Full text of Federal Reserve Bank of New York Circulars : 10655. Enhanced Recordkeeping Requirements for Certain Wire Transfers

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FEDERAL RESERVE BANK
OF NEW YORK

[

Circular No. 10655 ~|
Septem ber 1, 1993

J

ENHANCED RECORDKEEPING REQUIREMENTS FOR
CERTAIN WIRE TRANSFERS
— Proposed Amendments to Regulation S
— Proposed Amendments to the Treasury’s
Bank Secrecy Act Regulations
C o m m e n ts I n v ite d b y O c to b e r 4 , 1 9 9 3

To All Depository Institutions, Bank Holding Companies and Broker!Dealers
in the Second Federal Reserve District, and Others Concerned:

The following statement has been issued by the Board of Governors of the Federal Reserve System:
The Federal Reserve Board has requested public comment on proposed amendments to Regulation S (Reimbursement
for Providing Financial Records; Recordkeeping Requirements for Certain Financial Records) regarding enhanced
recordkeeping requirements for certain wire transfers by financial institutions.
These amendments would incorporate by reference certain proposed provisions of 31 CFR 103.33(e), (f), and (g).
Comment is requested by October 4, 1993.
The recordkeeping amendments are divided into three sections:
• requirements for depository institutions;
• requirements for nonbank financial institutions that do not generally maintain accounts for their customers; and
• requirements for securities broker/dealers, which generally maintain account relationships with their customers.
Generally, institutions are required to maintain records of funds transfers that they process.
To the extent that an institution handles a funds transfer for a party that does not hold an account with the institution,
the institution is required to document proof o f the identity o f the party o f the transfer and retain pertinent information.
To the extent that a bank or broker/dealer holds an account for its customer, it is presumed to have information that
identifies the customer and therefore need not obtain and retain this information under this proposal.
The proposed amendments are developed jointly with the Department of the Treasury to implement revisions to the Bank
Secrecy Act as required by the Annunzio-Wylie Anti-Money Laundering Act of 1992.

Enclosed — for depository institutions, bank holding companies and broker/dealers in this District — is the
text of 1) the Board o f Governors’ proposed amendments to its Regulation S, and 2) a joint proposal by the Board
of Governors and the Department of the Treasury amending the Bank Secrecy Act Regulations relating to
recordkeeping for funds transfers and transmittals of funds by financial institutions, both which have been submitted
to the F e d e r a l R e g iste r.
Comments on both proposals should be submitted by October 4, and should be sent separately to the Board
and to the Treasury Department, as specified in the notices, or to Carol W. Barrett, Vice President, Funds and
Securities Group.




W

il l ia m

J.

M

cD o n o u g h

P r e s id e n t.

,

FEDERAL RESERVE SYSTEM
12 CFR Part 219
[Regulation S; Docket No. R-0807]
Reimbursement for Providing Financial
Records; Recordkeeping Requirements
for Certain Financial Records
AGENCY:

Board o f

ACTION:

N o tice

SUMMARY:
(Board)

Governors

of proposed

The B oard o f
is

req u estin g

req u irem en ts

Treasury

p ro v isio n s

of

sets

12 CFR P a r t
the

in

th is

su b sta n tiv e

B,

p ro v isio n s

in v o lv ed

tran sfer w ill

have

The a m o u n t a n d t y p e
depend upon t h e
the p a r t ic u la r
to

the

to
of

C ir.




No.

w hich
set

N o tice,

the

tran sfer,

10655]

of

the

the

forth

for

the

or

the

J o in t

at

N o tice.

fin a n cia l

in tern a tio n a l

w ire

in form ation .

and r e t a i n e d w i l l

in stitu tio n ,

rela tio n sh ip

fin a n cia l

in stitu tio n .
to

T h is

cross-referen ces

and t h e

a p p lica b le

by

su b sta n tiv e

co d ifica tio n

certa in

co llected

fin a n cia l

of

R egister

req u irem en ts.

a d om estic

are

P ro p o sed R ulem aking,

each d om estic

and r e t a i n

fin a n cia l

Departm ent

Federal

sets

in

by

req u irem en ts

ex ten siv ely

forth

in fo rm a tio n

req u irem en ts

of

System

record k eep in g

Board and t h e

N o tice)

eith er

of

System .

R eserve

transfers

reg u la tio n

co llect

tr a n s a c tio n w ith

record k eep in g

[Enc.

in

nature
w ire

Federal

record k eep in g

a proposed

Under t h e J o i n t
in stitu tio n

the

w ire

issu e

(J o in t

Subpart

R eserve

record k eep in g

by t h e

th e proposed

219,

of

A com panion N o t i c e

Board

forth

Federal

on e n h a n c e d

certa in

jo in tly

elsew h ere

T r e a s u r y and t h e

N o tice

to

(T reasu ry).

p u b lish ed

Governors

These prop osed

b ein g p rom u lgated

the

ru lem ak ing.

comments

rela tin g

in stitu tio n s.

of

its

of

role

the p a r tie s

Th e

in tern a tio n a l

in

w ire

2

tran sfers
January

are

1,

r e q u i r e d by s t a t u t e

1994.

For e a s e

of

to

t o make t h e p r o p o s e d

a p p lica b le

b oth d om estic

effectiv e

DATES:

on D ecem b er 3 1 ,

N o tice

E a c h com m en t

(as

and i n t e r n a t i o n a l

to

both

the

and t h e

req u irem en ts

w ire

tran sfers

1993.
O ctober

on t h e p r o v i s i o n s

s u p p le m e n t e d by t h e J o i n t

sep a ra tely

before

Treasury

record k eep in g

C o m m e n ts a r e d u e o n o r b e f o r e

ADDRESSES:

effectiv e

im p lem en tation ,

Board p r o p o s e
to

be

Treasury

of

N o tice)

and t h e

4,

1993.

th is

proposed

sh ould

Board a t

be

the

sent

fo llo w in g

addresses:
Treasury:

Mr.

Enforcem ent,
1500

Departm ent

P en n sylvan ia

Board:
the

Mr.

Federal

Secretary,
sh ould

5:15 p .m .,
hours.

DC

to

to

and t o

Treasury,

Secretary,

20th

Governors

of

from th e

In sp ection

courtyard

of

Board,

room B -1 1 2 2

the

C om m ents:

Avenue,

Reserve

8:45

secu rity

entrance

a.m .

control

on 2 0 th

of

NW.,

W iles,

room o u t s i d e

System ,
be

and
of

those

room a r e

Street

betw een

NW.

C o m m en ts may b e

9 a.m .

G overnors

C o m m en ts may a l s o

2 0 t h and C o n s t i t u t i o n
betw een

20220;

t o Mr.

Federal

control

A v en u e and C S t r e e t ,

DC

and C o n s t i t u t i o n

R -0807.

secu rity

F in an cial

Board o f

B o a rd 's m ailroom b etw een
the

of

Room 5 0 0 0 A n n e x ,

Co m m en ts a d d r e s s e d

D o c k e t No.

the

O ffice

NW ., W a s h i n g t o n ,

System ,

20551.

Board o f

C o n stitu tio n




the

B o th t h e m a ilr o o m and t h e

a ccessib le

R eserve

Avenue,

R eserve

refer

d eliv ered

of

D irecto r,

W i l l i a m W. W i l e s ,

W ashington,

in

P eter D jin is ,

in sp ected

Avenue,

and 5 p . m . ,

at

the

Federal

NW., W a s h i n g t o n ,

as p rovid ed

in

Part

DC,
261

3

of

the

B oard 's

R ules

12 CFR 2 6 1 . 8 .
of

Co m m en ts may a l s o

T r e a s u r y b e t w e e n 10 a . m .

w hich i s

lo ca ted

W ashington,

in

DC.

(202)

and 4 p .m .

room 5 0 3 0 ,

request

of

be in s p e c t e d

1500

Persons w ish in g

su bm itted sh o u ld
at

R egard in g A v a i l a b i l i t y

to

in

the

In form ation ,
at

the

Departm ent

T reasury

L ib rary,

P e n n s y lv a n ia Avenue,
in sp ect

an a p p o i n t m e n t

at

the
the

N W.,

comments
Treasury

L ibrary

622-0990.

FOR FURTHER INFORMATION CONTACT:
Treasury:

A.

R eg u la tio n s
of

the

C arlos

S ectio n ,

Treasury,

Board:

G ayle

O p eration s
A ssociate

Correa,
O ffice

(202)

B rett,

M anager,

S en ior A tto rn ey ,

Legal

Governors

Federal

im paired o n ly ,
D orothea

Thompson

and 1 9 5 1 - 1 9 5 9 ,

and f i l e

(202)

in

prim ary p u r p o se
source,




to

reports

of u sefu ln ess

volu m e

(202)

452-2934;

452-3625,

D iv isio n ,
R eserve

(Pub.

req u ire

that

the

crim in a l,
of

the

and
D epartm ent

(202)

of

O liv er

the

B o u tilier,

Board o f

For t h e
for

Ban k

Irela n d ,

o r E l a i n e M.

452-2418,

System .

R eserve

h earin g

Deaf

(TDD),

452-3544.
The s t a t u t e
L.

a n d 31 U . S . C .

T reasury

R ules

E nforcem ent,

D iv isio n

T elecom m u nication D e v ic e

t h e Bank S e c r e c y A c t

the

F ed w ire,

(202)

SUPPLEMENTARY INFORMATION:

of

F in an cial

System s

G eneral C ounsel

the

of

D irecto r,

622-0400.

an d Payment

of

A ssista n t

91-508,

co d ified

5311-5328)

fin a n cia l
Secretary

g en era lly
at

a u th o rizes

in stitu tio n s
d eterm ines

referred
12 U . S . C .
the
to

and movement o f

funds

is

in to

to

keep

and o u t

of

1829b

records

have a h igh

id en tify

as

Secretary

t a x and r e g u l a t o r y m a t t e r s .

B an k S e c r e c y A c t

to

degree

The
the

the

country

4

and th r o u g h

d om estic

fin a n cia l

A ct was amended l a s t
L au n derin g A ct

of

D evelopm ent A ct
as

the

the
of

1992

1992,

of

Treasury
w ire

to

in

by in s u r e d
th at

Eoard t o

in tern a tio n a l

the
issu e

a p p ly

to

31 CFR 1 0 3 . 1 1 ( i ) ,

w hich

in clu d e

p rovid e

and d e a le r s

check

ca sh in g

and b u s i n e s s e s
checks

that

or o th er

check

cash in g

these

req u ired

issu e

sim ila r

to

B oard and t h e

a h igh

d om estic

degree

of

in v estig a tio n s

or

reg u la tio n s

be e f f e c t i v e
for

before

as

d ep o sito ry
as w e ll

as

the

u sefu ln ess

tax,

or r e g u la to r y

in v estig a tio n s

of

January

1,

d efin ed

in stitu tio n s
that

b u sin esses,

referred

to

as

In p r e s c r i b i n g

T r e a s u r y m ust

records

or p r o c e e d in g s

in

travelers'

b u sin esses).

th ese

to

b u sin esses

(c o l l e c t i v e l y

Board and t h e

co n sid era tio n

regard

in tern a tio n a l

money t r a n s m i t t i n g

and money t r a n s m i t t i n g

the

the

w ith

in stitu tio n s

in su red

in stru m en ts

the

tran sfers.

whenever

fin a l

in to




funds

in stitu tio n s
have

an d

r e q u ir e m aintenance

o r red eem money o r d e r s ,

regu lation s,

Treasury

for

secu rities,

serv ices,

the

h ereafter

1 9 9 2 Ame ndm en t r e q u i r e s

fin a n cia l

in

to

req u irem en ts

req u irem en ts

w ill

and b r o k e r s

to

the

or r e g u la to r y

tra n sa ctio n s

Th e r e c o r d k e e p i n g

tra n sa ctio n s

a u th o rize

and i n t e r n a t i o n a l

such record s
tax

and Community

(referred

regu lation s

d ep o sito ry

In a d d i t i o n ,

T r e a s u r y and t h e

1994.

102-550

record k eep in g

crim in a l

p roceed in gs.

the

L.

th e H ousing

sp ecifica lly

d om estic

p rom u lgate

d eterm ine

u sefu ln ess

XV o f

1 9 9 2 A m en dm en t a u t h o r i z e s

transfers

agen cies

Pub.

to

T h e Ban k S e c r e c y

th e A n n u n zio-W ylie A nti-M oney

to p r e s c r ib e

regardin g
The

in

T itle

1992,

A m en dm e nt )

Board j o i n t l y
records

year

in stitu tio n s.

in

take

crim in a l,

and t h e

effect

5

the

reco rd k eep in g w i l l

payment

system .

w ould be

sim p ler

and i n t e r n a t i o n a l
record k eep in g

h a v e on t h e

T reasury have

to

regu lation s

issu e

funds

proposed

tran sfers

The number o f w i r e
For exam ple,

transfers

the

aggregate

d a ily

d o lla r

amount

aggregate

d a ily

d o lla r

amount o f

Mo n ey l a u n d e r i n g

Federal

and o t h e r

a c tiv ities

in v o lv in g

tran sfers.

d om estic

agen cies.

the

to

in

tra cin g

a ssist

in

the
in

th e Board b e l i e v e
h igh d egree

of

in v estig a tio n s




component

illeg a l

th is

w ire

sam e.

d a ily

crim in a l,

w ith

is

average

drug
th e w orld ,

tran sfers.

t h r o u g h money

lau n d erin g

paym ents
several

Federal

of

recent

law
that

and w i l l

in d iv id u a ls

A cco rd in g ly ,

tax,

by w i r e

ru lem ak ing w i l l

a ctiv ities

th ese

and

Proceeds

Treasury b e lie v e

and p r o s e c u t i o n

o f money l a u n d e r i n g

the

a sig n ifica n t

proposed

illeg a l

a c tiv itie s.

in

that

and o t h e r

th a t m ain ten an ce o f

u sefu ln ess

the

of

in tern a tio n a l

of

b oth d om estic
because

throughout

The B oard and t h e

the p roceed s

it

and a peak

b een docum ented in

under

th at

tr illio n .

b eliev e

an d /or

id en tifica tio n

such

$1

in v o lv es

has

be r e ta in e d

u seful

in volved

over

con d u cted by T rea su ry

enforcem ent
records

$800 b i l l i o n

may b e p r o c e s s e d

Such a c t i v i t y

in v estig a tio n s

270 ,0 0 0 ,

a ctiv ity

a g en cies

the

a v e r a g e number o f w i r e

a v ita l

t h e money l a u n d e r e d

from i l l e g a l
schem es

is

com p leted

1992 was
of

crim in a l

law e n f o r c e m e n t

amount o f

in

d a ily

made o v e r F e d w i r e

for

su b sta n tia lly

of

decided

sim u lta n eo u sly ,

be

transfers

tra ffic k in g

and e f f i c i e n c y

The B o a r d a n d t h e

req u irem en ts w i l l

su b sta n tia l.

cost

T r e a s u r y and

records w ill

have a

or r e g u la to r y

o p era tio n s.

F urther,

the

be

6

T rea su ry and t h e

Board b e l i e v e

req u irem en ts w i l l
cost

or th e

not

of

of

th e paym ents

the proposed

the

scope of

th is

in tera c tio n

w ith

su b sta n tiv e

req u irem en ts

w ith

other

3 1 CFR P a r t
regu lation s

the

jo in tly

The c u r r e n t

reim bursem ent

to

w ill

Board e x p e c t s
subpart A in

to
the

ru le

la u n d erin g

jo in tly

near
of

B to

of

and i t s

pursuant

of

T reasu ry's

Treasury,

219,

to

Board i s

w hich w i l l
in

3 1 CFR

con cernin g

for

assem b lin g

the

R igh t

12 CFR P a r t

th is

req u ired

the

req u irem en ts

to

A of

be c o d if ie d

Board i s

219,

the

to

and

F in an cial

219.

(T h e

n ew ly d e s ig n a t e d

fu tu r e .)
the

revised

N o tice,

p rovid es

proposed

p u b lish ed

of

req u irem en ts w ith

regard

in stitu tio n s,

ru le.

proposed
to

the

in

d escrip tio n

the proposed
jo in tly

ru le.

elsew h ere

an e x t e n s i v e

prom u lgate

in su red d e p o s ito r y

the

12 CFR P a r t

en tities

regu lation s,

12 CFR P a r t

p rescrib ed

and u p d a t e

req u irem en ts
to

w ith

in stitu tio n s

records

rev ise

The J o i n t

a u th o rized

Because

become su b p a r t

Summary d e s c r i p t i o n

Federal R eg ister

text

fin a n cia l

fin a n cia l

P rivacy A ct,




103.

a d d a new s u b p a r t

cross-reference

rep ortin g

an ti-m on ey

jo in t

as p art

to

is

proposed

by a f f e c t e d

reg u la tio n s,

p rop osin g

su b sta n tiv e

con fu sion

Bank S e c r e c y A ct
in

on t h e

system .

ru le w ill

th ese

p ro v id in g

im pact

the proposed

p rescrib e

103.

adverse

of

regu lation s

Part

other

record k eep in g

ru le.

To m i n i m i z e p o t e n t i a l
regardin g

th ese

have a s ig n if ic a n t

effic ien cy

C o d ifica tio n

th at

of

the

W hile th e

record k eep in g

d o m estic w ire
Board i s

to d a y 's

Board
and

transfers

sp ecifica lly

by

req u ired

to

rep ortin g
in su red

p rom u lgate

jo in tly

req u irem en ts

d ep o sito ry

for

The B o a rd i s

record k eep in g

and r e p o r t i n g

tran sfers

by nonbank

a u th o rity

under o th er

reflected

in

Board

for

Treasury
nonbank

for

fin a n cia l
affected

however,

a r e w elcom e.

payment
w ill

C om m ents:

ru le

for

A ll

for




of

h a v e on t h e

to

C om m en ts

a ctio n .

the

Oral

the

N eith er

cost

p r o p o s e d by
tran sfers

by

regu latory

aspects

of

w ill

after

au th o rity .

the proposed

c o v e r e d by t h e

and t h e

effects

and e f f i c i e n c y

the

be

Board s p e c i f i c a l l y

records

before

not

the

of

clo sin g

that
the
date

comments m ust b e r e d u c e d

be tr e a te d
the

219.

fin a n cia l

Board a n d /o r T r e a s u r y

receiv ed

w ill

12 CFR P a r t

is

c o m p lia n c e by nonbank

and t h e

receiv ed

co n sid ered .

co n sid era tio n

future

u sefu ln ess

lim ita tio n

req u irem en ts

B oard 's

Th e T r e a s u r y

comments

and s u b m it t e d

co n sid era tio n .

the

th is

p r o p o s e d by t h e

w ire

T herefore,

the proposed
in

T h is

those

Com m en ts o n a l l

r u l e m ight

system .

(T reasury has

B of

law e n f o r c e m e n t p u r p o s e s

be c a r e f u l l y

w ritin g

la te

on t h e

for

d o m estic w ire

by nonbank

to

by b o th

to p rom u lgate

req u irem en ts

tran sfers

and

fin a n cia l

for

subpart

id en tic a l

lim ita tio n

regu lation

the proposed

w ire

w ith

of

proposed

transfers

in stitu tio n s.

in stitu tio n s.

in stitu tio n s

comment

a u th o rized

(and i n t e r n a t i o n a l )

S u bm ission

request

and nonbank

proposed

are

d om estic

by t h i s

w ire

req u irem en ts

and r e p o r t i n g

fin a n cia l

record k eep in g

sta tu to ry p r o v isio n s.)

in tern a tio n a l

in stitu tio n s,

not

fin a n cia l

B oard 's

The r e c o r d k e e p i n g

Treasury

in tern a tio n a l

in stitu tio n s

in stitu tio n s.

the

w ith

clo sin g

as p o s s ib le

to

to

receiv e

date

and t o o

su ggestion s

Board n or T r e a su r y w i l l

recogn ize

8

as

co n fid en tia l

any p e r s o n
d isclo sed

any m a t e r i a l s

su bm ittin g
to

or

com m ents,

com m ents.

the p u b lic

in clu d in g

Any m a t e r i a l

should not

be

not

in clu d ed

t h e n am e o f

in ten d ed

in

the

to

be

com m ents.

INITIAL REGULATORY FLEXIBILITY ANALYSIS
As r e q u i r e d b y
r e a s o n s why a c t i o n
" su ccin ct

by th e

statem ent

the proposed

5 U .S .C .

ru le"

of

agency

the

are

in

in stitu tio n s

subject

to

th eir

size.

of

ru le

o p eration s
fin a n cia l
u sefu ln ess

to

evade th e

these

and l e g a l

in

th is

Treasury propose

the

to

a ll

B an k S e c r e c y A c t ,
An e x e m p t i o n
it

for

crim in a l,

as

b a sis

for,

im plem ented,

sm all

tax

and a

fin a n cia l

w o u ld p e r m i t money

for

the

the

en tities

by u s in g

or

w ould

la u n d erin g

T h is w ould s i g n i f i c a n t l y

records

of

p ream b le.

that

record k eep in g p r o c e s s

in stitu tio n s.
of

" d escrip tio n

co n sid ered "

of,

be a p p lic a b l e

not be a p p ro p ria te b eca u se

a

b ein g

found e ls e w h e r e

req u irem en ts

regard less

is

o b jectiv es

The B o a r d and t h e
th is

603(b),

sm all

d im in ish

the

regu latory

in v estig a tio n s.
Th e s m a l l
proposed r u le

in clu d e

money t r a n s m i t t i n g
im pact

on s m a l l

in stitu tio n s
h old ers

to

b eliev e




that

sm all

that
banks

b u sin esses.

en tities,

th at

use

record k eep in g

e n tities

and many c h e c k

the proposed

records

req u irem en ts.

be a f f e c t e d

In o rd er

send or r e c e iv e

ex istin g

w ill

to

ca sh in g

to m in im ize

the

r u l e w ould a llo w

tra n sm itta l
sa tisfy

orders

some o f

The B o a rd an d t h e

t h e p r o p o se d r u l e w ould

by t h i s
and
econom ic
fin a n cia l

for account

the

T r e a s u r y do n o t

im p ose r e p o r t i n g

or

9

record k eep in g
p ro fessio n a l

burdens
sk ills

on s m a ll

not

en tities

a v a ila b le

to

that

req u ire

sp ecia lized

them .

LIST OF SUBJECTS IN 12 CFR PART 219
Banks,
req u irem en ts,

banking,

R ep ortin g

and r e c o r d k e e p in g

F oreign b an kin g.

For th e
Part

Currency,

reasons

set

out

in

t h e pream b le,

be amended a s

set

forth

12 CFR

219

is

proposed to

b elow .

PART 2 1 9

--

REIMBURSEMENT FOR PROVIDING FINANCIAL RECORDS;

RECORDKEEPING REQUIREMENTS FOR CERTAIN FINANCIAL RECORDS
1.

The t i t l e

of

part

219

is

revised

to

read as

set

forth

above.

2.
S e c t i o n s 2 1 9 . 1 t h r o u g h 2 1 9 . 7 a r e d e s i g n a t e d a s S u b p a r t A,
a new S u b p a r t A h e a d i n g i s a d d e d t o r e a d a s f o l l o w s :
Subpart A - - R eim bursem ent t o
P rovid in g F in a n c ia l Records

F in an cial

In stitu tio n s

and

for

3.
The a u t h o r i t y c i t a t i o n f o r P a r t 2 1 9 i s d e s i g n a t e d a s t h e
a u t h o r i t y f o r S ubpart A and c o n t i n u e s t o r e a d a s f o l l o w s :
A uth ority:
4.

12 U . S . C .

Subpart A i s

§ 219.1

Governors
sectio n
U .S .C .

amended by r e v i s i n g

A uth ority,
T his
of

1115
3415).

reim bursem ent

3415.

purpose

subpart

the
of

Federal
th e R ight

It
of

fin a n cia l

records

S ectio n

read as




21 9 .2

fo llo w s:

R eg u la tio n
R eserve
to

to
is

in

S is

System

F in an cial
the

read as

fo llo w s:

by th e

Board o f

assem b lin g

a governm ent

issu ed
(the

Board)

P r iv a c y Act

rates

rea so n a b ly n e c e ssa r y

in stitu tio n s

to

and s c o p e .

esta b lish es

fin a n cia l

5.

of

§ 2 1 9 .1

(th e A ct)

and c o n d i t i o n s

costs

d irectly

or p ro v id in g

a u th o rity

amended by r e v i s i n g

under

the

(12

for

i n c u r r e d by

custom er

pursuant

to

in trod u ctory

th e A ct.
text

to

10

§ 219.2

D efin itio n s.
For th e p u rp o se s

d efin itio n s

sh a ll

6.

B is

Subpart

Subpart

B --

added t o

Part

Sec.
219,21

A uth ority,

219.22

D efin itio n s.

219.23

R ecord k eep in g

2 1 9 .2 4 .

R eten tion

of

purpose

A uth ority,

of

of

the

tran sfers

by

fin a n cia l

in stitu tio n s.




fo llo w s:

R equirem ents

for

Funds

for

Funds

req u irem en ts.

(3 ) .

R eg u la tio n
21(b)

1829b),
of

as

1992

by in s u r e d

R equirem ents

S is
of

issu ed

the

(P u b .L .

Federal

102-550,

Secretary

of

and r e p o r t i n g
d ep o sito ry

req u irem en ts

d ep o sito ry

by th e

Board

D ep osit

amended by t h e A n n u n z io - W y l ie

Board and T r e a s u r y

and r e p o r t i n g
in su red

as

and s c o p e .

record k eep in g

tran sfers

req u ires

record k eep in g

and

t h e B oard and t h e

p rescrib e

d om estic w ir e
w hich a l s o

read

and s c o p e .

sectio n

A nti-M oney L au n derin g Act

to

to

and R e p o r t i n g
o f Funds

purpose

(12 U . S . C .

w hich a u t h o r iz e s

fo llo w in g

Funds

1 8 2 9 b (2)

subpart

a u th o rity

In su ra n ce Act

the

p eriod .

12 U . S . C .

T h is

jo in tly

219

and r e p o r t i n g

Subpart B - - R ecord k eep in g
T r a n s f e r s and T r a n s m it t a ls

under th e

subpart,

R e c o r d k e e p in g and R e p o r t i n g

and T r a n s m it t a ls

§ 219.21

th is

ap p ly:

T ransfers

A u th ority:

of

for

X V ),

Treasury

req u irem en ts

in stitu tio n s;

jo in tly

in stitu tio n s

The d e f i n i t i o n s

the

T itle

for

and

to p rescrib e

in tern a tio n a l

w ire

and by nonbank

and r e c o r d k e e p i n g

and

11

rep ortin g

req u irem en ts

referenced

in

p ro m u lg a ted and a d m in is te r e d by th e
are c o d ifie d

in

record k eep in g

3 1 CFR 1 0 3 . 1 1 ;

and r e p o r t i n g

have a h igh

degree

§ 219 .2 2

jo in t




a ctiv ities

u sefu ln ess

in

(f)

tax

jo in tly

Treasury
and

a ssist

and a r e

crim in a l,

are

(g).
in

and
Such

the

d eterm ined
or

to

regu latory

or p roceed in gs.

D efin itio n s.
The

the

B oard and t h e

req u irem en ts w i l l

o f money l a u n d e r i n g

in v estig a tio n s

subpart

and 1 0 3 . 3 3 ( e ) ,

p ro secu tio n

of

th is

fo llo w in g

au th o rity

of

term s
the

are

d efin ed

Board and t h e

in

T reasury:

A ccept.
B en eficia ry .
B e n e f i c i a r y 1s b a n k .
E xecu tion
Funds

date.

tran sfer.

In term ed ia ry bank.
In term ed iary

fin a n cia l

in stitu tio n .

O rig in a to r.
O rig in a to r's

bank.

Payment d a t e .
Payment o r d e r .
R e c e iv in g bank.
R eceiv in g

fin a n cia l

in stitu tio n .

R ecip ien t.
R ecip ien t's
Sender.

fin a n cia l

31 CFR 1 0 3 . 1 1

in stitu tio n .

under

1 2

T ran sm ittal

of

funds.

T ran sm ittal

order.

T ra n sm itto r.

§ 219.23

T r a n s m i t t e r *s

fin a n cia l

R ecord k eep in g

and r e p o r t i n g

(a)

and i n t e r n a t i o n a l

D om estic

in su red

d ep o sito ry

in stitu tio n s.

jo in tly

a u th orized

to

req u irem en ts
in su red
that

for

d ep o sito ry

u sefu ln ess

in

crim in al,

p roceed in gs.

1 0 3 .3 3 (e)

ap p ly

of

th is

on ly

to

record k eep in g

whenever

records

tax,

or r e g u la to r y
are

subpart,
funds

tran sfers

has

a h igh

transfers

are

of

in v estig a tio n s
at

by

d eterm ine

degree

or

31 CFR 1 0 3 . 3 3 ( e ) .

the p r o v is io n s

transfers

Treasury

agen cies

co d ified

by

and r e p o r t i n g

funds

the

such

These r e g u la t io n s

For t h e p u r p o s e s

funds

and i n t e r n a t i o n a l

in stitu tio n s

th e m ain ten an ce o f

req u irem en ts.

Th e E o a r d a n d t h e

prom u lgate

d om estic

in stitu tio n .

of

by in s u r e d

31 CFR
d ep o sito ry

in stitu tio n s.
(b)
in stitu tio n s

In tern a tio n a l
other

Board and t h e
rep ortin g

Treasury

of

funds

and d e a l e r s

r e d ee m money o r d e r s ,
in stru m en ts.
the

Treasury

crim in a l,




in su red
are

by

in

fin a n cia l

secu rities,

In p r e s c r i b i n g
take

tax,

or

in to

account

regu latory

the

bv

fin a n cia l

for

in tern a tio n a l
in clu d in g

and b u s i n e s s e s
or oth er

th at

the

u sefu ln ess

these

of

issu e

or

sim ila r

req u irem en ts,

in v estig a tio n s

Th e

to prom u lgate

in stitu tio n s,

checks

these

funds

in stitu tio n s.

req u ired

req u irem en ts

travelers'

of

d ep o sito ry

jo in tly

and r e c o r d k e e p in g

tra n sm itta ls
brokers

than

tra n sm itta ls

B oard and
records

or p ro ceed in g s

and

in

13

the
of

effect

the

record k eep in g w i l l

th e payment

1 0 3 .3 3 (f)

and

p ro v isio n s

of

in tern a tio n a l
other

than

§ 219.24

system .
(g).

These r e g u la t io n s

For th e p u r p o se s

3 1 CFR 1 0 3 . 3 3 ( f )
tra n sm itta ls

in su red

of

d ep o sito ry

and

(g)

funds

are

th is

co d ified
subpart,

ap p ly o n ly

by

and e f f i c i e n c y

fin a n cia l

at

31 CFR

the

to
in stitu tio n s

in stitu tio n s.

records

that

are

req u ired

subpart

sh a ll

be

retain ed

for

records

sh a ll

be

filed

stored

a ccessib le

w ith in

co n sid era tio n
has

of

cost

R eten tio n p e r io d .
A ll

that

h a v e on t h e

the

ex p ired

to be r e t a i n e d

or

a p eriod
in

sin ce

by t h i s

the

the

of

be r e t a in e d
fiv e

of

record,

tim e,
and t h e

r e c o r d was m ade.

part

sh a ll

by t h i s

years.

s u c h a way a s

a reason ab le p erio d
nature o f

to

to

A ll
be

ta k in g
amount

in to
of

Any r e c o r d s

b e made a v a i l a b l e

these

to

tim e
req u ired

the

upon r e q u e s t .
By o r d e r o f
R eserve




System ,

August

the
19,

Board o f

Governors

of

the

Federal

1993.

(Siqnec) YV

Ici

v7

' . . ' S t 5C

W i l l i a m W. W i l e s
S e c r e t a r y o f t h e Board

Board

FEDERAL RESERVE SYSTEM
12 CFR PART 219
DEPARTMENT OF THE TREASURY
31 CFR Part 103
PROPOSED AMENDMENT TO THE
BANK SECRECY ACT REGULATIONS
RELATING TO RECORDKEEPING FOR FUNDS
TRANSFERS AND TRANSMITTALS OF FUNDS
BY FINANCIAL INSTITUTIONS
AGENCIES:

Department of the Treasury; Board of Governors of the

Federal Reserve System.
ACTION:
SUMMARY:

Notice of proposed rulemaking.
This Notice is published jointly by the Department of

the Treasury (Treasury) and the Board of Governors of the Federal
Reserve System (Board).

It proposes enhanced recordkeeping

requirements relating to certain wire transfers (which include
funds transfers and transmittals of funds) by financial
institutions.

Each domestic financial institution involved in a

wire transfer will have to collect and retain certain
information.

The amount and type of information collected and

retained will depend upon the nature of the financial
institution, its role in the particular wire transfer, and the
relationship of the parties to the transaction with the financial
institution.

This notice also proposes to amend the existing

regulation that .permits Treasury to require reports of certain
transactions with targeted foreign financial institutions to




p erm it T reasury to
fin a n cia l

in stitu tio n s.

R ulem aking
issu e

req u ire

of the

Federal R eg ister

in stitu tio n

receiv in g

fin a n cia l

order.

Treasury

that

and t h e

transfers)

1,

to

are req u ired

Mr.

P eter D jin is ,

D epartm ent

P en n sylvan ia

Avenue,

Mr.

W ashington,
Secretary,

NW,

W i l l i a m W.

Federal R eserve
DC

of

proposed

DC

record k eep in g

to

of

1500

to

Mr.

Governors
Avenue,

to

the

B o a r d ’ s m a i l room b e t w e e n

p . m . , and t o

the

secu rity

8:45

room o u t s i d e
con trol

of

NW,

W iles,

C om m en ts may a l s o

secu rity

both th e

F in an cial

Federal R eserve

d eliv ered

control

be

1993.

Board o f

to

room and t h e

R -0807.

to

20220;

sh ould r e f e r

Both t h e m a il

D o c k e t No.

4,

and C o n s t i t u t i o n

of the

to

Room 5 0 0 0 A n n e x ,

Com men ts a d d r e s s e d

Board o f G overnors

in

and i n t e r n a t i o n a l w i r e

O ffice

Secretary,

20th

a

addresses:

th e Treasury,

System ,

20551.

D irecto r,

W iles,

a

im p lem en tation ,

sep a ra tely

fo llo w in g

W ashington,

req u ire

1993.

E a c h co m m en t s h o u l d b e s e n t

E nforcem ent,




of

th is

in fo rm a tio n

a p p lica b le

C o m m en ts a r e d u e on o r b e f o r e O c t o b e r

T reasury:

in

order to

cer ta in

For e a s e

on Decem ber 3 1 ,

to

by s t a t u t e

both d o m e stic

Board a t t h e

elsew h ere

proposes

in clu d e

by

Proposed

a tra n sm itta l

1994.

to

tran sfers

of

p u b lish ed

B o a r d p r o p o s e t o make t h e

(a p p lica b le

T r e a s u r y and t h e

the

w ire

by T r e a s u r y ,

in stitu tio n

January

effectiv e

ADDRESSES:

Board:

a lso

sends

w ire t r a n s f e r s

before

req u irem en ts

DATES:

a ll

The r e c o r d k e e p i n g r e q u i r e m e n t s

in tern a tio n a l
effectiv e

of

A com panion N o t i c e

(Companion N o t i c e ) ,

fin a n cia l

the

reports

a.m .

System ,
be
and 5 :1 5

of th ose hours.

room a r e

a ccessib le

- 2 -

from t h e

courtyard

entrance

A venue and C S t r e e t ,
of

Comments:

regu lation

a r e w elcom e.

th e proposed

for

A ll

la te
for

for

co n sid ered .

a ctio n .

any p e r s o n
d isclo sed
In sp ection

w ill

sh ould

Comments:

R eserve Board,

20th

i n ro om B - 1 1 2 2

betw een

9 a.m .

w hich i s

i n r oo m 5 0 3 0 ,

subm itted
at

or

(202)




sh ould

622-0990.

that

of the

clo sin g

clo sin g

date

receiv e

date

not

n o t be in c l u d e d

in

NW,

the

and 4 p .m .

in

the

in

be

Federal
DC,

§ 261
12 CFR

D epartm ent o f

th e T reasury L ib rary,

1500 P e n n s y lv a n ia A venue,
to

to

W ash in gton,

In fo rm a tio n ,

at the

name o f

com m ents.

at the

and 5 p . m . , a s p r o v i d e d
of

recogn ize

in ten d ed

in sp ected

Avenue,

and t o o

su ggestion s

in clu d in g

Any m a t e r i a l

Persons w ish in g
request

the

by t h e

effects

and e f f i c i e n c y

com m ents,

be in s p e c t e d

10 a . m .

DC.

and t h e

Board n o r T r e a s u r y w i l l

and C o n s t i t u t i o n

T reasury betw een

W ashington,

proposed

covered

as p o s s ib le

Co m m en ts may b e

C o m m en ts may a l s o

lo c a te d

records

the

B o a rd 's R u les R egarding A v a i l a b i l i t y

2 6 1 .8 .

the

Board s p e c i f i c a l l y

before

after

be t r e a t e d

com m ents.

p u b lic

of

Board a n d /o r T r e a s u r y t o

any m a t e r i a l s

the

of

the

N eith er th e

su bm ittin g
to

C o n stitu tio n

O ral com m ents m u st be r e d u c e d t o

Comments r e c e i v e d

as c o n fid e n tia l

the

to

co n sid era tio n

future

cost

comments r e c e i v e d

a nd s u b m i t t e d

co n sid era tio n .

and t h e

of the

m ig h t h a v e on t h e

be c a r e f u l l y

w ritin g

Th e T r e a s u r y

aspects

law e n f o r c e m e n t p u r p o s e s

ru le

payment s y s te m .
w ill

Com men ts on a l l

comment on t h e u s e f u l n e s s

proposed r u le

betw een

NW.

S u bm ission

request

on 2 0 t h S t r e e t

in sp ect the

an a p p o i n t m e n t a t t h e

NW,

comments
T reasu ry L ib rary

of

FOR FURTHER INFORMATION CONTACT:
T reasury:

A.

R eg u la tio n s
of the

C arlos

S ectio n ,

Treasury,

Board:

A ssociate

O ffice

(202)

G ayle B r e t t ,

O p eration s

Correa,

A ssista n t
of

F in an cial

Manager,

F ed w ire,

Counsel

(202)

(202)

Legal

Governors

Federal R eserve

im p aired

the

o n ly ,

D iv isio n ,

(202)

t h e Ban k S e c r e c y A c t
§ 1 8 2 9 b and §§
Secretary

to keep r ec o rd s
have a h igh
m atters.
id en tify
the

(Pub.

1951-1959,
of

country

452-2934;

(202)

L.

and f i l e

reports

degree of u sefu ln ess
of

co d ified

req u ire

in
the

fin a n cia l
year

in

1992,

Pub.

Board j o i n t l y

to

to

to

as

12 U . S . C .

tax

a u th o rizes

in stitu tio n s
d eterm in es

and r e g u l a t o r y

B an k S e c r e c y A c t

C o m m u n it y D e v e l o p m e n t A c t o f

1 9 9 2 Am en dm e nt )

at

Secretary

crim in a l,

T itle




(TDD),

referred

fin a n cia l

th a t the

1992,

and t h e

Deaf

§§ 5 3 1 1 - 5 3 2 8 )

A nti-M oney L au n derin g A ct o f

Treasury

the

B o u tilier,

h earin g

g en era lly

v o lu m e and m ovem ent o f

and th ro u g h d o m e s t ic

as th e

Irela n d ,

Board o f

For t h e
for

and 31 U . S . C .

Ban k S e c r e c y A c t w a s a m e n d e d l a s t

h ereafter

O liv er

o r E l a i n e M.

System .

91-508,

the Treasury to

source,

Departm ent

o f R e s e r v e B an k

452-2418,

The s t a t u t e

The p rim a ry p u r p o s e
the

and

452-3544.

SUPPLEMENTARY INFORMATION:

the

D iv isio n

T elecom m unication D ev ice

D o r o t h e a Thompson

E nforcem ent,

452-3625,

S en ior A tto rn ey ,
of

R ules

622-0400.

and Payment S y s te m s
G eneral

D irector,

funds

is

in to

to

and o u t o f

in stitu tio n s.

The

th e A nn u n zio-W ylie
XV o f t h e H o u s i n g a n d

L.

102-550

sp ecifica lly

p rescrib e

(referred

au th o rize

regu lation s

to

the

to

-4-

req u ire

m ain ten an ce

in tern a tio n a l

of

records

th e u n iq u e
title
Board.

of

Board t o

funds

th is

document t h a t

by t h e

be amended w i t h

issu e

th is

of the

cross-refrences

in

reg u la tio n s

scheme e s t a b l i s h e d

proposed to

in

p a rticip a te

tran sfer

In c o n j u n c t io n w it h

elsew h ere

the

the

statutory

31 i s

d om estic

and

funds t r a n s f e r s .

To e n a b l e t h e
p rom u lgation

regardin g

the

a ctio n ,

Federal
these

the
as

jo in t

req u ired

1992 Amendment,

concurrence

the

under

of

Board a l s o

R eg ister

regu lation s

the

p u b lish es

a proposed
in

title

ru le

12 o f

CFR.
Th e

Treasury to

1 9 9 2 Amendment a u t h o r i z e s

p rom u lgate

w ire t r a n s f e r s
agen cies

by i n s u r e d

d eterm ine

u sefu ln ess

in

p roceedin gs.

1994.

th at

crim in a l

tax

Board t o

ap p ly t o

b u sin esses

brokers

that

tra n sm ittin g

whenever th e

p rovid e

fin a n cia l
in clu d e

tra v elers'

(co llectiv ely

referred

to

in v estig a tio n s

or

reg u la tio n s

for

in

checks

w ith

before

regard

to

1,

in tern a tio n a l
as

d efin ed

in

d ep o sito ry

secu rities,
serv ices,

or o th er

the

January

in stitu tio n s

and b u s i n e s s e s

as

of

in su red

check ca sh in g

b u sin esses,

degree

be e f f e c t i v e

and d e a l e r s

m o n ey o r d e r s ,




to

fin a l

req u irem en ts

31 CFR § 1 0 3 . 1 1 ( i ) , w h i c h
in stitu tio n s,

in stitu tio n s
a h igh

d om estic

1 9 9 2 A m en d m e n t r e q u i r e s

issu e

tra n sa ctio n s

w ill

for

or r e g u la to r y
the

Board and t h e

req u irem en ts

such reco rd s have

Th e r e c o r d k e e p i n g

tra n sa ctio n s

d ep ository

In a d d i t i o n ,

T r e a s u r y and t h e
in tern a tio n a l

record k eep in g

the

that

as

money

issu e

sim ila r

check ca sh in g

as w ell

or redeem

in stru m en ts

and money t r a n s m i t t i n g

-5-

b u sin esses).

In p r e s c r i b i n g

Board and t h e

T r ea su ry m ust t a k e

u sefu ln ess

these

of

in v estig a tio n s
w ill

issu e

cost

and t h e

for

w ill

be t h e

before

A ssista n t

Secretary

N oble

its

now,

and t h e

proposed

record k eep in g

record k eep in g

at th is

in itia tiv e.

the

tim e

con d u ctin g

co in cid es

For exam p le,

program s,
in

by

the

response

the
to

co n sid ered

exam in ation .
tran sfers

the d a ily
in

com p leted

d a ily

d o lla r

amount o f

$800 b i l l i o n

aggregate d a ily

d o lla r

amount o f

over

$1 t r i l l i o n .

a v ita l

component o f

is

crim in a l

is

a v e r a g e number o f w i r e

d a ily

and o t h e r

1993,

in clu d in g

be c a r e f u l l y

aggregate

M o n ey l a u n d e r i n g

in

a com p reh en sive

Co m m en ts r e c e i v e d

com prehensive

both

D epartm ent o f

made o v e r F e d w i r e




for

As n o t e d

transfers

tra ffick in g

The

and i n t e r n a t i o n a l

reg u la tio n s

Companion N o t i c e w i l l

T h e n u m be r o f w i r e
su b sta n tia l.

the

w ould be s im p le r t o

the

lau n d erin g

Bank S e c r e c y A c t r e g u l a t i o n s .

th is

or r e g u la to r y

payment sy ste m .

it

(E nforcem ent),

an ti-m on ey

as p art of

because

the

t h e H o u s e B a n k i n g C o m m i t t e e o n May 2 5 ,

exam in ation

N o tice

the

th at

Treasury

and i s

th is

of

funds t r a n s f e r s

T rea su ry w ould b e,
of

effect

both d o m e stic

issu in g

but r e la t e d

testim on y

tax,

the

same.

and i n t e r n a t i o n a l

a separate

regu lation s,

con sid era tio n

crim in a l,

sim u ltan eou sly,

A d d itio n a lly ,

w ith

in to

and e f f i c i e n c y

regu lation s

funds t r a n s f e r s

d om estic

req u ired

Treasury have d ecid ed

proposed

req u irem en ts

in

or p r o cee d in g s

h a v e on t h e

B oard and t h e

records

these

1992 was

a ctiv ity

2 7 0 ,0 0 0 ,

w ith

average

and a p ea k

drug

th rou gh ou t th e w orld ,

and

- 6 -

federal

law e n f o r c e m e n t

amount o f

t h e money l a u n d e r e d

from i l l e g a l
schem es

a ctiv ities

in v o lv in g

tran sfers.

d om estic

conducted

enforcem ent

agen cies.

the records

to

p a rticu la rly

a ssist

in d iv id u a ls

an d /or

under t h i s

such

Board b e l i e v e

w ill

degree

Further,

of

in v estig a tio n s

the

Treasury

the

i m p a c t on t h e

cost

In a d d i t i o n
proposed r u le ,
th a t h avin g
o rig in a to r's
in clu d ed

in

to

fed eral

certa in

efficien cy
reten tion

of

of

of

custom er

id en tity
name,

t o d a y by T r e a s u r y .

(FFIEC)




has

F in an cial

adopted a p o lic y

these

have

b ein g

In stitu tio n s

statem ent

adverse

system .

covered

degree

Companion N o t i c e

Federal

or

by t h e
in d ica ted

(i,.e. , th e

and a c c o u n t number)

T his

the

tax,

records

o p era tio n s.

a g en cies

is

a ctiv ities

these

paym ents

law e n f o r c e m e n t p u r p o s e s .

m easure,

of

in form ation

issu e

be

A ccord in gly,

that

address

th at

of

a sig n ifica n t
the

payment o r d e r has a h ig h

p u b lish ed

illeg a l

crim in a l,

records

law e n f o r c e m e n t

and b e n e f i c i a r y ' s
the

not have

law

ru lem ak ing w i l l

a ctiv ities.

in

recent

b eliev e

and p r o s e c u t i o n

Board b e l i e v e

req u irem en ts w i l l
or t h e

fed eral

th a t m ain ten an ce

record k eep in g

several

Treasury

o f money l a u n d e r i n g

and t h e

p a y m e n ts by w i r e

in

proposed

u sefu ln ess

Proceeds

t h r o u g h money l a u n d e r i n g

proceeds

illeg a l

T r e a s u r y and t h e

regu latory

tran sfers.

in tern a tio n a l

id en tifica tio n

in

a sig n ific a n t

by T r e a s u r y and o t h e r

tracin g

in th e

have a h igh

w ire

Th e B o a r d a n d t h e

in

in volved

in v o lv e s

that

has been docum ented

be r e t a i n e d

useful

b eliev e

may b e p r o c e s s e d

Such a c t i v i t y

in v estig a tio n s

and w i l l

agen cies

of u sefu ln ess
addressed

for

by t h e

As an i n t e r i m

E xam in ation C o u n cil

encouraging a l l

fin a n cia l

-7-

in stitu tio n s
o rig in a to r
orders,

to

in clu d e,

and b e n e f i c i a r y

in clu d in g

C learin gh ou se
W orldw ide

to

extent p r a c tic a l,

Interbank

com p lete

i n f o r m a t i o n when s e n d i n g

payment o r d e r s

Interbank

FFIEC P r e s s

the

sent

through

Payment S ystem

F ed w ire,

(CHIPS)

and S o c i e t y

F in a n c ia l T elecom m u n ication s

R e l e a s e d a t e d Ma rc h 1 1 ,

1993,

payment

for

(SW IFT).

58 FR 1 4 4 0 0 ,

(See,

March 1 7 ,

1993.)
A lth ou gh
F edw ire

form at t o

in form ation ,
use

the

a v a ila b le

such

in clu d e

o p tion al

field s

be

co n ta in

b en eficia ry
g en era lly
o p tio n a l

not

accepted

by t h e

enough s p a c e

field s,

used

field

as d iffe r e n t

for

such as

(0BI=)

be u sed t o

g iv e n w ire




users
the

in

(BNF=)

or

is

recommended f o r

o p tio n a l

field s

tran sfer,

data

W hile t h e s e

su fficien t

and

space

is

in fo rm a tio n .

If

B en eficia ry
(BBI=)

in fo rm a tio n ,

in fo rm a tio n .

in clu d in g

the

m ust c o n t a in

B an k I n f o r m a t i o n "

address

to

in clu d e

o rig in a to r

address

for p aym en t-related

convey th e

the

the

system

form at to

field s

" O rigin ator to

"Bank t o

Fedw ire

system .

id en tify

in

and b e n e f i c i a r y

a th ird -p a rty

in clu d in g

the

space

of the

F edw ire

F edw ire

to

for

these

field s

No s p e c i f i c

address

may b e a v a i l a b l e

field s,

in form ation

use

in

any

tran sfer.
The F e d e r a l R e s e r v e

p ossib le

in

and b e n e f i c i a r y

a v a ila b le

are not b ein g

op tio n a l

field s

o rig in a to r

b y name a n d a c c o u n t n u m b e r ,

In form ation "

cou ld

in su fficien t

com p lete

F or e x a m p l e ,

(ORG=)

order to

is

Board e n c o u r a g e s

in fo rm a tio n .

o rig in a to r
in

at present there

rev isio n s

to

the

System

F edw ire

is

cu rren tly

stud ying

fo r m a t and e x p e c t s

to

p u b lish

a

- 8 -

Federal R eg ister
proposed

n o tice

req u irem en ts

in form ation
R egu latory

be

in

that

in clu d ed

in

of

sp ecific
F edw ire

1989,

in v itin g

o rig in a to r

funds t r a n s f e r

The A d v a n c e N o t i c e

in itia tiv e s,

in clu d in g

of

funds t r a n s f e r s

of

su sp icio u s

address

system

suggested

seven

tra n sa ctio n s.

review

P r o p o s e d R u le m a k in g on O c t o b e r

and p r o p o s i n g
fin a n cia l

amendments t o

in stitu tio n s

com m ents on t h e

55 FR 4 1 6 9 6 .

comments w e r e r e c e i v e d
from b a n k s .

15,

the

th eir

con cernin g

in stitu tio n s,

T reasu ry's




settin g

the

a

forth

a total

effects

the

333
of

p a rticu la rly
opposed th e

variou s

ex p la in ed

cu rren tly

what

m ain tain ed

means o f

a v a ila b ility

current

of

The v a s t m a j o r i t y

in stitu tio n s,

is

by a l l

and i n t e r n a t i o n a l

a ltern a tiv e

en su rin g th e

in fo rm a tio n w ith o u t d is r u p tin g

1990,

and r e c o r d k e e p i n g

in stitu tio n s,

funds t r a n s f e r s

of

15,

com m enters g e n e r a l l y

and p r e s e n t e d

o b jectiv es

com m ents

T reasury p u b lish ed

p rop osal.

sp ecific

p r o p o s a l s w o u ld h a v e on t h e i r

rep ortin g

id en tifica tio n

Treasury r e c e iv e d

1990,

W h ile m ost o f t h e

ro u tin e

of the

d om estic

from f i n a n c i a l

many d i s c u s s e d

in fo rm a tio n

in

54 FR

B an k S e c r e c y A c t r e g u l a t i o n s ,

co llectio n

engaged

O ctober

the

the

regu latory

th e Advance N o t i c e ,

enhanced rec o rd

funds t r a n s f e r s .

p ro p o sa l,

to

A fter

of

and e n h a n c e d

N otice

proposed

use

enhanced r e c o r d k e e p in g ,

and t r a n s m i t t a l s ,

response

the

an A dvance

by money l a u n d e r e r s .

in

sp ecific

and b e n e f i c i a r y

funds t r a n s f e r s .

su bm itted
of

comment on

Treasury p u b lish ed

P r o p o s e d R ulem aking t o

in tern a tio n a l
45769.

future

Background
On O c t o b e r 3 1 ,

N o tice

the

of

by

effectin g
necessary

funds t r a n s f e r

system .

-9-

A ll

comments r e c e i v e d

N otice

a r e on f i l e

above,

and a r e

b u sin ess

at th e Treasury,

agreed to

the

ru le

rev ise

the

the

address

in sp ectio n

and t h e

in d ica te d

d u rin g r e g u la r

b eliev es

th e proposed r u le

in

the

the

proposal

is

form ation

at th is

Summary d e s c r i p t i o n

of

its

ren o tice

in clu d es

and t h e

Board

and j o i n t l y

p u b lish

a ne w

Board b e l i e v e

be r e t a i n e d

to

1990 p r o p o s a l.
of

its

th at,

by t h i s

in stitu tio n s.

resp on sive

com p reh en sive r e v ie w

seem ed a p p r o p r i a t e t o
ru le

to

by f i n a n c i a l

c o m m e n t s on t h e

of T reasu ry's
program s and

req u ired

w hich

Treasury

The T r e a s u r y a n d t h e

in fo rm a tio n

that

1992 Amendment,

m aking p r o c e s s ,

a lr ea d y m ain tain ed

a fin a l

at

for p u b lic

enactm ent o f th e

proposed r u le .

raised

t h e Advance N o t ic e

hours.

t h e Board in

is

response to

a v a ila b le

A fter

cases,

in

proposal

The T r e a s u r y

many o f

the

concerns

M oreover,

an ti-m on ey

in view

lau n d erin g

Bank S e c r e c y A c t A d v i s o r y
th is

proposal

i n many

rather

Group,

than

to

it

issu e

tim e.
of the

revised

proposed

ru le.

General Overview
The p r o p o s e d r u l e
req u irem en ts
in stitu tio n

for

or d e a le r

types

ad d itio n a l




req u irem en ts

in to
for

of

three

com ponents:

a nonbank f i n a n c i a l
in

secu rities

th a t has

t h e t r a n s m i t t o r / r e c i p i e n t ; and r e q u i r e m e n t s
in

secu rities

tra n sm itto r/recip ien t.
three

d iv id ed

o th e r than a broker or d e a le r

an a c c o u n t f o r
broker

a bank;

is

an a c c o u n t f o r

the

The r e c o r d k e e p i n g r e q u i r e m e n t s

for

in stitu tio n s

co llectio n

th a t has

are g e n e r a lly

req u irem en ts

p a ra llel,

are proposed

for

for

a

th ese

but
tra n sa ctio n s

- 1 0 -

in v o lv in g
other

p e r s o n s who d o n o t m a i n t a i n

fin a n cia l

on t h e

B oard 's

d ea lers

in

in

th eir

alread y

the

d istin ctio n

that

retain

m ost o f

bank or

is

based

b an k s and b r o k e r s
the

and w i l l

or

d esired

not

need to

gather

in fo rm a tio n .

fa c ilita te

tracin g

At f i n a n c i a l
the

reten tion

of

are

d esign ed

to

funds through th e w ir e

tran sfer

process.

in stitu tio n s
req u ired

payment o r d e r

w ill

T h is

b elief

custom er r ec o rd s

The r e c o r d k e e p i n g

h o ld er,

in volved .

and T r e a s u r y ' s

secu rities

in fo rm a tio n
d u p lica te

in stitu tio n

an a c c o u n t w i t h

req u irem en ts

th at

are

in form ation

and in t h e

a ctin g

w ill

u su a lly

custom er a cco u n t

of

the

payment o r d e r w it h

sa tisfy

the

proposed

on b e h a l f

the

record k eep in g

be

of

an a c c o u n t

in clu d ed

records.

custom er

in

the

In su ch c a s e s

account records

req u irem en ts.

Definitions
Several
The f o l l o w i n g

new d e f i n i t i o n s

same t e r m s u s e d
A rticle
bank",

4A:

fo r banks

bank".

nonbank f i n a n c i a l
in ten d ed

to

fin a n cia l

in stitu tio n " ,

" tran sm ittor" ,




in stitu tio n s
the

to

" b en eficia ry 's

" o rig in a to r's

in
be

sectio n

bank",

referrin g

" recip ien t" ,

" tran sm ittal

of

funds",

and " t r a n s m i t t o r ' s

to

in stitu tio n " ,
" recip ien t's
" tran sm ittal

fin a n cia l

the

" in term ed iary
and

tra n sa ctio n s

and t h e s e
in

to

(UCC)

"payment o r d e r " ,

w ould be ad d ed ,

fin a n cia l

1 0 3 .1 1 .

id en tic a l

bank",

eq u iv a len t d e f in it io n s

" in term ed iary

in stitu tio n " ,

in ten d ed

O ther d e f i n i t i o n s

p a ra llel

4A:

are

are proposed

i n U n ifo r m C o m m e r c ia l Code

" b en eficiary" ,

" origin ator" ,

" receiv in g

A rticle

new d e f i n i t i o n s

by

are

UCC
" receiv in g
fin a n cia l
order",

in stitu tio n " .

-11-

Because "financial institution" is already defined to include
"bank", the new terms used for nonbank financial institutions are
written to include transactions by banks.

For example, the

definition of the term "transmittal order" includes a "payment
order".

Separate definitions specifically for bank transactions

have been added for clarity and conformity with the UCC.

Other

terms, such as "execution date", "payment date" and "sender",
have been modified slightly from the UCC Article 4A definition to
specifically include transactions by nonbank financial
institutions as well as banks.
The proposed definition of the term "funds transfer"
differs from the same term in UCC Article 4A in that it excludes
all automated clearinghouse (ACH) transfers or funds transfers
governed in any part by the Electronic Funds Transfer Act of 1978
(15 U.S.C. §§ 1693, et sea.).

The term "accept" differs from the

definition of "acceptance" in UCC Article 4A.

It includes

transactions by nonbank financial institutions, and it does not
spell out the rights and obligations of the parties to the
transaction upon acceptance or rejection of a payment order.
In addition, the words, "For purposes of section 103.29
of this part," that appear in section 103.11(g), have been
deleted to allow the term "deposit account" to be used in the
amendments to section 103.33.
Retention of records by banks
This proposed rule would require banks to retain
information on funds transfers that is likely to be in the




-12-

records of the bank in the case of bank customers who have
deposit accounts or loans with the bank, or which can be easily
obtained from noncustomers.

This information need not be

retained alphabetically by name or numerically by account number;
but the bank must be able to access the funds transfer records
readily by name or account number of the originator or
beneficiary, as the case may be, and may do so through reference
to some other record maintained by the bank.

Existing section

103.38(d) would be applicable to these records, and requires
retention for five years from the execution date of the
payment/transmittal order.
An originator's bank will be required to retain the
following information for a payment order that it accepts:
(A) the name and address of the originator;
funds transfer;

(B) the amount of the

(C) the execution date of the payment order;

(D) any payment instructions received from the originator;
(E) the identity of the beneficiary's bank; and (F) either the
name and address or the account number of the beneficiary of the
payment order, if such information is received with the payment
order.

It is expected that an originator's bank accepting a

payment order from a customer will have most of the required
information either in its account records or in the payment
order.

(Originator's banks are encouraged to collect from the

originator complete information regarding the beneficiary of a
payment order.)

If the originator does not have a deposit

account or loan with the originator's bank, then the originator's




-13-

bank will be required to verify the originator's name and address
before accepting the payment order, and must retain a record of
that verified information as well as a record of the originator's
social security number, alien identification number, or employer
identification number, or note the lack of such a number in the
record.
An intermediary bank that accepts a payment order must
retain either the original or a duplicate of the payment order.
A beneficiary's bank that accepts a payment order must
retain either the original or a duplicate of the payment order.
If the beneficiary has a deposit account or loan with the bank,
then the bank is expected to have the beneficiary's name and
address already in its records in a retrievable form.

If the

payment order is for a beneficiary that does not have a deposit
account or a loan with the bank, then the beneficiary's bank must
obtain and retain a record of the beneficiary's name and address,
and social security number, alien identification number, or
employer identification number, or note the lack of such a number
in the record.

Furthermore, the beneficiary's bank must verify

the beneficiary's name and address whenever it delivers the
proceeds of the funds transfer in person to a beneficiary who
does not have a deposit account or loan with the bank.

If the

proceeds are not delivered in person, then a copy of the
instrument (e.g., check) used to send the proceeds must be
retained.




-14-

The following funds transfers are exempt from these
recordkeeping requirements:
(i)

funds transfers where both the originator and the
beneficiary are domestic banks;

(ii)

funds transfers where both the originator and
beneficiary are the same domestic bank or one is the
wholly-owned domestic subsidiary of the other;

(iii) 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 domestic
bank; and
(iv)

funds transfers where both the originator and the
beneficiary are either a domestic bank, the United
States, any state or local government, or a federal,
State or local government agency or instrumentality.

Retention of records by nonbank financial institutions
The proposed record retention requirements for nonbank
financial institutions differ depending on whether the nonbank
financial institution is a broker or dealer in securities.

A

special category of requirements is being proposed for a broker
or dealer in securities that maintains an account for the
transmittor or recipient.

Accordingly, no verification

requirements are proposed for transmittals of funds by a broker
or dealer in securities which makes or receives transmittals of
funds for an account holder.
Nonbank financial institutions that are not brokers or dealers




-15-

These nonbank financial institutions are more likely
than banks or brokers or dealers to send or receive transmittals
of funds for persons with whom they have no regular account
relationship and therefore, no existing records.

Accordingly,

these nonbank financial institutions must collect, verify and
retain information that may not be in their existing records.
The retained information must be retrievable by the name of the
transmitter.

(These requirements also apply to brokers and

dealers in securities that send or receive transmittals of funds
on behalf of persons for which they do not maintain an account.)
A transmitter's nonbank financial institution must
verify the transmitter's name and address prior to accepting a
transmittal order, and it shall maintain a record of that
information.

In addition, the nonbank financial institution

shall obtain and retain:

(A) the transmitter's social security

number, alien identification number, or employer identification
number; or, if the transmittal of funds is on the nonbank
financial institution's own behalf, a statement to that effect:
(B) the amount of the transmittal order; (C) the execution date
of the transmittal order; (D) any payment instructions received
from the transmitter with the transmittal order;

(E) the name and

address of the recipient of the transmittal of funds; and (F) any
form completed by the person or the nonbank financial institution
relating to the transmittal of funds.




-16-

An intermediary nonbank financial institution that
accepts a transmittal order shall retain either the original or a
duplicate of the transmittal order.
A recipient's nonbank financial institution that
accepts a transmittal order shall retain the original or a
duplicate of the transmittal order, as well as the name, address,
and social security number, alien identification number or
employer identification number of the recipient.

If the

recipient's nonbank financial institution delivers the proceeds
of a transmittal of funds in person to the recipient, it shall
verify the name and address of the recipient and retain a record
of that information.

If the recipient's nonbank financial

institution sends the proceeds of a transmittal of funds by
written instrument (e.g., check, draft), it shall retain a copy
of the instrument or the information contained thereon, and the
name and address of the person to whom it was sent.
Retention of records by brokers and dealers
These requirements apply only to transmittals of funds
that a broker or dealer in securities (which is also a type of
nonbank financial institution) sends or receives for a person for
which it has an account.

The retained records must be readily

retrievable by either the name or account number of the
broker/dealer's account holder.
A transmitter's broker/dealer must retain the following
information for a transmittal order that it accepts:
name of the transmittor;




(A) the

(B) the amount of the transmittal of
-17-

funds; (C) the execution date of the transmittal order; (D) any
payment instructions received from the transmitter;

(E) the

identity of the recipient's financial institution; and (F) either
the name and address or the account number of the recipient, if
received with the transmittal order.
An intermediary broker/dealer must retain either the
original or a duplicate of each transmittal order that it
accepts.
A recipient's broker/dealer must retain either the
original or a duplicate of each transmittal order that it
accepts.
The following transactions are exempt from these
requirements:

transmittals of funds where both the transmitter

and the recipient are each a domestic broker or dealer in
securities transmitting on its own behalf; transmittals of funds
on their own accounts between a domestic broker or dealer in
securities and its bank or the broker dealer's wholly-owned
subsidiary; transmittals of funds between domestic accounts at
the same domestic broker or dealer where both the transmitter and
the recipient are the same person; and transmittals of funds
between a domestic broker or dealer and a governmental agency.
EXECUTIVE ORDER 12291
In response to its October 15, 1990 Notice of Proposed
Rulemaking, Treasury received many detailed comments on the
projected costs of the proposed rule.

Many of the provisions

identified in those comments as imposing undue costs or burdens




-18-

on the financial services community have been either revised,
clarified or eliminated.

In particular, today's proposed rule

would allow many financial institutions to rely upon information
systems already in place without diminishing the nature and
quality of the information required to be maintained.

This

modification significantly reduces the resources and effort
required of financial institutions to comply with the terms of
today's proposed rule.

As a result of these significant cost

reductions, today's proposed rule is categorized as non-major for
purposes of Executive Order 12291.

Today's proposal, if adopted

as a final rule, will not have an annual effect on the economy of
$100 million or more.

Nor will it result in a major increase in

costs or prices for consumers; individual industries; federal,
state, or local government agencies; or geographic regions.

It

will not have any significant adverse effect on competition,
employment, investment, productivity, innovation, or on the
ability of United States-based enterprises to compete with
foreign-based enterprises in domestic or foreign markets.
Therefore, a regulatory impact analysis is not required.
INITIAL REGULATORY FLEXIBILITY ANALYSIS
As required by 5 U.S.C. 603(b), a "description of the
reasons why action by the agency is being considered" and a
"succinct statement of the objectives of, and legal basis for,
the proposed rule" are found elsewhere in this preamble.
The Board and the Treasury propose that the
requirements in this rule be applicable to all financial




-19-

institutions subject to the Bank Secrecy Act, as implemented,
regardless of their size.

An exemption for small entities would

not be appropriate because it would permit money laundering
operations to evade the recordkeeping process by using small
financial institutions.

This would significantly diminish the

usefulness of these records for criminal, tax or regulatory
investigations.
The small entities that will be affected by this
proposed rule include small banks and many check cashing and
money transmitting businesses.

In order to minimize the economic

impact on small entities, the rule would allow financial
institutions that send or receive transmittal orders for account
holders to use existing records to satisfy some of the
recordkeeping requirements.

The Board and the Treasury do not

believe that the proposed rule would impose reporting or
recordkeeping burdens on small entities that require specialized
professional skills not available to them.
PAPERWORK REDUCTION ACT
The collection of information contained in this Notice
of Proposed Rulemaking has been submitted 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 1505-0063.

Comments on the collection of information and

the burden estimate should be directed to the Office of
Management and Budget, Paperwork Reduction Project (1505-0063),




-20-

Washington, DC 20503, and to the Treasury and the Board at the
addresses noted above.
The collections of information in this proposed
regulation are authorized by 12 U.S.C. §§ 1829b and 1951-1959 and
31 U.S.C. §§ 5311-5328.

The likely recordkeepers are financial

institutions that perform funds transfers.
Estimated number of respondents and/or recordkeepers:
60,000.
Estimated total annual recordkeeping burden:

6.5

million hours.
Estimated average annual burden per respondent and/or
recordkeeper: 108.3 hours.
Estimated annual frequency of responses: Upon request.
LIST OF SUBJECTS IN 31 CFR PART 103
Authority Delegations (Government Agencies), Banks and
Banking, Currency, Foreign Banking, Investigations, Law
Enforcement, Reporting and Recordkeeping Requirements, Taxes.
AMENDMENT
For the reasons set forth in the preamble, 31 CFR Part 103 is
amended as set forth below:
PART 103 — FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND
FOREIGN TRANSACTIONS
1.

The authority citation for Part 103 is amended to read as

follows:
Authority:

Pub. L. 91-508, Title I, 84 Stat. 1114 (12

U.S.C. 1829b and 1951-1959); and Pub. L. 91-508, Title
II, 84 Stat. 1118, as amended (31 U.S.C. 5311-5328).




- 2 1 -

2.

It is proposed to amend § 103.11 by deleting the words, "For

purposes of § 103.29 of this part," in paragraph (g); and by
redesignating paragraphs (a) and (b) as paragraphs (b) and (c);
redesignating paragraphs (c) through (h) as paragraphs (f)
through (k); redesignating paragraphs (i) through (k) as
paragraphs (m) through (o); redesignating (1) and (m) as
paragraphs (s) and (t); redesignating paragraph (n) as
paragraph (y); redesignating paragraph (o) as paragraph (dd);
redesignating paragraphs (p) through (r) as paragraphs (ff)
through (hh); redesignating paragraphs (s) through (u) as
paragraphs (mm) through paragraphs (oo); and adding new
paragraphs (a),

(d) , (e) , (1), (p) , (g) , (r) , (u) , (v) , (w) , (x) ,

(z), (aa), (bb), (cc), (ee), (ii),

(jj),

(kk), and (11) each to

read as follows:
Section 103.11 - Meaning of Terms.
(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.
*

(d)

Beneficiary.

*

*

*

*

The person to be paid by the

beneficiary's bank.
(e)

Beneficiarv's bank.

The bank identified in a payment

order in which an account of the beneficiary is to be credited




-22-

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.

(1)

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.
★

(p)

★

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.

Automated

clearinghouse transfers or funds transfers governed in any part
by the Electronic Funds Transfer Act of 1978 (Title XX, Public
Law 95-630, 92 Stat. 3728, 15 U.S.C. 1693 et sea.. as amended
from time to time), are excluded from this definition.




-23-

(q)

Intermediary bank.

A receiving bank other than the

originator's bank or the beneficiary's bank.
(r)

Intermediary financial institution.

A receiving

financial institution, other than a bank, the transmittor's
financial institution or the recipient's financial institution.
*

(u)

Originator.

*

*

*

*

The sender of the first payment order in a

funds transfer.
(v)

Originator's bank.

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.
(w)

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.
(x)

Payment order.

An instruction of a sender, to a

receiving bank, transmitted orally, electronically, or in
writing, to pay, or to cause another 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




-24-

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.
*

(z)

*

Receiving bank.

*

*

*

The bank to which the sender's

instruction is addressed.
(aa)

Receiving financial institution.

The financial

institution to which the sender's instruction is addressed.

The

term receiving financial institution includes a receiving bank.
(bb)

Recipient.

financial institution.

The person to be paid by the recipient's
The term recipient includes a

beneficiary.
(cc)

Recipient's financial institution.

The financial

institution 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.
*

(ee)

Sender.

*

*

*

*

The person giving the instruction to the

receiving bank or receiving financial institution.
*

(ii)

*

*

*

Transmittal of funds.

*

A series of transactions

beginning with the transmitter'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 transmitter's




-25-

financial institution or an intermediary financial institution
intended to carry out the transmitter's transmittal order.

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 transmitter's transmittal order.
Automated clearinghouse transfers and funds transfers governed in
any part by the Electronic Funds Transfer Act of 1978 (Title XX,
Pub. L. 95-630, 92 Stat. 3728, 15 U.S.C. 1693 et. sea.. as
amended from time to time, are excluded from this definition.
The term transmittal of funds includes a funds transfer.
(jj)

Transmittal order.

An instruction of a sender to a

receiving financial institution, transmitted orally,
electronically, or in writing, to pay, or to cause another
financial institution 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.

The term transmittal order includes a payment

order.
(kk)

Transmitter.

The sender of the first transmittal

order in a transmittal of funds.

The term transmittor includes

an originator.




-26-

(11)

Transmitter'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 the transmittor if the transmittor is a financial
institution.

The term transmitter's financial institution

includes an originator's bank.
*

3.

*

*

*

*

Paragraph (b)(2) of § 103.25 is revised to read as follows:
103.25

Report of transactions with foreign financial
agencies.
*

(b)

*

*

(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 § 103.33.
4.

Section 103.33 is amended by adding new paragraphs (e), (f)

and (g), each to read as follows:




103.33

Records to be made and retained by financial
institutions
*

(e)

*

*

*

*

With respect to funds transfers:
(1)(i)

For each payment order that it accepts as an

originator's bank, a bank shall retain either the original,
a microfilm or other copy, record, or reproduction of the
following information relating to the payment order:
-27-

(A)

the name and address of the originator of the
payment order;

(B)

the amount of the funds transfer;

(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)

either the name and address or the account number
of the beneficiary of the payment order, if
received with the payment order.

(ii)

For each payment order that it accepts as an

intermediary bank, a bank shall retain either the original,
a microfilm, or other copy, record, or reproduction of the
payment order.
(iii)

For each payment order that it accepts as a

beneficiary's bank, a bank shall retain either the original,
a microfilm, or other copy, record, or reproduction of the
payment order.
(2)(i)

Prior to accepting a payment order from an

originator that does not have a deposit account or loan with
the bank, an originator's bank shall verify the originator's
name and address by examination of a document that contains
such information; and, if it accepts the payment order,
record and retain a record of that information, the type of




identification reviewed, and the number of the
identification document (e.g., drivers license).

In
-28-

addition to the information required in paragraph (e)(1)(i)
of this section, the bank shall obtain and retain a record
of the originator's social security number, alien
identification number, or employer identification number.
(ii)

Verification of the name and address 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 name and address 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 drivers license).
(iii)

If the originator does not have a social

security number, alien identification number, or employer
identification number, the lack of such a number shall be
noted in the record.
(3)

(i)

For each payment order that it accepts as a

beneficiary's bank for a beneficiary that does not have a
deposit account or loan with that bank, in addition to
maintaining the information required in paragraph
(e) (1) (iii) of this section, a beneficiary's bank shall
obtain and retain a record of the beneficiary's name and
address, and social security number, alien identification




-29-

number, or employer identification number.

If the

beneficiary does not have a social security number, alien
identification number, or employer identification number,
the lack of such a number shall be noted in the record.
(ii) If a beneficiary's bank delivers the proceeds of a
funds transfer, in person, to a beneficiary that does not
have a deposit account or loan account with that bank, a
beneficiary's bank shall verify the beneficiary's name and
address by examination of a document that contains such
information, and retain a record of that information, the
type of identification reviewed, and the number of the




identification document (e.g., drivers license).
(iii)

Verification of the name and address 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 drivers license).

If a

beneficiary's bank sends the proceeds of a funds transfer in
the form of a check or other written instrument to a
beneficiary that does not have a deposit account or loan
-30-

account with that bank, that bank shall retain a copy of the
check or other written instrument, or the information
contained thereon, and the name and address of the person to
whom it was sent.
(4)

The information that an originator's bank must

retain under paragraphs (e)(1)(i) and (e)(2)(i) of this
section shall be readily retrievable by the originator's
bank by reference to either the name or account number of
the originator.

The information that a beneficiary's bank

must retain under paragraphs (e)(1)(iii) and (e)(3)(i) of
this section shall be readily retrievable by the
beneficiary's bank by reference to either the name or
account number of the beneficiary.
(5)

The following funds transfers are not subject to

the requirements of this paragraph:




(i)

funds transfers where both the originator and the
beneficiary are domestic banks;

(ii)

funds transfers where both the originator and
beneficiary are the same domestic bank or one is
the wholly-owned domestic subsidiary of the other;

(iii)

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 domestic bank; and

(iv)

funds transfers where both the originator and the
beneficiary are either a domestic bank, the United
-31-




States, any state or local government, or a
federal, state or local government agency or
instrumentality.
(f)

With respect to a transmittal of funds:
(1)

Prior to accepting a transmittal order from a

transmitter, a transmitter's financial institution, other
than a bank or a broker or dealer in securities that has an
account for the transmittor, shall verify the transmitter's
name and address by examination of a document that contains
such information; and, if it accepts such transmittal order,
record and retain a record of that information, the type of
identification reviewed, and the number of the
identification document (e.g., drivers license no.)*
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 drivers license).

In addition, the financial institution

shall obtain and retain the original, or a microfilm or
other copy, record, or reproduction of the following
-32-

information relating to the transmittal order:
(i)(A)

the transmitter’s social security
number, alien identification number, or
employer identification number; or

(B)

if the transmittal of funds is by the
financial institution on its own behalf,
a statement to that effect:

(ii)
(iii)
(iv)

the amount of the transmittal order;
the execution date of the transmittal order;
any payment instructions received from the
transmitter with the transmittal order;

(v)

the name and address of the recipient of the
transmittal of funds; and

(vi)

any form completed by the person or the
financial institution relating to the
transmittal of funds.

If the transmittor does not have a social security number,
alien identification number, or employer identification
number, the lack of such a number shall be noted in the
record.
(2)

For each transmittal order that it accepts as an

intermediary financial institution, a financial institution,
other than a bank or broker or dealer in securities, shall
retain either the original, a microfilm, or other copy,
record, or reproduction of the transmittal order.




-33-




(3)(i)

For each transmittal order that it accepts as a

recipient's financial institution, a financial institution,
other than a bank or a broker or dealer in securities that
has an account for the recipient, shall retain the original
or a microfilm, or other copy, record, or reproduction of
the transmittal order; and the name, address, and the social
security number, alien identification number or employer
identification number of the recipient.

If the recipient

does not have a social security number, alien identification
number, or employer identification number, the lack of such
a number shall be noted in the record.
(ii)

If a recipient's financial institution, other

than a bank or broker or dealer in securities that has an
account for the recipient, delivers the proceeds of a
transmittal of funds in person to the recipient, the
financial institution shall verify the name and address of
the recipient by examination of a document that contains
such information and shall retain a record of that
information, the type of identification reviewed, and the
number of the identification document (e.g., drivers
license).

If a recipient's financial institution, other

than a bank or a broker or dealer in securities that has an
account for the recipient, sends the proceeds of a
transmittal of funds to the recipient in the form of a check
or other written instrument, the financial institution shall

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retain a copy of the check or other written instrument, or
the information contained thereon, and the name and address
of the person to whom it was sent.
(4)

The information that a transmitter's financial

institution must retain under paragraph (f)(1) of this
section shall be readily retrievable by the transmitter's
financial institution by reference to the name of the
transmitter.

The information that a recipient's financial

institution must retain under paragraph (f)(3) of this
section shall be readily retrievable by the recipient's
financial institution by reference to the name of the
recipient.

This information need not be retained

alphabetically by name, but the financial institution must
be able to access the transmittal of funds records readily
by name of the transmittor or recipient, as the case may be,
and may do so through reference to some other record
maintained by the financial institution.
(g)

With respect to a transmittal of funds:
(1)

For each transmittal order that it accepts as a

transmitter's financial institution, a broker or dealer in
securities that has an account for the transmittor shall
retain either the original, a microfilm or other copy,
record, or reproduction of the following information
relating to the transmittal order:




(i)

the name and address of the transmittor of

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the transmittal order;
(ii)
(iii)
(iv)

the amount of the transmittal of funds;
the execution date of the transmittal order;
any payment instructions received from the
transmitter with the transmittal order;

(v)

the identity of the recipients financial
institution; and

(vi) either the name and address or the account
number of the recipient of the transmittal of
funds, if received with the transmittal
order.
(2)

For each transmittal order that it accepts as an

intermediary financial institution, a broker or dealer in
securities shall retain either the original, a microfilm, or
other copy, record, or reproduction of the transmittal
order;
(3)

For each transmittal order that it accepts as a

recipient's financial institution, a broker or dealer in
securities' that has an account for the recipient shall
retain either the original, a microfilm, or other copy,
record, or reproduction of the transmittal order.
(4)

The information that a transmitter's financial

institution must retain under paragraph (g)(1) of this
section shall be readily retrievable by the transmitter's
financial institution by reference to either the name or

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account number of the transmitter.

The information that a

recipient’s financial institution must retain under
paragraph (g)(3) of this section shall be readily
retrievable by the recipient's financial institution by
reference to either the name or account number of the
recipient.

This information need not be retained

alphabetically by name or numerically by account number; but
the financial institution must be able to access the
transmittal of funds records readily by name or account
number of the transmittor or recipient, as the case may be,
and may do so through reference to some other record
maintained by the financial institution.
(5)

The following transmittals of funds are not

subject to the requirements of this paragraph:




(i)

a transmittal of funds where both the

transmittor and the recipient of the funds are domestic
brokers or dealers in securities;
(ii)

a transmittal of funds where both the

transmittor and recipient are the same domestic broker
or dealer in securities or one is the wholly-owned
domestic subsidiary of the other, or a bank;
(iii)

transmittals of funds where both the

transmittor and recipient are the same person and the
transmitter's financial institution and the recipient's
financial institution are the same domestic broker or
dealer in securities; and
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(iv)

transmittals of funds where both the

transmitter and the recipient are either a domestic
broker or dealer in securities, the United States, any
state or local government, or a federal, state, or
local government agency or instrumentality.

Dated:
In concurrence:
By the Board of Governors of the Federal Reserve System.

William W. Wiles
Secretary

Dated:

AUG i i 1993

By the Department of the Treasury.
.

/-

>nald K. Noble
Assistant Secretary
(Enforcement)

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