Notice2024-17605
Agency Information Collection Activities; Proposed Renewal; Comment Request; Renewal Without Change of Transactions of Exempt Persons Regulations, and FinCEN Form 110, Designation of Exempt Person Report
Primary source
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Published
August 8, 2024
Issuing agencies
Treasury DepartmentFinancial Crimes Enforcement Network
Abstract
As part of its continuing effort to reduce paperwork and respondent burden, FinCEN invites comments on the proposed renewal, without change, of existing information collection requirements found in Bank Secrecy Act regulations that require a bank to file a FinCEN Form 110, Designation of Exempt Person, to designate eligible customers as exempt persons, such that a bank is not required to file a report with respect to any transaction in currency over $10,000 with such customers. In addition to filing this report, the regulations require the bank to take steps to ensure that a person meets the requirements for an exemption, document the basis for the bank's initial conclusion that a person is exempt, annually review the eligibility of certain exempt persons, document compliance with the requirements of FinCEN Form 110, Designation of Exempt Person, and maintain a monitoring system that is reasonably designed to detect, for each account of a non-listed business or payroll customer, transactions in currency requiring a bank to file a suspicious transaction report. This request for comments is made pursuant to the Paperwork Reduction Act of 1995.
Full Text
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<title>Federal Register, Volume 89 Issue 153 (Thursday, August 8, 2024)</title>
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[Federal Register Volume 89, Number 153 (Thursday, August 8, 2024)]
[Notices]
[Pages 65012-65015]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-17605]
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DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
Agency Information Collection Activities; Proposed Renewal;
Comment Request; Renewal Without Change of Transactions of Exempt
Persons Regulations, and FinCEN Form 110, Designation of Exempt Person
Report
AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.
ACTION: Notice and request for comments.
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SUMMARY: As part of its continuing effort to reduce paperwork and
respondent burden, FinCEN invites comments on the proposed renewal,
without change, of existing information collection requirements found
in Bank Secrecy Act regulations that require a bank to file a FinCEN
Form 110, Designation of Exempt Person, to designate eligible customers
as exempt persons, such that a bank is not required to file a report
[[Page 65013]]
with respect to any transaction in currency over $10,000 with such
customers. In addition to filing this report, the regulations require
the bank to take steps to ensure that a person meets the requirements
for an exemption, document the basis for the bank's initial conclusion
that a person is exempt, annually review the eligibility of certain
exempt persons, document compliance with the requirements of FinCEN
Form 110, Designation of Exempt Person, and maintain a monitoring
system that is reasonably designed to detect, for each account of a
non-listed business or payroll customer, transactions in currency
requiring a bank to file a suspicious transaction report. This request
for comments is made pursuant to the Paperwork Reduction Act of 1995.
DATES: Written comments are welcome and must be received on or before
October 7, 2024.
ADDRESSES: Comments may be submitted by any of the following methods:
<bullet> Federal E-rulemaking Portal: <a href="http://www.regulations.gov">http://www.regulations.gov</a>.
Follow the instructions for submitting comments. Refer to Docket Number
FINCEN-2024-0015 and Office of Management and Budget (OMB) control
number 1506-0012.
<bullet> Mail: Policy Division, Financial Crimes Enforcement
Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-
2024-0015 and OMB control number 1506-0012.
Please submit comments by one method only. Comments will be
reviewed consistent with the Paperwork Reduction Act of 1995 (PRA) and
applicable OMB regulations and guidance. All comments submitted in
response to this notice will become a matter of public record.
Therefore, you should submit only information that you wish to make
publicly available.
FOR FURTHER INFORMATION CONTACT: FinCEN's Regulatory Support Section at
1-800-767-2825 or electronically at <a href="/cdn-cgi/l/email-protection#305642537056595e53555e1e575f46"><span class="__cf_email__" data-cfemail="4c2a3e2f0c2a25222f2922622b233a">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Statutory and Regulatory Provisions
The legislative framework generally referred to as the Bank Secrecy
Act (BSA) consists of the Currency and Foreign Transactions Reporting
Act of 1970, as amended by the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (USA PATRIOT Act) \1\ and other legislation,
including the Anti-Money Laundering Act of 2020 (AML Act).\2\ The BSA
is codified at 12 U.S.C. 1829b and 1951-1960 and 31 U.S.C. 5311-5314
and 5316-5336, and notes thereto, with implementing regulations at 31
CFR chapter X.
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\1\ USA PATRIOT Act, Public Law 107-56.
\2\ The AML Act was enacted as Division F, sections 6001-6511,
of the William M. (Mac) Thornberry National Defense Authorization
Act for Fiscal Year 2021, Public Law 116-283, 134 Stat. 3388 (NDAA).
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The BSA authorizes the Secretary of the Treasury (Secretary) to,
inter alia, require financial institutions to keep records and file
reports that are determined to have a high degree of usefulness in
criminal, tax, or regulatory matters, risk assessments or proceedings,
or in the conduct of intelligence or counter-intelligence activities to
protect against terrorism, and to implement anti-money laundering/
countering the financing of terrorism (AML/CFT) programs and compliance
procedures.\3\ The authority of the Secretary to administer the BSA has
been delegated to the Director of FinCEN.\4\
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\3\ See 31 U.S.C. 5311; see also 12 U.S.C. 1829b(a).
\4\ Treasury Order 180-01 (Jan. 14, 2020).
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Under 31 U.S.C. 5313, the Secretary is authorized to require
financial institutions to report currency transactions exceeding
$10,000. Regulations implementing 31 U.S.C. 5313 are found at 31 CFR
1010.310 through 1010.314, 31 CFR 1021.311, and 31 CFR 1021.313. The
Money Laundering Suppression Act of 1994 amended the BSA to create
certain mandatory exemptions applicable to banks from the requirement
for financial institutions to file currency transaction reports (CTRs),
and to give the Secretary authority to create additional such
exemptions.\5\ Regulations implementing this exemption authority,
including by requiring the collection of information on FinCEN Form
110, Designation of Exempt Person (``DOEP Report''), are found at 31
CFR 1020.315.
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\5\ Public Law 103-325, Title IV, Section 402 (Sep. 23, 1994),
108 Stat. 2243. These authorities are codified at 31 U.S.C. 5313(d)
(mandatory exemptions) and (e) (discretionary exemptions).
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Under 31 CFR 1020.315(a), a bank is not required to file a CTR with
respect to any transaction in currency between exempt persons and the
bank, or between an exempt person and other banks that are affiliated
with the bank.\6\
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\6\ 31 CFR 1010.315(a). The exemption does not apply when the
exempt person is acting as agent for another person who is the
beneficial owner of the funds that are the subject of the
transaction. 31 CFR 1010.315(f).
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31 CFR 1020.315(b) sets out that an exempt person is: (1) a bank,
to the extent of such bank's domestic operations; (2) a department or
agency of the United States, of any State, or of any political
subdivision of any State; (3) any entity established under the laws of
the United States, any State, or any political subdivision of any
State, or under an interstate compact, that exercises governmental
authority on behalf of the United States, any such State, or any such
political subdivision; (4) any entity, other than a bank, whose common
stock or analogous equity interests are listed on the New York Stock
Exchange, the American Exchange, or the NASDAQ Stock Market (a ``listed
entity''), provided that, if the listed entity is a financial
institution other than a bank, it is an exempt person only to the
extent of its domestic operations; (5) any subsidiary, other than a
bank, of a listed entity mentioned in the previous item (4) that is
organized under the laws of the United States or of any State, provided
that the listed entity owns at least 51 percent of the equity interest
of the subsidiary, and subject to the qualification that if the
subsidiary is a financial institution other than a bank, it is an
exempt person only to the extent of its domestic operations; (6) any
other commercial enterprise, with certain exceptions, that maintains a
transaction account at the bank for at least two months, frequently
engages in transactions with the bank in currency in excess of $10,000,
and is incorporated or organized under the laws of, or is registered as
and eligible to do business within, the United States or a State (a
``non-listed business''), but only to the extent of the non-listed
business customer's domestic operations and only with respect to
transactions conducted through the non-listed business customer's
exemptible accounts; or (7) any other person, with certain exceptions,
that maintains a transaction account at the bank for at least two
months, operates a firm that frequently withdraws more than $10,000 in
order to pay its U.S. employees in currency, and is incorporated or
organized under the laws of, or is registered as and eligible to do
business within, the United States or a State (a ``payroll customer''),
but solely with respect to withdrawals for payroll purposes from
existing exemptible accounts.\7\
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\7\ In certain circumstances, a limited exemption from the two-
month transaction account holding requirement may apply to non-
listed business and payroll customers pursuant to the special rule
at 31 CFR 1010.315(c)(2)(ii).
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31 CFR 1020.315(c)(1) requires a bank to designate an exempt person
by filing
[[Page 65014]]
the DOEP Report \8\ within 30 calendar days after the day of the first
reportable transaction in currency with the person that the bank seeks
to exempt from reporting. A bank holding company or one of its bank
subsidiaries may make such a designation on behalf of any or all of the
bank holding company's bank subsidiaries by listing those bank
subsidiaries in the DOEP Report that it files.\9\ However, a bank is
not required to file a DOEP Report for transfer of currency to or from:
(1) any of the 12 Federal Reserve Banks; (2) a bank, to the extent of
such bank's domestic operations; (3) a department or agency of the
United States, of any State, or of any political subdivision of any
State; or (4) any entity established under the laws of the United
States, any State, or any political subdivision of any State, or under
an interstate compact between two or more States, that exercises
governmental authority on behalf of the United States or any such State
or political subdivision.\10\
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\8\ This is referred to in the regulations as ``FinCEN Form
110.'' FinCEN has referred to its forms as ``reports'' since moving
to electronic filing.
\9\ 31 CFR 1020.315(c)(1) and (e)(6).
\10\ 31 CFR 1020.315(c)(2)(i)(A) and (B).
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31 CFR 1020.315(d) requires a bank to review at least once annually
the continued eligibility of an exempt person that is a (1) listed
entity, (2) subsidiary of a listed entity, (3) non-listed business
customer, or (4) payroll customer. As part of the annual review, a bank
must also review the application to each existing account of a non-
listed business or payroll customer of the monitoring system that 31
CFR 1020.315(h)(2) requires the bank to maintain (related to suspicious
activity monitoring).
Under 31 CFR 1020.315(e), a bank must take steps to assure itself
that an exempt person meets the definition of that term (see 31 CFR
1020.315(b), summarized above), document the basis for its conclusion,
and document its compliance with the terms of the exemption, including
the operating rules in 31 CFR 1020.315(e)(2)-(9). A bank must also take
steps to document compliance with its suspicious activity monitoring
obligations under 31 CFR 1020.315(h)(2). The steps that the bank takes
under 31 CFR 1020.315(e) must be those that a reasonable and prudent
bank would take and document to protect itself from fraud or loss based
on misidentification of a person's status and, in the case of the
suspicious activity monitoring obligations, to identify suspicious
transactions.
31 CFR 1020.315(h)(1) states that the CTR exemption rules do not
relieve a bank of its obligation to report any suspicious transactions
pursuant to 31 CFR 1020.320, including any suspicious transactions or
attempted transactions in currency associated with the accounts of an
exempt person, or relieve a bank of any other reporting or
recordkeeping obligation imposed under the authority of the BSA.
Under 31 CFR 1020.315(h)(2), a bank must establish and maintain a
monitoring system that is reasonably designed to detect, for each
account of a non-listed business or payroll customer, transactions in
currency that would require a bank to file a suspicious activity
report.
II. Paperwork Reduction Act of 1995 (PRA) \11\
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\11\ Public Law 104-13, 44 U.S.C. 3506(c)(2)(A).
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Title: Transactions of exempt person (31 CFR 1020.315), and FinCEN
Form 110--DOEP Report.
OMB Control Number: 1506-0012.
Report Number: FinCEN Form 110--DOEP Report.
Abstract: FinCEN is issuing this notice to renew the OMB control
number for the transactions of exempt person regulations and the DOEP
Report.
Affected Public: Businesses or other for-profit institutions, and
non-profit institutions.
Type of Review: Renewal without change of a currently approved
information collection.
Frequency: As required.
Estimated Number of Respondents: 10,062 banks.\12\
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\12\ Table 1 below describes the distribution of the types of
financial institutions covered by this notice.
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Estimated Number of Responses: 15,105 DOEP Reports.\13\
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\13\ Based on 2023 filings, FinCEN received 15,105 DOEP Reports.
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Estimated Recordkeeping Burden:
In Part 1 of this notice, FinCEN describes the distribution of the
estimated number of financial institutions, by type, affected by the
regulatory requirements. In Part 2, FinCEN proposes for review and
comment a renewal of the calculation of the annual PRA burden that
includes a scope and methodology similar to that used in the 2021
notice to renew the OMB control number associated with this information
collection requirement.\14\
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\14\ See FinCEN, Agency Information Collections Activities;
Proposed Renewal; Comment Request: Renewal Without Change of
Transactions of Exempt Persons Regulations, and FinCEN Report 110,
Designation of Exempt Persons Reports, 86 FR 6964 (Jan. 25, 2021).
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Part 1. Distribution of the Financial Institutions Covered by This
Notice
The distribution of financial institutions, by type, covered by
this notice is reflected in table 1 below.
Table 1--Distribution of Financial Institutions Covered by This Notice,
by Type of Financial Institution
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Number of
Type of financial institution financial
institutions
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Banks with a Federal functional regulator (FFR) \a\..... 9,462
Banks lacking an FFR \b\................................ 600
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Total............................................... 10,062
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\a\ This estimate of the total number of banks with a federal functional
regulator, including credit unions, is based on end of year 2023 data
as provided by the FFR: the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, the Office of the
Comptroller of the Currency, and the National Credit Union
Administration.
\b\ This estimate of active entries as of year-end 2023 incorporates
data from both public and non-public sources, including: Call Reports;
various State banking/financial institution regulators' websites and
directories; the Federal Reserve Board of Governors' Master Account
and Services database (<a href="https://federalreserve.gov/paymentsystems/master-account-and">https://federalreserve.gov/paymentsystems/master-account-and</a> services-database-exisiting-access.htm); and data
from the OCIF (Oficina del Comisionado de Instituciones Financieras);
and was derived in consultation with staff from the Internal Revenue
Service's Small Business/Self-Employed Division.
In connection with a variety of initiatives FinCEN is undertaking
to implement the AML Act, FinCEN intends to conduct, in the future,
additional assessments of the PRA burden associated with BSA
requirements.
Part 2. Annual PRA Burden and Cost
FinCEN continues to estimate the annual hourly burden of the
designation of exempt persons as one hour per report. This estimate
covers the burden of: (1) reporting, which is estimated to require an
average of 45 minutes to fill out and file the report; and (2)
recordkeeping and maintenance, which is estimated to require an average
of 15 minutes per report. FinCEN believes that the information required
to be included on the DOEP Report is basic information that banks need
to maintain to conduct business. The BSA E-filing
[[Page 65015]]
system prompts banks to save the report after submission.
FinCEN's estimate of the annual PRA burden, which is based on
reporting activity in the previous calendar year, therefore, is 15,105
hours, as detailed in table 2 below:
Table 2--Estimated Total Annual Burden Hours Associated With Completion and Maintenance of the Doep Reports
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Number of Time per report in minutes Total burden hours per step
DOEP reports ------------------------------------------------------------------------------------- Total burden
Type of financial institution filed in hours
2023 Reporting Recordkeeping Reporting Recordkeeping
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Banks.................................. 15,105 45 minutes................ 15 minutes................ 11,329 3,776 15,105 \a\
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\a\ FinCEN estimates that the burden to complete and file the DOEP Report for banks was one hour (45 minutes for completion of the report and 15 minutes
for recordkeeping). 15,105 DOEP Reports multiplied by 45 minutes and converted to hours equals 11,329 hours. 15,105 DOEP Reports multiplied by 15
minutes and converted to hours equals 3,776 hours. The summation of 11,329 hours and 3,776 hours is 15,105 hours.
FinCEN is utilizing the same fully loaded composite hourly wage
rate of $106.30 utilized in the 2024 notices of proposed rulemaking
(NPRMs) entitled Customer Identification Programs for Registered
Investment Advisers and Exempt Reporting Companies and Anti-Money
Laundering and Countering the Financing of Terrorism Programs, as well
as in recent 60-Day Notices to renew OMB control numbers corresponding
to specific BSA regulations.\15\
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\15\ See, e.g., FinCEN and SEC, NPRM Customer Identification
Programs for Registered Investment Advisers and Exempt Reporting
Advisers, 89 FR 44571 (May 21, 2024); FinCEN, NPRM Anti-Money
Laundering and Countering the Financing of Terrorism Programs NPRM,
89 FR 55428 (Jul. 3, 2024); FinCEN, Agency Information Collection
Activities; Proposed Renewal; Comment Request; Renewal Without
Change of the Customer Identification Program Regulatory
Requirements for Certain Financial Institutions, 89 FR 51940 (Jun.
20, 2024); and FinCEN, Agency Information Collection Activities;
Proposed Renewal; Comment Request; Renewal Without Change of Due
Diligence Programs for Correspondent Accounts for Foreign Financial
Institutions and for Private Banking Accounts, 89 FR 49273, (Jun.
11, 2024).
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The total estimated cost of the annual PRA burden is $2,421,331.50,
as reflected in table 3 below:
Table 3--Estimated Total Cost of Annual PRA Burden
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Burden hours
Steps per step Wage rate Total cost
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Report completion................................................. 11,329 $106.30 $1,816,038.70
Maintenance/recordkeeping......................................... 3,776 106.30 605,292.80
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Total cost.................................................... .............. ........... 2,421,331.50
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Estimated Number of Respondents: 10,062 banks, as set out in table
1.
Estimated Total Annual Responses: 15,105 DOEP Reports.\16\
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\16\ See supra note 15.
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Estimated Total Annual Reporting and Recordkeeping Burden: The
estimated total annual reporting and recordkeeping burden is
approximately 15,105 hours, which is comprised of the total annual
reporting and total annual recordkeeping burdens described below.
Estimated Total Annual Reporting Burden: The estimated total annual
reporting burden is approximately 11,329 hours, as set out in table 2.
Estimated Total Annual Recordkeeping Burden: The estimated total
annual recordkeeping burden is approximately 3,776 hours, as set out in
table 2.
Estimated Total Annual Reporting and Recordkeeping Cost: The
estimated total annual PRA cost is approximately $2,421,331.50, as set
out in table 3.
An Agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid OMB control number. Records required to be
retained under the BSA must be retained for five years.
Request for Comments: Comments submitted in response to this notice
will be summarized and/or included in the request for OMB approval. All
comments will become a matter of public record. Comments are invited
on: (1) whether the collection of information is necessary for the
proper performance of the functions of the agency, including whether
the information shall have practical utility; (2) the accuracy of the
agency's estimate of the burden of the collection of information; (3)
ways to enhance the quality, utility, and clarity of the information to
be collected; (4) ways to minimize the burden of the collection of
information on respondents, including through the use of automated
collection techniques or other forms of information technology; and (5)
estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.
Andrea M. Gacki,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2024-17605 Filed 8-7-24; 8:45 am]
BILLING CODE 4810-02-P
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