[Federal Register Volume 61, Number 225 (Wednesday, November 20, 1996)]
[Rules and Regulations]
[Pages 58974-58975]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29638]
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FEDERAL RESERVE SYSTEM
12 CFR Part 219
[Regulation S; Docket No. R-0934]
Reimbursement for Providing Financial Records; Recordkeeping
Requirements for Certain Financial Records
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
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SUMMARY: The Board has approved an amendment to subpart B of its
Regulation S. Subpart B cross-references the substantive provisions of
a joint rule adopted by the Board and the Department of the Treasury
relating to the recordkeeping requirements for funds transfers and
transmittals of funds under the Bank Secrecy Act. The amendment
clarifies that Regulation S does not apply to any person or transaction
or class of persons or transactions that the Treasury has exempted from
the joint rule.
EFFECTIVE DATE: December 20, 1996.
FOR FURTHER INFORMATION CONTACT: Louise Roseman, Associate Director,
(202/452-2789), Division of Reserve Bank Operations and Payment
Systems; Oliver Ireland, Associate General Counsel (202/452-3625), or
Elaine Boutilier, Senior Counsel (202/ 452-2418); Legal Division. For
the hearing impaired only, contact Dorothea Thompson,
Telecommunications Device for the Deaf (TDD) (202/452-3544).
SUPPLEMENTARY INFORMATION: The Bank Secrecy Act,1 as amended by
the Annunzio-Wylie Anti-Money Laundering Act of 1992,2 authorizes,
and in some cases requires, the Secretary of the Treasury 3 and
the
[[Page 58975]]
Board to prescribe recordkeeping rules for domestic and international
funds transfers and money transmittals. The Board and the Treasury
issued a joint rule,4 effective May 28, 1996, that sets forth
recordkeeping and reporting requirements for funds transfers and money
transmittals by banks and nonbank financial institutions. These
requirements are intended to assist in the investigation and
prosecution of money-laundering activities. In promulgating these
rules, the Board and the Treasury determined that the requirements
would have a high degree of usefulness in criminal, tax, or regulatory
investigations or proceedings. The substance of the joint rule is
codified with the Treasury's Bank Secrecy Act regulations in 31 CFR
part 103.5 At the same time, the Board added subpart B to its
Regulation S (12 CFR part 219) to cross-reference the joint rule.
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\1\ Pub. L. 91-508, codified at 12 U.S.C. 1829b and 1951-1959,
and 31 U.S.C. 5311-5329.
\2\ Pub. L. 102-550, title XV.
\3\ The Secretary of the Treasury has delegated the authority to
administer the Bank Secrecy Act to the Director of the Financial
Crimes Enforcement Network.
\4\ 60 FR 231 (January 3, 1995), as modified by 60 FR 44144
(August 24, 1995) and 61 FR 14382 (April 1, 1996).
\5\ 31 CFR 103.11 and 103.33 (e) and (f).
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Under its general Bank Secrecy Act regulations, the Treasury may
make exceptions or grant exemptions from the requirements in 31 CFR
part 103 for particular persons or classes of persons or particular
transactions or classes of transactions.6 The Board has no similar
exemptive provisions in Regulation S. The Board recognizes the
possibility that the Treasury could grant an exception or exemption for
a person or transaction subject to the joint rule. Therefore, on August
21, 1996 (61 FR 43195), the Board requested comments on an amendment to
clarify that subpart B does not apply to a particular person or class
of persons, or particular transaction or class of transactions, to the
extent that the Treasury has determined that the joint rule does not
apply to that person, transaction, or class of persons or transactions.
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\6\ See 31 CFR 103.45.
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Four comments, all favorable, were received in response to the
proposed change. Three comments were received from Federal Reserve
Banks, all of which supported the proposed amendment to clarify the
intent of subpart B of Regulation S. One comment was received from a
bank trade association, which supported the amendment, stating that
``any revisions that eliminate potential confusion help to alleviate
regulatory burden.'' That comment did suggest that the final language
be revised and put into clearer language--less ``legalese.'' The
language used in the amendment to subpart B adopts the terminology used
in the exemption authority given the Secretary of the Treasury in 31
CFR 103.45; and, to avoid confusion, the Board will continue to use the
same terminology.
Accordingly, to avoid confusion and to ensure consistent
application of the joint rule and subpart B of Regulation S, the Board
has amended Regulation S to clarify that subpart B does not apply to a
particular person or class of persons or particular transaction or
class of transactions to the extent that the Treasury has determined
that the joint rule does not apply to that person, transaction, or
class of persons or transactions.
Regulatory Flexibility Analysis
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 605(b)), the
Board hereby certifies that this amendment to subpart B of Regulation S
will not have a significant economic impact on a substantial number of
small entities. The amendment eliminates uncertainty as to the
application of the joint final rule and may result in reduced
compliance burden to the extent that the Treasury exempts persons or
transactions that would otherwise be subject to Regulation S.
Accordingly, a regulatory flexibility analysis is not required.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Ch. 3506; 5 CFR 1320 Appendix A.1), the Board reviewed the rule under
the authority delegated to the Board by the Office of Management and
Budget. No collections of information pursuant to the Paperwork
Reduction Act are contained in the final rule.
List of Subjects in 12 CFR Part 219
Banks, Banking, Currency, Foreign banking, Reporting and
recordkeeping requirements.
For the reasons set out in the preamble, 12 CFR part 219 is amended
as set forth below.
PART 219--REIMBURSEMENT FOR PROVIDING FINANCIAL RECORDS;
RECORDKEEPING REQUIREMENTS FOR CERTAIN FINANCIAL RECORDS
(REGULATION S)
* * * * *
Subpart B--Recordkeeping and Reporting Requirements for Funds
Transfers and Transmittals of Funds
1. The authority citation for subpart B is revised to read as
follows:
Authority: 12 U.S.C. 1829b(b)(2) and (3).
2. In Sec. 219.21, the first word ``Such'' in the last sentence is
revised to read ``These'' and a new sentence is added immediately
preceding the last sentence to read as follows:
Sec. 219.21. Authority, purpose, and scope.
* * * This subpart does not apply to a particular person or class
of persons or a particular transaction or class of transactions to the
extent that the Treasury has determined that 31 CFR 103.33(e) or (f) do
not apply to that person, transaction, or class of persons or
transactions. * * *
By order of the Board of Governors of the Federal Reserve
System, November 14, 1996.
William W. Wiles,
Secretary of the Board.
[FR Doc. 96-29638 Filed 11-19-96; 8:45 am]
BILLING CODE 6210-01-P