```

[Federal Register Volume 66, Number 250 (Monday, December 31, 2001)]
[Proposed Rules]
[Pages 67685-67686]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31847]

Federal Register / Vol. 66, No. 250 / Monday, December 31, 2001 / 
Proposed Rules

[[Page 67685]]

-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

31 CFR Part 103

RIN 1506-AA25

Financial Crimes Enforcement Network; Amendment to the Bank 
Secrecy Act Regulations--Requirement That Nonfinancial Trades or 
Businesses Report Certain Currency Transactions

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

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document proposes to amend the Bank Secrecy Act 
regulations to require that persons who, in the course of conducting a 
nonfinancial trade or business, receive more than $10,000 in coins or 
currency in one transaction (or two or more related transactions), file 
a report of such transaction with the Treasury Department.

DATES: Written comments on all aspects of the proposed rule are welcome 
and must be received on or before March 1, 2002.

ADDRESSES: Written comments should be submitted to: Cash Reporting-
Section 5331 Comments, P.O. Box 1618, Vienna, VA 22183-1618. Comments 
may also be submitted by electronic mail to the following Internet 
address: [email protected] with the caption in the body of 
the text, ``Attention: Proposed Rule--Cash Reporting-Section 5331.'' 
For additional instructions on the submission of comments, see 
SUPPLEMENTARY INFORMATION under the heading ``Submission of Comments.''
    Inspection of comments: Comments may be inspected at FinCEN between 
10 a.m. and 4 p.m., in the FinCEN Reading Room in Washington, DC. 
Persons wishing to inspect the comments submitted must request an 
appointment by telephoning (202) 354-6400.

FOR FURTHER INFORMATION CONTACT: Cynthia L. Clark, Deputy Chief 
Counsel, or Laurence J. Levine, Attorney-Advisor, Office of Chief 
Counsel, FinCEN, (703) 905-3590.

SUPPLEMENTARY INFORMATION:   

I. Introduction

    Published elsewhere in this issue of the Federal Register is an 
interim rule adding a new section 31 CFR 103.30. The text of the 
interim rule is the same as the text of this notice of proposed 
rulemaking.
    This document proposes a new section 31 CFR 103.30 in order to 
implement 31 U.S.C. 5331, as added to the Bank Secrecy Act by section 
365 of the Uniting and Strengthening America by Providing Appropriate 
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 
2001, Public Law 107-56 (October 26, 2001).

II. Statutory Provisions

    The Bank Secrecy Act, Titles I and II of Public Law 91-508, as 
amended, codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 
U.S.C. 5311, et seq., authorizes the Secretary of the Treasury, inter 
alia, to issue regulations requiring financial institutions to keep 
records and file reports that are determined to have a high degree of 
usefulness in criminal, tax, and regulatory matters, or in the conduct 
of intelligence or counter-intelligence activities, to protect against 
international terrorism, and to implement counter-money laundering 
programs and compliance procedures.\1\ Regulations implementing Title 
II of the Bank Secrecy Act (codified at 31 U.S.C. 5311, et seq.), 
appear at 31 CFR part 103. The authority of the Secretary to administer 
Title II of the Bank Secrecy Act has been delegated to the Director of 
FinCEN.
---------------------------------------------------------------------------

    \1\ Language expanding the scope of the Bank Secrecy Act to 
intelligence or counter-intelligence activities to protect against 
international terrorism was added by Section 358 of the USA Patriot 
Act of 2001.
---------------------------------------------------------------------------

    Under 31 U.S.C. 5331, any person who is engaged in a trade or 
business and who, in the course of such trade or business, receives 
more than $10,000 in coins or currency in one transaction (or two or 
more related transactions) is required to file a report with respect to 
such transaction (or related transactions) with the Treasury 
Department. Reporting under section 5331 does not apply to amounts 
received in a transaction reported under 31 U.S.C. 5313 and the 
accompanying regulations.
    For purposes of section 5331, currency includes foreign currency, 
and to the extent provided in regulations, any monetary instrument, 
whether or not in bearer form, with a face amount of not more than 
$10,000. Such monetary instruments shall not include any check drawn on 
the account of the writer in a financial institution referred to in 
subparagraph (A), (B), (C), (D), (E), (F), (G), (J), (K), (R), or (S) 
of 31 U.S.C. 5312 (a)(2).
    Reports required under section 5331 must be in such form as the 
Secretary may prescribe. The reports must contain: (1) The name, 
address, and such other identification information as the Secretary may 
require, of the person from whom the coins or currency was received; 
(2) the amount of coins or currency received; (3) the date and nature 
of the transaction; and (4) such other information, including the 
identification of the person filing the report, as the Secretary may 
prescribe.

III. Proposed Rule

    With a minor exception, section 5331 requires reporting of the same 
transaction that must be reported to the Internal Revenue Service 
(``IRS'') under section 6050I of title 26, United States Code, and 26 
CFR 1.6050I-1. Section 5331 does not require reporting of currency 
received by clerks of court. Cf. 26 U.S.C. 6050I(g). Further, section 
5331 does not require the person making a report under section 5331 to 
furnish to the person whose name is required to be set forth on the 
report a statement concerning the report. Cf. 26 U.S.C. 6050I(e).
    Because section 5331 is substantially similar to 26 U.S.C. 6050I, 
the proposed rule provides that persons required to report a 
transaction under section 5331 must make that report by filing a joint 
FinCEN/IRS form with the IRS. Under this dual-reporting regime, only 
one form is required to be filed for a transaction subject to both 
section 5331 and section 6050I of title 26. Thus, the proposed rule 
imposes no new reporting or record-keeping burden on persons required 
to report certain transactions under section 5331.
    Because of the similarity between the provisions, FinCEN believes 
it is appropriate that the proposed rule adopt the same rules for 
multiple payments, monetary instruments, and designated reporting 
transactions as appear in the regulations under section 6050I. Thus, 
for example, the proposed rule would require that recipients aggregate 
an initial payment and subsequent payments such that a report is 
required if the aggregation exceeds $10,000 within one year of the 
initial payment. In addition, the proposed rule, like 26 CFR 1.6050I-1, 
includes within the definition of currency monetary instruments such as 
cashiers' checks, bank drafts, traveler's checks or money orders, not 
having a face amount of more than $10,000, when such monetary 
instruments are received in a ``designated reporting transaction,'' 
i.e., certain retail sales as defined in the regulation.

IV. Submission of Comments

    An original and four copies of any comment (other than one sent 
electronically) must be submitted. All comments will be available for 
public inspection and copying, and no material in any such comments, 
including the name of any person submitting comments, will be 
recognized as

[[Page 67686]]

confidential. Accordingly, material not intended to be disclosed to the 
public should not be submitted.

V. Regulatory Flexibility Act

    It is hereby certified that the proposed rule is not likely to have 
a significant economic impact on a substantial number of small 
entities. This certification is based on the fact that the proposed 
rule applies only to persons already required to report information 
concerning transactions under the Internal Revenue Code and imposes no 
new reporting or recordkeeping requirements on those persons. 
Accordingly, an initial regulatory flexibility analysis is not required 
by the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.).

VI. Paperwork Reduction Act

    The collection of information contained in this regulation has been 
submitted to the Office of Management and Budget (OMB) for review under 
the requirements of the Paperwork Reduction Act (44 U.S.C. 3507(d)). 
Comments on the collection of information should be sent to the Office 
of Management and Budget, Attn: Alexander T. Hunt, Office of 
Information and Regulatory Affairs, New Executive Office Building, Room 
3208, Washington, DC 20503, with copies to FinCEN at Post Office Box 
39, Vienna, VA 22183. An agency may not conduct or sponsor, and a 
person is not required to respond to, a collection of information 
unless it displays a valid control number assigned by OMB.
    FinCEN specifically invites comments on (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the mission of FinCEN, including whether the information shall have 
practical utility; (b) the accuracy of FinCEN's estimate of the burden 
of the proposed collection of information (see below); (c) ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and (d) ways to minimize the burden of the collection of 
information on respondents, including through the use of automated 
collection techniques or other forms of information technology.
    Desciption of Respondents: Persons receiving cash payments greater 
than $10,000 in the course of a trade or business.
    Estimated Number of Respondents: 46,800.
    Frequency: As required.
    Estimate of Burden: None. Because this information is already 
required to be reported to the Internal Revenue Service pursuant to 26 
U.S.C. 6050I, and is subject to IRS recordkeeping requirements, there 
is no burden associated with this collection of information. This 
regulation does not impose any requirement on any person that is not 
already required by 26 U.S.C. 6050I.
    In addition, the Paperwork Reduction Act of 1995 requires agencies 
to estimate the total annual cost burden to respondents or 
recordkeepers resulting from the collection of information. Thus, 
FinCEN also specifically requests comments to assist with this 
estimate. In this connection, FinCEN requests commenters to identify 
any additional costs associated with the completion of the form. These 
comments on costs should be divided into two parts: (1) any additional 
costs associated with reporting; and (2) any additional costs 
associated with recordkeeping.

VII. Executive Order 12866

    The Department of the Treasury has determined that this proposed 
rule is not a significant regulatory action under Executive Order 
12866.

VIII. Unfunded Mandates Act of 1995 Statement

    Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 
104-4 (Unfunded Mandates Act), March 22, 1995, requires that an agency 
prepare a budgetary impact statement before promulgating a rule that 
includes a federal mandate 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 this proposal provides 
the most cost-effective and least burdensome alternative to achieve the 
objectives of the rule.

List of Subjects in 31 CFR Part 103

    Authority delegations (Government agencies), Banks and banking, 
Currency, Investigations, Law enforcement, Reporting and recordkeeping 
requirements.

Proposed Amendments to the Regulations

    For the reasons set forth above in the preamble, FinCEN proposes to 
amend 31 CFR Part 103 as follows:

PART 103--FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND 
FOREIGN TRANSACTIONS

    1. The authority citation for Part 103 continues to read as 
follows:

    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5331.
    2. The text of proposed Sec. 103.30 is the same as the text of 31 
CFR 103.30 set out in an interim rule rule published elsewhere in this 
issue of the Federal Register.

    Dated: December 20, 2001.
James F. Sloan,
Director, Financial Crimes Enforcement Network.
[FR Doc. 01-31847 Filed 12-28-01; 8:45 am]
BILLING CODE 4820-03-P
```