[Federal Register Volume 61, Number 163 (Wednesday, August 21, 1996)]
[Proposed Rules]
[Pages 43195-43196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21264]
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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: Proposed rule.
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SUMMARY: The Board is proposing 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. The proposed amendment would clarify 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.
DATES: Comments must be submitted on or before September 20, 1996.
ADDRESSES: Comments, which should refer to Docket No. R-0934, may be
mailed to Mr. William W. Wiles, Secretary, Board of Governors of the
Federal Reserve System, 20th Street and Constitution Avenue, NW.,
Washington, DC 20551. Comments addressed to Mr. Wiles also may be
delivered to the Board's mail room between 8:45 a.m. and 5:15 p.m. and
to the security control room outside of those hours. Both the mail room
and the security control room are accessible from the courtyard
entrance on 20th Street between Constitution Avenue and C Street, NW.
Comments may be inspected in Room MP-500 between 9:00 a.m. and 5:00
p.m.
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), Board of
Governors of the Federal Reserve System, 20th and C Streets, NW.,
Washington, DC 20551.
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 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 amended 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, to avoid
confusion and to ensure consistent application of the joint rule and
subpart B of Regulation S, the Board requests comment on an amendment
to 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,
[[Page 43196]]
transaction, or class of persons or transactions.
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\6\ See 31 CFR Sec. 103.45.
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Initial Regulatory Flexibility Analysis
The Regulatory Flexibility Act (5 U.S.C. 601-612) requires an
agency to publish an initial regulatory flexibility analysis with any
notice of proposed rulemaking. Two of the requirements of an initial
regulatory flexibility analysis (5 U.S.C. 603(b)), a description of the
reasons why action by the agency is being considered and a statement of
the objectives of, and legal basis for, the proposed rule, are
contained in the supplementary material above.
The proposed rule requires no additional reporting or recordkeeping
requirements and does not overlap with other federal rules. Rather, the
proposal clarifies the relationship between the Regulation S and the
joint rule. Another requirement for the initial regulatory flexibility
analysis is a description of and, where feasible, an estimate of the
number of small entities to which the proposed rule will apply. The
proposal will apply to all institutions subject to the regulation,
regardless of size, but would not result in any increased compliance or
other burden for affected institutions, 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.
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 proposed
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 proposed 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
proposed to be 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) and (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, August 15, 1996.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 96-21264 Filed 8-20-96; 8:45 am]
BILLING CODE 6210-01-P
