[Federal Register Volume 78, Number 80 (Thursday, April 25, 2013)]
[Notices]
[Pages 24601-24602]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-09786]
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DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
Order Imposing Recordkeeping and Reporting Obligations on Certain
U.S. Financial Institutions With Respect to Transactions Involving
Halawi Exchange Co. as a Financial Institution of Primary Money
Laundering Concern
AGENCY: Financial Crimes Enforcement Network, Treasury (``FinCEN'').
ACTION: Order.
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SUMMARY: The Director of FinCEN found on April 22, 2013, that Halawi
Exchange Co. (``Halawi Exchange'') is a financial institution operating
outside the United States that is of primary money laundering concern.
The Director of FinCEN is issuing an order imposing certain
recordkeeping and reporting obligations with respect to transactions
involving Halawi Exchange (the ``Order'').
DATES: The Order is effective on April 23, 2013. The Order will remain
in effect until August 21, 2013.
FOR FURTHER INFORMATION CONTACT: Regulatory Policy and Programs
Division, FinCEN, (800) 949-2732.
SUPPLEMENTARY INFORMATION: On April 22, 2013, the Director of FinCEN,
pursuant to 31 U.S.C. 5318A, found Halawi Exchange to be a Financial
Institution of Primary Money Laundering Concern (the ``Finding'').
Notice of the Finding is published elsewhere in this issue of the
Federal Register.
Also published elsewhere in this issue of the Federal Register is a
notice of proposed rulemaking (``NPRM'') proposing to apply the first
and fifth special measures provided in 31 U.S.C. 5318A to any
transaction or attempted transaction involving Halawi Exchange. The
explanations and interpretations found in the NPRM are applicable to
this Order to the extent that this Order imposes the same obligations
proposed in the NPRM.
This Order addresses FinCEN's concern that Halawi Exchange may
continue to be involved in transactions that present a substantial
money laundering risk prior to any implementation of the proposed rule.
This Order applies to covered financial institutions as defined in
31 CFR 1010.605(e)(1), and money transmitters that are required to
register under 31 CFR 1022.380 (``principal money transmitters''), that
are requested to process transactions involving Halawi Exchange. This
Order requires covered financial institutions and principal money
transmitters to report the information listed in Part 2 below in a
comma separated value (``CSV'') file. Covered financial institutions
and principal money transmitters are required to load the CSV file on
an encrypted CD-ROM and mail the CD-ROM on or before the 15th day
following the date of the transaction or the date the covered financial
institution or principal money transmitter became aware of the
attempted transaction to the Department of the Treasury, Financial
Crimes Enforcement Network, Post Office Box 39, Vienna, Virginia 22183-
0039 (Attn: 311 Reporting). Information of a contact person from whom
FinCEN may obtain the encryption password should be enclosed in the
mailing. To ease regulatory burden and as appropriate, reports filed as
Bank Secrecy Act-Suspicious Activity Reports (``BSA-SARs'') will be
deemed to comply with this reporting requirement if filed within 15
days with all required information included in an attached CSV file and
containing both in the narrative and field 35z the text ``Halawi
Exchange SM1 Report''. As long as transactions or attempted
transactions are reported within the fifteen-day requirement and the
attached CSV file does not exceed one megabyte, multiple transactions
may be reported on the same BSA-SAR.
This Order imposes requirements with respect to entities identified
as primary money laundering concern for their involvement in laundering
the proceeds of narcotics traffickers and money launderers. Because
advanced notice of this action could result in the loss of reporting
information related to these entities, and section 311 of the USA
PATRIOT Act authorizes the issuance of this Order without a prior
notice of proposed rulemaking, it is found to be impracticable,
unnecessary, and contrary to the public interest to comply with notice
and public procedure under 5 U.S.C. 553(b). For these reasons, the
Order is made effective before 30 days have passed after its
publication date. See 5 U.S.C. 553(d). In addition, the provisions of
the Regulatory Flexibility Act relating to initial and final regulatory
flexibility analysis (5 U.S.C. 604) are not applicable to this Order
because FinCEN was not required to publish a prior
[[Page 24602]]
notice of proposed rulemaking under 5 U.S.C. 553 or any other law.
By virtue of the authority contained in 31 U.S.C. 5318A and
delegated to the Director of FinCEN, I hereby order, for the period
from April 23, 2013 through August 21, 2013 that:
Part 1--Requirements for financial institutions subject to this Order
(1) Identifying Transactions or Attempted Transactions Involving
Halawi Exchange Co. A financial institution subject to this Order is
required to use its existing anti-money laundering programs and
processes to identify transactions or attempted transactions involving
Halawi Exchange Co. U.S. financial institutions generally apply some
degree of due diligence in screening their transactions and accounts,
often through the use of commercially available software such as that
used for compliance with the economic sanctions programs administered
by the Office of Foreign Assets Control of the Department of the
Treasury. The identification required by this Order may be accomplished
by relying on these same automated programs and filters used to
identify sanctioned entities.
(2) Reporting. A financial institution subject to this Order is
required to take reasonable steps to collect and report to FinCEN on
the following information with respect to any transaction or attempted
transaction involving Halawi Exchange Co.:
(i) The identity and address of the participants in the transaction
or attempted transaction, including the identity of the originator and
beneficiary of any funds transfer;
(ii) the legal capacity in which Halawi Exchange Co. is acting with
respect to the transaction or attempted transaction and, to the extent
to which Halawi Exchange Co. is not acting on its own behalf, the
customer or other person on whose behalf Halawi Exchange Co. is acting;
and
(iii) a description of the transaction or attempted transaction and
its purpose.
(3) When to file. A report required this Order shall be filed by
the financial institution subject to the Order within fifteen business
days following the day when the financial institution subject to the
Order engaged in the transaction or became aware of an attempted
transaction. Willful failure to provide timely, accurate, and complete
information in such reporting may constitute a violation of this Order
subject to civil and criminal penalties under 31 U.S.C. 5321 and 5322.
(4) Form of Reporting. A report required by this Order shall be
filed on an encrypted CD-ROM sent to the Department of the Treasury,
Financial Crimes Enforcement Network, Post Office Box 39, Vienna,
Virginia 22183-0039 (Attn: 311 Reporting) However, if a financial
institution subject to this Order determines the reportable transaction
to be suspicious, filing FinCEN Form 111 within 15 days with all
required information included in an attached CSV file and containing
both in the narrative and field 35z the text ``Halawi Exchange SM1
Report'' will be deemed to comply with this Order. The collection of
information required by this Order is approved under OMB Control Number
1506-0065. An agency may not conduct or sponsor and a person is not
required to respond to a collection of information unless it displays a
valid OMB control number.
Part 2--Specifications for Reporting.
(1) Financial institutions subject to this Order shall place the
required information in a CSV file in the following format:
Transaction Reference Number, Payment Date, Instruction Date,
Payment Amount, Transmittor's Account Number, Transmittors's Full Name,
Transmittors's Address, Transmittor's Financial Institution's
Identifier, Transmittor's Financial Institution's Name, Transmittor's
Financial Institution's Address, Incoming Correspondent Financial
Institution's Identifier, Incoming Correspondent Financial
Institution's Name, Incoming Correspondent Financial Institution's
Address, Outgoing Correspondent Financial Institution's Identifier,
Outgoing Correspondent Financial Institution's Name, Outgoing
Correspondent Financial Institution's Address, Recipient's Financial
Institution's Identifier, Recipient's Financial Institution's Name,
Recipient's Financial Institution's Address, Recipient's Account
Number, Recipient's Full Name, Recipient's Address, Payment
Instructions.
Part 3--Definitions.
When used in this Order, where not otherwise distinctly defined or
manifestly incompatible with the intent thereof, terms shall have the
meanings ascribed in 31 CFR 1010.100. For purposes of this Order, the
following terms shall have the following meanings:
(1) Halawi Exchange Co. means all branches, offices, and
subsidiaries of Halawi Exchange Co. operating in any jurisdiction.
(2) Financial institution subject to the Order means a covered
financial institution as defined in 31 CFR 1010.605(e)(1) or a money
transmitter required to register under 31 CFR 1022.380.
(3) Subsidiary means a company of which more than 50 percent of the
voting stock or analogous equity interest is owned by Halawi Exchange
Co.
(4) Transaction Reference Number means a reference number assigned
to a transaction by the reporting financial institution.
(5) Incoming Correspondent Financial Institution means the
financial institution that sent the transmittal order to the reporting
financial institution.
(6) Outgoing Correspondent Financial Institution means the
financial institution to which the reporting financial institution will
send a transmittal order.
(7) Payment Instructions means any information provided by the
originator to be included in the transmittal order that describes the
purpose of the transaction for the beneficiary.
Dated: April 20, 2013.
Jennifer Shasky Calvery,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2013-09786 Filed 4-23-13; 11:15 am]
BILLING CODE 4810-02-P