[Federal Register Volume 61, Number 246 (Friday, December 20, 1996)]
[Proposed Rules]
[Pages 67260-67265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32396]
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DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network Proposed Amendments to the
Bank Secrecy Act Regulations Regarding Reporting and Recordkeeping by
Card Clubs
31 CFR Part 103
RIN 1506-AA18
AGENCY: Financial Crimes Enforcement Network, Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Financial Crimes Enforcement Network (``FinCEN'') is
proposing to amend the regulations implementing the statute generally
referred to as the Bank Secrecy Act to include certain gaming
establishments, commonly called ``card clubs,'' ``card rooms,''
``gaming clubs,'' or ``gaming rooms'' within the definition of
financial institution subject to those regulations.
DATES: Written comments must be received on or before March 20, 1997.
ADDRESSES: Written comments should be submitted to: Office of
Regulatory Policy and Enforcement, Financial Crimes Enforcement
Network, Department of the Treasury, 2070 Chain Bridge Road, Vienna,
Virginia 22182, Attention: NPRM--Card Clubs.
Submission of comments: Comments on all aspects of the proposed
regulation are welcome and will be considered if submitted in writing
prior to March 20,
[[Page 67261]]
1997. An original and four copies of any comments must be submitted.
All comments will be available for public inspection and copying, and
no material in any such comments, including the name of any person
submitting comments, will be recognized as confidential. Accordingly,
material not intended to be disclosed to the public should not be
submitted.
Inspection of comments: Comments may be inspected at the Department of
the Treasury between 10:00 a.m. and 4:00 p.m., in the Financial Crimes
Enforcement Network (``FinCEN'') reading room, on the third floor of
the Treasury Annex, 1500 Pennsylvania Avenue, N.W., Washington, D.C.
20220. Persons wishing to inspect the comments submitted should request
an appointment by telephoning (202) 622-0400.
FOR FURTHER INFORMATION CONTACT: Leonard C. Senia, Senior Financial
Enforcement Officer, Office of Regulatory Policy and Enforcement,
Financial Crimes Enforcement Network (703) 905-3931, or Joseph M.
Myers, Attorney-Advisor, Office of Legal Counsel, Financial Crimes
Enforcement Network, (703) 905-3557.
SUPPLEMENTARY INFORMATION:
Introduction
This document proposes (i) to add a definition of ``card club,'' in
a new paragraph (8) of 31 CFR 103.11(n), as a component of the
definition of ``financial institution'' for purposes of the Bank
Secrecy Act rules, (ii) to provide, by means of a new paragraph
(7)(iii) in section 103.11(n), for treatment of card clubs generally in
the same manner as casinos under the Bank Secrecy Act, (iii) to
renumber paragraphs (8) and (9) of section 103.11(n) as paragraphs (9)
and (10), respectively, and (iv) to add a new paragraph (11),
applicable only to card clubs, to 31 CFR 103.36(b), to require
retention by card clubs of records of a customer's currency
transactions, and records of all activity at card club cages or similar
facilities, maintained in the ordinary course of a club's business. The
proposed changes reflect the authority contained in section 409 of the
Money Laundering Suppression Act of 1994 (the ``Money Laundering
Suppression Act''), Title IV of the Riegle Community Development and
Regulatory Improvement Act of 1994, Pub. L. 103-325.
Background
The statute popularly known as the ``Bank Secrecy Act,'' Titles I
and II of Pub. L. 91-508, as amended, codified at 12 U.S.C. 1829b, 12
U.S.C. 1951-1959, and 31 U.S.C. 5311-5330, authorizes the Secretary of
the Treasury, inter alia, to issue regulations requiring financial
institutions to keep records and file reports that are determined to
have a high degree of usefulness in criminal, tax, and regulatory
matters, and to implement counter-money laundering programs and
compliance procedures. Regulations implementing Title II of the Bank
Secrecy Act (codified at 31 U.S.C. 5311-5330), appear at 31 CFR Part
103. The authority of the Secretary to administer the Bank Secrecy Act
has been delegated to the Director of FinCEN.
The range of financial institutions to which the Bank Secrecy Act
applies is not limited to banks and other depository institutions. It
also includes securities brokers and dealers, money transmitters, and
the other non-bank businesses that offer customers one or more
financial services.
State licensed gambling casinos were generally made subject to the
Bank Secrecy Act as of May 7, 1985, by regulation issued early that
year. See 50 FR 5065 (February 6, 1985).1 Gambling casinos
authorized to do business under the Indian Gaming Regulatory Act became
subject to the Bank Secrecy Act on August 1, 1996. See 61 FR 7054-7056
(February 23, 1996).2
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\1\ Casinos with gross annual gaming revenue of $1 million or
less were, and continue to be, excluded from coverage.
\2\ Treasury has issued four sets of rules in all relating to
the application of the Bank Secrecy Act to casino gaming
establishments. See, in addition to the two rules cited in the text,
54 FR 1165-1167 (January 12, 1989), and 59 FR 61660-61662 (December
1, 1994) (modifying and putting into final effect the rule
originally published at 58 FR 13538-13550 (March 12, 1993)).
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In recognition of the importance of application of the Bank Secrecy
Act to the gaming industry, section 409 of the Money Laundering
Suppression Act codified the application of the Bank Secrecy Act to
gaming activities by adding casinos and other gaming establishments to
the list of financial institutions specified in the Bank Secrecy Act
itself.3 The statutory specification reads:
\3\ The 1985 action initially making casinos subject to the Bank
Secrecy Act had been based on Treasury's statutory authority to
designate as financial institutions (i) businesses that engage in
activities ``similar to'' the activities of the businesses listed in
the Bank Secrecy Act, as well as (ii) other businesses ``whose cash
transactions have a high degree of usefulness in criminal, tax, or
regulatory matters.'' See 31 U.S.C. 5312(a)(2)(Y) and (Z) (as
renumbered by the Money Laundering Suppression Act).
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(2) financial institution means--
* * * * *
(X) a casino, gambling casino, or gaming establishment with an
annual gaming revenue of more than $1,000,000 which--
(i) is licensed as a casino, gambling casino, or gaming
establishment under the laws of any State or any political
subdivision of any State; or
(ii) is an Indian gaming operation conducted under or pursuant
to the Indian Gaming Regulatory Act other than an operation which is
limited to class I gaming (as defined in section 4(6) of such Act) *
* *
31 U.S.C. 5312(a)(2)(X). Treasury has previously indicated that it is
in the process of rethinking the application of the Bank Secrecy Act to
gaming establishments. See 59 FR 61660-61662 (December 1, 1994) and 61
FR 7054, 7055 (February 23, 1996). This notice of proposed rulemaking
is a step in that process.
Explanation of Provisions
A. Overview
The proposed regulations would expand the range of gaming
establishments to which the Bank Secrecy Act applies to include card
clubs. Generally card clubs would be subject to the same rules as
casinos (a matter on which comment is specifically requested below),
unless a specific provision of the rules in 31 CFR Part 103 applicable
to casinos explicitly required a different treatment for card clubs.
B. Definition of Card Club
The definition of card club itself is proposed to be added as a
component of the definition of ``financial institution'' in a new
paragraph 31 CFR 103.11(n)(8).4 Under the proposed amendment, the
term would include, inter alia, any establishment of the type commonly
referred to as a ``card club,'' ``card room,'' ``gaming club'' or
``gaming room,'' that is duly licensed or authorized to do business
either under state law, under the laws of a particular political
subdivision within a state, or under the Indian Gaming Regulatory Act
or other federal, state, or tribal law or arrangement affecting Indian
lands. Card clubs licensed by U.S. territories or possessions would
also fall within the definition.
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\4\ As indicated, no language in the financial institution
definition is being deleted; present paragraphs 103.11(n)(8) and
(n)(9) would simply become paragraphs (n)(9) and (n)(10),
respectively.
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The general need for and appropriateness of treatment of casinos as
financial institutions for purposes of the Bank Secrecy Act have been
accepted, as indicated above, since the mid-1980s. Treasury has made
clear the need to prevent casinos, which both deal in cash and cash-
equivalent chips
[[Page 67262]]
and can offer a variety of other financial services to customers, from
being used to avoid the effect of the Bank Secrecy Act.5
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\5\ The preamble to the final rule bringing casinos within the
Bank Secrecy Act stated that
[i]n recent years Treasury has found that an increasing number
of persons are using gambling casinos for money laundering and tax
evasion purposes. In a number of instances, narcotics traffickers
have used gambling casinos as substitutes for other financial
institutions in order to avoid the reporting and recordkeeping
requirements of the Bank Secrecy Act.
Inclusion of casinos in the definition of financial
institution[s] in 31 CFR Part 103 was among the specific
recommendations in the October 1984 report of the President's
Commission on Organized Crime, ``The Cash Connection: Organized
Crime, Financial Institutions, and Money Laundering.'' The problem
was also the subject of hearings in 1984 before the House Judiciary
Subcommittee on Crime entitled ``The Use of Casinos to Launder the
Proceeds of Drug Trafficking and Organized Crime.''
In order to prevent the use of casinos in this fashion, Treasury
is amending the regulations in 31 CFR Part 103 to require gambling
casinos to file the same types of reports [and maintain the same
types of records] that it requires from financial institutions
currently covered by the Bank Secrecy Act.
50 FR 5065, 5066, (February 6, 1985); see also 49 FR 32861,
32862 (August 17, 1984) (corresponding language in notice of
proposed rulemaking).
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Although application of the Bank Secrecy Act to gaming
establishments has heretofore been limited to casinos, that limitation
is not a statutory one. As noted, the statutory definition of financial
institution includes any establishment licensed as a ``gaming
establishment,'' whether the licensing authority is a state, a
municipality or other state subdivision, or one of the licensing
authorities recognized by the Indian Gaming Regulatory Act. See 31
U.S.C. 5311(a)(2)(X)(quoted above).
Card clubs are a fast-growing segment of the gaming industry,
primarily in California. Although card club operations differ, the
establishments generally offer facilities for gaming by customers who
bet against one another, rather than against the establishment. Most
large card clubs run the games, but the clubs earn their revenue by
receiving a fee from customers (for example a per table charge) rather
than from, as in a classic casino, running games and effectively
``banking'' the games offered so that customers bet against the house.
While the scope of casinos and card club operations may have
differed in the past, they no longer necessarily do so. California and
some other states in which card clubs operate do not permit casino
gaming (or only permit such gaming in limited forms). But, for example,
customers at California card clubs wagered about $8.9 billion in 1995.
Against that background, there are two primary reasons that card clubs,
like other gaming establishments, require coverage under the Bank
Secrecy Act.
First, many card clubs, like casinos, now offer their customers a
wide range of financial services. As it indicated when it proposed
extension of the Bank Secrecy Act to tribal casinos, the Treasury has
generally sought to apply the Bank Secrecy Act to gaming establishments
that provide their customers with a financial product--gaming--and as a
corollary offer a broad array of financial services, such as customer
deposit or credit accounts, facilities for transmitting and receiving
funds transfers directly from other institutions, and check cashing and
currency exchange services, that are similar to those offered by
depository institutions and other financial firms. The fact that the
gaming at card clubs does not directly involve the wagering of house
monies in no way alters the fact that vast sums of currency and other
funds pass through such establishments, or the fact that card clubs are
coming to offer their customers corollary financial services to
facilitate the movement of funds.
Second, card clubs are at least as vulnerable as other gaming
establishments to use by money launderers and those seeking to commit
tax evasion or other financial crimes, both because of their size and
because those institutions lack many of the controls found at casinos.
Given their growth, their prevalence in the nation's most populous
state, and their potential for expansion, there is no basis for
distinguishing card clubs from casinos for purposes of the Bank Secrecy
Act.6
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\6\ Federal and state law enforcement authorities have expressed
concern for several years about card clubs as venues for criminal
activity. See, e.g., Asian Organized Crime, Part I, S. Rep. 102-346,
101st Cong., 1st Sess. (1991); Asian Organized Crime: the New
International Criminal, S. Rep. 102-940, 101st Cong., 2nd. Sess.
(1992); Office of the Attorney General of California, ``Status of
Cardroom Gambling in California and the Proposed Gambling Control
Act'' (Public Document, February 1995); cf. Permanent Subcommittee
on Investigations, Senate Committee on Governmental Affairs,
Hearings: Asset Forfeiture Program--A Case Study of the Bicycle Club
Casino, 104th Cong., 2nd. Sess. (March 19, 1996).
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There is also some indication that the line between card clubs and
casinos may be blurring in practice. Thus, FinCEN noted in the preamble
to the final rule extending the Bank Secrecy Act to tribal casinos
that:
[A]n establishment that claimed to be a gambling ``club'' rather
than a casino because it simply offered customers an opportunity to
gamble with one another, but that in practice funded certain
customers so that other customers were in effect gambling against
``house'' money, and that offered its customers financial services
of various kinds, is arguably a casino under present law. Thus, for
example, if such a ``club'' failed to file currency transactions
reports or allowed a customer to deposit funds in a player bank
account in the name of the customer without requiring the customer
to provide identifying information, the club would arguably be
operating in violation of the Bank Secrecy Act.
61 FR 7055 note 1.
Given the growth of card clubs and their potential for offering a
venue for money launderers, the application of the Bank Secrecy Act to
such establishments should not depend on whether games are banked or
otherwise backed with house funds.7 Similarly, the fact that some
card clubs operating under the terms of the Indian Gaming Regulatory
Act, 25 U.S.C. 2701 et seq, may be Class II rather than Class III
establishments for purposes of the regulatory provisions of that
legislation (so that card clubs are subject to tribal regulation rather
than to regulation pursuant to state-tribal compact), does not provide
a relevant distinction for Bank Secrecy Act purposes.8 (As was the
case with tribal casinos, a card club that operates on Indian lands
under a view that compliance with the Indian Gaming Regulatory Act is
unnecessary or inconsistent with inherent tribal rights would not for
that reason be exempted from the terms of the Bank Secrecy Act, to the
extent that those terms would otherwise apply to the card club's
operations.)
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\7\ At present, the receipt of cash in excess of $10,000 by card
clubs in a single transaction (or multiple related transactions) is
required to be reported under section 6050I of the Internal Revenue
Code. The limited cash transaction reporting rules of section 6050I
(which apply to currency received in all non-financial trades or
businesses) are not as extensive as the reporting rules of the Bank
Secrecy Act (which apply both to receipts and payments of currency
and are not matched by recordkeeping, suspicious transaction
reporting, and anti-money laundering compliance program rules).
\8\ The National Indian Gaming Commission has taken the position
that games banked by players, rather than the house, are nonetheless
``banked card games'' whose operation is required to occur in a
Class III facility. Thus it appears that some percentage of card
clubs on tribal lands will be, or will be operated within, Class III
facilities that will generally become subject to the Bank Secrecy
Act on August 1, 1996. See National Indian Gaming Commission
Bulletin 95-1 (April 10, 1995). FinCEN understands that certain
Asian card games (whose rules employ a betting formula in which a
player does not offer to take on all competitors), may be permitted
to be offered in Class II facilities for purposes of the Indian
Gaming Regulatory Act.
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Card clubs, like casinos, will only become subject to the Bank
Secrecy Act once they generate more than $1 million in ``gross annual
gaming revenue.'' Treasury believes that as applied to card clubs the
term includes revenue derived from or generated by customer gaming
[[Page 67263]]
activity (whether in the form of per-game or per-table fees, fees based
on winnings, rentals, or otherwise) and received by an establishment.
C. Treatment of Card Clubs Under the Bank Secrecy Act
Under the proposed regulations, card clubs would be treated under
the Bank Secrecy Act in the same manner as casinos unless specific
provisions of the rules in 31 CFR Part 103 explicitly require a
different treatment. Thus, card clubs would become subject not simply
to the Bank Secrecy Act's currency transaction reporting rules but to
the full set of provisions (described by the Congress as ``a
comprehensive currency reporting and detailed recordkeeping system with
numerous anti-money laundering safeguards'' 9) to which casinos in
the United States are subject.
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\9\ See H.R. Rep. No. 652, 103rd Cong., 2nd Sess. 193 (1994).
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Treatment of card clubs on a par with casinos would generally
impose on such clubs the Bank Secrecy Act rules that apply to casinos.
Thus, each card club would be required to file with the Department of
the Treasury a report of each receipt or disbursement of more than
$10,000 in currency in its operations during any gaming day;
aggregation of multiple currency transactions is required in a number
of situations. See 31 CFR 103.22(a)(2). The requirement would apply to
all receipts or disbursements of currency in connection with gaming
activities at the card club, including, but not limited to, transfers
of currency for chip purchases or redemptions, exchanges of bills of
one denomination for bills of another denomination, exchanges of one
currency for another currency, transfers to or from player accounts or
deposit facilities, payments or advances on credit, wagers of currency
or payments of currency to settle wagers, and transfers intended for
conversion to other forms of negotiable instruments or for electronic
funds transfer or transmittal out of, or as a result of such transfer
or transmittal into, the card club.10
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\10\ Legislation recently enacted in California adds gaming
clubs to the list of financial institutions in that state that are
required to report transactions in currency of more than $10,000 to
the California Department of Justice. See Assembly Bill 3183 (signed
September 28, 1996), amending Cal. Penal Code 14161. The new
reporting requirement becomes effective on January 1, 1997. It is
anticipated that the California and Bank Secrecy Act currency
transaction reporting requirements will be coordinated (as is done
in other situations in which Bank Secrecy Act and state reporting
rules overlap) to reduce regulatory burden and costs of compliance.
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It is particularly important to understand that the requirements
would apply regardless of where the transfers occur at the card club.
Thus no distinction is to be made between, for example, transactions at
a cage, cashier, or other central facility, and chip purchases or
redemptions from club runners or from dealers or other operators of
specific games.
Each card club would also be required, like a casino, to maintain,
and to retain, certain records relating to its operation, including
records identifying account holders (see 31 CFR 103.36(a)), records
showing transactions for or through each customer's account (see,
generally, 31 CFR 103.36(b)), and records of transactions involving
persons, accounts or places outside the United States. See 31 CFR
103.36(b)(5). Records of transactions of more than $3,000 involving
checks or other monetary instruments and records that are prepared or
used by a card club to monitor a customer's gaming activity are also
among the types of records that would be required to be maintained. See
31 CFR 103.36 (b)(8) and (b)(9). (A specific record retention
requirement, applicable only to card clubs, is discussed below.)
Finally, card clubs would be required to institute training and
internal control programs to assure and monitor compliance with the
Bank Secrecy Act. See 31 CFR 103.36(b)(10) and 103.54(a).11
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\11\ In addition, Treasury intends to issue regulations to
require classes of non-bank financial institutions, including gaming
establishments, to file reports of suspicious transactions. See 31
U.S.C. 5318(g)(1).
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Card clubs within the scope of the proposed rule will in any event
remain subject to the filing requirements of section 6050I of the
Internal Revenue Code, with respect to their gaming and financial
services operations, until the proposals made by this document become
effective as a final rule. See section 6050I (a) and (c) of the
Internal Revenue Code, 26 U.S.C. 6050I(a) and (c), and Treas. Reg.
1.6050I-1(d)(2). Section 6050I of the Code will continue to apply to
any non-gaming and non-financial services operations (for example
restaurant service), at card clubs that become subject to the Bank
Secrecy Act.
D. Additions to Record Retention Requirements
The proposed rule contains one new record retention requirement,
applicable only to card clubs. A proposed new paragraph (11) of 31 CFR
103.36(b) would require card clubs to retain, for five years, all
currency transaction logs, multiple currency transaction logs, and cage
control logs that the clubs maintain in their business operations. This
requirement is proposed to assure an adequate basis for the audit of
compliance or review of compliance by card clubs with the Bank Secrecy
Act; the restriction of the requirement to card clubs reflects the
absence for such clubs of a state regulatory scheme under whose terms
similar records would already be required to be maintained.
E. Request for Comments on Specific Subjects
FinCEN recognizes that card club operations are not uniform
throughout the United States, and it is keenly aware of the need to
proceed thoughtfully in adopting the rules of the Bank Secrecy Act to
the realities of those operations. FinCEN specifically seeks comment on
the following questions:
1. Are there particular parts of the Bank Secrecy Act regulations
applicable to casinos generally that cannot or should not be applied to
card clubs?
2. What types of financial services, other than gaming, are offered
by card clubs?
3. Do any elements of the operation of card clubs on tribal lands
justify different treatment for such clubs than for other card clubs?
Are specific rules necessary to take account of situations in which
card clubs operate in Class II facilities that offer several different
Class II gaming activities?
4. How can compliance with the Bank Secrecy Act by tribal card
clubs best be examined and enforced?
In seeking guidance on these and other issues raised by this notice
of proposed rulemaking, FinCEN is interested in hearing from all
parties potentially affected by the proposed rules, including operators
of card clubs, officials of jurisdictions in which card clubs are
located, and Indian tribes on whose lands card club gaming is
conducted.
Treasury is continuing to consider issues affecting the application
of the Bank Secrecy Act to the gaming industry generally. Those issues
include whether special rules should be applicable to small gaming
establishments, and how best to implement with respect to gaming
establishments the general provisions added to the Bank Secrecy Act by
the Annunzio-Wylie Anti-Money Laundering Act of 1992, Title XV of the
Housing and Community Development Act of 1992, Pub. L. 102-550, and the
Money Laundering Suppression Act.
Proposed Effective Date
The amendments to 31 CFR Part 103 proposed in this notice of
proposed rulemaking will become effective 90 days following publication
in the
[[Page 67264]]
Federal Register of the final rule to which this notice of proposed
rulemaking relates.
Special Analyses
It has been determined that this notice of proposed rulemaking (i)
is not subject to the ``budgetary impact statement'' requirement of
section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4), and (ii) is not a significant regulatory action as defined in
Executive Order 12866. It is not anticipated that this proposed rule,
if adopted as a final rule, will have an annual effect on the economy
of $100 million or more. Nor will it, if so adopted, affect adversely
in a material way the economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or state,
local or tribal governments or communities. The proposed rule is
neither inconsistent with, nor does it interfere with, actions taken or
planned by other agencies. Finally, it raises no novel legal or policy
issues.
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''--all as required by 5 U.S.C. 553(b)--are
found elsewhere in this preamble.
Paperwork Reduction Act
The proposed rule would add a new paragraph (b)(11) to section
103.36 to require card clubs to retain records, created in the ordinary
course of business, (i) of currency transactions (for example, currency
transaction logs and multiple currency transaction logs) and (ii) of
all activity at card club cages or similar facilities, including,
without limitation, cage control logs. FinCEN believes that, as a
matter of usual and customary business practice, card clubs collect and
maintain information about currency and cage transactions conducted by
their customers; proposed paragraph (b)(11) would require simply that
such records be retained for at least five years (the generally
applicable Bank Secrecy Act record retention period). FinCEN thus
believes that the retention requirement of proposed 103.36(b)(11), the
only new retention requirement in the proposed rule, would impose a
minimal additional burden on the card club industry. Nevertheless,
because proposed 103.36(b)(11) is a recordkeeping obligation not
presently found in 31 CFR Part 103, FinCEN hereby presents the
following information concerning the retention of information on
currency and cage transactions, in accordance with requirements of the
Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq., to assist
those persons wishing to comment on the proposed information retention
requirement.
Proposed Collection Retention Requirement
Description of Respondents: All card clubs conducting transactions
in currency and cage transactions with their customers and creating
records of such transactions in the ordinary course of business.
Frequency: Each time a currency or cage transaction is recorded.
Estimated Number of Currency and Cage Transactions: Unknown.
Estimate of Total Annual Burden on Card Clubs: Recordkeeping burden
estimate = approximately 686 hours per year.
Estimate of Total Annual Cost to Card Clubs for Hour Burdens: Based
on $20 per hour, the total cost of compliance with the proposed
recordkeeping rule is estimated to be approximately $14,000.
Estimate of Total Other Annual Costs to Respondents: None.
FinCEN specifically invites comments on the following subjects: (a)
Whether the proposed collection of information is necessary to further
the purposes of the Bank Secrecy Act, including whether the information
retained shall have practical utility; (b) the accuracy of FinCEN's
estimate of the burden of the proposed collection of information; (c)
ways to enhance the quality, utility, and clarity of the information to
be retained; and (d) ways to minimize the burden of the collection of
information on the affected industry, including through the use of
automated storage and retrieval techniques or other forms of
information technology.
In addition, the Paperwork Reduction Act of 1995, supra, requires
agencies to estimate the total annual cost burden to respondents or
recordkeepers resulting from the retention of information. Thus, FinCEN
also specifically requests comments to assist with this estimate. In
this connection, FinCEN requests commenters to identify any additional
costs associated with the retention of the information covered by the
requirement.
The information collection in the proposed rule has been submitted
to the Office of Management and Budget for review under section 3507(d)
of the Paperwork Reduction Act of 1995. Comments on the proposed
collection may be directed to the Office of Information and Regulatory
Affairs of OMB, attention: Desk Officer for the Treasury Department.
Responses to this request for comments from FinCEN will be summarized
and included in the request for Office of Management and Budget
approval. All comments will become a matter of public record.
Drafting Information
This notice of proposed rulemaking was prepared in FinCEN's Office
of Legal Counsel, with the participation of staff members of FinCEN's
Office of Regulatory Policy and Enforcement.
List of Subjects in 31 CFR Part 103
Authority delegations (Government agencies), Banks, banking,
Currency, Foreign banking, Gambling, Investigations, Law enforcement,
Reporting and recordkeeping requirements, Taxes.
Proposed Amendments to the Regulations
Accordingly, 31 CFR Part 103 is proposed to be amended as follows:
PART 103--FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND
FOREIGN TRANSACTIONS
1. The authority citation for Part 103 continues to read as
follows:
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5330.
2. Section 103.11 is amended by redesignating paragraphs (n)(8) and
(n)(9) as paragraphs (n)(9) and (n)(10), respectively, and by adding
new paragraphs (n)(7)(iii) and (n)(8) to read as follows:
Sec. 103.11 Meaning of terms.
* * * * *
(n) * * *
(7) * * *
(iii) Any reference in this Part, other than in this paragraph
(n)(7) and in paragraph (n)(8), to a casino shall also include a
reference to a card club, unless the provision in question contains
specific language varying its application to card clubs or excluding
card clubs from its application.
(8)(i) Card club. A card club, gaming club, card room, gaming room,
or similar gaming establishment that is duly licensed or authorized to
do business as such in the United States, whether under the laws of a
State, of a Territory or Insular Possession of the United States, or of
a political subdivision of any of the foregoing, or under the Indian
Gaming Regulatory Act or other federal, state, or tribal law or
arrangement affecting Indian lands (including, without limitation, an
establishment operating on the assumption or under the view that no
such authorization is required for
[[Page 67265]]
operation on Indian lands for an establishment of such type), and that
has gross annual gaming revenue in excess of $1,000,000. The term
includes the principal headquarters and every domestic branch or place
of business of the establishment. The term ``casino,'' as used in this
Part shall include a reference to ``card club'' to the extent provided
in paragraph (n)(7)(iii).
(ii) For purposes of this paragraph (n)(8), ``gross annual gaming
revenue'' means the gross revenue derived from or generated by customer
gaming activity (whether in the form of per-game or per-table fees,
however computed, rentals, or otherwise) and received by an
establishment, during either the establishment's previous business year
or its current business year. A card club that is a financial
institution for purposes of this Part solely because its gross annual
revenue exceeds $1,000,000 during its current business year, shall not
be considered a financial institution for purposes of this Part prior
to the time in its current business year when its gross annual revenue
exceeds $1,000,000.
3. Section 103.36 is amended by adding a new paragraph (b)(11) to
read as follows:
Sec. 103.36 Additional records to be made and retained by casinos.
* * * * *
(b) * * *
(11) In the case of card clubs only, records of all currency
transactions by customers, including without limitation, records in the
form of currency transaction logs and multiple currency transaction
logs, and records of all activity at cages or similar facilities,
including, without limitation, cage control logs.
* * * * *
Dated: December 16, 1996.
Stanley E. Morris,
Director, Financial Crimes Enforcement Network.
[FR Doc. 96-32396 Filed 12-19-96; 8:45 am]
BILLING CODE 4820-03-P
