term ‘‘insurance 

company’’ or ‘‘insurer’’ means any 

person engaged within the United States 

as a business in the issuing or 

underwriting of any covered product. 

(2) The term ‘‘insurance company’’ or 

‘‘insurer’’ does not include an insurance 

agent or insurance broker. 

(h) Permanent life insurance policy 

means an agreement that contains a cash 

value or investment element and that 

obligates the insurer to indemnify or to 

confer a benefit upon the insured or 

beneficiary to the agreement contingent 

upon the death of the insured. 

Subpart B—Programs 

§ 1025.200 General. 

Insurance companies are subject to 

the program requirements set forth and 

cross referenced in this subpart. 

Insurance companies should also refer 

to Subpart B of Part 1010 of this Chapter 

for program requirements contained in 

that subpart which apply to insurance 

companies. 

§ 1025.210 Anti-money laundering 

programs for insurance companies. 

(a) In general. Not later than May 2, 

2006, each insurance company shall 

develop and implement a written antimoney laundering program applicable 

to its covered products that is 

reasonably designed to prevent the 

insurance company from being used to 

facilitate money laundering or the 

financing of terrorist activities. The 

program must be approved by senior 

management. An insurance company 

shall make a copy of its anti-money 

laundering program available to the 

Department of the Treasury, the 

Financial Crimes Enforcement Network, 

or their designee upon request. 

(b) Minimum requirements. At a 

minimum, the program required by 

paragraph (a) of this section shall: 

(1) Incorporate policies, procedures, 

and internal controls based upon the 

insurance company’s assessment of the 

money laundering and terrorist 

financing risks associated with its 

covered products. Policies, procedures, 

and internal controls developed and 

implemented by an insurance company 

under this section shall include 

provisions for complying with the 

applicable requirements of subchapter II 

of chapter 53 of title 31, United States 

Code and this chapter, integrating the 

company’s insurance agents and 

insurance brokers into its anti-money 

laundering program, and obtaining all 

relevant customer-related information 

necessary for an effective anti-money 

laundering program. 

(2) Designate a compliance officer 

who will be responsible for ensuring 

that: 

(i) The anti-money laundering 

program is implemented effectively, 

including monitoring compliance by the 

company’s insurance agents and 

insurance brokers with their obligations 

under the program; 

(ii) The anti-money laundering 

program is updated as necessary; and 

(iii) Appropriate persons are educated 

and trained in accordance with 

paragraph (b)(3) of this section. 

(3) Provide for on-going training of 

appropriate persons concerning their 

responsibilities under the program. An 

insurance company may satisfy this 

requirement with respect to its 

employees, insurance agents, and 

insurance brokers by directly training 

such persons or verifying that persons 

have received training by another 

insurance company or by a competent 

third party with respect to the covered 

products offered by the insurance 

company. 

(4) Provide for independent testing to 

monitor and maintain an adequate 

program, including testing to determine 

compliance of the company’s insurance 

agents and insurance brokers with their 

obligations under the program. The 

scope and frequency of the testing shall 

be commensurate with the risks posed 

by the insurance company’s covered 

products. Such testing may be 

conducted by a third party or by any 

officer or employee of the insurance 

company, other than the person 

designated in paragraph (b)(2) of this 

section. 

(c) Anti-money laundering program 

requirements for insurance companies 

registered or required to register with the 

Securities and Exchange Commission as 

broker-dealers in securities. An 

insurance company that is registered or 

required to register with the Securities 

and Exchange Commission as a brokerdealer in securities shall be deemed to 

have satisfied the requirements of this 

section for its broker-dealer activities to 

the extent that the company is required 

to establish and has established an antimoney laundering program pursuant to 

§ 1023.210 of this Chapter and complies 

with such program. 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65869 

(d) Compliance. Compliance with this 

section shall be examined by the 

Department of the Treasury, through the 

Financial Crimes Enforcement Network 

or its delegees, under the terms of the 

Bank Secrecy Act. Failure to comply 

with the requirements of this section 

may constitute a violation of the Bank 

Secrecy Act and of this chapter. 

Subpart C—Reports Required To Be 

Made By Insurance Companies 

§ 1025.300 General. 

Insurance companies are subject to 

the reporting requirements set forth and 

cross referenced in this subpart. 

Insurance companies should also refer 

to Subpart C of Part 1010 of this Chapter 

for reporting requirements contained in 

that subpart which apply to insurance 

companies. 

§ 1025.310 [Reserved] 

§ 1025.315 [Reserved] 

§ 1025.320 Reports by insurance 

companies of suspicious transactions. 

(a) General. (1) Each insurance 

company shall file with the Financial 

Crimes Enforcement Network, to the 

extent and in the manner required by 

this section, a report of any suspicious 

transaction involving a covered product 

that is relevant to a possible violation of 

law or regulation. An insurance 

company may also file with the 

Financial Crimes Enforcement Network 

by using the form specified in paragraph 

(b)(1) of this section or otherwise, a 

report of any suspicious transaction that 

it believes is relevant to the possible 

violation of any law or regulation but 

the reporting of which is not required by 

this section. 

(2) A transaction requires reporting 

under this section if it is conducted or 

attempted by, at, or through an 

insurance company, and involves or 

aggregates at least $5,000 in funds or 

other assets, and the insurance company 

knows, suspects, or has reason to 

suspect that the transaction (or a pattern 

of transactions of which the transaction 

is a part): 

(i) Involves funds derived from illegal 

activity or is intended or conducted in 

order to hide or disguise funds or assets 

derived from illegal activity (including, 

without limitation, the ownership, 

nature, source, location, or control of 

such funds or assets) as part of a plan 

to violate or evade any Federal law or 

regulation or to avoid any transaction 

reporting requirement under Federal 

law or regulation; 

(ii) Is designed, whether through 

structuring or other means, to evade any 

requirements of this chapter or of any 

other regulations promulgated under the 

Bank Secrecy Act; 

(iii) Has no business or apparent 

lawful purpose or is not the sort in 

which the particular customer would 

normally be expected to engage, and the 

insurance company knows of no 

reasonable explanation for the 

transaction after examining the available 

facts, including the background and 

possible purpose of the transaction; or 

(iv) Involves use of the insurance 

company to facilitate criminal activity. 

(3)(i) An insurance company is 

responsible for reporting suspicious 

transactions conducted through its 

insurance agents and insurance brokers. 

Accordingly, an insurance company 

shall establish and implement policies 

and procedures reasonably designed to 

obtain customer-related information 

necessary to detect suspicious activity 

from all relevant sources, including 

from its insurance agents and insurance 

brokers, and shall report suspicious 

activity based on such information. 

(ii) Certain insurance agents may have 

a separate obligation to report 

suspicious activity pursuant to other 

provisions of this chapter. In those 

instances, no more than one report is 

required to be filed by the financial 

institutions involved in the transaction, 

as long as the report filed contains all 

relevant facts, including the names of 

both institutions and the words ‘‘joint 

filing’’ in the narrative section, and both 

institutions maintain a copy of the 

report filed, along with any supporting 

documentation. 

(iii) An insurance company that 

issues variable insurance products 

funded by separate accounts that meet 

the definition of a mutual fund in 

§ 1024.320(a)(1) of this Chapter shall file 

reports of suspicious transactions 

pursuant to § 1024.320 of this Chapter. 

(b) Filing procedures—(1) What to file. 

A suspicious transaction shall be 

reported by completing a Suspicious 

Activity Report by Insurance Companies 

(SAR–IC), and collecting and 

maintaining supporting documentation 

as required by paragraph (d) of this 

section. 

(2) Where to file. The SAR–IC shall be 

filed with the Financial Crimes 

Enforcement Network as indicated in 

the instructions to the SAR–IC. 

(3) When to file. A SAR–IC shall be 

filed no later than 30 calendar days after 

the date of the initial detection by the 

insurance company of facts that may 

constitute a basis for filing a SAR–IC 

under this section. If no suspect is 

identified on the date of such initial 

detection, an insurance company may 

delay filing a SAR–IC for an additional 

30 calendar days to identify a suspect, 

but in no case shall reporting be delayed 

more than 60 calendar days after the 

date of such initial detection. In 

situations that require immediate 

attention, such as terrorist financing or 

ongoing money laundering schemes, the 

insurance company shall immediately 

notify by telephone an appropriate law 

enforcement authority in addition to 

filing timely a SAR–IC. Insurance 

companies wishing voluntarily to report 

suspicious transactions that may relate 

to terrorist activity may call the 

Financial Crimes Enforcement 

Network’s Financial Institutions Hotline 

at 1–866–556–3974 in addition to filing 

timely a SAR–IC if required by this 

section. 

(c) Exception. An insurance company 

is not required to file a SAR–IC to report 

the submission to it of false or 

fraudulent information to obtain a 

policy or make a claim, unless the 

company has reason to believe that the 

false or fraudulent submission relates to 

money laundering or terrorist financing. 

(d) Retention of records. An insurance 

company shall maintain a copy of any 

SAR–IC filed and the original or 

business record equivalent of any 

supporting documentation for a period 

of five years from the date of filing the 

SAR–IC. Supporting documentation 

shall be identified as such and 

maintained by the insurance company 

and shall be deemed to have been filed 

with the SAR–IC. When an insurance 

company has filed or is identified as a 

filer in a joint Suspicious Activity 

Report, the insurance company shall 

maintain a copy of such joint report 

(together with copies of any supporting 

documentation) for a period of five 

years from the date of filing. An 

insurance company shall make all 

supporting documentation available to 

the Financial Crimes Enforcement 

Network and any other appropriate law 

enforcement agencies or supervisory 

agencies upon request. 

(e) Confidentiality of reports; 

limitation of liability. No insurance 

company, and no director, officer, 

employee, agent, or broker of any 

insurance company, who reports a 

suspicious transaction under this 

chapter (whether such a report is 

required by this section or made 

voluntarily), may notify any person 

involved in the transaction that the 

transaction has been reported, except to 

the extent permitted by paragraph (a)(3) 

of this section. Thus, any insurance 

company subpoenaed or otherwise 

requested to disclose a SAR–IC or the 

information contained in a SAR–IC (or 

a copy of a joint Suspicious Activity 

Report filed with another financial 

institution involved in the same 


erowe on DSK5CLS3C1PROD with RULES3
65870 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

transaction, including an insurance 

agent), except where such disclosure is 

requested by the Financial Crimes 

Enforcement Network or another 

appropriate law enforcement or 

supervisory agency, shall decline to 

produce the Suspicious Activity Report 

or to provide any information that 

would disclose that a Suspicious 

Activity Report has been prepared or 

filed, citing as authority 31 CFR 

1025.320 and 31 U.S.C. 5318(g)(2), and 

shall notify the Financial Crimes 

Enforcement Network of any such 

request and its response thereto. An 

insurance company, and any director, 

officer, employee, agent, or broker of 

such insurance company, that makes a 

report pursuant to this section, 

including a joint report (whether such 

report is required by this section or 

made voluntarily) shall be protected 

from liability for any disclosure 

contained in, or for failure to disclose 

the fact of, such report, or both, to the 

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

(f) Compliance. Compliance with this 

section shall be examined by the 

Department of the Treasury, through the 

Financial Crimes Enforcement Network 

or its delegees, under the terms of the 

Bank Secrecy Act. Failure to comply 

with the requirements of this section 

may constitute a violation of the 

reporting rules of the Bank Secrecy Act 

and of this chapter. 

(g) Suspicious transaction reporting 

requirements for insurance companies 

registered or required to register with the 

Securities and Exchange Commission as 

broker-dealers in securities. An 

insurance company that is registered or 

required to register with the Securities 

and Exchange Commission as a brokerdealer in securities shall be deemed to 

have satisfied the requirements of this 

section for its broker-dealer activities to 

the extent that the company complies 

with the reporting requirements 

applicable to such activities pursuant to 

§ 1023.320 of this Chapter. 

(h) Applicability date. This section 

applies to transactions occurring after 

May 2, 2006. 

§ 1025.330 Reports relating to currency in 

excess of $10,000 received in a trade or 

business. 

Refer to § 1010.330 of this Chapter for 

rules regarding the filing of reports 

relating to currency in excess of $10,000 

received by insurance companies. 

Subpart D—Records Required To Be 

Maintained By Insurance Companies 

§ 1025.400 General. 

Insurance companies are subject to 

the recordkeeping requirements set forth 

and cross referenced in this subpart. 

Insurance companies should also refer 

to Subpart D of Part 1010 of this Chapter 

for recordkeeping requirements 

contained in that subpart which apply 

to insurance companies. 

§ 1025.410 Recordkeeping. 

Refer to § 1010.410. 

Subpart E—Special Information 

Sharing Procedures To Deter Money 

Laundering and Terrorist Activity 

§ 1025.500 General. 

Insurance companies are subject to 

the special information sharing 

procedures to deter money laundering 

and terrorist activity requirements set 

forth and cross referenced in this 

subpart. Insurance companies should 

also refer to Subpart E of Part 1010 of 

this Chapter for special information 

sharing procedures to deter money 

laundering and terrorist activity 

contained in that subpart which apply 

to insurance companies. 

§ 1025.520 Special information sharing 

procedures to deter money laundering and 

terrorist activity for insurance companies. 

(a) Refer to § 1010.520 of this Chapter. 

(b) [Reserved] 

§ 1025.530 [Reserved] 

§ 1025.540 Voluntary information sharing 

among financial institutions. 

(a) Refer to § 1010.540 of this Chapter. 

(b) [Reserved] 

Subpart F—Special Standards of 

Diligence; Prohibitions; and Special 

Measures for Insurance Companies 

§ 1025.600 [Reserved] 

§ 1025.610 [Reserved] 

§ 1025.620 [Reserved] 

§ 1025.630 [Reserved] 

§ 1025.640 [Reserved] 

§ 1025.670 [Reserved] 

PART 1026—RULES FOR FUTURES 

COMMISSION MERCHANTS AND 

INTRODUCING BROKERS IN 

COMMODITIES 

Subpart A—Definitions 

Sec. 

1026.100 Definitions. 

Subpart B—Programs 

1026.200 General. 

1026.210 Anti-money laundering program 

requirements for futures commission 

merchants and introducing brokers in 

commodities. 

1026.220 Customer identification program 

requirements for futures commission 

merchants and introducing brokers. 

Subpart C—Reports Required To Be Made 

By Futures Commission Merchants and 

Introducing Brokers in Commodities 

1026.300 General. 

1026.310 Reports of transactions in 

currency. 

1026.315 Exemptions. 

1026.320 Reports by futures commission 

merchants and introducing brokers in 

commodities of suspicious transactions. 

Subpart D—Records Required To Be 

Maintained By Futures Commission 

Merchants and Introducing Brokers in 

Commodities 

1026.400 General. 

1026.410 Recordkeeping. 

Subpart E—Special Information Sharing 

Procedures To Deter Money Laundering 

and Terrorist Activity 

1026.500 General. 

1026.520 Special information sharing 

procedures to deter money laundering 

and terrorist activity for futures 

commission merchants and introducing 

brokers in commodities. 

1026.530 [Reserved] 

1026.540 Voluntary information sharing 

among financial institutions. 

Subpart F—Special Standards of Diligence; 

Prohibitions, and Special Measures for 

Futures Commission Merchants and 

Introducing Brokers in Commodities 

1026.600 General. 

1026.610 Due diligence programs for 

correspondent accounts for foreign 

financial institutions. 

1026.620 Due diligence programs for 

private banking accounts. 

1026.630 Prohibition on correspondent 

accounts for foreign shell banks; records 

concerning owners of foreign banks and 

agents for service of legal process. 

1026.640 [Reserved] 

1026.670 Summons or subpoena of foreign 

bank records; Termination of 

correspondent relationship. 

Subpart A—Definitions 

§ 1026.100 Definitions. 

Refer to § 1010.100 of this Chapter for 

general definitions not noted herein. To 

the extent there is a differing definition 

in § 1010.100 of this Chapter, the 

definition in this Section is what 

applies to Part 1026. Unless otherwise 

indicated, for the purposes of this Part: 

(a) Account. For purposes of 

§ 1026.220: 

(1) Account means a formal 

relationship with a futures commission 

merchant, including, but not limited to, 

those established to effect transactions 

in contracts of sale of a commodity for 

future delivery, options on any contract 

of sale of a commodity for future 

delivery, or options on a commodity. 

(2) Account does not include: 

(i) An account that the futures 

commission merchant acquires through 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65871 

any acquisition, merger, purchase of 

assets, or assumption of liabilities; or 

(ii) An account opened for the 

purpose of participating in an employee 

benefit plan established under the 

Employee Retirement Income Security 

Act of 1974. 

(b) Commodity means any good, 

article, service, right, or interest 

described in Section 1a(4) of the 

Commodity Exchange Act (7 U.S.C. 

1a(4)). 

(c) Contract of sale means any sale, 

agreement of sale or agreement to sell as 

described in Section 1a(7) of the 

Commodity Exchange Act (7 U.S.C. 

1a(7)). 

(d) Customer. For purposes of 

§ 1026.220: 

(1) Customer means: 

(i) A person that opens a new account 

with a futures commission merchant; 

and 

(ii) An individual who opens a new 

account with a futures commission 

merchant for: 

(A) An individual who lacks legal 

capacity; or 

(B) An entity that is not a legal 

person. 

(2) Customer does not include: 

(i) A financial institution regulated by 

a Federal functional regulator or a bank 

regulated by a state bank regulator; 

(ii) A person described in 

§ 1020.315(b)(2) through (4) of this 

Chapter; or 

(iii) A person that has an existing 

account, provided the futures 

commission merchant or introducing 

broker has a reasonable belief that it 

knows the true identity of the person. 

(3) When an account is introduced to 

a futures commission merchant by an 

introducing broker, the person or 

individual opening the account shall be 

deemed to be a customer of both the 

futures commission merchant and the 

introducing broker for the purposes of 

this section. 

(e) Financial institution is defined at 

31 U.S.C. 5312(a)(2) and (c)(1). 

(f) Futures commission merchant 

means any person registered or required 

to be registered as a futures commission 

merchant with the Commodity Futures 

Trading Commission (‘‘CFTC’’) under 

the Commodity Exchange Act (7 U.S.C. 

1 et seq.), except persons who register 

pursuant to Section 4f(a)(2) of the 

Commodity Exchange Act (7 U.S.C. 

6f(a)(2)). 

(g) Introducing broker means any 

person registered or required to be 

registered as an introducing broker with 

the CFTC under the Commodity 

Exchange Act (7 U.S.C. 1 et seq.), except 

persons who register pursuant to 

Section 4f(a)(2) of the Commodity 

Exchange Act (7 U.S.C. 6f(a)(2)). 

(h) Option means an agreement, 

contract or transaction described in 

Section 1a(26) of the Commodity 

Exchange Act (7 U.S.C. 1a(26)). 

Subpart B—Programs 

§ 1026.200 General. 

Futures commission merchants and 

introducing brokers in commodities are 

subject to the program requirements set 

forth and cross referenced in this 

subpart. Futures commission merchants 

and introducing brokers in commodities 

should also refer to Subpart B of Part 

1010 of this Chapter for program 

requirements contained in that subpart 

which apply to futures commission 

merchants and introducing brokers in 

commodities. 

§ 1026.210 Anti-money laundering 

program requirements for futures 

commission merchants and introducing 

brokers in commodities. 

A financial institution regulated by a 

self-regulatory organization shall be 

deemed to satisfy the requirements of 31 

U.S.C. 5318(h)(1) if: 

(a) The financial institution complies 

with the requirements of §§ 1010.610 

and 1010.620 of this Chapter and any 

applicable regulation of its Federal 

functional regulator governing the 

establishment and implementation of 

anti-money laundering programs; and 

(b)(1) The financial institution 

implements and maintains an antimoney laundering program that 

complies with the rules, regulations, or 

requirements of its self-regulatory 

organization governing such programs; 

and 

(2) The rules, regulations, or 

requirements of the self-regulatory 

organization have been approved, if 

required, by the appropriate Federal 

functional regulator. 

§ 1026.220 Customer identification 

programs for futures commission 

merchants and introducing brokers. 

(a) Customer identification program: 

Minimum requirements—(1) In general. 

Each futures commission merchant and 

introducing broker must implement a 

written Customer Identification Program 

(CIP) appropriate for its size and 

business that, at a minimum, includes 

each of the requirements of paragraphs 

(a)(1) through (a)(5) of this section. The 

CIP must be a part of each futures 

commission merchant’s and introducing 

broker’s anti-money laundering 

compliance program required under 31 

U.S.C. 5318(h). 

(2) Identity verification procedures. 

The CIP must include risk-based 

procedures for verifying the identity of 

each customer to the extent reasonable 

and practicable. The procedures must 

enable each futures commission 

merchant and introducing broker to 

form a reasonable belief that it knows 

the true identity of each customer. The 

procedures must be based on the futures 

commission merchant’s or introducing 

broker’s assessment of the relevant risks, 

including those presented by the 

various types of accounts maintained, 

the various methods of opening 

accounts, the various types of 

identifying information available, and 

the futures commission merchant’s or 

introducing broker’s size, location and 

customer base. At a minimum, these 

procedures must contain the elements 

described in paragraph (a)(2) of this 

section. 

(i)(A) Customer information required. 

The CIP must include procedures for 

opening an account that specify 

identifying information that will be 

obtained from each customer. Except as 

permitted by paragraph (a)(2)(i)(B) of 

this section, each futures commission 

merchant and introducing broker must 

obtain, at a minimum, the following 

information prior to opening an 

account: 

(1) Name; 

(2) Date of birth, for an individual; 

(3) Address, which shall be: 

(i) For an individual, a residential or 

business street address; 

(ii) For an individual who does not 

have a residential or business street 

address, an Army Post Office (APO) or 

Fleet Post Office (FPO) box number, or 

the residential or business street address 

of a next of kin or another contact 

individual; or 

(iii) For a person other than an 

individual (such as a corporation, 

partnership or trust), a principal place 

of business, local office or other 

physical location; and 

(4) Identification number, which shall 

be: 

(i) For a U.S. person, a taxpayer 

identification number; or 

(ii) For a non-U.S. person, one or more 

of the following: A taxpayer 

identification number, a passport 

number and country of issuance, an 

alien identification card number, or the 

number and country of issuance of any 

other government-issued document 

evidencing nationality or residence and 

bearing a photograph or similar 

safeguard. 

Note to Paragraph (a)(2)(i)(A)(4)(ii): When 

opening an account for a foreign business or 

enterprise that does not have an 

identification number, the futures 

commission merchant or introducing broker 

must request alternative government-issued 

documentation certifying the existence of the 

business or enterprise. 


erowe on DSK5CLS3C1PROD with RULES3
65872 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

(B) Exception for persons applying for 

a taxpayer identification number. 

Instead of obtaining a taxpayer 

identification number from a customer 

prior to opening an account, the CIP 

may include procedures for opening an 

account for a customer that has applied 

for, but has not received, a taxpayer 

identification number. In this case, the 

CIP must include procedures to confirm 

that the application was filed before the 

customer opens the account and to 

obtain the taxpayer identification 

number within a reasonable period of 

time after the account is opened. 

(ii) Customer verification. The CIP 

must contain procedures for verifying 

the identity of each customer, using 

information obtained in accordance 

with paragraph (a)(2)(i) of this section, 

within a reasonable time before or after 

the customer’s account is opened. The 

procedures must describe when the 

futures commission merchant or 

introducing broker will use documents, 

non-documentary methods, or a 

combination of both methods, as 

described in this paragraph (a)(2)(ii). 

(A) Verification through documents. 

For a futures commission merchant or 

introducing broker relying on 

documents, the CIP must contain 

procedures that set forth the documents 

the futures commission merchant or 

introducing broker will use. These 

documents may include: 

(1) For an individual, an unexpired 

government-issued identification 

evidencing nationality or residence and 

bearing a photograph or similar 

safeguard, such as a driver’s license or 

passport; and 

(2) For a person other than an 

individual (such as a corporation, 

partnership or trust), documents 

showing the existence of the entity, 

such as certified articles of 

incorporation, a government-issued 

business license, a partnership 

agreement, or a trust instrument. 

(B) Verification through nondocumentary methods. For a futures 

commission merchant or introducing 

broker relying on non-documentary 

methods, the CIP must contain 

procedures that set forth the nondocumentary methods the futures 

commission merchant or introducing 

broker will use. 

(1) These methods may include 

contacting a customer; independently 

verifying the customer’s identity 

through the comparison of information 

provided by the customer with 

information obtained from a consumer 

reporting agency, public database, or 

other source; checking references with 

other financial institutions; or obtaining 

a financial statement. 

(2) The futures commission 

merchant’s or introducing broker’s nondocumentary procedures must address 

situations where an individual is unable 

to present an unexpired governmentissued identification document that 

bears a photograph or similar safeguard; 

the futures commission merchant or 

introducing broker is not familiar with 

the documents presented; the account is 

opened without obtaining documents; 

the customer opens the account without 

appearing in person at the futures 

commission merchant or introducing 

broker; and where the futures 

commission merchant or introducing 

broker is otherwise presented with 

circumstances that increase the risk that 

the futures commission merchant or 

introducing broker will be unable to 

verify the true identity of a customer 

through documents. 

(C) Additional verification for certain 

customers. The CIP must address 

situations where, based on the futures 

commission merchant’s or introducing 

broker’s risk assessment of a new 

account opened by a customer that is 

not an individual, the futures 

commission merchant or introducing 

broker will obtain information about 

individuals with authority or control 

over such account in order to verify the 

customer’s identity. This verification 

method applies only when the futures 

commission merchant or introducing 

broker cannot verify the customer’s true 

identity after using the verification 

methods described in paragraphs 

(a)(2)(ii)(A) and (B) of this section. 

(iii) Lack of verification. The CIP must 

include procedures for responding to 

circumstances in which the futures 

commission merchant or introducing 

broker cannot form a reasonable belief 

that it knows the true identity of a 

customer. These procedures should 

describe: 

(A) When an account should not be 

opened; 

(B) The terms under which a customer 

may conduct transactions while the 

futures commission merchant or 

introducing broker attempts to verify the 

customer’s identity; 

(C) When an account should be closed 

after attempts to verify a customer’s 

identity have failed; and 

(D) When the futures commission 

merchant or introducing broker should 

file a Suspicious Activity Report in 

accordance with applicable law and 

regulation. 

(3) Recordkeeping. The CIP must 

include procedures for making and 

maintaining a record of all information 

obtained under procedures 

implementing paragraph (a) of this 

section. 

(i) Required records. At a minimum, 

the record must include: 

(A) All identifying information about 

a customer obtained under paragraph 

(a)(2)(i) of this section; 

(B) A description of any document 

that was relied on under paragraph 

(a)(2)(ii)(A) of this section noting the 

type of document, any identification 

number contained in the document, the 

place of issuance, and if any, the date 

of issuance and expiration date; 

(C) A description of the methods and 

the results of any measures undertaken 

to verify the identity of a customer 

under paragraphs (a)(2)(ii)(B) and (C) of 

this section; and 

(D) A description of the resolution of 

each substantive discrepancy 

discovered when verifying the 

identifying information obtained. 

(ii) Retention of records. Each futures 

commission merchant and introducing 

broker must retain the records made 

under paragraph (a)(3)(i)(A) of this 

section for five years after the account 

is closed and the records made under 

paragraphs (a)(3)(i)(B), (C), and (D) of 

this section for five years after the 

record is made. In all other respects, the 

records must be maintained pursuant to 

the provisions of 17 CFR 1.31. 

(4) Comparison with government lists. 

The CIP must include procedures for 

determining whether a customer 

appears on any list of known or 

suspected terrorists or terrorist 

organizations issued by any Federal 

government agency and designated as 

such by Treasury in consultation with 

the Federal functional regulators. The 

procedures must require the futures 

commission merchant or introducing 

broker to make such a determination 

within a reasonable period of time after 

the account is opened, or earlier if 

required by another Federal law or 

regulation or Federal directive issued in 

connection with the applicable list. The 

procedures also must require the futures 

commission merchant or introducing 

broker to follow all Federal directives 

issued in connection with such lists. 

(5)(i) Customer notice. The CIP must 

include procedures for providing 

customers with adequate notice that the 

futures commission merchant or 

introducing broker is requesting 

information to verify their identities. 

(ii) Adequate notice. Notice is 

adequate if the futures commission 

merchant or introducing broker 

generally describes the identification 

requirements of this section and 

provides such notice in a manner 

reasonably designed to ensure that a 

customer is able to view the notice, or 

is otherwise given notice, before 

opening an account. For example, 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65873 

depending upon the manner in which 

the account is opened, a futures 

commission merchant or introducing 

broker may post a notice in the lobby or 

on its Web site, include the notice on its 

account applications or use any other 

form of written or oral notice. 

(iii) Sample notice. If appropriate, a 

futures commission merchant or 

introducing broker may use the 

following sample language to provide 

notice to its customers: 

Important Information About Procedures for 

Opening a New Account 

To help the government fight the funding 

of terrorism and money laundering activities, 

Federal law requires all financial institutions 

to obtain, verify, and record information that 

identifies each person who opens an account. 

What this means for you: When you open 

an account, we will ask for your name, 

address, date of birth and other information 

that will allow us to identify you. We may 

also ask to see your driver’s license or other 

identifying documents. 

(6) Reliance on another financial 

institution. The CIP may include 

procedures specifying when the futures 

commission merchant or introducing 

broker will rely on the performance by 

another financial institution (including 

an affiliate) of any procedures of its CIP, 

with respect to any customer of the 

futures commission merchant or 

introducing broker that is opening an 

account, or has established an account 

or similar business relationship with the 

other financial institution to provide or 

engage in services, dealings, or other 

financial transactions, provided that: 

(i) Such reliance is reasonable under 

the circumstances; 

(ii) The other financial institution is 

subject to a rule implementing 31 U.S.C. 

5318(h), and is regulated by a Federal 

functional regulator; and 

(iii) The other financial institution 

enters into a contract requiring it to 

certify annually to the futures 

commission merchant or introducing 

broker that it has implemented its antimoney laundering program, and that it 

will perform (or its agent will perform) 

specified requirements of the futures 

commission merchant’s or introducing 

broker’s CIP. 

(b) Exemptions. The CFTC, with the 

concurrence of the Secretary, may by 

order or regulation exempt any futures 

commission merchant or introducing 

broker that registers with the CFTC or 

any type of account from the 

requirements of this section. In issuing 

such exemptions, the CFTC and the 

Secretary shall consider whether the 

exemption is consistent with the 

purposes of the Bank Secrecy Act, and 

in the public interest, and may consider 

other necessary and appropriate factors. 

(c) Other requirements unaffected. 

Nothing in this section relieves a futures 

commission merchant or introducing 

broker of its obligation to comply with 

any other provision of this chapter, 

including provisions concerning 

information that must be obtained, 

verified, or maintained in connection 

with any account or transaction. 

Subpart C—Reports Required To Be 

Made by Futures Commission 

Merchants and Introducing Brokers in 

Commodities 

§ 1026.300 General. 

Futures commission merchants and 

introducing brokers in commodities are 

subject to the reporting requirements set 

forth and cross referenced in this 

subpart. Futures commission merchants 

and introducing brokers in commodities 

should also refer to Subpart C of Part 

1010 of this Chapter for reporting 

requirements contained in that subpart 

which apply to futures commission 

merchants and introducing brokers in 

commodities. 

§ 1026.310 Reports of transactions in 

currency. 

The reports of transactions in 

currency requirements for futures 

commission merchants and introducing 

brokers in commodities are located in 

subpart C of Part 1010 of this Chapter 

and this subpart. 

§ 1026.315 Exemptions. 

Refer to § 1010.315 of this Chapter for 

exemptions from the obligation to file 

reports of transactions in currency for 

futures commission merchants and 

introducing brokers in commodities. 

§ 1026.320 Reports by futures commission 

merchants and introducing brokers in 

commodities of suspicious transactions. 

(a) General—(1) Every futures 

commission merchant (‘‘FCM’’) and 

introducing broker in commodities (‘‘IB– 

C’’) within the United States shall file 

with FinCEN, to the extent and in the 

manner required by this section, a 

report of any suspicious transaction 

relevant to a possible violation of law or 

regulation. An FCM or IB–C may also 

file with FinCEN a report of any 

suspicious transaction that it believes is 

relevant to the possible violation of any 

law or regulation but whose reporting is 

not required by this section. Filing a 

report of a suspicious transaction does 

not relieve an FCM or IB–C from the 

responsibility of complying with any 

other reporting requirements imposed 

by the CFTC or any registered futures 

association or registered entity as those 

terms are defined in the Commodity 

Exchange Act (‘‘CEA’’), 7 U.S.C. 21 and 

7 U.S.C. 1a(29). 

(2) A transaction requires reporting 

under the terms of this section if it is 

conducted or attempted by, at, or 

through an FCM or IB–C, it involves or 

aggregates funds or other assets of at 

least $5,000, and the FCM or IB–C 

knows, suspects, or has reason to 

suspect that the transaction (or a pattern 

of transactions of which the transaction 

is a part): 

(i) Involves funds derived from illegal 

activity or is intended or conducted in 

order to hide or disguise funds or assets 

derived from illegal activity (including, 

without limitation, the ownership, 

nature, source, location, or control of 

such funds or assets) as part of a plan 

to violate or evade any Federal law or 

regulation or to avoid any transaction 

reporting requirement under Federal 

law or regulation; 

(ii) Is designed, whether through 

structuring or other means, to evade any 

requirements of this chapter or of any 

other regulations promulgated under the 

Bank Secrecy Act; 

(iii) Has no business or apparent 

lawful purpose or is not the sort in 

which the particular customer would 

normally be expected to engage, and the 

FCM or IB–C knows of no reasonable 

explanation for the transaction after 

examining the available facts, including 

the background and possible purpose of 

the transaction; or 

(iv) Involves use of the FCM or IB–C 

to facilitate criminal activity. 

(3) The obligation to identify and 

properly and timely to report a 

suspicious transaction rests with each 

FCM and IB–C involved in the 

transaction, provided that no more than 

one report is required to be filed by any 

of the FCMs or IB–Cs involved in a 

particular transaction, so long as the 

report filed contains all relevant facts. 

(b) Filing procedures—(1) What to file. 

A suspicious transaction shall be 

reported by completing a Suspicious 

Activity Report by Securities and 

Futures Industries (‘‘SAR–SF’’), and 

collecting and maintaining supporting 

documentation as required by paragraph 

(d) of this section. 

(2) Where to file. The SAR–SF shall be 

filed with FinCEN in a central location, 

to be determined by FinCEN, as 

indicated in the instructions to the 

SAR–SF. 

(3) When to file. A SAR–SF shall be 

filed no later than 30 calendar days after 

the date of the initial detection by the 

reporting FCM or IB–C of facts that may 

constitute a basis for filing a SAR–SF 

under this section. If no suspect is 

identified on the date of such initial 

detection, an FCM or IB–C may delay 


erowe on DSK5CLS3C1PROD with RULES3
65874 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

filing a SAR–SF for an additional 30 

calendar days to identify a suspect, but 

in no case shall reporting be delayed 

more than 60 calendar days after the 

date of such initial detection. In 

situations involving violations that 

require immediate attention, such as 

terrorist financing or ongoing money 

laundering schemes, the FCM or IB–C 

shall immediately notify by telephone 

an appropriate law enforcement 

authority in addition to filing timely a 

SAR–SF. FCMs and IB–Cs wishing 

voluntarily to report suspicious 

transactions that may relate to terrorist 

activity may call FinCEN’s Financial 

Institutions Hotline at 1–866–556–3974 

in addition to filing timely a SAR–SF if 

required by this section. The FCM or 

IB–C may also, but is not required to, 

contact the CFTC to report in such 

situations. 

(c) Exceptions—(1) An FCM or IB–C is 

not required to file a SAR–SF to 

report— 

(i) A robbery or burglary committed or 

attempted of the FCM or IB–C that is 

reported to appropriate law enforcement 

authorities; 

(ii) A violation otherwise required to 

be reported under the CEA (7 U.S.C. 1 

et seq.), the regulations of the CFTC (17 

CFR chapter I), or the rules of any 

registered futures association or 

registered entity as those terms are 

defined in the CEA, 7 U.S.C. 21 and 7 

U.S.C. 1a(29), by the FCM or IB–C or 

any of its officers, directors, employees, 

or associated persons, other than a 

violation of 17 CFR 42.2, as long as such 

violation is appropriately reported to 

the CFTC or a registered futures 

association or registered entity. 

(2) An FCM or IB–C may be required 

to demonstrate that it has relied on an 

exception in paragraph (c)(1) of this 

section, and must maintain records of 

its determinations to do so for the 

period specified in paragraph (d) of this 

section. To the extent that a Form 8–R, 

8–T, U–5, or any other similar form 

concerning the transaction is filed 

consistent with CFTC, registered futures 

association, or registered entity rules, a 

copy of that form will be a sufficient 

record for the purposes of this 

paragraph (c)(2). 

(d) Retention of records. An FCM or 

IB–C shall maintain a copy of any SAR– 

SF filed and the original or business 

record equivalent of any supporting 

documentation for a period of five years 

from the date of filing the SAR–SF. 

Supporting documentation shall be 

identified as such and maintained by 

the FCM or IB–C, and shall be deemed 

to have been filed with the SAR–SF. An 

FCM or IB–C shall make all supporting 

documentation available to FinCEN, the 

CFTC, or any other appropriate law 

enforcement agency or regulatory 

agency, and, for purposes of paragraph 

(g) of this section, to any registered 

futures association, registered entity, or 

self-regulatory organization (‘‘SRO’’) (as 

defined in section 3(a)(26) of the 

Securities Exchange Act of 1934, 15 

U.S.C. 78c(a)(26)), upon request. 

(e) Confidentiality of reports. No 

financial institution, and no director, 

officer, employee, or agent of any 

financial institution, who reports a 

suspicious transaction under this 

chapter, may notify any person involved 

in the transaction that the transaction 

has been reported, except to the extent 

permitted by paragraph (a)(3) of this 

section. Thus, any person subpoenaed 

or otherwise requested to disclose a 

SAR–SF or the information contained in 

a SAR–SF, except where such 

disclosure is requested by FinCEN, the 

CFTC, another appropriate law 

enforcement or regulatory agency, or for 

purposes of paragraph (g) of this section, 

a registered futures association, 

registered entity, or SRO shall decline to 

produce the SAR–SF or to provide any 

information that would disclose that a 

SAR–SF has been prepared or filed, 

citing this paragraph and 31 U.S.C. 

5318(g)(2), and shall notify FinCEN of 

any such request and its response 

thereto. 

(f) Limitation of liability. An FCM or 

IB–C, and any director, officer, 

employee, or agent of such FCM or IB– 

C, that makes a report of any possible 

violation of law or regulation pursuant 

to this section or any other authority (or 

voluntarily) shall not be liable to any 

person under any law or regulation of 

the United States (or otherwise to the 

extent also provided in 31 U.S.C. 

5318(g)(3), including in any arbitration 

or reparations proceeding) for any 

disclosure contained in, or for failure to 

disclose the fact of, such report. 

(g) Examination and enforcement. 

Compliance with this section shall be 

examined by the Department of the 

Treasury, through FinCEN or its 

delegates, under the terms of the Bank 

Secrecy Act. Reports filed under this 

section or § 1023.320 of this Chapter 

(including any supporting 

documentation), and documentation 

demonstrating reliance on an exception 

under paragraph (c) of this section or 

§ 1023.320 of this Chapter, shall be 

made available, upon request, to the 

CFTC, Securities and Exchange 

Commission, and any registered futures 

association, registered entity, or SRO, 

examining an FCM, IB–C, or broker or 

dealer in securities for compliance with 

the requirements of this section or 

§ 1023.320 of this Chapter. Failure to 

satisfy the requirements of this section 

may constitute a violation of the 

reporting rules of the BSA or of this 

chapter. 

(h) Applicability date. This section 

applies to transactions occurring after 

May 18, 2004. 

Subpart D—Records Required To Be 

Maintained By Futures Commission 

Merchants and Introducing Brokers in 

Commodities 

§ 1026.400 General. 

Futures commission merchants and 

introducing brokers in commodities are 

subject to the recordkeeping 

requirements set forth and cross 

referenced in this subpart. Futures 

commission merchants and introducing 

brokers in commodities should also 

refer to Subpart D of Part 1010 of this 

Chapter for recordkeeping requirements 

contained in that subpart which apply 

to futures commission merchants and 

introducing brokers in commodities. 

§ 1026.410 Recordkeeping. 

Refer to § 1010.410 of this Chapter. 

Subpart E—Special Information 

Sharing Procedures To Deter Money 

Laundering and Terrorist Activity 

§ 1026.500 General. 

Futures commission merchants and 

introducing brokers in commodities are 

subject to the special information 

sharing procedures to deter money 

laundering and terrorist activity 

requirements set forth and cross 

referenced in this subpart. Futures 

commission merchants and introducing 

brokers in commodities should also 

refer to Subpart E of Part 1010 of this 

Chapter for special information sharing 

procedures to deter money laundering 

and terrorist activity contained in that 

subpart which apply to futures 

commission merchants and introducing 

brokers in commodities. 

§ 1026.520 Special information sharing 

procedures to deter money laundering and 

terrorist activity for futures commission 

merchants and introducing brokers in 

commodities. 

(a) Refer to § 1010.520 of this Chapter. 

(b) [Reserved] 

§ 1026.530 [Reserved] 

§ 1026.540 Voluntary information sharing 

among financial institutions. 

(a) Refer to § 1010.540 of this Chapter. 

(b) [Reserved] 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65875 

Subpart F—Special Standards of 

Diligence; Prohibitions; and Special 

Measures for Futures Commission 

Merchants and Introducing Brokers in 

Commodities 

§ 1026.600 General. 

Futures commission merchants and 

introducing brokers in commodities are 

subject to the special standards of 

diligence; prohibitions; and special 

measures requirements set forth and 

cross referenced in this subpart. Futures 

commission merchants and introducing 

brokers in commodities should also 

refer to Subpart F of Part 1010 of this 

Chapter for special standards of 

diligence; prohibitions; and special 

measures contained in that subpart 

which apply to futures commission 

merchants and introducing brokers in 

commodities. 

§ 1026.610 Due diligence programs for 

correspondent accounts for foreign 

financial institutions. 

(a) Refer to § 1010.610 of this Chapter. 

(b) [Reserved] 

§ 1026.620 Due diligence programs for 

private banking accounts. 

(a) Refer to § 1010.620 of this Chapter. 

(b) [Reserved] 

§ 1026.630 Prohibition on correspondent 

accounts for foreign shell banks; records 

concerning owners of foreign banks and 

agents for service of legal process. 

(a) Refer to § 1010.630 of this Chapter. 

(b) [Reserved] 

§ 1026.640 [Reserved] 

§ 1026.670 Summons or subpoena of 

foreign bank records; Termination of 

correspondent relationship. 

(a) Refer to § 1010.670 of this Chapter. 

(b) [Reserved] 

PART 1027—RULES FOR DEALERS IN 

PRECIOUS METALS, PRECIOUS 

STONES, OR JEWELS 

Subpart A—Definitions 

Sec. 

1027.100 Definitions. 

Subpart B—Programs 

1027.200 General. 

1027.210 Anti-money laundering programs 

for dealers in precious metals, precious 

stones, or jewels. 

Subpart C—Reports Required To Be Made 

By Dealers in Precious Metals, Precious 

Stones, or Jewels 

1027.300 General. 

1027.310 [Reserved] 

1027.315 [Reserved] 

1027.320 [Reserved] 

1027.330 Reports relating to currency in 

excess of $10,000 received in a trade or 

business. 

Subpart D—Records Required To Be 

Maintained By Dealers in Precious Metals, 

Precious Stones, or Jewels 

1027.400 General. 

1027.410 Recordkeeping. 

Subpart E—Special Information Sharing 

Procedures To Deter Money Laundering 

and Terrorist Activity 

1027.500 General. 

1027.520 Special information sharing 

procedures to deter money laundering 

and terrorist activity for dealers in 

precious metals, precious stones, or 

jewels. 

1027.530 [Reserved] 

1027.540 Voluntary information sharing 

among financial institutions. 

Subpart F—Special Standards of Diligence; 

Prohibitions, and Special Measures for 

Dealers in Precious Metals, Precious 

Stones, or Jewels 

1027.600 [Reserved] 

1027.610 [Reserved] 

1027.620 [Reserved] 

1027.630 [Reserved] 

1027.640 [Reserved] 

1027.670 [Reserved] 

Subpart A—Definitions 

§ 1027.100 Definitions. 

Refer to § 1010.100 of this Chapter for 

general definitions not noted herein. To 

the extent there is a differing definition 

in § 1010.100 of this Chapter, the 

definition in this Section is what 

applies to Part 1027. Unless otherwise 

indicated, for purposes of this Part: 

(a) Covered goods means: 

(1) Jewels (as defined in paragraph (c) 

of this section); 

(2) Precious metals (as defined in 

paragraph (d) of this section); 

(3) Precious stones (as defined in 

paragraph (e) of this section); and 

(4) Finished goods (including, but not 

limited to, jewelry, numismatic items, 

and antiques), that derive 50 percent or 

more of their value from jewels, 

precious metals, or precious stones 

contained in or attached to such 

finished goods; 

(b) Dealer. (1) Except as provided in 

paragraphs (b)(2) and (b)(3) of this 

section, the term ‘‘dealer’’ means a 

person engaged within the United States 

as a business in the purchase and sale 

of covered goods and who, during the 

prior calendar or tax year: 

(i) Purchased more than $50,000 in 

covered goods; and 

(ii) Received more than $50,000 in 

gross proceeds from the sale of covered 

goods. 

(2) For purposes of this section, the 

term ‘‘dealer’’ does not include: 

(i) A retailer (as defined in paragraph 

(f) of this section), unless the retailer, 

during the prior calendar or tax year, 

purchased more than $50,000 in 

covered goods from persons other than 

dealers or other retailers (such as 

members of the general public or foreign 

sources of supply); or 

(ii) A person licensed or authorized 

under the laws of any State (or political 

subdivision thereof) to conduct business 

as a pawnbroker, but only to the extent 

such person is engaged in pawn 

transactions (including the sale of pawn 

loan collateral). 

(3) For purposes of paragraph (b) of 

this section, the terms ‘‘purchase’’ and 

‘‘sale’’ do not include a retail transaction 

in which a retailer or a dealer accepts 

from a customer covered goods, the 

value of which the retailer or dealer 

credits to the account of the customer, 

and the retailer or dealer does not 

provide funds to the customer in 

exchange for such covered goods. 

(4) For purposes of paragraph (b) of 

this section and § 1027.210(a), the terms 

‘‘purchase’’ and ‘‘sale’’ do not include the 

purchase of jewels, precious metals, or 

precious stones that are incorporated 

into machinery or equipment to be used 

for industrial purposes, and the 

purchase and sale of such machinery or 

equipment. 

(5) For purposes of applying the 

$50,000 thresholds in paragraphs (b)(1) 

and (b)(2)(i) of this section to finished 

goods defined in paragraph (a)(4) of this 

section, only the value of jewels, 

precious metals, or precious stones 

contained in, or attached to, such goods 

shall be taken into account. 

(c) Jewel means an organic substance 

with gem quality market-recognized 

beauty, rarity, and value, and includes 

pearl, amber, and coral. 

(d) Precious metal means: 

(1) Gold, iridium, osmium, palladium, 

platinum, rhodium, ruthenium, or 

silver, having a level of purity of 500 or 

more parts per thousand; and 

(2) An alloy containing 500 or more 

parts per thousand, in the aggregate, of 

two or more of the metals listed in 

paragraph (d)(1) of this section. 

(e) Precious stone means a substance 

with gem quality market-recognized 

beauty, rarity, and value, and includes 

diamond, corundum (including rubies 

and sapphires), beryl (including 

emeralds and aquamarines), 

chrysoberyl, spinel, topaz, zircon, 

tourmaline, garnet, crystalline and 

cryptocrystalline quartz, olivine peridot, 

tanzanite, jadeite jade, nephrite jade, 

spodumene, feldspar, turquoise, lapis 

lazuli, and opal. 

(f) Retailer means a person engaged 

within the United States in the business 

of sales primarily to the public of 

covered goods. 


erowe on DSK5CLS3C1PROD with RULES3
65876 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

Subpart B—Programs 

§ 1027.200 General. 

Dealers in precious metals, precious 

stones, or jewels are subject to the 

program requirements set forth and 

cross referenced in this subpart. Dealers 

in precious metals, precious stones, or 

jewels should also refer to Subpart B of 

Part 1010 of this Chapter for program 

requirements contained in that subpart 

which apply to dealers in precious 

metals, precious stones, or jewels. 

§ 1027.210 Anti-money laundering 

programs for dealers in precious metals, 

precious stones, or jewels. 

(a) Anti-money laundering program 

requirement. (1) Each dealer shall 

develop and implement a written antimoney laundering program reasonably 

designed to prevent the dealer from 

being used to facilitate money 

laundering and the financing of terrorist 

activities through the purchase and sale 

of covered goods. The program must be 

approved by senior management. A 

dealer shall make its anti-money 

laundering program available to the 

Department of Treasury through FinCEN 

or its designee upon request. 

(2) To the extent that a retailer’s 

purchases from persons other than 

dealers and other retailers exceeds the 

$50,000 threshold contained in 

§ 1027.100(b)(2)(i), the anti-money 

laundering compliance program 

required of the retailer under this 

paragraph need only address such 

purchases. 

(b) Minimum requirements. At a 

minimum, the anti-money laundering 

program shall: 

(1) Incorporate policies, procedures, 

and internal controls based upon the 

dealer’s assessment of the money 

laundering and terrorist financing risks 

associated with its line(s) of business. 

Policies, procedures, and internal 

controls developed and implemented by 

a dealer under this section shall include 

provisions for complying with the 

applicable requirements of the Bank 

Secrecy Act (31 U.S.C. 5311 et seq.), and 

this chapter. 

(i) For purposes of making the risk 

assessment required by paragraph (b)(1) 

of this section, a dealer shall take into 

account all relevant factors including, 

but not limited to: 

(A) The type(s) of products the dealer 

buys and sells, as well as the nature of 

the dealer’s customers, suppliers, 

distribution channels, and geographic 

locations; 

(B) The extent to which the dealer 

engages in transactions other than with 

established customers or sources of 

supply, or other dealers subject to this 

rule; and 

(C) Whether the dealer engages in 

transactions for which payment or 

account reconciliation is routed to or 

from accounts located in jurisdictions 

that have been identified by the 

Department of State as a sponsor of 

international terrorism under 22 U.S.C. 

2371; designated as non-cooperative 

with international anti-money 

laundering principles or procedures by 

an intergovernmental group or 

organization of which the United States 

is a member and with which 

designation the United States 

representative or organization concurs; 

or designated by the Secretary of the 

Treasury pursuant to 31 U.S.C. 5318A as 

warranting special measures due to 

money laundering concerns. 

(ii) A dealer’s program shall 

incorporate policies, procedures, and 

internal controls to assist the dealer in 

identifying transactions that may 

involve use of the dealer to facilitate 

money laundering or terrorist financing, 

including provisions for making 

reasonable inquiries to determine 

whether a transaction involves money 

laundering or terrorist financing, and for 

refusing to consummate, withdrawing 

from, or terminating such transactions. 

Factors that may indicate a transaction 

is designed to involve use of the dealer 

to facilitate money laundering or 

terrorist financing include, but are not 

limited to: 

(A) Unusual payment methods, such 

as the use of large amounts of cash, 

multiple or sequentially numbered 

money orders, traveler’s checks, or 

cashier’s checks, or payment from third 

parties; 

(B) Unwillingness by a customer or 

supplier to provide complete or accurate 

contact information, financial 

references, or business affiliations; 

(C) Attempts by a customer or 

supplier to maintain an unusual degree 

of secrecy with respect to the 

transaction, such as a request that 

normal business records not be kept; 

(D) Purchases or sales that are 

unusual for the particular customer or 

supplier, or type of customer or 

supplier; and 

(E) Purchases or sales that are not in 

conformity with standard industry 

practice. 

(2) Designate a compliance officer 

who will be responsible for ensuring 

that: 

(i) The anti-money laundering 

program is implemented effectively; 

(ii) The anti-money laundering 

program is updated as necessary to 

reflect changes in the risk assessment, 

requirements of this chapter, and further 

guidance issued by the Department of 

the Treasury; and 

(iii) Appropriate personnel are trained 

in accordance with paragraph (b)(3) of 

this section. 

(3) Provide for on-going education 

and training of appropriate persons 

concerning their responsibilities under 

the program. 

(4) Provide for independent testing to 

monitor and maintain an adequate 

program. The scope and frequency of 

the testing shall be commensurate with 

the risk assessment conducted by the 

dealer in accordance with paragraph 

(b)(1) of this section. Such testing may 

be conducted by an officer or employee 

of the dealer, so long as the tester is not 

the person designated in paragraph 

(b)(2) of this section or a person 

involved in the operation of the 

program. 

(c) Implementation date. A dealer 

must develop and implement an antimoney laundering program that 

complies with the requirements of this 

section on or before the later of January 

1, 2006, or six months after the date a 

dealer becomes subject to the 

requirements of this section. 

Subpart C—Reports Required To Be 

Made by Dealers in Precious Metals, 

Precious Stones, or Jewels 

§ 1027.300 General. 

Dealers in precious metals, precious 

stones, or jewels are subject to the 

reporting requirements set forth and 

cross referenced in this subpart. Dealers 

in precious metals, precious stones, or 

jewels should also refer to Subpart C of 

Part 1010 of this Chapter for reporting 

requirements contained in that subpart 

which apply to dealers in precious 

metals, precious stones, or jewels. 

§ 1027.310 [Reserved] 

§ 1027.315 [Reserved] 

§ 1027.320 [Reserved] 

§ 1027.330 Reports relating to currency in 

excess of $10,000 received in a trade or 

business. 

Refer to § 1010.330 of this Chapter for 

rules regarding the filing of reports 

relating to currency in excess of $10,000 

received by dealers in precious metals, 

precious stones, or jewels. 

Subpart D—Records Required To Be 

Maintained By Dealers in Precious 

Metals, Precious Stones, or Jewels 

§ 1027.400 General. 

Dealers in precious metals, precious 

stones, or jewels are subject to the 

recordkeeping requirements set forth 

and cross referenced in this subpart. 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65877 

Dealers in precious metals, precious 

stones, or jewels should also refer to 

Subpart D of Part 1010 of this Chapter 

for recordkeeping requirements 

contained in that subpart which apply 

to dealers in precious metals, precious 

stones, or jewels. 

§ 1027.410 Recordkeeping. 

Refer to § 1010.410 of this Chapter. 

Subpart E—Special Information 

Sharing Procedures To Deter Money 

Laundering and Terrorist Activity 

§ 1027.500 General. 

Dealers in precious metals, precious 

stones, or jewels are subject to the 

special information sharing procedures 

to deter money laundering and terrorist 

activity requirements set forth and cross 

referenced in this subpart. Dealers in 

precious metals, precious stones, or 

jewels should also refer to Subpart E of 

Part 1010 of this Chapter for special 

information sharing procedures to deter 

money laundering and terrorist activity 

contained in that subpart which apply 

to dealers in precious metals, precious 

stones, or jewels. 

§ 1027.520 Special information sharing 

procedures to deter money laundering and 

terrorist activity for dealers in precious 

metals, precious stones, or jewels. 

(a) Refer to § 1010.520 of this Chapter. 

(b) [Reserved] 

§ 1027.530 [Reserved] 

§ 1027.540 Voluntary information sharing 

among financial institutions. 

(a) Refer to § 1010.540 of this Chapter. 

(b) [Reserved] 

Subpart F—Special Standards of 

Diligence; Prohibitions; and Special 

Measures for Dealers in Precious 

Metals, Precious Stones, or Jewels 

§ 1027.600 [Reserved] 

§ 1027.610 [Reserved] 

§ 1027.620 [Reserved] 

§ 1027.630 [Reserved] 

§ 1027.640 [Reserved] 

§ 1027.670 [Reserved] 

PART 1028—RULES FOR OPERATORS 

OF CREDIT CARD SYSTEMS 

Subpart A—Definitions 

Sec. 

1028.100 Definitions. 

Subpart B—Programs 

1028.200 General. 

1028.210 Anti-money laundering programs 

for operators of credit card systems. 

Subpart C—Reports Required To Be Made 

by Operators of Credit Card Systems 

1028.300 General. 

1028.310 [Reserved] 

1028.315 [Reserved] 

1028.320 [Reserved] 

1028.330 Reports relating to currency in 

excess of $10,000 received in a trade or 

business. 

Subpart D—Records Required To Be 

Maintained by Operators of Credit Card 

Systems 

1028.400 General. 

1028.410 Recordkeeping. 

Subpart E—Special Information Sharing 

Procedures To Deter Money Laundering 

and Terrorist Activity 

1028.500 General. 

1028.520 Special information sharing 

procedures to deter money laundering 

and terrorist activity for operators of 

credit card systems. 

1028.530 [Reserved] 

1028.540 Voluntary information sharing 

among financial institutions. 

Subpart F—Special Standards of Diligence; 

Prohibitions, and Special Measures for 

Operators of Credit Card Systems 

1028.600 [Reserved] 

1028.610 [Reserved] 

1028.620 [Reserved] 

1028.630 [Reserved] 

1028.640 [Reserved] 

1028.670 [Reserved] 

Subpart A—Definitions 

§ 1028.100 Definitions. 

Refer to § 1010.100 of this Chapter for 

general definitions not noted herein. To 

the extent there is a differing definition 

in § 1010.100 of this Chapter, the 

definition in this Section is what 

applies to Part 1028. Unless otherwise 

indicated, for purposes of this Part: 

(a) Acquiring institution means a 

person authorized by the operator of a 

credit card system to contract, directly 

or indirectly, with merchants or other 

persons to process transactions, 

including cash advances, involving the 

operator’s credit card. 

(b) Credit card has the same meaning 

as in 15 U.S.C. 1602(k). It includes 

charge cards as defined in 12 CFR 

226.2(15). 

(c) Foreign bank means any 

organization that is organized under the 

laws of a foreign country; engages in the 

business of banking; is recognized as a 

bank by the bank supervisory or 

monetary authority of the country of its 

organization or the country of its 

principal banking operations; and 

receives deposits in the regular course 

of its business. For purposes of this 

definition: 

(1) The term foreign bank includes a 

branch of a foreign bank in a territory 

of the United States, Puerto Rico, Guam, 

American Samoa, or the U.S. Virgin 

Islands. 

(2) The term foreign bank does not 

include: 

(i) A U.S. agency or branch of a 

foreign bank; and 

(ii) An insured bank organized under 

the laws of a territory of the United 

States, Puerto Rico, Guam, American 

Samoa, or the U.S. Virgin Islands. 

(d) Issuing institution means a person 

authorized by the operator of a credit 

card system to issue the operator’s 

credit card. 

(e) Operator of a credit card system 

means any person doing business in the 

United States that operates a system for 

clearing and settling transactions in 

which the operator’s credit card, 

whether acting as a credit or debit card, 

is used to purchase goods or services or 

to obtain a cash advance. To fall within 

this definition, the operator must also 

have authorized another person 

(whether located in the United States or 

not) to be an issuing or acquiring 

institution for the operator’s credit card. 

(f) Operator’s credit card means a 

credit card capable of being used in the 

United States that: 

(1) Has been issued by an issuing 

institution; and 

(2) Can be used in the operator’s 

credit card system. 

Subpart B—Programs 

§ 1028.200 General. 

Operators of credit card systems are 

subject to the program requirements set 

forth and cross referenced in this 

subpart. Operators of credit card 

systems should also refer to Subpart B 

of Part 1010 of this Chapter for program 

requirements contained in that subpart 

which apply to operators of credit card 

systems. 

§ 1028.210 Anti-money laundering 

programs for operators of credit card 

systems. 

(a) Anti-money laundering program 

requirement. Effective July 24, 2002, 

each operator of a credit card system 

shall develop and implement a written 

anti-money laundering program 

reasonably designed to prevent the 

operator of a credit card system from 

being used to facilitate money 

laundering and the financing of terrorist 

activities. The program must be 

approved by senior management. 

Operators of credit card systems must 

make their anti-money laundering 

programs available to the Department of 

the Treasury or the appropriate Federal 

regulator for review. 

(b) Minimum requirements. At a 

minimum, the program must: 


erowe on DSK5CLS3C1PROD with RULES3
65878 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 

(1) Incorporate policies, procedures, 

and internal controls designed to ensure 

the following: 

(i) That the operator does not 

authorize, or maintain authorization for, 

any person to serve as an issuing or 

acquiring institution without the 

operator taking appropriate steps, based 

upon the operator’s money laundering 

or terrorist financing risk assessment, to 

guard against that person issuing the 

operator’s credit card or acquiring 

merchants who accept the operator’s 

credit card in circumstances that 

facilitate money laundering or the 

financing of terrorist activities; 

(ii) For purposes of making the risk 

assessment required by paragraph 

(b)(1)(i) of this section, the following 

persons are presumed to pose a 

heightened risk of money laundering or 

terrorist financing when evaluating 

whether and under what circumstances 

to authorize, or to maintain 

authorization for, any such person to 

serve as an issuing or acquiring 

institution: 

(A) A foreign shell bank that is not a 

regulated affiliate, as those terms are 

defined in § 1010.605(g) and (n) of this 

Chapter; 

(B) A person appearing on the 

Specially Designated Nationals List 

issued by Treasury’s Office of Foreign 

Assets Control; 

(C) A person located in, or operating 

under a license issued by, a jurisdiction 

whose government has been identified 

by the Department of State as a sponsor 

of international terrorism under 22 

U.S.C. 2371; 

(D) A foreign bank operating under an 

offshore banking license, other than a 

branch of a foreign bank if such foreign 

bank has been found by the Board of 

Governors of the Federal Reserve 

System under the Bank Holding 

Company Act (12 U.S.C. 1841, et seq.) 

or the International Banking Act (12 

U.S.C. 3101, et seq.) to be subject to 

comprehensive supervision or 

regulation on a consolidated basis by 

the relevant supervisors in that 

jurisdiction; 

(E) A person located in, or operating 

under a license issued by, a jurisdiction 

that has been designated as 

noncooperative with international antimoney laundering principles or 

procedures by an intergovernmental 

group or organization of which the 

United States is a member, with which 

designation the United States 

representative to the group or 

organization concurs; and 

(F) A person located in, or operating 

under a license issued by, a jurisdiction 

that has been designated by the 

Secretary of the Treasury pursuant to 31 

U.S.C. 5318A as warranting special 

measures due to money laundering 

concerns; 

(iii) That the operator is in 

compliance with all applicable 

provisions of subchapter II of chapter 53 

of title 31, United States Code and this 

chapter; 

(2) Designate a compliance officer 

who will be responsible for assuring 

that: 

(i) The anti-money laundering 

program is implemented effectively; 

(ii) The anti-money laundering 

program is updated as necessary to 

reflect changes in risk factors or the risk 

assessment, current requirements of this 

chapter, and further guidance issued by 

the Department of the Treasury; and 

(iii) Appropriate personnel are trained 

in accordance with paragraph (b)(3) of 

this section; 

(3) Provide for education and training 

of appropriate personnel concerning 

their responsibilities under the program; 

and 

(4) Provide for an independent audit 

to monitor and maintain an adequate 

program. The scope and frequency of 

the audit shall be commensurate with 

the risks posed by the persons 

authorized to issue or accept the 

operator’s credit card. Such audit may 

be conducted by an officer or employee 

of the operator, so long as the reviewer 

is not the person designated in 

paragraph (b)(2) of this section or a 

person involved in the operation of the 

program. 

Subpart C—Reports Required To Be 

Made by Operators of Credit Card 

Systems 

§ 1028.300 General. 

Operators of credit card systems are 

subject to the reporting requirements set 

forth and cross referenced in this 

subpart. Operators of credit card 

systems should also refer to Subpart C 

of Part 1010 of this Chapter for reporting 

requirements contained in that subpart 

which apply to operators of credit card 

systems. 

§ 1028.310 [Reserved] 

§ 1028.315 [Reserved] 

§ 1028.320 [Reserved] 

§ 1028.330 Reports relating to currency in 

excess of $10,000 received in a trade or 

business. 

Refer to § 1010.330 of this Chapter for 

rules regarding the filing of reports 

relating to currency in excess of $10,000 

received by operators of credit card 

systems. 

Subpart D—Records Required To Be 

Maintained By Operators of Credit 

Card Systems 

§ 1028.400 General. 

Operators of credit card systems are 

subject to the recordkeeping 

requirements set forth and cross 

referenced in this subpart. Operators of 

credit card systems should also refer to 

Subpart D of Part 1010 of this Chapter 

for recordkeeping requirements 

contained in that subpart which apply 

to operators of credit card systems. 

§ 1028.410 Recordkeeping. 

Refer to § 1010.410 of this Chapter. 

Subpart E—Special Information 

Sharing Procedures To Deter Money 

Laundering and Terrorist Activity 

§ 1028.500 General. 

Operators of credit card systems are 

subject to the special information 

sharing procedures to deter money 

laundering and terrorist activity 

requirements set forth and cross 

referenced in this subpart. Operators of 

credit card systems should also refer to 

Subpart E of Part 1010 of this Chapter 

for special information sharing 

procedures to deter money laundering 

and terrorist activity contained in that 

subpart which apply to operators of 

credit card systems. 

§ 1028.520 Special information sharing 

procedures to deter money laundering and 

terrorist activity for operators of credit card 

systems. 

(a) Refer to § 1010.520. 

(b) [Reserved] 

§ 1028.530 [Reserved] 

§ 1028.540 Voluntary information sharing 

among financial institutions. 

(a) Refer to § 1010.540 of this Chapter. 

(b) [Reserved] 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Rules and Regulations 65879 

Subpart F—Special Standards of 

Diligence; Prohibitions; and Special 

Measures for Operators of Credit Card 

Systems 

§ 1028.600 [Reserved] 

§ 1028.610 [Reserved] 

§ 1028.620 [Reserved] 

§ 1028.630 [Reserved] 

§ 1028.640 [Reserved] 

§ 1028.670 [Reserved] 

PARTS 1029–1099 [RESERVED] 

Dated: October 7, 2010. 

James H. Freis, Jr., 

Director, Financial Crimes Enforcement 

Network. 

[FR Doc. 2010–25914 Filed 10–25–10; 8:45 am] 

BILLING CODE 4810–02–P 


erowe on DSK5CLS3C1PROD with RULES3