[Federal Register Volume 77, Number 190 (Monday, October 1, 2012)]
[Rules and Regulations]
[Pages 59747-59748]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-23995]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 1010

RIN 1506-AA63


Repeal of the Final Rule Imposing Special Measures and Withdrawal 
of the Findings of Primary Money Laundering Concern Against Myanmar 
Mayflower Bank and Asia Wealth Bank

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

ACTION: Final rule.

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SUMMARY: This document repeals FinCEN's final rule, ``Imposition of 
Special Measures Against Myanmar Mayflower Bank and Asia Wealth Bank'' 
of April 12, 2004, and withdraws the findings of Myanmar Mayflower Bank 
and Asia Wealth Bank as Financial Institutions of Primary Money 
Laundering Concern of November 25, 2003, issued pursuant to 31 U.S.C. 
5318A of the Bank Secrecy Act (the ``BSA'').

DATES: Effective Date: October 1, 2012.

FOR FURTHER INFORMATION CONTACT: Regulatory Policy and Programs 
Division, Financial Crimes Enforcement Network, (800) 949-2732 and 
select Option 1.

SUPPLEMENTARY INFORMATION: 

I. Background

A. Statutory Provisions

    On October 26, 2001, the President signed into law the Uniting and 
Strengthening America by Providing Appropriate Tools Required to 
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (``USA 
PATRIOT Act''). Title III of the USA PATRIOT Act amends the anti-money 
laundering provisions of the BSA, codified at 12 U.S.C. 1829b, 12 
U.S.C. 1951-1959, and 31 U.S.C. 5311-5314 and 5316-5332, to promote the 
prevention, detection, and prosecution of money laundering and the 
financing of terrorism. Regulations implementing the BSA appear at 31 
CFR Chapter X.\1\ The Secretary of the Treasury (the ``Secretary'') has 
delegated his authority to administer the BSA and its implementing 
regulations to the Director of the Financial Crimes Enforcement 
Network.\2\
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    \1\ On October 26, 2010, FinCEN issued a final rule creating a 
new Chapter X in Title 31 of the Code of Federal Regulations for the 
BSA regulations. See 75 FR 65806 (October 26, 2010) (Transfer and 
Reorganization of Bank Secrecy Act Regulations Final Rule) (referred 
to herein as the ``Chapter X Final Rule''). The Chapter X Final Rule 
became effective on March 1, 2011.
    \2\ Therefore, references to the authority of the Secretary 
under section 311 of the USA PATRIOT Act apply equally to the 
Director of the Financial Crimes Enforcement Network.
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    Section 311 of the USA PATRIOT Act (``section 311'') added Section 
5318A to the BSA, granting the Secretary the authority, upon finding 
that reasonable grounds exist for concluding that a foreign 
jurisdiction, foreign financial institution, class of international 
transactions, or type of account is of ``primary money laundering 
concern,'' to require domestic financial institutions and domestic 
financial agencies to take certain ``special measures'' against the 
primary money laundering concern.\3\
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    \3\ Available special measures include requiring: (1) 
Recordkeeping and reporting of certain financial transactions; (2) 
collection of information relating to beneficial ownership; (3) 
collection of information relating to certain payable-through 
accounts; (4) collection of information relating to certain 
correspondent accounts; and (5) prohibition or conditions on the 
opening or maintaining of correspondent or payable-through accounts. 
31 U.S.C. 5318A(b)(1)-(5). For a complete discussion of the range of 
possible countermeasures, see 68 FR 18917 (April 17, 2003) 
(proposing to impose special measures against Nauru).
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    Taken as a whole, Section 5318A provides the Secretary with a range 
of options that can be adapted to target specific money laundering and 
terrorist financing concerns most effectively. These options provide 
the authority to bring additional and useful pressure on those 
jurisdictions and institutions that pose money-laundering threats and 
the ability to take steps to protect the U.S. financial system. Through 
the imposition of various special measures, FinCEN can: Gain more 
information about the concerned jurisdictions, financial institutions, 
transactions, and accounts; monitor more effectively the respective 
jurisdictions, financial institutions, transactions, and accounts; and, 
ultimately, protect U.S. financial institutions from involvement with 
jurisdictions, financial institutions, transactions, or accounts that 
pose a money laundering concern.

B. Myanmar Mayflower Bank and Asia Wealth Bank

    Myanmar Mayflower Bank was incorporated in 1996 as a full-service 
commercial bank in Rangoon, Burma. At the time of the final rule, the 
bank maintained 25 branches and had 1,153 employees. The Banker's 
Almanac and Dun and Bradstreet reports indicated that Mayflower Bank 
was incorporated in 1994.
    Asia Wealth Bank started its banking operation in 1995, was one of 
the largest private banks in Burma, and offered a wide variety of 
banking services. In August 2000, Asia Wealth Bank held 52 percent of 
the market share in fixed deposits of Burmese banks (over U.S. $23 
billion). At the end of March 2001, it had 39 branches with a total of 
3,200 employees (in December 2002, Dun and Bradstreet indicated only 
2,200 employees).

II. The Finding, Final Rule, and Subsequent Developments

A. The Finding and Final Rule

    Based upon review and analysis of relevant information, 
consultations with relevant Federal agencies and departments, and after 
consideration of

[[Page 59748]]

the factors enumerated in section 311, the Secretary found that 
reasonable grounds existed for concluding that Myanmar Mayflower Bank 
and Asia Wealth Bank (``the Banks'') were financial institutions of 
primary money laundering concern.\4\ Based on that finding, FinCEN 
issued a notice of proposed rulemaking to impose the special measure 
authorized under 31 U.S.C. 5318A(b)(5) against the Banks.\5\
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    \4\ See 68 FR 66298 (November 25, 2003).
    \5\ See 68 FR 66305 (November 25, 2003).
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    After consulting with required Federal agencies and parties, 
reviewing public comments received on the notice of proposed 
rulemaking, and considering additional relevant factors, FinCEN issued 
a final rule on April 12, 2004 that imposed the special measure 
authorized under 31 U.S.C. 5318A(b)(5) against the Banks.\6\ The final 
rule requires covered financial institutions to terminate any 
correspondent or payable-through accounts for, or on behalf of, the 
Banks, and to apply due diligence reasonably designed to guard against 
indirect use of their correspondent or payable-through accounts by the 
Banks.
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    \6\ See 69 FR 19098 (April 12, 2004).
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III. Withdrawal of the Finding of Primary Money Laundering Concern 
Against Myanmar Mayflower Bank and Repeal of the Final Rule

    Subsequent to the issuance of the final rule related to the Banks, 
the Government of Burma revoked the licenses of the Banks in 2005 and 
neither financial institution currently exists.\7\ Therefore, FinCEN 
hereby withdraws the finding that Myanmar Mayflower Bank and Asia 
Wealth Bank are financial institutions of primary money laundering 
concern, as of October 1, 2012. FinCEN is also repealing the final 
rule, as published in the Federal Register on April 12, 2004 (69 FR 
19098) as 31 CFR 103.187 (now 31 CFR 1010.652), that was based upon the 
finding. FinCEN's withdrawal of the finding of primary money laundering 
concern against the Banks and the repeal of the related final rule do 
not acknowledge any remedial measures taken by the Banks, but are the 
result of the revocation of their licenses by the Government of Burma 
and the cessation of their business activities. Notwithstanding this 
document, the finding that the jurisdiction of Burma is of primary 
money laundering concern and the related outstanding 311 final rule 
imposing the special measure authorized under 31 U.S.C. 5318A(b)(5) on 
the jurisdiction of Burma are still in effect.\8\
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    \7\ See International Narcotics Control Strategy Report, Volume 
II, Department of State, at 120 (March 2007).
    \8\ Burma was described at length in the November 25, 2003 
notice of proposed rulemaking, 68 FR 66305, and April 12, 2004 final 
rule, 69 FR 19100. Today's repeal of the final rule and withdrawal 
of the findings of primary money laundering concern against Myanmar 
Mayflower Bank and Asia Wealth Bank do not provide an update on 
jurisdictional developments nor does it withdraw the November 25, 
2003 finding that the jurisdiction of Burma is of primary money 
laundering concern (68 FR 66298). Further discussion of 
jurisdictional developments can be found at the U.S. Department of 
State's ``2012 International Narcotics Control Strategy Report'' at 
page 68 (http://www.state.gov/documents/organization/185866.pdf).
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IV. Regulatory Matters

    Although section 553 of the Administrative Procedure Act (5 U.S.C. 
551 et seq.) requires notice and an opportunity for comment before an 
agency issues a final rule as well as a 30-day delayed effective date, 
it provides that an agency may dispense with these procedures when good 
cause exists. In this final rule, FinCEN has found that public comment 
procedures and delaying the effective date of the removal of the 
regulation would be contrary to the public interest. As discussed in 
this preamble, the Government of Burma revoked the licenses of the 
Banks that are the subject of the regulations and neither financial 
institution currently exists. Accordingly, FinCEN has found that good 
cause exists to dispense with prior notice and comment and a delay in 
effective date.

A. Executive Order 12866

    It has been determined that this rulemaking is not a significant 
regulatory action for purposes of Executive Order 12866. Accordingly, a 
regulatory impact analysis is not required.

B. Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded 
Mandates Act''), Public Law 104-4 (March 22, 1995), requires that an 
agency prepare a budgetary impact statement before promulgating a rule 
that may result in expenditure by state, local, and tribal governments, 
in the aggregate, or by the private sector, of $100 million or more in 
any one year. If a budgetary impact statement is required, section 202 
of the Unfunded Mandates Act also requires an agency to identify and 
consider a reasonable number of regulatory alternatives before 
promulgating a rule. FinCEN has determined that it is not required to 
prepare a written statement under Section 202 and has concluded that on 
balance the rule provides the most cost-effective and least burdensome 
alternative to achieve the objectives of the rule.

C. Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et 
seq.), FinCEN certifies that this final regulation likely will not have 
a significant economic impact on a substantial number of small 
entities. The regulatory changes in this final rule merely remove the 
current obligations for financial institutions under 31 CFR 103.187 
(now 31 CFR 1010.652).

D. Paperwork Reduction Act

    This regulation discontinues the Office of Management and Budget 
Control Number 1506-AA63 assigned to the final rule and, as a result, 
reduces the estimated average burden of one hour per affected financial 
institution, totaling 5,000 hours. This regulation contains no new 
information collection requirements subject to review and approval by 
the Office of Management and Budget under the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3507(d) et seq.).

List of Subjects in 31 CFR Part 1010

    Administrative practice and procedure, Banks, banking, Brokers, 
Currency, Foreign banking, Foreign currencies, Gambling, 
Investigations, Penalties, Reporting and recordkeeping requirements, 
Securities, Terrorism.

Authority and Issuance

    For the reasons set forth above, 31 CFR part 1010 is amended as 
follows:

PART 1010--GENERAL PROVISIONS

0
1. The authority citation for 31 CFR part 1010 continues to read as 
follows:

    Authority:  12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307.


Sec.  1010.652  [Removed]

0
2. Section 1010.652 is removed.

    Dated: September 25, 2012.
Peter S. Alvarado,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2012-23995 Filed 9-28-12; 8:45 am]
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