Federal Register / Vol. 66, No. 250 / Monday, December 31, 2001 / Proposed Rules 67685

1Language 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.

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:

regcomments@fincen.treas.gov 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.

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

67686 Federal Register / Vol. 66, No. 250 / Monday, December 31, 2001 / Proposed Rules

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 § 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]

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