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Federal R eserve Bank OF DALLAS TON Y J . S A L V A G G IO D ALLAS , TEX AS FIR S T V IC E P R ES ID EN T September 1, 1995 75265-5906 Notice 95-86 TO: The Chief Operating Officer of each financial institution in the Eleventh Federal Reserve District SUBJECT Proposed Amendments to the Bank Secrecy Act; Delay of Final Rule DETAILS In accordance with the Bank Secrecy Act, the Board of Governors of the Federal Reserve System and the Department of the Treasury are requesting comment on proposed amendments to their rule that requires enhanced recordkeeping related to certain wire transfers by financial institutions. The proposed amendments would conform the meaning of the definitions of the parties to an international funds transfer in the rule to their meanings under Article 4A of the Uniform Commercial Code. These changes should facilitate compliance with the Bank Secrecy Act rules. Each comment should be sent separately to both the Treasury and the Board. Comments must be received by September 25, 1995. At the Board, please address com ments to William W. Wiles, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, D.C. 20551. All comments should refer to Docket No. R-0888. At the Treasury, please send comments to the Office of Regulatory Policy and Enforcement, Financial Crimes Enforcement Network, Department of the Treasury, 2070 Chain Bridge Road, Vienna, VA 22182, Attention: Funds Transfer NPRM. The Board and the Treasury have also deferred the effective date of the recordkeeping rule from January 1, 1996, to April 1, 1996. For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas: Dallas Office (800) 333 -4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrasiale (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - ATTACHMENTS Copies of the Board’s and the Treasury’s notices as they appear on pages 44143-54, Vol. 60, No. 164, of the Federal Register dated August 24, 1995 is attached. MORE INFORMATION For more information, please contact James Dean at (214) 922-6237. For additional copies of this Bank’s notice, please contact the Public Affairs Department at (214) 922-5254. Sincerely, Thursday August 24, 1995 Part IV FederaJ Reserve System Department of the Treasury 31 CFR Part 103 Bank Secrecy Act Regulations; Final Rule and Proposed Rule Federal Reserve System 12 CFR Part 219 Reimbursement for Providing Financial Records; Recordkeeping Requirements for Certain Financial Records; Final Rule Department of the Treasury 31 CFR Part 103 Bank Secrecy Act Regulations; Final Rule and Proposed Rule 44144 Federal Register / Vol. 60, No. 164 / Thursday, August 24, 1995 / Rules and Regulations FEDERAL RESERVE SYSTEM is delayed for three months from January 1,1 9 9 6 to April 1,1996. [Docket No. R-0807] DEPARTMENT OF THE TREASURY In concurrence: By the Board of Governors of the Federal Reserve System, August 17,1995. 31 CFR Part 103 W illiam W. Wiles, Secretary to the Board. RIN 1506-AA16 By the Department of the Treasury, Dated: July 31,1995. Amendment to the Bank Secrecy Act Regulations Relating to Recordkeeping for Funds Transfers and Transmittals of Funds by Financial Institutions Stanley E. Morris, Director, Financial Crimes Enforcement Network. AGENCY: Board of Governors of the BILUNG CODES: #210-01-f>, 4B2<W>3-P FR Doc 95-20841 Filed 0 8 -1 3 -9 5 ; 8:45 a.m. FEDERAL RESERVE SYSTEM SUMMARY: On January 3,1995, the [Regulation S; Docket No. R-0807] FOR FURTHER INFORMATION CONTACT: Treasury: Roger Weiner, Assistant Director, 202/622-0400; Stephen R. Kroll, Legal Counsel, 703/905-3534; or Nina A. Nichols, Attomey-Advisor, 703/ 905-3598, FinCEN. B oard: Louise L. Roseman, Associate Director, 202/452-2789; Gayle Brett, Manager, Fedwire Section, 202/4522934; Division of Reserve Bank Operations and Payment Systems; Oliver Ireland, Associate General Counsel, 202/452-3625; or Elaine Boutilier, Senior Counsel 202/452-2418, Legal Division, Board of Governors of the Federal Reserve System. For the hearing impaired only, Telecommunication Device for the Deaf (TDD), Dorothea Thompson, 202/4523544. The effective date of the joint final rule published by the Board and Treasury at 60 FR 220, January 3, 1995, By the Board of Governors of the Federal Reserve System, August 17,1995. William W. Wiles, Federal Reserve System; Department of the Treasury. ACTION: Joint final rule; delay of effective date. Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury (Treasury) and the Board of Governors of the Federal Reserve System (Board) jointly published a final rule that requires enhanced recordkeeping related to certain funds transfers and transmittals of funds by financial institutions, effective January 1 ,1 996. (60 FR 220). The Treasury and the Board have delayed the effective date of the joint final rule until April 1, 1996, because of the uncertainty by financial institutions as to their responsibilities under the joint final rule with respect to international transfers pending final action on proposed amendments to the rule, which are published elsewhere in today’s Federal Register. EFFECTIVE OATES: Effective August 24, 1995, the effective date of the joint final rule published on January 3 ,1 9 9 5 , at 60 FR 220, is delayed until April 1,1996. 3625; or Elaine Boutilier, Senior Counsel 202/452-2418, Legal Division, Board of Governors of the Federal Reserve System. For the hearing impaired only, Telecommunication Device for the Deaf (TDD), Dorothea Thompson, 202/452-3544. The effective date of the final rule published by the Board at 60 FR 231, January 3 ,1 9 9 5 , is delayed for three months from January 1 ,1 996, to April 1,1996. 12 CFR Part 219 Reimbursement for Providing Financial Records; Recordkeeping Requirements for Certain Financial Records AGENCY: Board of Governors of the Secretary to the Board. [FR Doc. 95-20843 Filed 8 -2 3 -9 5 ; 8:45 am] BILUNG CODE 8210-01-P DEPARTMENT OF THE TREASURY 31 CFR Part 103 RIN 1506-AA17 Federal Reserve System. ACTION: Final rule; delay of effective date. Amendment to the Bank Secrecy Act Regulations Relating to Orders for Transmittals of Funds by Financial Institutions SUMMARY: On January 3 ,1 9 9 5 , the Board AGENCY: Financial Crimes Enforcement of Governors of the Federal Reserve System (Board) published a final rule that established Subpart B of Regulation S (60 FR 231), which cross-references the substantive provisions of a joint rule adopted by the Board and the Department of the Treasury on the same day. The joint rule requires enhanced recordkeeping related to certain funds transfers and transmittals of funds by financial institutions. The Board and the Department of the Treasury have delayed the effective date of the joint final rule until April 1 ,1 9 9 6 , because of the uncertainty by financial institutions as to their responsibilities under the joint final rule with respect to international transfers pending final action on proposed amendments to the rule, which are published elsewhere in today’s Federal Register. Because Subpart B of Regulation S relies on the joint final rule for its substantive provisions, its effective date is also delayed until April 1,1996. EFFECTIVE DATES: Effective August 24, 1995, the effective date of the final rule published on January 3 ,1 9 9 5 , at 60 FR 231, is delayed until April 1,1996. FOR FURTHER INFORMATION CONTACT: Louise L. Roseman, Associate Director, 202/452-2789; Gayle Brett, Manager, Fedwire Section, 202/452-2934; Division of Reserve Bank Operations and Payment Systems; Oliver Ireland, Associate General Counsel, 2 0 2 /4 5 2 - Network, Treasury. ACTION: Final rule; delay of effective date. SUMMARY: In January 1995, the Department of the Treasury (Treasury), through its Financial Crimes Enforcement Network (FinCEN), adopted a final rule (60 FR 234, January 3.1995) requiring financial institutions that transmit funds to include in transmittal orders certain information (the travel rule). On the same date, Treasury, through FinCEN, and the Board of Governors of the Federal Reserve System (the Board) jointly adopted a final rule (60 FR 220, January 3 .1995) requiring financial institutions to obtain and retain certain information about parties to transmittals of funds (the joint rule). In response to requests from the banking industry, Treasury and the Board have issued proposed amendments to the joint rule, and Treasury has proposed conforming amendments to the travel rule (see documents published elsewhere in today’s Federal Register). In order to provide financial institutions subject to the rules sufficient time to adapt their funds transmittal systems to comply with the rules as they are proposed to be amended, the effective date of the travel rule is hereby delayed from January 1 ,1 9 9 6 to April 1 ,1 9 9 6 . The effective date of the joint rule has also Federal Register / Vol. 60, No. 164 / Thursday, August 24, 1995 / Rules and Regulations been delayed from January 1,1 9 9 6 to April 1,1 9 9 6 (see document published elsewhere in today’s Federal Register). EFFECTIVE DATES: Effective August 24, 1995, this document delays the effective date of the final rule published at 60 FR 234, January 3, 1995, until April 1, 1996. FOR FURTHER INFORMATION CONTACT: Roger Weiner, Assistant Director, Office of Compliance and Enforcement, 202/ 622-0400; Nina A. Nichols, AttomeyAdvisor, Office of Legal Counsel, 703/ 905-3598. The effective date of the final rule issued by Treasury and published at 60 FR 234, January 3 ,1 9 9 5 , is delayed for three months, from January 1,1996 to April 1,1996. Dated: July 31,1995. Stanley E. M orris, Director, Financial Crimes Enforcement Network. [FR Doc. 95-20844 Filed 8 -2 3 -9 5 ; 8:45 am] BILUNG CODE 4820-03-P 44145 44146 Federal Register / Vol. 60, No. 164 / Thursday, August 24, 1995 / Proposed Rules FEDERAL RESERVE SYSTEM [Docket No. R-0888] DEPARTMENT OF THE TREASURY 31 CFR Part 103 RIN 1506-AA16 Amendment to the Bank Secrecy Act Regulations Relating to Recordkeeping for Funds Transfers and Transmittals of Funds by Banks and Other Financial Institutions AGENCY: Department of the Treasury; Board of Governors of the Federal Reserve System. ACTION: Joint proposed rule. SUMMARY: In January 1995, the Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury (Treasury) and the Board of Governors of the Federal Reserve System (Board) jointly published a final rule that requires enhanced recordkeeping related to certain funds transfers and transmittals of funds by financial institutions (the joint rule). Also in January 1995, the Treasury adopted a companion rule, known as the travel rule, that requires financial institutions to include in transmittal orders certain information that must be maintained under the joint rule. The joint rule sets forth definitions of terms used in both rules. The original effective date of these rules was January 1, 1996. Subsequent to adoption of these rules, several banks have expressed concerns to the Treasury and the Board that compliance with the joint rule and the travel rule would be complicated if the parties to an international transfer were defined differently in the Bank Secrecy Act regulations than they are defined in the Uniform Commercial Code Article 4A. The Treasury and the Board have proposed amendments to the joint rule’s definitions and technical conforming changes to the substantive provisions of the joint rule to conform the meanings of the definitions of the parties to an international transfer to their meanings under Article 4A of the Uniform Commercial Code. These proposed amendments are intended to reduce confusion of banks and nonbank financial institutions as to the applicability of the joint rule and the travel rule and to reduce the cost of complying with the rules’ requirements. The Treasury and the Board believe that the proposed amendments will not have a material adverse effect on the rules’ usefulness in law enforcement investigations and proceedings. The proposed amendments should not affect a bank’s responsibilities under the rules with respect to domestic funds transfers. Due to the uncertainties resulting from these proposed amendments, the Treasury and the Board have delayed the effective date of the joint rule; a document delaying the effective date of the final joint rule until April 1,1996, is published elsewhere in today’s Federal Register. DATES: Comments must be submitted on or before September 25,1995. ADDRESSES: Each comment should be sent separately to both the Treasury and the Board at the following addresses: Treasury: Office of Regulatory Policy and Enforcement, Financial Crimes Enforcement Network, Department of the Treasury, 2070 Chain Bridge Road, Vienna, VA 22182, Attention: Funds Transfer NPRM. Comments may be inspected between 10:00 a.m. and 4:00 p.m. at the Treasury Library, located in room 5030,1500 Pennsylvania Avenue, N.W., Washington, D.C. Persons wishing to inspect the comments submitted should request an appointment at the Treasury Library, 202/622-0990. B oard: Comments, which should refer to Docket No. R -0888, may be mailed to Mr. William W. Wiles, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, D.C. 20551. Comments also may be delivered to Room B -2222 of the Eccles building between 8:45 a.m. and 5:15 p.m. weekdays, or to the guard station in the Eccles Building courtyard on 20th Street N.W. (between Constitution Avenue and C Street) at any time. Comments may be inspected in Room M P-500 of the Martin Building between 9:00 a.m. and 5:00 p.m. weekdays, except as provided in 12 CFR 261.8 of the Board’s Rules Regarding Availability of Information. FOR FURTHER INFORMATION CONTACT: Treasury: Roger Weiner, Assistant Director, 202/622-0400; Stephen R. Kroll, Legal Counsel, 703/905-3534; or Nina A. Nichols, Attomey-Advisor, 703/ 905-3598, FinCEN. B oard: Louise L. Roseman, Associate Director, 202/452-2789; Gayle Brett, Manager, Fedwire Section, 2 02/4522934; Division of Reserve Bank Operations and Payment Systems; Oliver Ireland, Associate General Counsel, 202/452-3625; or Elaine Boutilier, Senior Counsel, 2 02/4522418, Legal Division, Board of Governors of the Federal Reserve System. For the hearing impaired only, Telecommunication Device for the Deaf (TDD), Dorothea Thompson, 202/452— 3544. SUPPLEMENTARY INFORMATION: I. Background The statute generally referred to as the Bank Secrecy Act (BSA) (Pub. L. 9 1 508, codified at 12 U.S.C. 1829b and 1951-1959, and 31 U.S.C. 5311-5330) authorizes the Secretary of the Treasury to require financial institutions to keep records and file.reports that the Secretary determines have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings. The authority of the Secretary to administer the BSA has been delegated to the Director of FinCEN. The BSA was amended by the Annunzio-Wylie AntiMoney Laundering Act of 1992 (Pub. L. 102-550), which authorizes the Treasury and the Board to prescribe regulations to require maintenance of records regarding domestic and international funds transfers. The Treasury and the Board are required to promulgate jointly, after consultation with state banking supervisors, recordkeeping requirements for international funds transfers by depository institutions and nonbank financial institutions. The Treasury and the Board are required to consider the usefulness of recordkeeping rules for international funds transfers in criminal, tax, or regulatory investigations or proceedings and the effect of such rules on the cost and efficiency of the payments system. The Treasury and the Board are authorized to promulgate regulations for domestic funds transfers by depository institutions. The Treasury, but not the Board, is authorized to promulgate recordkeeping and reporting requirements for domestic funds transfers by nonbank financial institutions. In January 1995, the Treasury and the Board jointly published enhanced recordkeeping requirements related to certain funds transfers and transmittals of funds by banks and other financial institutions, in accordance with the BSA (60 FR 220, January 3, 1995). At the same time, the Treasury adopted a companion rule, known as the travel rule, that requires financial institutions to include in transmittal orders certain information that must be retained under the joint rule (60 FR 234, January 3, 1995). The joint rule sets forth definitions of terms used in both rules. These rules were scheduled to become effective on January 1 ,1 996. II. Industry Concerns Regarding Definition of Parties to an International Funds Transfer Subsequent to adoption of these rules, several large banks as well as bank Federal Register / Vol. 60, No. 164 / Thursday, August 24, 1995 / Proposed Rules counsel have advised the Treasury and the Board that compliance with the joint rule and the travel rule would be complicated if the parties to an international funds transfer were defined differently in the joint rule than they are in the Uniform Commercial Code Article 4A (UCC 4A). Under the joint rule adopted in January, the first U.S. bank office that handles an incoming international funds transfer is defined as the originator’s bank.1 Under UCC 4A and the Board’s Regulation J governing Fedwire transfers (12 CFR Part 210, subpart B), which incorporates UCC 4A, if the U.S. bank receives a payment order from a foreign bank and executes a corresponding payment order to a subsequent receiving bank, the first U.S. bank would be deemed an intermediary bank rather than the originator’s bank. Large banks that regularly process international funds transfers believe that substantial confusion would result from defining the parties to an international funds transfer for the purposes of the BSA rules differently from the manner in which they are defined under UCC 4A. In addition to the confusion created by defining the parties to an international funds transfer in a manner that is not consistent with the roles of the parties as defined by UCC 4A, German Company ........................................ ........... German Bank 1 ........................................................ German Bank 2 ........................................................ New York Bank 1 ..................................................... New York Bank 2 ..................................................... California Bank ......................................................... Japanese Bank ......................................................... Japanese Company.................................................. In this transfer, a German company instructs its bank (German Bank 1) to send a dollar payment to Japanese Bank for credit to a Japanese company. German Bank 1 forwards the payment instructions to its correspondent, German Bank 2. German Bank 2 sends the payment instructions via SWIFT to its New York correspondent, New York Bank 1. New York Bank 1 executes a payment order via CHIPS to New York Bank 2. New York Bank 2 forwards the payment order via Fedwire to California Bank. California Bank sends the payment order via SWIFT to Japanese Bank, which credits the account of the Japanese company. several banks have indicated that they believe the difference between the BSA and the UCC 4A definitions may cause certain problems in the application of the joint rule and the travel rule to international funds transfers. The following chart depicts a hypothetical funds transfer that serves to illustrate the operational issues raised by the industry representatives if the first U.S. bank in an incoming international funds transfer were deemed to be the originator’s bank and the last U.S. bank in an outgoing international funds transfer were deemed to be the beneficiary’s bank: Definitions of bank and FI parties to transfer limited to US offices (rule published in January 1995) Parties to transfer 44147 Originator/Transmittor .............................................. Originator’s bank/Trans minor's FI ............................ Intermediary bank/intermediary’s FI ......................... Beneficiary’s bank/Recipient’s F I .............................. Beneficiary/Recipient ............................................... Definitions that conform to UCC 4A meanings (proposed amended rule) Originator/Transmittor. Originator’s bank/Transmittor's FI. Intermediary bank/lntermediary FI. Intermediary bank/lntermediary FI. Intermediary bank/lntermediary FI. Intermediary bank/lntermediary FI. Beneficiary’s bank/Recipient’s FI. Beneficiary/Recipient. Under the joint rule as adopted in January, German Bank 2 is defined as the originator (transmittor) of the transfer, because it is the sender of the first payment order 2 in a funds transfer and New York Bank 1 is defined as the originator’s bank (transmittor’s financial institution). Japanese Bank 1, which is neither a bank nor a financial institution under the BSA definitions, is defined as the beneficiary and California Bank is defined as the beneficiary’s bank. In the example, New York Bank 1 as originator’s bank would be subject to the following requirements under the joint rule: A. Obtain an d retain the n am e an d ad d ress o f German B an k 2 (the originator) (I03.33(e)(l)(i)j. New York Bank 1 generally would have a record of the name and address of German Bank 2, which in virtually all cases would be an accountholder at New York Bank 1. In the rare case in which German Bank 2 is not an established customer of New York Bank 1, New York Bank 1 would be required to obtain this information. B. H ave the cap ab ility to retrieve the record o f the fu n d s transfer b y n a m e or accou nt n um ber o f German B an k 2 (103.33(e)(4)). All financial institutions are currently subject to the general retrievability requirements under section 103.38(d), which states that all records required to be retained under 31 CFR Part 103 “ . . . shall be filed or stored in such a way as to be accessible within a reasonable time, taking into consideration the nature of the record, and the amount of time expired since the record was made.” While the requirements of the joint rule emphasize the need for an originator’s bank to have the capability to retrieve funds transfer records by name or account number of the originator, the bank would nonetheless have to have the capability to retrieve these records if it were deemed to be an intermediary bank. C. C om ply with the verification requirem ents i f German B an k 2 is not an estab lish ed cu stom er (103.33(e)(2)). If German Bank 2 were not an established customer of New York Bank 1 (a situation that would occur only rarely), New York Bank 1 would have to comply with the joint rule’s verification requirements. This would require manual intervention in what is generally a highly automated process, and the Treasury and the Board do not believe that the resulting information would be highly useful to law enforcement. In addition, under the travel rule, the originator’s bank and each intermediary bank (if the information is received from the sender) would be required to: D. In clu de the nam e, address, an d accou n t n u m ber o f German B an k 2 in the p aym en t ord er it ex ecu tes (103.33(g) 1 The originator’s bank is defined as “the receiving bank to which the payment order of the originator is issued if the originator is not a bank, or the originator if the originator is a bank.” (103.11(w)) A receiving bank is defined as "the bank to which the sender’s instruction is addressed.” (103.11(aa)) As the definition of bank is limited to an “agent, agency, branch or office within the United States” (103.11(c)), a receiving bank must be a U.S. banking office, and therefore the originator’s bank is the first U.S. banking office to handle the transfer. 2 A payment order is defined as “an instruction of a sender to a receiving b a n k .. . . ” (31 CFR 103.11(y)) As noted above, a receiving bank is defined as “the bank to which the sender’s instruction is addressed.” Because the BSA rules limit the definition of bank to an office within the United States, the instruction of a sender to the first U.S. banking office is defined as the first payment order. III. Definitions Under Joint Rule as Published in January 1995 44148 Federal Register / Vol. 60, No. 164 / Thursday, August 24, 1995 / Proposed Rules (1) an d (2)). New York Bank 1 typically would include in the payment order it executes the SWIFT Bank Identification Code (BIC) or CHIPS Universal Identifier (UID) of German Bank 2 (the originator), rather than German Bank 2’s name, address, and account number. The Treasury believes that use of a widely-used industry code, such as a BIC, UID, or routing number, to identify the transmittor constitutes compliance with the travel rule requirement to include the name, address, and account number of the transmittor in subsequent payment orders. Information pertaining to German Bank 2 may not be retained in all subsequent payment orders, however, because German Bank 2 generally would be identified as the instructing bank, rather than the originator’s bank, in the CHIPS message sent by New York Bank 1. While the identification of the bank included in the originator’s bank field generally is retained in subsequent payment orders, the identification of the bank in the instructing bank field may change in subsequent payment orders.3 California Bank, as beneficiary’s bank, would be required under the joint rule to (1) retain the information contained in the payment order sent by New York Bank 2 (103.33(e)(l)(iii)); (2) have the capability to retrieve the record of the funds transfer by name or account number of Japanese Bank (103.33(e)(4)); and (3) comply with the verification requirements if Japanese Bank is not an established customer (103.33(e)(3)). IV. Effect of Proposed Amendment If New York Bank 1 and California Bank in the example above were considered to be intermediary banks instead of the originator’s bank and beneficiary’s bank, respectively, under the BSA rules, they would be required under the joint rule to retain a copy of the payment order they accept (103.33(e)(l)(ii)). As noted above, while there is no specific retrievability requirement under the joint rule for intermediary banks, under 103.38(d) 3 Banks often define the parties to an international transfer in the SWIFT, CHIPS, and Fedwire formats differently than the parties are defined in the BSA rules as adopted in January. These formats have fields for the identification of the originator’s bank, the instructing bank, the sender bank (the bank that sends the transfer through SW IFT, CHIPS, or Fedwire), the receiver bank, the intermediary bank, and the beneficiary’s bank. The first U.S. or foreign bank in a transfer is generally identified in the message format as the originator’s bank; the bank that immediately precedes the sender bank (if different than the originator's bank) is identified as the instructing bank. For transfers that are sent through a large number of receiving banks, the identification of instructing bank may change from payment order to payment order. expansion of the definitions of beneficiary’s bank, originator’s bank, payment order, receiving bank, receiving financial institution, recipient’s financial institution, transmittal order, transmittor, and transmittor’s financial institution to include both domestic and foreign institutions. The Treasury and the Board have also proposed technical conforming changes to the joint rule to clarify that only bank and financial institution offices located within the United States are subject to the joint rule’s requirements. These amendments should reduce confusion with respect to the interpretation of the rules and should facilitate compliance with the rules’ requirements. Moreover, the Treasury and the Board do not believe that these proposed amendments will increase the cost of compliance with the rules’ requirements for those banks and nonbank financial institutions that have prepared to comply with the rules under the assumption that the first U.S. banking office in an international transfer is subject to the originator’s bank responsibilities. In addition, the Treasury and the Board have revised section 103.33(e)(6) by deleting the word “domestic” prior to the word “bank” and prior to the words “broker or dealer in securities.” These changes have no material effect on the scope of the exclusions set forth in this section as the word “bank” is V. Corresponding Changes Affecting defined to be limited to offices located Nonbank Financial Institutions within the United States and the term The example reviewed above involves “broker or dealer in securities” is limited to brokers registered with the banks, as banks have raised concerns Securities and Exchange Commission.4 with the differences between the definitions of the parties to international VII. Paperwork Reduction Act funds transfers in the joint rule and UCC The collection of information required 4A. Financial institutions other than by the joint final rule whose amendment banks have not raised operational is proposed in this notice was submitted concerns with the Treasury and the by the Treasury to the Office of Board on this matter. The Treasury and Management and Budget in accordance the Board believe, however, that with the requirements of the Paperwork nonbank financial institutions that Reduction Act (44 U.S.C. 3504(h)) under conduct international transmittals of control number 1505-0063. (See, 60 FR funds may have similar compliance 227 (January 3, 1995)) The collection is concerns. Accordingly, the proposed authorized, as before, by 12 U.S.C. amendments to the joint rule include 1829b and 1959 and 31 U.S.C. 53 1 1 modifications that correspond to the 5330. changes that apply to banks. The changes to the joint final rule VI. Request for Comment proposed in this document will The Treasury and the Board request eliminate information collection comment on proposed amendments to requirements that were required by the the definitions that make the roles of the joint final rule. Therefore, no additional parties to an international funds transfer Paperwork Reduction Act submissions consistent under the BSA rules and are required. under UCC 4A and that make parallel changes to the definitions of the parties 4 The Treasury has also proposed companion to an international transmittal of funds. amendments to the travel rule. See document elsewhere in today’s Federal Register. The proposed amendments include information retained must be “accessible.” Under the travel rule, New York Bank 1 would be required to include in its payment order to New York Bank 2 only the information pertaining to the transmittor and other transfer information that it received from German Bank 2 (103.33(g)(2)). Similarly, New York Bank 2 and California Bank, as other intermediary banks in the funds transfer, would be required to include this information in the payment orders they execute if received in the payment orders they accepted. Treatment of New York Bank 1 and California Bank as intermediary banks addresses the concerns of industry representatives, Under current industry practice, banks generally would be in compliance with the recordkeeping, retrievability, and travel rule requirements for intermediary banks. The Treasury and the Board do not believe that identifying the banks in an international transfer in the same manner as they are defined in UCC 4A will reduce the usefulness of the information to law enforcement, p ro v id ed that intermediary banks comply with the requirements of 103.38(d). As part of the 36-month review of the effectiveness of the joint rule and the travel rule, Treasury will monitor the experience of law enforcement in obtaining from intermediary banks information retained pursuant to the joint rule. Federal Register^/ Vol. 60, No. 164 / 'fhursday, August 24. JL995 / Proposed -RalesV m . Regulatory Flexibility Act Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Treasury and the Board hereby certify that these proposed amendments to the joint final rule will not have a significant economic impact on a substantial number of small entities. The proposed amendments eliminate uncertainty as to the application of the joint final rule and reduce the cost of complying with the joint rule’s requirements. Furthermore, the proposed amendments affect international funds transfers and transmittals of funds, which are handled almost exclusively by large institutions. Accordingly, a regulatory flexibility analysis is not required. IX. Executive Order 12866 The Treasury finds that these proposed amendments to the joint rule are not “significant” for purposes of Executive Order 12866. The modifications should reduce the cost of compliance with the joint rule and the travel rule. The Treasury believes that these proposed rule changes will not affect adversely in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. These proposed revisions create no inconsistencies with, nor do they interfere with actions taken or planned by other agencies. Finally, these proposed revisions raise no novel legal or policy issues. A cost and benefit analysis therefore is not required. X. Unfunded Mandates Reform Act of 1995 Statement Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 104—4 (Unfunded Mandates Act), signed into law on 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. The Treasury has determined that it is not required to prepare a written budgetary impact statement for the proposed amendments, and has concluded that the proposed amendments are the most cost-effective and least burdensome means of achieving the stated objectives of the rule. List of Subjects in 31 CFR Part 103 Administrative practice and procedure, Banks, banking, Brokers, Currency, Foreign banking, foreign 44149 recipient’s financial institution includes a beneficiary’s bank, except where the beneficiary is a recipient’s financial institution. Amendment * * * * * For the reasons set forth in the (kk) Transm ittal order. The term preamble, 31 CFR Part 103 is proposed transmittal order includes a payment to be amended as set forth below: order and is an instruction of a sender to a receiving financial institution, PART 103—FINANCIAL transmitted orally, electronically, or in RECORDKEEPING AND REPORTING writing, to pay, or cause another OF CURRENCY AND FOREIGN financial institution or foreign financial TRANSACTIONS agency to pay, a fixed or determinable amount of money to a recipient if: 1. The authority citation for Part 103 * * * * * is revised to read as follows: (11) Transmittor. The sender of the Authority: 12 U.S.C. 1829b and 1951-1959; first transmittal order in a transmittal of 31 U.S.C. 5311-5330. funds. The term transmittor includes an 2. Section 103.11 is amended by originator, except where the revising paragraphs (e), (w), (y) transmittor’s financial institution is a introductory text, (aa), (bb), (dd), (kk) financial institution or foreign financial introductory text, (11), and (mm) to read agency other than a bank or foreign as follows: bank. (mm) T ransm ittor’s fin an cia l §103.11 Meaning of terms. institution. The receiving financial * * * * * institution to which the transmittal (e) B en eficiary ’s b an k. The bank or order of the transmittor is issued if the foreign bank identified in a payment transmittor is not a financial institution order in which an account of the or foreign financial agency, or the beneficiary is to be credited pursuant to transmittor if the transmittor is a the order or w hich otherwise is to make financial institution or foreign financial payment to the beneficiary if the order agency. The term transmittor’s financial does not provide for payment to an institution includes an originator’s account. bank, except where the originator is a * * * * * transmittor’s financial institution other (w) O riginator’s ban k. The receiving than a bank or foreign bank. bank to which the payment order of the * * * * * originator is issued if the originator is 3. In § 103.33, paragraphs (e) not a bank or foreign bank, or the introductory text, (e)(l)(i) introductory originator if the originator is a bank or text, (e)(l)(ii), (e)(l)(iii), (e)(6)(i)(A) foreign bank. through (e)(6)(i)(G), (e)(6)(ii), (f) * * * * * introductory text, (f)(l)(i) introductory (y) P aym ent order. An instruction of text, (f)(l)(ii), (f)(l)(iii), (f)(6)(i)(A) a sender to a receiving bank, transmitted through (f)(6)(i)(G) and (f)(6)(ii) are orally, electronically, or in writing, to revised to read as follows: pay, or to cause another bank or foreign bank to pay, in a fixed or determinable § 103.33 Records to be made and retained by financial institutions. amount of money to a beneficiary if: * * * * * * * * * * (e) B anks. Each agent, agency, branch, (aa) R eceiving ban k. The bank or or office located within the United foreign bank to which the sender’s States of a bank is subject to the instruction is addressed. requirements of this paragraph (e) with (bb) Receiving fin a n cia l institution. respect to a funds transfer in the amount The financial institution or foreign of $3,000 or more: financial agency to which the sender’s (1) R ecord keep in g requirem ents, (i) instruction is addressed. The term receiving financial institution includes a For each payment order that it accepts as an originator’s bank, a bank shall receiving bank. * * * * * obtain and retain either the original or a microfilm, other copy, or electronic (dd) R ecip ien t’s fin a n cia l institution. record of the following information The financial institution or foreign relating to the payment order: financial agency identified in a * * * * transmittal order in which an account of * (ii) For each payment order that it the recipient is to be credited pursuant accepts as an intermediary bank, a bank to the transmittal order or which shall retain either the original or a otherwise is to make payment to the microfilm, other copy, or electronic recipient if the order does not provide record of the payment order. for payment to an account. The term currencies, Gambling, Investigations, Penalties, Reporting and recordkeeping requirements, Securities. 44150 Federal Register / Vol. 60, No. 164 / Thursday, August 24, 1995 / Proposed Rules (iii) for each payment order that it accepts as a beneficiary’s bank, a bank shall retain either the original or a microfilm, other copy, or electronic record of the payment order. * * * * * (6) E xceptions. * * * (i) * * * (A) A bank; (B) A wholiy-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) The United States; (F) A state or local government; or (G) A federal, state or local government agency or instrumentality; 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. (f) N onban k fin a n cia l 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 (f) with respect to a transmittal of funds in the amount of $3,000 or more: (1) R ecord keep in g requirem ents, (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: * * * * * (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. * * * * * (6) E xceptions. * * * (i) * * * (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) The United States; (F) A state or local government; or (G) A federal, state or local government agency or instrumentality; 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 financial institution are the same broker or dealer in securities. In concurrence: By the Board of Governors of the Federal Reserve System, August 17,1995. William \V. Wiles, Secretary to the Board. Dated: July 31,1995. By the Department of the Treasury. Stanley E. Morris, Director, Financial Crimes Enforcement Network. [FR Doc. 95-20842 Filed 8 -2 3 -9 5 ; 8:45 am] BILUNG CODE 6210-01-P; 4820-03-P Federal Register / Vol. 60, No. 164 / Thursday, August 24, 1995 / Proposed Rules DEPARTMENT OF THE TREASURY 31 CFR Part 103 RIN 1506-AA17 Amendment to the Bank Secrecy Act Regulations Relating to Orders for Transmittals of Funds by Banks and Other Financial Institutions AGENCY: Financial Crimes Enforcement Network, Treasury. ACTION: Proposed rule. SUMMARY: In January 1995, the Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury (Treasury) and the Board of Governors of the Federal Reserve System (the Board) jointly adopted a final rule (the joint rule) requiring financial , institutions to collect and retain certain information pertaining to transmittals of funds. At the same time, FinCEN adopted a final rule (the travel rule) that required financial institutions to include in transmittal orders certain information collected under the joint rule. Both the travel rule and the joint rule were to become effective on January 1 ,1 9 9 6 . In response to industry concerns about the application of the joint rule and the travel rule to transmittals of funds involving foreign financial institutions, Treasury and the Board today are proposing amendments to the joint rule that conform the definitions of the parties to transmittals of funds to definitions found in Article 4A of the Uniform Commercial Code (see document published elsewhere in today’s Federal Register). This document proposes amendments to the travel rule that are necessary to reflect the amended definitions in the joint rule. These proposed amendments to the travel rule also make the exceptions applicable for the joint rule applicable for the travel rule. To provide financial institutions sufficient time to complete their compliance programs for both rules, the effective dates of the joint rule and the travel rule are delayed until April 1 ,1 9 9 6 (see documents published elsewhere in today’s Federal Register). DATES: Comments are due by September 25,1995. ADDRESSES: Comments should be in writing and addressed to: Office of Regulatory Policy and Enforcement, Financial Crimes Enforcement Network, Department of the Treasury, 2070 Chain Bridge Road, Vienna, VA 22182, A ttention: Transmittal of Funds NPRM. Comments may be inspected between 10:00 a.m. and 4:00 p.m. at the Treasury Library, located in room 5030,1500 Pennsylvania Avenue, N.W., Washington, D.C. Persons wishing to inspect the comments submitted should request an appointment at the Treasury Library, 202/622-0990. FOR FURTHER INFORMATION CONTACT: Roger Weiner, Assistant Director, Office of Compliance and Enforcement, 202/ 622-0400; Nina A. Nichols, AttomeyAdvisor, Office of Legal Counsel, 703/ 905-3598. SUPPLEMENTARY INFORMATION: Background The statute generally referred to as the Bank Secrecy Act (Titles I and II of Pub. L. 91-508, codified at 12 U.S.C. 1829b and 1951-1959, and 31 U.S.C. 5 3 1 1 5330), authorizes the Secretary of the Treasury (the Secretary), in ter alia, to require financial institutions to keep records and file reports that the Secretary determines have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, and to implement counter-money laundering programs and compliance procedures. The Secretary’s authority to administer the Bank Secrecy Act has been delegated to the Director of FinCEN. Section 1515 of the Annunzio-Wylie Anti-Money Laundering Act of 1992 (Title XV of Pub. L. 102-550 (AnnunzioWylie)), codified at 12 U.S.C. 1829b(b), amended the Bank Secrecy Act (1) to require the Secretary and the Board jointly to promulgate, after consultation with state banking supervisors, recordkeeping requirements for international funds transfers by depository institutions and nonbank financial institutions; and (2) to authorize the Secretary and the Board jointly to promulgate regulations for domestic funds transfers by depository institutions. Section 1517(a) of Annunzio-Wylie, codified at 31 U.S.C. 5318(g) and (h), authorizes the Secretary, in ter alia, to require financial institutions to carry out anti-money laundering programs. See 31 U.S.C. 5318(h)(1). In January 1995, Treasury and the Board jointly adopted a rule (the joint rule) that imposed recordkeeping requirements with respect to transmittals of funds by banks and other financial institutions (60 FR 220, January 3,1995). Treasury also adopted a rule (the travel rule) requiring financial institutions (including banks) to include in transmittal orders certain information collected under the joint rule (60 FR 234, January 3, 1995). The joint rule contained definitions of the terms used in both rules. These rules were to become effective on January 1, 1996. 44151 Subsequent to publication of the joint rule and the travel rule, it became apparent that there was confusion within the banking industry about the application of the rules to transmittals of funds involving foreign financial institutions. Several banks and bank counsel advised Treasury and the Board that compliance with the rules was complicated by the fact that the joint rule definitions of parties to funds transfers differed from the definitions in Article 4A of the Uniform Commercial Code (UCC 4A). Because a financial institution’s obligations under the joint and travel rules depend upon its role in a particular transmittal of funds, the differences between the Bank Secrecy Act regulations definitions and UCC 4A definitions have material operational consequences. Definitions of Parties to International Transfers The joint rule, when read together with other definitions found in the Bank Secrecy Act regulations at 31 CFR 103.11, limits the definition of the term “bank” to offices located within the U.S.; thus, a foreign bank could not be an originator’s bank, intermediary bank or beneficiary’s bank. In a transfer from a foreign bank to a LT.S. bank (an inbound transfer), the foreign bank would be the originator and the U.S. bank would be the originator’s bank. UCC 4A, however, does not restrict the definition of a bank in this way; therefore, applying UCC 4A definitions to an inbound transfer, the foreign bank would be an originator’s (or intermediary) bank and the U.S. bank would be an intermediary (or beneficiary’s) bank. The joint rule added definitions of financial institutions that correspond to the UCC 4A definitions used for banks— e.g., transmittor’s financial institution, intermediary financial institution, recipient’s financial institution. These definitions resulted in further confusion because the Bank Secrecy Act regulations also limit the definition of “financial institution” to offices located in the U.S. One other source of confusion is the overlap among the terms used to refer to banks and financial institutions. In general, the travel rule obligations apply equally to banks and to nonbank financial institutions, because the terms used for financial institutions include the terms used to refer to banks. The. travel rule imposes obligations only on transmitters’ financial institutions and intermediary financial institutions; 44152 Federal Register / Vol. 60, No. 164 / Thursday, August 24, 1995 / Proposed Rules these terms include originators’ banks -and intermediary banks.1 Obligations Under the Travel Rule as Adopted Industry Concerns About Application of the Travel Rule The middle column of the chart reflects the roles of the parties to this transmittal under the rules as adopted in January 1995. The travel rule imposes the following obligations: 1. New York Bank 1, as the transmittor’s financial institution, must include in the transmittal order to New York Bank 2 the name, address and account number of German Bank 2 (the transmittor) (103.33(g)(l)(i)-(ii)). New York Bank 1 would typically include German Bank 2’s SWIFT Bank Identification Code (BIC) or its CHIPS Universal Identifier (UID) rather than its name, address and account number; however, Treasury believes that a widely-used industry code, such as a BIC, UID or routing number, would comply with the requirements, so long as the financial institution’s name, address and account number can be readily derived from its industry code. In addition, New York Bank 1 would have to include, if received, information about Japanese Bank 1 (the recipient) and California Bank (the recipient’s financial institution) (103.33(g)(l)(v)(vi)). 2. New York Bank 2, as an intermediary financial institution, must include in its transmittal order to California Bank the name, address and account number of German Bank 2 (the transmittor), if New York Bank 2 receives this information. This requirement raises significant operational concerns, because as a matter of ordinary business practice, German Bank 2 would be identified as the “instructing bank” in the order received by New York Bank 2, and would not be identified in the order executed by New York Bank 2. While the bank identified in the originator’s bank field generally is retained in subsequent transmittal orders, the identification in the instructing bank field may change, and the information may not be passed on to the next receiving financial institution. New York Bank 2 must also include information on New York Bank 1 as the transmittor’s financial institution (103.33(g)(l)(vii)). Again, New York Bank 1 would be identified as the instructing bank in the transmittal order executed by New York Bank 2, but the information might be dropped from subsequent transmittal orders. New York Bank 2 would also have to include, if received, the identity of California Bank (the recipient’s financial institution) and Japanese Bank 1 (the recipient) (103,33(g)(2)(v)-(vi)). The following hypothetical transmittal of funds (illustrated on the accompanying chart) illustrates the differences between the effect of the travel rule as published and its effect following the proposed amendments to the definitions in the joint rule. In this transfer, German Company instructs its bank, German Bank 1, to send a dollar payment to Japanese Bank 2 for credit to Japanese Company. German Bank 1 forwards the payment instructions to its correspondent, German Bank 2. German Bank 2 sends the payment instructions via SWIFT to its New York correspondent, New York Bank 1. New York Bank 1 executes a transmittal order via CHIPS to New York Bank 2. New York Bank 2 forwards the transmittal order via Fedwire to California Bank. California Bank sends the transmittal order via SWIFT to its correspondent, Japanese Bank 1. Japanese Bank 1 forwards the transmittal order to Japanese Bank 2, which credits the account of Japanese Company. Parties to transfer German Company. German Bank 1. German Bank 2. New York Bank 1. New York Bank 2. California Bank. Japanese Bank 1. Japanese Bank 2. Japanese Company. Definitions of financial institutions limited to U.S. offices (travel rule adopted in January 1995) Definitions are parallel to UCC 4A definitions of banks (pro posed amend ed travel rule) Transmittor. Transmitter's Fi. Transmittor . Intermediary FI. Transmittor’s FI. Intermediary FI. Recipient’s FI. Recipient .... Intermediary FI. Intermediary FI. Intermediary FI. Intermediary FI. Recipient’s FI. Recipient. 1In limited circumstances, a beneficiary’s bank will also have travel rule obligation?. If the recipient's financial institution is not a bank, then the bank that sends a transmittal order to the recipient’s financial institution w ill be a beneficiary’s bank and an intermediary financial institution subject to the requirements of 103.33(g)(2). 3. California Bank, as the recipient’s financial institution, is not subject to travel rule requirements. Effect of Proposed Amendments In response to banking industry concerns, Treasury and the Board have proposed amendments to the joint rule that will conform the definitions of banks that are parties to funds transfers to the definitions found in UCC 4A and that will change the definitions of the terms applicable to financial institutions so that their meanings are parallel to the definitions in UCC 4A. (See document published elsewhere in today’s Federal Register.) The third column of the accompanying chart reflects the effect of the proposed amendments for compliance with the travel rule. When the definitions applicable to financial institutions are conformed to the definitions in UCC 4A, all of the U.S. banks in the hypothetical transfer are treated as intermediary financial institutions. As an intermediary financial institution, rather than a transmittor’s financial institution, New York Bank 1 is not required under the travel rule to pass on the specified information unless it actually receives it from German Bank 2. More importantly, the redefinition of the parties to the transmittal means that the information that must be passed on pertains to German Company (the transmittor), German Bank 1 (the transmittor’s financial institution), Japanese Bank 2 (the recipient’s financial institution) and Japanese Company (the recipient). These definitions are more in accord with the economic reality of the transaction and with current industry practice, and the information required is more likely to be included in the transmittal orders. With respect to the transmittal from California Bank, Treasury does not believe that the requirements placed on the U.S. bank in an outbound transfer significantly increase the cost of complying with the travel rule. Although California Bank, as an intermediary financial institution, would have to include information in its transmittal order to Japanese Bank 1, this information would typically be included as a matter of standard practice. Furthermore, California Bank would not have the verification obligations that it has as a beneficiary’s bank. When considered in combination with the proposed amendments to the joint rule, Treasury believes that there is an overall reduction in burden. Federal Register / Vol. 60, No. 164 / Thursday, August 24, 1995 / Proposed Rules Effect on Law Enforcement; Ongoing Review Treasury believes that these proposed changes, while reducing the burden of compliance, will maintain the usefulness for law enforcement of the information passed on in transmittal orders pursuant to the travel rule. While the requirement placed on an intermediary financial institution is limited to information that it receives, the information passed on should be of greater use because it will pertain to the true transmittor and recipient in the transaction. Furthermore, the financial institutions that must be identified will more likely be ones with which the transmittor and recipient have account relationships. Under the rule adopted in January, transmittor’s financial institutions and intermediary financial institutions may not be required to pass along information pertaining to these parties when a transmittal involves a foreign financial institution. Under the proposed amendments, an intermediary financial institution will be required to pass on information to a receiving financial institution even when the receiving financial institution is located outside the U.S. Treasury believes that in the interests of international cooperation in law enforcement, and recognizing the use for illicit purposes of the global payments system, there is a law enforcement benefit to this requirement. In addition to the potential availability of information that is forwarded to foreign financial institutions, this rule lays a foundation for international cooperation in setting standards for improving law enforcement efforts while imposing a minimal administrative burden on financial institutions. As stated in the joint and travel rules when they were adopted, Treasury will monitor the effectiveness of the rules to assess their usefulness to law enforcement and their effect on the cost and efficiency of the payments system. Within 36 months of April 1,1996, Treasury will review the effectiveness of the travel rule and will consider making any appropriate modifications. Addition of Exceptions This proposed rule also proposes the addition of new § 103.33(g)(3), which incorporates exceptions to the joint rule that appear in §§ 103.33(e)(6) and 103.33(f)(6). Those sections provide that a transmittal of funds is not subject to the requirements of the joint rule if the parties to the transmittal are both banks or brokers and dealers in securities, or their subsidiaries, or government entities, or if the transmittor and recipient are the same person and the transmittal involves a single bank or broker/dealer. These exceptions apply to the travel rule as well. Request for Comment These proposed amendments to the travel rule specify that the requirements of the travel rule apply only to financial institution offices that are located within the U.S. Treasury requests comments on these proposed amendments, and comments on the effect oir the travel rule of the proposed amendments to the joint rule. Executive Order 12866 Treasury finds that these proposed amendments to a final rule are not a significant rule for purposes of Executive Order 12866. The final rule is not anticipated to have an annual-effect on the economy of $100 million or more. It will not affect adversely in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local, or tribal governments or communities. It creates no inconsistencies with, nor does it interfere with actions taken or planned by other agencies. Finally, it raises no novel legal or policy issues. A cost and benefit analysis is therefore not required. Regulatory Flexibility Act Pursuant to section 605(b) of the Regulatory Flexibility Act, Treasury hereby certifies that these proposed amendments to the final rule will not have a significant economic impact on a substantial number of small entities. The proposed amendments eliminate uncertainty as to the application of the final rule and reduce the cost of complying with the rule’s requirements. Accordingly, a regulatory flexibility analysis is not required. Paperwork Reduction Act The collection of information required by the final rule whose amendment is proposed in this document was submitted by the Treasury to the Office of Management and Budget in accordance with the requirements of the Paperwork Reduction Act (44 U.S.C. 3504(h)) under control number 15050063. See 60 FR 237 (January 3,1995). The c Q l l e c t i o n is authorized, as before, by 12 U.S.C. 1829b and 1959 and 31 U.S.C. 5311-5330. The changes to the final rule proposed in this document w ill eliminate information collection requirements that were required by the final rule. 44153 Therefore no additional Paperwork Reduction Act submissions are required. Unfunded Mandates Reform Act of 1995 Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 10 4 -4 (Unfunded Mandates Act), signed into law on March 2 2 ,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. Treasury has determined that it is not required to prepare a written budgetary impact statement for the proposed amendments, and has concluded that the proposed amendments are the most cost-effective and least burdensome means of achieving the stated objectives of the rule. 1 List of Subjects in 31 CFR Part 103 Administrative practice and procedure, Banks, banking, Brokers, Currency, Foreign banking, foreign currencies, Gambling, Investigations, Penalties, Reporting and recordkeeping requirements, Securities. Amendment For the reasons set forth in the preamble, 31 CFR Part 103 is proposed to be amended as set forth below: 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. 5311-5330. 2. In § 103.33, paragraphs (g) introductory text and (g)(1) introductory text are revised and paragraph (g)(3) is added to read as follows: § 103.33 Records to be made and retained by financial Institutions. h * * * * (g) 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 (g): (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: * * * * * 44154 Federal Register / Vol. 60, No. 164 / Thursday, August 24, 1995 / Proposed Rules (3) Exceptions. The requirements of this paragraph (g) shall not apply to transmittals of funds that are listed in paragraphs (e)(6) or (f)(6) of this section. Dated: July 31,1995. Stanley E. Morris, Director. Financial Crimes Enforcement Network. [FR Doc. 95-20845 Filed 8-23-95; 8:45 am] BILLING CODE 4820- 03-P
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