Proposed Rule2025-19927
Proposal of Special Measure Regarding Transactions Involving Ten Mexican Gambling Establishments as a Class of Transactions of Primary Money Laundering Concern
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Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 17, 2025
Issuing agencies
Treasury DepartmentFinancial Crimes Enforcement Network
Abstract
FinCEN is issuing a notice of proposed rulemaking, pursuant to section 311 of the USA PATRIOT Act, that finds transactions involving ten identified Mexico-based gambling establishments to be a class of transactions of primary money laundering concern, and proposes imposing a special measure to: (1) prohibit U.S. financial institutions from opening or maintaining a correspondent account for any foreign banking institution if such account is used to process transactions involving any of the gambling establishments, and (2) require U.S. financial institutions to apply special due diligence to their correspondent accounts that is reasonably designed to guard against the use of such accounts to process transactions involving any of the gambling establishments.
Full Text
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<title>Federal Register, Volume 90 Issue 219 (Monday, November 17, 2025)</title>
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[Federal Register Volume 90, Number 219 (Monday, November 17, 2025)]
[Proposed Rules]
[Pages 51234-51247]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19927]
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DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
31 CFR Part 1010
RIN 1506-AB70
Proposal of Special Measure Regarding Transactions Involving Ten
Mexican Gambling Establishments as a Class of Transactions of Primary
Money Laundering Concern
AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: FinCEN is issuing a notice of proposed rulemaking, pursuant to
section 311 of the USA PATRIOT Act, that finds transactions involving
ten identified Mexico-based gambling establishments to be a class of
transactions of primary money laundering concern, and proposes imposing
a special measure to: (1) prohibit U.S. financial institutions from
opening or maintaining a correspondent account for any foreign banking
institution if such account is used to process transactions involving
any of the gambling establishments, and (2) require U.S. financial
institutions to apply special due diligence to their correspondent
accounts that is reasonably designed to guard against the use of such
accounts to process transactions involving any of the gambling
establishments.
DATES: Written comments on the notice of proposed rulemaking must be
submitted on or before December 17, 2025.
ADDRESSES: Comments must be submitted in one of the following two ways
(please choose only one of the ways listed):
<bullet> Federal E-rulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
If you are reading this document on <a href="http://federalregister.gov">federalregister.gov</a>, you may use
the green ``SUBMIT A PUBLIC COMMENT'' button beneath this rulemaking's
title to submit a comment to the <a href="http://regulations.gov">regulations.gov</a> docket.
<bullet> Mail: Financial Crimes Enforcement Network, P.O. Box 39,
Vienna, VA 22183. Refer to Docket Number FINCEN-2025-0138 in the
submission.
Do not include any personally identifiable information (such as
name, address, or other contact information) or confidential business
information that you do not want publicly disclosed. All comments are
public records; they are publicly displayed exactly as received, and
will not be deleted, modified, or redacted. Comments may be submitted
anonymously.
Follow the search instructions on <a href="https://www.regulations.gov">https://www.regulations.gov</a> to
view public comments.
FOR FURTHER INFORMATION CONTACT: FinCEN's Regulatory Support Section at
<a href="http://www.fincen.gov/contact">www.fincen.gov/contact</a>.
SUPPLEMENTARY INFORMATION:
I. Statutory Provisions
Section 311 of the USA PATRIOT Act \1\ (section 311), codified at
31 U.S.C. 5318A, grants the Secretary of the Treasury (Secretary) the
authority to make a finding that ``reasonable grounds exist for
concluding'' that any of the following ``is of primary money laundering
concern'':
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\1\ Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act
of 2001, Public Law 107-56, 115 Stat. 272 (Oct. 26, 2001).
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(i) A jurisdiction outside of the United States;
(ii) One or more financial institutions operating outside of the
United States;
(iii) One or more classes of transactions within, or involving, a
jurisdiction outside of the United States; or
(iv) One or more types of accounts.\2\
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\2\ 31 U.S.C. 5318A(a)(1).
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Upon making such a finding, the Secretary is authorized to require
domestic financial institutions and domestic financial agencies--
collectively, ``covered financial institutions''--to take certain
``special measures.'' The five special measures set out in section 311
are safeguards that may be employed to defend the U.S. financial system
from money laundering and terrorist financing risks. The Secretary may
impose one or more of these special measures to protect the U.S.
financial system from such threats. Through special measures one
through four, the Secretary may impose additional recordkeeping,
information collection, and reporting requirements on covered financial
institutions.\3\ Through special measure five, the Secretary may
``prohibit, or impose
[[Page 51235]]
conditions upon, the opening or maintaining in the United States of a
correspondent account or payable-through account'' for or on behalf of
a foreign banking institution, if such correspondent account or
payable-through account involves the class of transactions found to be
of primary money laundering concern.\4\
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\3\ 31 U.S.C. 5318A(b)(1)-(4). For purposes of this proposed
rulemaking, the term ``covered financial institution'' has the same
meaning as provided at 31 CFR 1010.605(e)(1); see infra Section
VI.A.3.
\4\ 31 U.S.C. 5318A(b)(5).
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Before making a finding that reasonable grounds exist for
concluding that a class of transactions (or other jurisdiction,
financial institution, or account) is of primary money laundering
concern, the Secretary is required to consult with both the Secretary
of State and the Attorney General.\5\ In addition, in making a finding
that reasonable grounds exist for concluding that a class of
transactions is of primary money laundering concern, the Secretary is
required to consider such information as the Secretary determines to be
relevant, including the following potentially relevant institutional
factors:
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\5\ 31 U.S.C. 5318A(c)(1).
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<bullet> The extent to which such a class of transactions is used
to facilitate or promote money laundering in or through a jurisdiction
outside the United States, including any money laundering activity by
organized criminal groups, international terrorists, or entities
involved in the proliferation of weapons of mass destruction (WMD) or
missiles.
<bullet> The extent to which such a class of transactions is used
for legitimate business purposes in the jurisdiction; and
<bullet> The extent to which such action is sufficient to ensure
that the purposes of section 311 continue to be fulfilled, and to guard
against international money laundering and other financial crimes.\6\
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\6\ 31 U.S.C. 5318A(c)(2)(B)(i)-(iii). In addition, in the case
of a finding relating to a particular jurisdiction, section 311 sets
out certain ``jurisdictional factors'' that the Secretary may
consider, which are not relevant here. See 31 U.S.C.
5318A(c)(2)(A)(i)-(vii).
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In selecting one or more special measures, the Secretary ``shall
consult with the Chairman of the Board of Governors of the Federal
Reserve System, any other appropriate Federal banking agency (as
defined in section 3 of the Federal Deposit Insurance Act), the
Secretary of State, the Securities and Exchange Commission, the
Commodity Futures Trading Commission, the National Credit Union
Administration Board, and in the sole discretion of the Secretary, such
other agencies and interested parties as the Secretary may find
appropriate.'' \7\ When imposing special measure five, the Secretary
must do so ``in consultation with the Secretary of State, the Attorney
General, and the Chairman of the Board of Governors of the Federal
Reserve System.'' \8\ In addition, the Secretary is required to
consider the following factors:
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\7\ 31 U.S.C. 5318A(a)(4)(A).
\8\ 31 U.S.C. 5318A(b)(5).
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<bullet> Whether similar action has been or is being taken by other
nations or multilateral groups;
<bullet> Whether the imposition of any particular special measure
would create a significant competitive disadvantage, including any
undue cost or burden associated with compliance, for financial
institutions organized or licensed in the United States;
<bullet> The extent to which the action or the timing of the action
would have a significant adverse systemic impact on the international
payment, clearance, and settlement system, or on legitimate business
activities involving the particular jurisdiction, institution, class of
transactions, or type of account; and
<bullet> The effect of the action on United States national
security and foreign policy.\9\
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\9\ 31 U.S.C. 5318A(a)(4)(B)(i)-(iv).
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The authority of the Secretary to administer the Bank Secrecy Act
(BSA) \10\ and its implementing regulations, including the authority
under section 311 to make such a finding and to impose special
measures, has been delegated to FinCEN.\11\
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\10\ The BSA, as amended, is the popular name for a collection
of statutory authorities that FinCEN administers that is codified at
12 U.S.C. 1829b, 1951-1960, and 31 U.S.C. 5311-5314, 5316-5336, and
includes other authorities reflected in notes thereto. Regulations
implementing the BSA appear at 31 CFR Chapter X.
\11\ See Treasury Order 180-01 (Jan. 14, 2020).
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II. Summary
The ten Mexican gambling establishments at issue in this Notice of
Proposed Rulemaking (NPRM)--namely, (1) Emine Casino (San Luis Rio
Colorado, Sonora); (2) Casino Mirage (Culiacan, Sinaloa); (3) Midas
Casino (Agua Prieta, Sonora); (4) Midas Casino (Guam[uacute]chil,
Sinaloa); (5) Midas Casino (Los Mochis, Sinaloa); (6) Midas Casino
(Mazatlan, Sinaloa); (7) Midas Casino (Rosarito, Baja California); (8)
Palermo Casino (Nogales, Sonora); (9) Skampa Casino (Ensenada, Baja
California); and (10) Skampa Casino (Villahermosa, Tabasco)
(collectively, the ``Gambling Establishments'') \12\--all operate in
Mexico and offer gambling services, including gaming machines, table
gaming, and sportsbooks betting.\13\ These Gambling Establishments are
owned by three separate Mexico-based companies, all of which are
regulated and licensed by Mexico's Ministry of the Interior,
Secretar[iacute]a de Gobernaci[oacute]n (SEGOB), through its Gambling
and Raffles Bureau, Direcci[oacute]n General de Juegos y Sorteos
(DGJS).\14\
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\12\ As discussed in greater detail in Section III, FinCEN
assesses that these ten gambling establishments have related
activities and ownership, and for that reason, FinCEN will
correspondingly treat them as a unitary collective.
\13\ Under Mexican laws, sportsbooks betting falls under the
classification of remote betting centers, which are captured under
the same type of gambling license as land-based casinos. Thus, the
Gambling Establishments may offer sportsbooks and gaming services
under the same license. See International Comparative Legal Guides,
Gambling Laws and Regulations Mexico 2025 (Nov. 19, 2024), <a href="https://iclg.com/practice-areas/gambling-laws-and-regulations/mexico">https://iclg.com/practice-areas/gambling-laws-and-regulations/mexico</a>.
\14\ According to public information, the three companies that
own the Gambling Establishments are licensed by DGJS and authorized
to hold permits for remote betting centers, which includes land-
based casinos. Only Mexico-based companies may obtain licenses for
owning gambling establishments. According to the laws and
regulations applicable to SEGOB and DGJS, companies that obtain
licenses to operate and hold permits for land-based casinos in
Mexico are granted broad parameters for how to organize and
establish their gambling activities. License-holding companies are
authorized to establish as many land-based casinos as their license
authorizes. Land-based casino licenses have a minimum duration of
one year and a maximum of 25 years, after which they must be
reauthorized for an additional 15 years at a time. A 2023 Mexican
government decree changed the maximum to 15 years. Until the 2023
decree, license holders could request authorization from DGJS to
jointly exploit their license with a Mexico-based sub-licensor. The
decree did not apply retroactively to prevent preexisting sub-
licensing structures from continued operation. See International
Comparative Legal Guides, Gambling Laws and Regulations Mexico 2025
(Nov. 19, 2024), <a href="https://iclg.com/practice-areas/gambling-laws-and-regulations/mexico">https://iclg.com/practice-areas/gambling-laws-and-regulations/mexico</a>; see also The National Law Review, Mexico Amends
Gaming Law, Bans Slot Machines (Dec. 14, 2023), <a href="https://natlawreview.com/article/mexico-amends-gaming-law-bans-slot-machines#google_vignette">https://natlawreview.com/article/mexico-amends-gaming-law-bans-slot-machines#google_vignette</a>. FinCEN assesses that because the Gambling
Establishments are owned by three Mexico-based companies duly
authorized to operate and hold permits for land-based casinos, that
the Gambling Establishments are appropriately licensed and
authorized to conduct gambling activities. However, the Mexican
government website that explicitly lists authorized gambling
establishment permits recognized by SEGOB and DGJS was not available
to validate this assessment. Thus, FinCEN is incapable of
conclusively confirming the permitting status of the Gambling
Establishments. See DGJS website, Number Drawing Rooms and Remote
Betting Centers (last accessed Nov. 3, 2025),
www.juegosysorteos.gob.mx/es/Juegos_y_Sorteos/
Salas_de_Sorteos_de_Numeros.
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FinCEN assesses that the Gambling Establishments are ultimately
controlled by a criminal group with a longstanding and transactional
financial relationship in which the Gambling Establishments facilitate
money laundering for the benefit of the Cartel de Sinaloa (Sinaloa
Cartel). The organized crime group purportedly uses complex,
multinational illicit financial networks, leveraging bank accounts in
multiple
[[Page 51236]]
jurisdictions, to facilitate its money laundering operations, including
its joint ventures with the Sinaloa Cartel involving Mexico-based
casinos. Based on non-public information available to FinCEN, for over
six years, the Gambling Establishments' senior leadership has conducted
transactions benefitting the Sinaloa Cartel under the instruction of
Sinaloa Cartel members and affiliates.\15\
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\15\ The financial relationship between the group controlling
the operations of the Gambling Establishments and the Sinaloa Cartel
is explained in greater detail in Section III.
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The Sinaloa Cartel is a drug trafficking organization (DTO), a
designated Foreign Terrorist Organization (FTO), and a Specially
Designated Global Terrorist (SDGT) based in Sinaloa, Mexico.\16\ In
2024, the Drug Enforcement Administration (DEA) described the Sinaloa
Cartel as being ``at the heart'' of the synthetic drug crisis,
including opioids, using its global supply chain network to gain access
to the pill presses and precursor chemicals needed to manufacture
opioids in Mexico, distribute them in the United States, and then
return laundered profits back to Mexico.\17\ In 2009, the Sinaloa
Cartel was found to be a significant foreign narcotics trafficker
pursuant to the Foreign Narcotics Kingpin Act (Kingpin Act).\18\ The
Sinaloa Cartel has used violence to murder, kidnap, and intimidate
civilians, government officials, and journalists.
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\16\ Department of State, Foreign Terrorist Organization
Designations of Tren de Aragua, Mara Salvatrucha, Cartel de Sinaloa,
Cartel de Jalisco Nueva Generacion, Carteles Unidos, Cartel del
Noreste, Cartel del Golfo, and La Nueva Familia Michoacana, 90 FR
10030 (Feb. 20, 2025); Department of State, Fact Sheet, Designation
of International Cartels (Feb. 20, 2025), <a href="https://www.state.gov/designation-of-international-cartels">https://www.state.gov/designation-of-international-cartels</a>.
\17\ See Drug Enforcement Administration, DEA-DCT-DIR-010-24,
2024 National Drug Threat Assessment (May 2024), p. 2, <a href="https://www.dea.gov/sites/default/files/2024-05/5.23.2024%20NDTA-updated.pdf">https://www.dea.gov/sites/default/files/2024-05/5.23.2024%20NDTA-updated.pdf</a>.
\18\ The White House, Fact Sheet: Overview of the Foreign
Narcotics Kingpin Designation Act (Apr. 15, 2009), <a href="https://obamawhitehouse.archives.gov/the-press-office/fact-sheet-overview-foreign-narcotics-kingpin-designation-act">https://obamawhitehouse.archives.gov/the-press-office/fact-sheet-overview-foreign-narcotics-kingpin-designation-act</a>; Treasury's Office of
Foreign Assets Control (OFAC), Press Release, Treasury Designates
Sinaloa Cartel Members Under the Kingpin Act (Dec. 15, 2009),
<a href="https://home.treasury.gov/news/press-releases/tg444">https://home.treasury.gov/news/press-releases/tg444</a>.
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The United States is committed to countering DTOs, FTOs, and SDGTs,
their illicit activities, and the threat they pose to U.S. national
security.\19\ Furthermore, since DTOs are known to exploit financial
institutions and agencies, including, but not limited to, banks, money
services businesses, and online payment processors to drive illicit
financial flows,\20\ casinos and other gambling establishments may
provide similar avenues for money laundering on behalf of DTOs.
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\19\ See, e.g., Exec. Order No. 14157 of Jan. 20, 2025
(Designating Cartels and Other Organizations as Foreign Terrorist
Organizations and Specially Designated Global Terrorists), 90 FR
8439.
\20\ FinCEN, Financial Trend Analysis, Fentanyl-Related Illicit
Finance: 2024 Threat Pattern & Trend Information (Apr. 2025).
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This NPRM sets forth FinCEN's finding, based on public and non-
public information, that transactions involving the Gambling
Establishments are a class of transactions of primary money laundering
concern. Accordingly, this NPRM proposes that, under special measure
five, covered financial institutions: (1) would be prohibited from
opening or maintaining in the United States any correspondent account
for, or on behalf of, a foreign banking institution, if such
correspondent account is used to process a transaction involving any of
the Gambling Establishments; and (2) would be required to apply special
due diligence to any correspondent account for, or on behalf of, a
foreign banking institution, that is reasonably designed to guard
against the use of such accounts to process transactions involving any
of the Gambling Establishments.
III. Finding That Transactions Involving the Gambling Establishments
Are a Class of Transactions of Primary Money Laundering Concern
As set forth above, section 311 authorizes FinCEN, through
delegated authority and in pertinent part, to make a finding ``that
reasonable grounds exist for concluding'' that ``[one] or more classes
of transactions within, or involving, a jurisdiction outside of the
United States'' is ``of primary money laundering concern.''
A. The Gambling Establishments
A prerequisite to such a finding is that the relevant class of
transactions is a class of transactions ``within, or involving, a
jurisdiction outside of the United States.'' \21\
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\21\ See 31 U.S.C. 5318A(a)(1), (c).
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The Gambling Establishments are located in Mexico and are each
owned by one of three Mexico-based entertainment and sports companies.
The Gambling Establishments are:
(1) Casino Emine (San Luis Rio Colorado, Sonora): Casino Emine is
located in San Luis Rio Colorado, Sonora.\22\
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\22\ Casino Emine's Facebook page states that it is located at
Av. F[eacute]lix Contreras 203, Comercial, 83449 San Luis R[iacute]o
Colorado, Sonora. See Facebook, Emine Casino, <a href="https://www.facebook.com/people/Emine-Casino/61574389321589/#">https://www.facebook.com/people/Emine-Casino/61574389321589/#</a> (last accessed
Nov. 3, 2025).
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(2) Casino Mirage (Culiacan, Sinaloa): Casino Mirage is located in
Culiacan, Sinaloa. FinCEN assesses that Casino Mirage was later renamed
``Copa Kabana Casino'' based on the fact that, in January 2022, its
parent company was granted permission to establish a casino in Culiacan
\23\ at an address that a search of Google Maps \24\ revealed to be
Copa Kabana Casino.
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\23\ Gaceta Municipal, Opini[oacute]n Favorable Para un Casino
(Jan. 19, 2022), <a href="https://apps.culiacan.gob.mx/gaceta/archivos/GACETA_ENERO_2022.pdf">https://apps.culiacan.gob.mx/gaceta/archivos/GACETA_ENERO_2022.pdf</a>.
\24\ A search of Google Search revealed that Casino Mirage is
located at Boulevard Enrique S[aacute]nchez Alonso, Desarrollo
Urbano Tres Rios, 80034 Culiac[aacute]n Rosales, Sinaloa. That
search also revealed that Copa Kabana Casino was permanently closed.
This address corresponds with Plaza 2255, a shopping complex. A
search of Google Maps at this location shows that as of September
2023, there was a prominent sign advertising Copa Kabana Casino.
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(3) Midas Casino (Agua Prieta, Sonora): Midas Casino Agua Prieta is
located in Agua Prieta, Sonora.\25\
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\25\ Casino City, an independent gaming industry directory,
states that Midas Casino Agua Prieta is located at Calle 5 y Avenida
21, Agua Prieta, Sonora 84269. See Casino City, M Casino-Agua Prieta
Address, <a href="https://www.casinocity.mx/agua-prieta/m-casino-agua-prieta/">https://www.casinocity.mx/agua-prieta/m-casino-agua-prieta/</a>
(last accessed Nov. 3, 2025). Midas Casino Agua Prieta's Facebook
page corroborates this address. See Facebook, Midas Casino Agua
Prieta, <a href="https://www.facebook.com/p/Midas-Casino-Agua-Prieta-100089561588120/">https://www.facebook.com/p/Midas-Casino-Agua-Prieta-100089561588120/</a> (last accessed Nov. 3, 2025). World Casino
Directory, an independent gaming industry directory, also
corroborates this address. See World Casino Directory, Agua Prieta
Casinos, <a href="https://www.worldcasinodirectory.com/sonora/agua-prieta">https://www.worldcasinodirectory.com/sonora/agua-prieta</a>
(last accessed Nov. 3, 2025).
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(4) Midas Casino (Guam[uacute]chil, Sinaloa): Midas Casino
Guam[uacute]chil is located in Guam[uacute]chil, Sinaloa.\26\
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\26\ Midas Casino Guam[uacute]chil's Facebook page states that
it is located at Boulevard Antonio Rosales 334, Morelos, Salvador
Alvarado, Guam[uacute]chil, Sinaloa 81460. See Facebook, Midas
Casino Guam[uacute]chil, <a href="https://www.facebook.com/mcasinoguamuchil/?locale=ms_MY">https://www.facebook.com/mcasinoguamuchil/?locale=ms_MY</a> (last accessed Nov. 3, 2025).
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(5) Midas Casino (Los Mochis, Baja California): Midas Casino Los
Mochis is located in Los Mochis, Sinaloa.\27\
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\27\ The Casino City website states that Midas Casino Los Mochis
is located at Boulevard Canuto Ibarra Guerrero, 1048 Monferrath, Los
Mochis, Sinaloa 81248. See Casino City, M Casino-Ahome Address,
<a href="https://www.casinocity.mx/los-mochis/m-casino-ahome/">https://www.casinocity.mx/los-mochis/m-casino-ahome/</a> (last accessed
Nov. 3, 2025). Midas Casino Los Mochis's Facebook page corroborates
this address. See Facebook, Midas Casino Los Mochis, <a href="https://www.facebook.com/cmidaslosmochis/">https://www.facebook.com/cmidaslosmochis/</a> (last accessed Nov. 3, 2025).
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(6) Midas Casino (Mazatlan, Sinaloa): Midas Casino Mazatlan is
located in Mazatl[aacute]n, Sinaloa.\28\
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\28\ The Casino City website states that Midas Casino Mazatlan
is located at La Gran Plaza local T-10, Avenida Reforma,
Mazatl[aacute]n, Sinaloa, 82123. See Casino City, M Casino-
Mazatl[aacute]n Address, <a href="https://www.casinocity.mx/Mazatl">https://www.casinocity.mx/Mazatl</a>[aacute]n/
m-casino-Mazatl[aacute]n/(last accessed Nov. 3, 2025). Midas Casino
Mazatlan's Facebook page corroborates this address and specifies
that it is located at #2206 La Gran Plaza local T-10, Avenida
Reforma, Mazatl[aacute]n, Sinaloa, 82123. See Facebook, Midas Casino
Mazatl[aacute]n <a href="https://www.facebook.com/midascasinomazatlan/">https://www.facebook.com/midascasinomazatlan/</a> (last
accessed Nov. 3, 2025).
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[[Page 51237]]
(7) Midas Casino (Rosarito, Baja California): Midas Casino Rosarito
is located in Rosarito, Baja California.\29\
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\29\ Casino City states that Midas Casino Rosarito is located at
Boulevard Benito Juarez 2701, Echeverr[iacute]a, Rosarito, Baja
California 22703. See Casino City, M Casino-Rosarito Address,
<a href="https://www.casinocity.mx/rosarito/m-casino-rosarito/">https://www.casinocity.mx/rosarito/m-casino-rosarito/</a> (last accessed
Nov. 3, 2025). Midas Casino Rosarito's Facebook page corroborates
this address. See Facebook, Midas Casino Rosarito, <a href="https://www.facebook.com/midascasinororosarito/">https://www.facebook.com/midascasinororosarito/</a> (last accessed Nov. 3,
2025).
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(8) Palermo Casino (Nogales, Sonora): Palermo Casino is located in
Nogales, Sonora.\30\
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\30\ World Casino Directory states that Palermo Casino is
located at Boulevard Luis Donaldo Colosio, Kennedy, 84063, Heroica
Nogales, Sonora. See World Casino Directory, Palermo Casino Nogales
Review, <a href="https://www.worldcasinodirectory.com/casino/palermo-casino-nogales">https://www.worldcasinodirectory.com/casino/palermo-casino-nogales</a> (last accessed Nov. 3, 2025).
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(9) Skampa Casino (Ensenada, Baja California): Skampa Casino
Ensenada is located in Ensenada, Baja California.\31\
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\31\ World Casino Directory states that Skampa Casino Ensenada
is located at Avenida Gral Agustin Sangin[eacute]s, Carlos Pacheco
4, Ensenada, Baja California 22890. See World Casino Directory,
Skampa Casino Review, <a href="https://www.worldcasinodirectory.com/casino/skampa-casino">https://www.worldcasinodirectory.com/casino/skampa-casino</a> (last accessed Nov. 3, 2025). Skampa Casino Ensenada's
Facebook page corroborates this address. See Facebook, Skampa Casino
Ensenada, <a href="https://www.facebook.com/skampacasinoensenada/">https://www.facebook.com/skampacasinoensenada/</a> (last
accessed Nov. 3, 2025).
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(10) Skampa Casino, formerly known as Venezzia Casino
(Villahermosa, Tabasco): Skampa Casino Villahermosa is located in
Villahermosa, Tabasco.\32\
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\32\ A search of Google Maps revealed that Skampa Casino
Villahermosa is located at Periferico Carlos Pellicer C[aacute]mara,
Cuadrante II, Miguel Hidalgo 2a Secc, 86127 Villahermosa, Tabasco.
Casino City corroborates this address. See Casino City, Venezzia
Casino Address, <a href="https://www.casinocity.mx/villahermosa/venezzia-casino/">https://www.casinocity.mx/villahermosa/venezzia-casino/</a> (last accessed Nov. 3, 2025). Skampa Casino Villahermosa's
Facebook page corroborates this address. See Facebook, Official
Venezzia Casino, <a href="https://www.facebook.com/VenezziaCasinoficial/">https://www.facebook.com/VenezziaCasinoficial/</a>
(last accessed Nov. 3, 2025).
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By virtue of their locations and nature of their operations,
transactions by or involving the Gambling Establishments necessarily
are within, or involving, Mexico, a jurisdiction outside of the United
States.
For purposes of making the requisite finding of primary money
laundering concern, FinCEN also considered whether to treat the
Gambling Establishments as ``financial institutions operating outside
of the United States.'' Although that phrase is used in section 311, it
is not defined there, or anywhere else in the BSA. However, the BSA, as
set forth in 31 U.S.C. 5312(a)(2), does define the term ``financial
institution.'' Certain gambling establishments are considered financial
institutions under section 5312(a)(2)(X). However, the ten Mexico-based
gambling establishments that are the subject of this NPRM do not meet
the explicit definition set forth in section 5312(a)(2)(X).\33\ FinCEN
assesses that they are not licensed under the laws of any U.S. state or
subdivision of a U.S. state nor are they Indian gaming operations.\34\
FinCEN further assesses that these gambling establishments are
appropriately licensed and authorized to conduct gambling activities in
Mexico, see infra note 15. Nevertheless, the inclusion of casinos and
gaming establishments generally in 31 U.S.C. 5312(a)(2)(X) is
instructive in determining whether the Gambling Establishments are
``financial institutions.'' Utilizing its authorities under 31 U.S.C.
5312(a)(2)(Y) and 31 U.S.C. 5318A(e)(4),\35\ FinCEN has proposed in the
rulemaking to define ``financial institution operating outside of the
United States'' to include the Gambling Establishments. These Gambling
Establishments engage in activity that is very similar to ``casinos''
as defined in 31 U.S.C. 5312 and are located in Mexico and therefore
are operating outside of the United States. Given the nature of the
relationship between, transactions conducted by, and illicit finance
threat posed by the Gambling Establishments, FinCEN assessed that
finding a ``class of transactions'' involving the Gambling
Establishments would be the most efficient and effective means of
addressing the illicit finance threat posed by the Gambling
Establishments. In addition, because section 5312(a)(2)(X) defines the
term ``casino, gambling casino, or gaming establishment'' by reference
to state and tribal law, laws that are not applicable to the 10 Mexico-
based gambling establishments, those businesses are referred to as
``gambling establishments'' for the purposes of this NPRM to avoid
unnecessary confusion.
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\33\ See 31 U.S.C. 5312(a)(2)(X) (defining a casino, gambling
casino, or gaming establishment by reference to state or tribal
law).
\34\ See id.
\35\ See 31 U.S.C. 5312(a)(2)(Y) (allowing the Secretary of the
Treasury to determine, by regulation, that a business or agency is a
``financial institution'' if it engages in any activity ``which is
similar to, related to, or a substitute for any activity in which
any business described in this paragraph is authorized to engage'');
see also 31 U.S.C. 5318A(e)(4) (allowing the Secretary to ``define
other terms for the purposes of [section 311], as the Secretary
deems appropriate'').
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B. Relevant Factors
Based on information available to FinCEN, including non-public
reporting, and considering each of the factors discussed below, FinCEN
finds that reasonable grounds exist for concluding that transactions
involving the Gambling Establishments are of primary money laundering
concern. Below is a discussion of the relevant statutory institutional
factors FinCEN considered in making this finding related to
transactions involving these Mexico-based Gambling Establishments.
1. The Extent To Which Transactions Involving the Gambling
Establishments Are Used To Facilitate or Promote Money Laundering,
Including Any Money Laundering Activity by Organized Criminal Groups,
International Terrorists, or Entities Involved in the Proliferation of
WMD or Missiles
Based on non-public information, FinCEN assesses that transactions
involving the Gambling Establishments, and their senior leadership, are
used to facilitate or promote money laundering in or through
jurisdictions outside the United States, including benefiting the
Sinaloa Cartel. In making a finding that reasonable grounds exist for
concluding that a class of transactions is of primary money laundering
concern so as to authorize the imposition of special measures, FinCEN
may consider the extent to which the class of transactions is ``used to
facilitate or promote money laundering'' including ``any money
laundering activity by organized criminal groups, international
terrorists, or entities involved in the proliferation of weapons of
mass destruction or missiles.'' \36\
---------------------------------------------------------------------------
\36\ 31 U.S.C. 5318A(c)(2)(B)(i).
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a. Monthly Disbursements
FinCEN's analysis of available, non-public information determined
that, in the aggregate, the Gambling Establishments facilitated the
laundering of over U.S. dollar (USD) 2 million worth of illicit
payments between 2017 and 2024. The volume, duration, and repetitive
nature of this activity indicate that the Gambling Establishments are a
substantial and enduring source of funds and facilitator of money
laundering for the Sinaloa Cartel.
From 2017 through 2024, senior leadership of Midas Casino in
Mazatlan, Sinaloa, made monthly disbursements of funds to the Sinaloa
Cartel as part of an agreement with a highly influential Sinaloa Cartel
affiliate. The payments were made by the senior leadership of Midas
Casino in Mazatlan, Sinaloa, to a highly influential Sinaloa Cartel
affiliate in furtherance of joint casinos ventures. Additionally,
according to non-public information available to FinCEN, the operations
of (1) Emine Casino in San Luis Rio Colorado, Sonora; (2) Palermo
[[Page 51238]]
Casino in Nogales, Sonora; (3) Skampa Casino in Ensenada, Baja
California; and (4) Casino Mirage in Culiacan, Sinaloa, are all
overseen by the senior leadership of Midas Casino in Mazatlan, Sinaloa.
Furthermore, from at least 2021 through 2023, senior leadership for
Midas Casinos made monthly payments to a highly influential Sinaloa
Cartel affiliate as part of an agreement related to (1) Midas Casino in
Agua Prieta, Sonora; (2) Midas Casino in Guamuchil, Sinaloa; (3) Midas
Casino in Los Mochis, Sinaloa; (4) Midas Casino in Mazatlan, Sinaloa;
(5) Midas Casino in Rosarita, Baja California; and (6) Skampa Casino in
Villahermosa, Tabasco.
b. Illicit Payments Intended To Evade Detection
For years, the Gambling Establishments, including their leadership,
have also sent illicit payments to senior cartel members, with the
purpose of evading detection. FinCEN assesses the Gambling
Establishments' leadership received detailed instructions from the
Sinaloa Cartel on ways to avoid detection from financial institutions'
anti-money laundering controls. For example, as part of the agreement
regarding the disbursements, the Gambling Establishments' senior
leadership was directed to (1) make one or two transactions into bank
accounts designated by a highly influential Sinaloa Cartel affiliate;
(2) allow pick up of the disbursements, in person, by a highly
influential Sinaloa Cartel affiliate at Midas Casino in Mazatlan,
Sinaloa; or (3) hand the disbursements to a person designated by a
highly influential Sinaloa Cartel affiliate. Furthermore, the highly
influential Sinaloa Cartel affiliate instructed the Gambling
Establishments' leadership to make two deposits per account, make no
more than MXN 90,000 (USD 4,354) per deposit, and avoid making deposits
on consecutive days to prevent the accounts from being blocked. FinCEN
believes that these instructions appear similar to structuring--the
breaking up of transactions into multiple, smaller ones for the
intended purpose of evading recordkeeping or other regulatory
requirements established by governments or financial institutions.\37\
FinCEN further assesses these payments were part of a sophisticated
operation intended to prevent documentable connections between the
Gambling Establishments and the Sinaloa Cartel. As evidence of these
obfuscation efforts, casino leadership received instructions on how to
complete payments to the Sinaloa Cartel, along with multiple accounts
to utilize for cash deposits. In one instance, a highly influential
Sinaloa Cartel affiliate provided the Gambling Establishments'
leadership over 30 bank accounts in the name of Mexico-based companies
into which to make cash deposits.
---------------------------------------------------------------------------
\37\ See generally FinCEN, Suspicious Activity Reporting
(Structuring) (July 15, 2005), <a href="https://www.fincen.gov/resources/statutes-regulations/administrative-rulings/suspicious-activity-reporting-structuring">https://www.fincen.gov/resources/statutes-regulations/administrative-rulings/suspicious-activity-reporting-structuring</a>.
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c. Beneficiary of Illicit Payments as a Threat to U.S. National
Security
Given the various egregious factors described above, FinCEN finds
that, if not disrupted, transactions involving the Gambling
Establishments will continue to facilitate money laundering benefiting
the Sinaloa Cartel, a DTO and U.S.-designated FTO and SDGT. Of special
concern is the longstanding involvement of the Gambling Establishments'
senior leadership in the facilitation of money laundering in connection
with the Gambling Establishments, for the benefit of the Sinaloa
Cartel--which plays a significant role in the opioid crisis in the
United States. The sustained influx of fentanyl and other synthetic
opioids into the United States has profound consequences, including
drug overdoses becoming the leading cause of death for people aged 18
to 44 in the United States.\38\ To address the synthetic opioid crisis,
it is necessary to target the money laundering efforts of the Mexico-
based DTOs that are the primary source of fentanyl and other synthetic
opioids trafficked into the United States. These DTOs manufacture
synthetic opioids in clandestine laboratories in Mexico using precursor
chemicals sourced largely from the People's Republic of China (China),
traffic these synthetic opioids into and throughout the United States,
and launder the illicit profits back to Mexico.\39\
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\38\ See Centers for Disease Control, CDC Reports Nearly 24%
Decline in U.S. Drug Overdose Deaths (Feb. 25, 2025), <a href="https://www.cdc.gov/media/releases/2025/2025-cdc-reports-decline-in-us-drug-overdose-deaths.html">https://www.cdc.gov/media/releases/2025/2025-cdc-reports-decline-in-us-drug-overdose-deaths.html</a>; E.O. 14159, Imposing Duties To Address the
Synthetic Opioid Supply Chain in the People's Republic of China, 90
FR 9121 (Feb. 7, 2025), <a href="https://www.federalregister.gov/documents/2025/02/07/2025-02408/imposing-duties-to-address-the-synthetic-opioid-supply-chain-in-the-peoples-republic-of-china">https://www.federalregister.gov/documents/2025/02/07/2025-02408/imposing-duties-to-address-the-synthetic-opioid-supply-chain-in-the-peoples-republic-of-china</a>.
\39\ See Drug Enforcement Administration, DEA-DCT-DIR-010-24,
2024 National Drug Threat Assessment (May 2024), pp. 46-50, <a href="https://www.dea.gov/sites/default/files/2024-05/5.23.2024%20NDTA-updated.pdf">https://www.dea.gov/sites/default/files/2024-05/5.23.2024%20NDTA-updated.pdf</a>; FinCEN, FIN-2024-A002, Supplemental Advisory on the
Procurement of Precursor Chemicals and Manufacturing Equipment Used
for the Synthesis of Illicit Fentanyl and Other Synthetic Opioids
(June 20, 2024), <a href="https://www.fincen.gov/sites/default/files/advisory/2024-06-20/FinCEN-Supplemental-Advisory-on-Fentanyl-508C.pdf">https://www.fincen.gov/sites/default/files/advisory/2024-06-20/FinCEN-Supplemental-Advisory-on-Fentanyl-508C.pdf</a>; Congressional Research Service, Illicit Fentanyl and
Mexico's Role (Dec. 19, 2024), pp. 1-2, <a href="https://crsreports.congress.gov/product/pdf/IF/IF10400">https://crsreports.congress.gov/product/pdf/IF/IF10400</a>.
---------------------------------------------------------------------------
These DTOs could not profit from trafficking fentanyl and other
synthetic opioids if not for their ability to launder their proceeds.
DTOs and third-party money launderers use a diverse array of methods to
launder money, including using financial institutions, remittance
payments, bulk cash smuggling, trade-based money laundering, mirror
trades, and cryptocurrencies.\40\ It is therefore critical to address
the role that certain classes of transactions play in facilitating the
money laundering that enables and facilitates the DTOs and their
illicit opioid trafficking and related money laundering.
---------------------------------------------------------------------------
\40\ See Drug Enforcement Administration, DEA-DCT-DIR-010-24,
2024 National Drug Threat Assessment (May 2024), pp. 46-50, <a href="https://www.dea.gov/sites/default/files/2024-05/5.23.2024%20NDTA-updated.pdf">https://www.dea.gov/sites/default/files/2024-05/5.23.2024%20NDTA-updated.pdf</a>.
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As previously described, the Sinaloa Cartel affiliate provided the
Gambling Establishments' leadership with over 30 bank accounts
associated with Mexico-based businesses to receive cash deposits in
furtherance of their money laundering activities. FinCEN assesses these
payments entered the Mexican financial system with minimal to no
documented connection to its illicit origin. This poses a threat to the
integrity of the U.S. financial system because of the highly
interconnected nature of the U.S. and Mexican financial systems.\41\ In
2024 alone, U.S. goods and services trade with Mexico totaled an
estimated USD 935 billion,\42\ and there are many U.S.-based banks
active in the Mexican market.\43\ Given that the money laundering
activity described above was conducted using over 30 bank accounts at
unidentified financial institutions, FinCEN assesses it is reasonable
to believe that at least a portion of this money, benefiting the
Sinaloa Cartel, a DTO and U.S.-designated FTO and SDGT, entered Mexico-
based banks with direct correspondent relationships with U.S. financial
institutions, indirect U.S. correspondent relationships, or with
exposure to U.S. financial markets.
---------------------------------------------------------------------------
\41\ See generally Department of State, 2024 Investment Climate
Statements: Mexico (last accessed Aug. 19, 2025), <a href="https://www.state.gov/reports/2024-investment-climate-statements/mexico/">https://www.state.gov/reports/2024-investment-climate-statements/mexico/</a>.
\42\ Office of the United States Trade Representative, Mexico
(last accessed Aug. 19, 2025), <a href="https://ustr.gov/countries-regions/americas/mexico">https://ustr.gov/countries-regions/americas/mexico</a>.
\43\ International Trade Administration, Mexico Country
Commercial Guide: Trade Financing (Nov. 5, 2023), <a href="https://www.trade.gov/country-commercial-guides/mexico-trade-financing">https://www.trade.gov/country-commercial-guides/mexico-trade-financing</a>.
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In addition to threatening the integrity of the U.S. financial
system, the transactions involving the Gambling
[[Page 51239]]
Establishments support the Sinaloa Cartel, a U.S.-designated FTO,
constituting a significant threat to U.S. national security. The
Sinaloa Cartel has a well-documented history of violence and crime that
threatens U.S. and Mexican persons. The Sinaloa Cartel is one of the
largest and most notorious DTOs in Mexico, and traffics multi-ton
quantities of illicit drugs, including fentanyl and heroin, into the
United States \44\ It uses money laundering and violent crimes to
conduct its operations.\45\ In addition to laundering funds through the
Gambling Establishments, the Sinaloa Cartel has engaged in numerous
illicit finance methodologies including fuel smuggling,\46\ time share
fraud,\47\ bulk cash smuggling, and currency arbitrage.\48\ This action
serves to end a longstanding source of income for the Sinaloa Cartel
and expose their diverse illicit financial operations, which sustain
their violent operations and drug trafficking operations, all of which
pose a significant threat to the integrity of the United States'
financial system.
---------------------------------------------------------------------------
\44\ Department of the Treasury, Treasury Uses New Sanctions
Authority to Combat Global Illicit Drug Trade (Dec. 15, 2021),
<a href="https://home.treasury.gov/news/press-releases/jy0535">https://home.treasury.gov/news/press-releases/jy0535</a>.
\45\ See Department of Justice, Four of Chapo's Sons Indicted
for Large-Scale Drug Trafficking, Money Laundering and Violent
Crimes as Alleged Leaders of Sinaloa Cartel (Apr. 14, 2023), <a href="https://www.justice.gov/usao-sdca/pr/four-chapos-sons-indicted-large-scale-drug-trafficking-money-laundering-and-violent">https://www.justice.gov/usao-sdca/pr/four-chapos-sons-indicted-large-scale-drug-trafficking-money-laundering-and-violent</a>.
\46\ FinCEN, FinCEN Alert on Oil Smuggling Schemes on the U.S.
Southwest Border Associated with Mexico-Based Cartels (May 1, 2025),
<a href="https://www.fincen.gov/sites/default/files/shared/FinCEN-Alert-Oil-Smuggling-FINAL-508C.pdf">https://www.fincen.gov/sites/default/files/shared/FinCEN-Alert-Oil-Smuggling-FINAL-508C.pdf</a>.
\47\ Federal Bureau of Investigation, Mexican Cartels Target
Americans in Timeshare Fraud Scams, FBI Warns (June 7, 2024),
<a href="https://www.fbi.gov/news/stories/mexican-cartels-targeting-americans-in-timeshare-fraud-scams-fbi-warns">https://www.fbi.gov/news/stories/mexican-cartels-targeting-americans-in-timeshare-fraud-scams-fbi-warns</a>.
\48\ Department of the Treasury, Treasury Sanctions Criminal
Operators and Money Launderers for the Notorious Sinaloa Cartel
(Mar. 31, 2025), <a href="https://home.treasury.gov/news/press-releases/sb0064">https://home.treasury.gov/news/press-releases/sb0064</a>.
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2. The Extent To Which Transactions Involving the Gambling
Establishments Are Used for Legitimate Business Purposes
In making a finding that reasonable grounds exist for concluding
that a class of transactions is of primary money laundering concern so
as to authorize the imposition of special measures, FinCEN may consider
the extent to which the class of transactions is ``used for legitimate
business purposes.'' \49\ While FinCEN does not know the full extent of
legitimate business activity in which the Gambling Establishments
engage, their collective, cumulative transactional volume identified to
have a nexus with illicit activity is assessed to exceed USD 2 million
since 2017. FinCEN lacks insight into the nature of most of the
Gambling Establishments' daily business operations, generally, and fiat
currency transaction activity, more specifically, which FinCEN
attributes to the Gambling Establishments' leadership obfuscating USD
transactional activity using money laundering typologies, as described
above.
---------------------------------------------------------------------------
\49\ 31 U.S.C. 5318A(c)(2)(B)(ii).
---------------------------------------------------------------------------
The Gambling Establishments advertise ostensibly legitimate
business services, such as gambling, gaming, and betting. FinCEN found
no information indicating that the Gambling Establishments offer online
gambling or online services. The Gambling Establishments' advertised
services indicate some legitimate business transiting the Gambling
Establishments. However, given the totality of circumstances, FinCEN
assesses that the benefits of any legitimate business activities of the
Gambling Establishments are outweighed by the substantial money
laundering risk posed by transactions involving the Gambling
Establishments.
3. The Extent To Which Action Proposed by FinCEN Would Guard Against
International Money Laundering and Other Financial Crimes
In making a finding that reasonable grounds exist for concluding
that a class of transactions is of primary money laundering concern so
as to authorize the imposition of special measures, FinCEN may consider
the extent to which such action is ``sufficient to ensure'' that the
purpose of section 311 ``continue[s] to be fulfilled, and to guard
against international money laundering and other financial crimes.''
\50\ A finding that transactions involving the Gambling Establishments
are of primary money laundering concern would make clear the illicit
finance risk such transactions pose to domestic financial institutions,
and by extension, to their foreign correspondents. FinCEN anticipates
that the imposition of special measure five may cause U.S. financial
institutions, their foreign correspondent accounts, and their
regulators, to act to mitigate the money laundering risks posed by
transactions involving the Gambling Establishments. A prohibition under
special measure five would sufficiently guard against international
money laundering and other financial crimes related to the Gambling
Establishments by restricting the ability of the Gambling
Establishments to access the U.S. financial system.
---------------------------------------------------------------------------
\50\ 31 U.S.C. 5318A(c)(2)(B)(iii).
---------------------------------------------------------------------------
IV. Proposed Special Measure
Having found that transactions involving the Gambling
Establishments are of primary money laundering concern, FinCEN proposes
imposing a prohibition on covered financial institutions under special
measure five. Special measure five authorizes the Secretary to impose
conditions upon the opening or maintaining in the United States of a
correspondent account or payable-through account, if a class of
transactions of primary money laundering concern may be conducted
through such an account.\51\ Although the Gambling Establishments are
not known to have direct correspondent accounts with U.S. financial
institutions, the Gambling Establishments may access the U.S. financial
system through correspondent accounts held at foreign banking
institutions. Given the seriousness of the threat posed to the United
States by DTOs, FTOs, and SDGTs, and the sophisticated payment
agreement between the Gambling Establishments' leadership and the
Sinaloa Cartel intended to obfuscate the purpose and origin of these
transactions, the imposition of special measure five is necessary to
mitigate the risks posed by the transactions involving the Gambling
Establishments. FinCEN considered the other special measures available
under section 311. As discussed further below, it was determined that
none of the other special measures would appropriately address the
risks posed by transactions involving the Gambling Establishments.
---------------------------------------------------------------------------
\51\ 31 U.S.C. 5318A(b)(5).
---------------------------------------------------------------------------
In proposing this special measure, FinCEN consulted with
representatives and staff of the Board of Governors of the Federal
Reserve System, the Office of the Comptroller of the Currency, the
Secretary of State, the Securities and Exchange Commission, the
Commodity Futures Trading Commission, the National Credit Union
Administration, the Federal Deposit Insurance Corporation, and the
Attorney General.\52\ These consultations involved interagency views on
the imposition of special measure five and the effects that such a
prohibition would have on the U.S. domestic and international financial
systems.
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\52\ See 31 U.S.C. 5318A(a)(4)(A), 31 U.S.C. 5318A(b)(5).
---------------------------------------------------------------------------
In addition, FinCEN considered the factors set forth in section
311, as set forth below.\53\
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\53\ 31 U.S.C. 5318A(a)(4)(B)(i)-(iv).
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[[Page 51240]]
A. Whether Similar Action Has Been or Is Being Taken by Other Nations
or Multilateral Groups Regarding the Gambling Establishments
FinCEN is aware that federal authorities in Mexico are considering
actions to complement the special measure proposed by FinCEN in this
NPRM. Until any such actions are taken, FinCEN is not able to assess
whether the resulting impact may be as effective as the proposed
special measure in insulating the U.S. financial system from the money
laundering risks inherent in the Gambling Establishments.
FinCEN is not otherwise aware of any other nation or multilateral
group that has imposed, or is currently imposing, similar action
against transactions involving the Gambling Establishments.
FinCEN notes that it coordinated with Treasury's Office of Foreign
Assets Control (OFAC) in addressing the illicit finance activity at the
Gambling Establishments.
B. Whether the Imposition of Any Particular Special Measure Would
Create a Significant Competitive Disadvantage, Including Any Undue Cost
or Burden Associated With Compliance, for Financial Institutions
Organized or Licensed in the United States
While FinCEN assesses that the prohibition proposed in this NPRM
would impose a burden on covered financial institutions, that burden is
not expected to be substantial and is neither undue nor inappropriate
in view of the threat posed by the illicit activity facilitated by
transactions involving the Gambling Establishments.
As described above, and as corroborated by non-public information,
the Gambling Establishments have no direct correspondent relationships
with U.S. financial institutions and instead, may access the U.S.
financial system through correspondent accounts held by foreign banking
institutions. To identify this type of access by illicit actors to the
correspondent accounts of foreign banking institutions, covered
financial institutions generally apply some level of monitoring and
screening of their transactions and accounts, often through the use of
commercially available software such as that used to detect potentially
suspicious activity and for compliance with the sanctions programs
administered by OFAC. FinCEN anticipates that covered financial
institutions will be able to leverage these pre-existing monitoring and
screening tools to identify whether a correspondent account is being
used to process a transaction involving any of the Gambling
Establishments, for purposes of complying with the proposed application
of special measure five.
As a corollary to the proposed requirement that would prohibit
covered financial institutions from opening or maintaining in the
United States any correspondent account for or on behalf of a foreign
banking institution if such correspondent account is used to process a
transaction involving any of the Gambling Establishments, covered
financial institutions would also be required to take reasonable steps
to apply special due diligence to all of their correspondent accounts
established with a foreign banking institution to help ensure that no
such account is being used to process transactions involving any of the
Gambling Establishments. Included in this special due diligence is the
requirement that covered financial institutions transmit a notice to
all foreign correspondent account holders concerning the prohibition on
processing transactions involving any of the Gambling Establishments
through the U.S. correspondent account. FinCEN assesses such notices
would involve a minimal burden. Additionally, as discussed above,
covered financial institutions generally apply some level of
transaction and account screening and monitoring for purposes of the
remaining proposed special due diligence requirements. Thus, the
special due diligence that would be required by this rulemaking is not
expected to impose a significant additional burden upon covered
financial institutions.
C. The Extent To Which the Action or the Timing of the Action Would
Have a Significant Adverse Systemic Impact on the International
Payment, Clearance, and Settlement System, or on Legitimate Business
Activities Involving the Class of Transactions
FinCEN assesses that imposing the proposed special measure would
have minimal impact upon the international payment, clearance, and
settlement system. As comparatively small entities providing gambling
and gaming services, none of the Gambling Establishments are relied
upon by the international banking community for clearance or settlement
services and none are systemically important financial institutions in
Mexico, regionally, or globally.
Nothing in the proposed rule would directly impede the Gambling
Establishments from continuing legitimate business activities in the
local economy following the imposition of a special measure insulating
the U.S. financial system from the illegitimate activities of the
Gambling Establishments. Furthermore, in light of FinCEN's finding that
transactions involving the Gambling Establishments are of primary money
laundering concern, FinCEN believes that any impact on the legitimate
business activities of the Gambling Establishments would be outweighed
by the need to protect the U.S. financial system.
D. The Effect of the Proposed Action on United States National Security
and Foreign Policy
As described above, evidence available to FinCEN demonstrates that
transactions involving the Gambling Establishments facilitate money
laundering benefiting the Sinaloa Cartel. Imposing special measure five
would: (1) impede the Gambling Establishments' access to the U.S.
financial system; and (2) inhibit the Gambling Establishments' ability
to act as an illicit finance facilitator for the Sinaloa Cartel. As a
result, the United States national security would be enhanced by making
it more difficult for terrorists and money launderers to continue their
illicit activities.
E. Consideration of Alternative Special Measures
In assessing the appropriate special measure to impose, FinCEN
considered alternatives to a prohibition on the opening or maintaining
in the United States of correspondent accounts or payable-through
accounts, including the imposition of one or more of the first four
special measures, or imposing conditions on the opening or maintaining
of correspondent accounts under special measure five. Having considered
these alternatives and for the reasons set out below, FinCEN assesses
that none of the other special measures available under section 311
would as appropriately address the risks posed by transactions
involving the Gambling Establishments and the urgent need to prevent
them from accessing the U.S. financial system through correspondent
banking.
Transactions involving the Gambling Establishments continue to
present a significant money laundering risk, particularly related to
DTO, FTO, and SDGT illicit finance. Taken as a whole, the Gambling
Establishments' history of facilitating money laundering benefiting the
Sinaloa Cartel presents a heightened risk that transactions involving
the Gambling Establishments will continue
[[Page 51241]]
to be used to support its violent and destabilizing activities
threatening Mexican and U.S. national security.
Because of the nature, extent, and purpose of the obfuscation
engaged in by the Gambling Establishments, any special measure intended
to mandate additional information collection would likely be
ineffective and insufficient to determine the true purpose for the
transactions or the identity of the parties involved. For example, the
provision under special measure one would require covered financial
institutions to ``maintain records, file reports, or both, concerning
the aggregate amount of transactions, or concerning each transaction;''
\54\ FinCEN believes that such a simple recording or reporting
obligation would be insufficient to counter the significant risks
presented by transactions involving the Gambling Establishments, as the
Sinaloa Cartel--a DTO and U.S.-designated FTO and SDGT--is the
beneficiary of the money laundering involving the Gambling
Establishments.
---------------------------------------------------------------------------
\54\ 31 U.S.C. 5318A(b)(1)(B)(i).
---------------------------------------------------------------------------
FinCEN also considered special measure two, which may require
domestic financial institutions to ``obtain and retain information
concerning the beneficial ownership of any account opened or maintained
in the United States by a foreign person.'' \55\ FinCEN determined that
this special measure would likely be ineffective since the Gambling
Establishments' illicit activities do not involve the Gambling
Establishments engaging in the opening or maintaining of accounts in
the United States.
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\55\ 31 U.S.C. 5318A(b)(2).
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Further, the requirements under special measures three and four,
that domestic financial institutions require the Gambling
Establishments, as a condition of opening or maintaining a
correspondent account at the domestic financial institution, to obtain
additional information about customers, would be inadequate. As noted
above, the Gambling Establishments do not appear to hold correspondent
accounts directly in the United States.
FinCEN similarly assesses that merely imposing conditions under
special measure five would be inadequate to address the risks posed by
the Gambling Establishments' activities. Special measure five allows
FinCEN to impose conditions as an alternative to a prohibition on the
opening or maintaining of correspondent accounts.\56\ However, any
measure short of prohibiting access by the Gambling Establishments to
the U.S. financial system through U.S. correspondent accounts of
foreign banking institutions is insufficient to counter the risks
presented by transactions involving the Gambling Establishments. FinCEN
does not believe that any conditioned access to U.S. correspondent
accounts, indirectly through a foreign banking institution, is
warranted, given the Gambling Establishments' facilitation of money
laundering on behalf of the Sinaloa Cartel.
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\56\ 31 U.S.C. 5318A(b)(5).
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In sum, any condition or additional recordkeeping or reporting
requirement would be an ineffective measure to safeguard the U.S.
financial system from the illicit behavior facilitated by transactions
involving the Gambling Establishments. Therefore, FinCEN has determined
that a prohibition on transactions involving the Gambling
Establishments' use of correspondent banking relationships is the
special measure available under section 311 that most adequately
protects the U.S. financial system from the illicit finance risk posed
by transactions involving the Gambling Establishments.
V. Severability
If any of the provisions of this rule, or the application thereof
to any person or circumstance, is held to be invalid, such invalidity
shall not affect the application of such provisions to other persons or
circumstances that can be given effect without the invalid provision or
application.
The provisions of this rule can function sensibly if any specific
provision or application is invalidated, enjoined, or stayed. For
example, if a court were to hold as invalid the application of the rule
with respect to transactions involving any identified Gambling
Establishment of the Gambling Establishments, FinCEN would preserve the
finding that transactions involving all other Gambling Establishments
are of primary money laundering concern. In such an instance, the
provisions of the rule should remain in effect, as those provisions
could function sensibly with respect to the remainder of the Gambling
Establishments' transactions. In sum, in the event that any of the
provisions of this rule, or the application thereof to any person or
circumstance, is held to be invalid, FinCEN has crafted this rule with
the intention to preserve its provisions to the fullest extent possible
and any adverse holding should not affect other provisions.
VI. Section-by-Section Analysis
The goal of this proposed rule is to combat and deter DTO- and FTO-
affiliated money laundering and the laundering of proceeds from illicit
activities including narcotics trafficking carried out by the Sinaloa
Cartel, and to impede the Gambling Establishments from accessing the
U.S. financial system to enable their illicit finance behavior.
A. 1010.665(a)--Definitions
1. Definition of the Gambling Establishments
This section defines the term by specific reference to the Gambling
Establishments that are the subject of the finding of primary money
laundering concern, and it specifically includes in the term all
subsidiaries, branches, and offices of those Gambling Establishments
that are operating in any jurisdiction outside of the United States:
(i). Casino Emine (San Luis Rio Colorado, Sonora);
(ii). Casino Mirage (Culiacan, Sinaloa);
(iii). Midas Casino (Agua Prieta, Sonora);
(iv). Midas Casino (Guamuchil, Sinaloa);
(v). Midas Casino (Los Mochis, Sinaloa);
(vi). Midas Casino (Mazatlan, Sinaloa);
(vii). Midas Casino (Rosarito, Baja California);
(viii). Palermo Casino (Nogales, Sonora);
(ix). Skampa Casino (Ensenada, Baja California); and,
(x). Skampa Casino (Villahermosa, Tabasco).
2. Definition of Correspondent Account
The term ``correspondent account'' has the same meaning as the
definition contained in 31 CFR 1010.605(c)(1)(ii). In the case of a
U.S. depository institution, this broad definition includes most types
of banking relationships between a U.S. depository institution and a
foreign banking institution that are established to provide regular
services, dealings, and other financial transactions, including a
demand deposit, savings deposit, or other transaction or asset account,
and a credit account or other extension of credit. FinCEN is using the
same definition of ``account'' for purposes of this proposed rule as is
established for depository institutions in the final rule implementing
the provisions of section 312 of the USA PATRIOT Act, requiring
enhanced due diligence for correspondent accounts maintained for
certain foreign banking institutions.\57\ Under this definition,
``payable-through
[[Page 51242]]
accounts'' are a type of correspondent account.
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\57\ See 31 CFR 1010.605(c)(2)(i).
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In the case of securities broker-dealers, futures commission
merchants, introducing brokers in commodities, and investment companies
that are open-end companies (mutual funds), FinCEN is also using the
same definition of ``account'' for purposes of this proposed rule as
was established for these entities in the final rule implementing the
provisions of section 312 of the USA PATRIOT Act, requiring due
diligence for correspondent accounts maintained for certain foreign
banking institutions.\58\
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\58\ See 31 CFR 1010.605(c)(2)(ii)-(iv).
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3. Definition of Covered Financial Institution
The term ``covered financial institution'' is defined by reference
to 31 CFR 1010.605(e)(1), the same definition used in the BSA rule (31
CFR 1010.610) requiring the establishment of due diligence programs for
correspondent accounts for financial institutions. Under this
definition, covered financial institutions are the following:
<bullet> a bank;
<bullet> a broker or dealer in securities;
<bullet> a futures commission merchant or an introducing broker in
commodities; and
<bullet> a mutual fund.
4. Definition of Foreign Banking Institution
The term ``foreign banking institution'' means a bank organized
under foreign law, or an agency, branch, or office located outside the
United States of a bank. The term does not include an agent, agency,
branch, or office within the United States of a bank organized under
foreign law.
5. Definition of Foreign Financial Institution Operating Outside of the
United States
Pursuant to 31 U.S.C. 5318A(e)(4), for the proposed rule, the term
``financial institution operating outside of the United States'' means
any business or agency operating, in whole or in part, outside of the
United States that engages in any activity which is similar to, related
to, or a substitute for any activity in which any financial
institution, as defined in 31 U.S.C. 5312(a)(2), engages.
FinCEN is including this definition as the proposed definition of
``Gambling Establishments'' incorporates this phrase. As discussed
above, 31 U.S.C. 5312 permits FinCEN, by regulation, to define as a
``financial institution'' any business or activity that engages in any
activity that FinCEN determines is an activity similar to, related to,
or a substitute for any activity in which any business defined as a
``financial institution'' in 31 U.S.C. 5312 is authorized to engage.
6. Definition of Subsidiary
The term ``subsidiary'' means a company of which more than 50
percent of the voting stock or an otherwise controlling interest is
owned by another company.
B. 1010.665(b)--Prohibition on Use of Correspondent Accounts and Due
Diligence Requirements for Covered Financial Institutions
1. Prohibition on Use of Correspondent Accounts
Section 1010.665(b)(1) of the proposed rule would prohibit covered
financial institutions from opening or maintaining in the United States
any correspondent account for or on behalf of a foreign banking
institution if such correspondent account is used to process a
transaction involving any of the Gambling Establishments.
2. Special Due Diligence for Correspondent Accounts to Prohibit Use
As a corollary to the prohibition set forth in section
1010.665(b)(1), section 1010.665(b)(2) of the proposed rule would
require covered financial institutions to apply special due diligence
to its correspondent accounts that is reasonably designed to guard
against such accounts being used to process transactions involving the
Gambling Establishments. That special due diligence must include
notifying those foreign correspondent account holders that the covered
financial institution knows or has reason to believe provide services
to the Gambling Establishments that those foreign banking institutions
may not provide the Gambling Establishments with access to the
correspondent account maintained at the covered financial institution.
This section specifies that a covered financial institution would be
able to satisfy this notification requirement by using the following
notice:
Notice: Pursuant to U.S. regulations issued under Section 311 of
the USA PATRIOT Act, see 31 CFR 1010.665, we are prohibited from
opening or maintaining in the United States a correspondent account
that is established, maintained, administered, or managed for, or on
behalf of, a foreign banking institution if such correspondent
account is used to process a transaction involving Midas Casino
(Mazatlan, Sinaloa), Midas Casino (Guamuchil, Sinaloa), Midas Casino
(Agua Prieta, Sonora), Midas Casino (Los Mochis, Sinaloa), Midas
Casino (Rosarito, Baja California), Skampa Casino (Villahermosa,
Tabasco), Emine Casino (San Luis Rio Colorado, Sonora), Palermo
Casino (Nogales, Sonora), Skampa Casino (Ensenada, Baja California),
or Casino Mirage (Culiacan, Sinaloa), including any subsidiaries,
branches, and offices of the above-listed gambling establishments.
The regulations also require us to notify you that you may not
provide any of the above-listed gambling establishments, including
any of their respective subsidiaries, branches, and offices, with
access to the correspondent account you hold at our financial
institution. If we become aware that the correspondent account you
hold at our financial institution has processed any transactions
involving any of the above-listed gambling establishments, including
any of their respective subsidiaries, branches, and offices, we will
be required to take appropriate steps to prevent such access,
including terminating your account.
The purpose of the notice requirement is to aid cooperation with
correspondent account holders in preventing transactions involving the
Gambling Establishments from accessing the U.S. financial system.
FinCEN does not require or expect a covered financial institution, as
part of its compliance with this notice requirement, to obtain
certification from any of its correspondent account holders that access
will not be provided.
Methods of compliance with the notice requirement could include,
for example, transmitting a notice by mail, fax, or email. The notice
should be transmitted whenever a covered financial institution knows or
has reason to believe that a foreign correspondent account holder
provides services to the Gambling Establishments.
Special due diligence also includes implementing risk-based
procedures designed to identify any use of correspondent accounts to
process transactions involving the Gambling Establishments. A covered
financial institution would be expected to apply an appropriate
screening mechanism to identify a funds transfer order that on its face
listed one or more of the ten Gambling Establishments as the financial
institution of the originator or beneficiary or otherwise referenced
the Gambling Establishments in a manner detectable under the financial
institution's normal screening mechanisms. An appropriate screening
mechanism could be the mechanisms used by a covered financial
institution to comply with various legal requirements, such as use of
commercially available software programs that are already being used to
comply with the economic sanction programs administered by OFAC.
[[Page 51243]]
3. Recordkeeping and Reporting
Section 1010.665(b)(3) of the proposed rule would clarify that the
proposed rule does not impose any reporting requirement upon any
covered financial institution that is not otherwise required by
applicable law or regulation. A covered financial institution must,
however, document its compliance with the notification requirement
described above in section 1010.665(b)(2).
VII. Request for Comments
FinCEN is requesting that comments on this NPRM be submitted within
30 days after its publication. Given the Gambling Establishments'
consistent and longstanding ties to the Sinaloa Cartel, FinCEN assesses
that a 30-day comment period for this NPRM strikes an appropriate
balance between ensuring sufficient time for notice to the public and
opportunity for comment on the proposed rule, while minimizing undue
risk posed to the U.S. financial system in processing illicit transfers
that are likely to finance the Sinaloa Cartel. FinCEN invites comments
on all aspects of the proposed rule, including the following specific
matters:
1. The impact of the proposed special measures upon legitimate
transactions involving the Gambling Establishments or Mexican financial
institutions generally;
2. FinCEN's proposal to prohibit the opening or maintaining of any
correspondent account used to process a transaction involving the
Gambling Establishments pursuant to special measure five under 31
U.S.C. 5318A(b), as opposed to imposing special measures one through
four, or imposing other conditions or prohibitions under special
measure five;
3. The form and scope of the notice to certain correspondent
account holders that would be required under the rule;
4. The appropriate scope of the due diligence requirements in this
proposed rule; and
5. The appropriate steps that a covered financial institution
should take once it identifies use of one of its correspondent accounts
to process transactions involving the Gambling Establishments.
VIII. Regulatory Impact Analysis
FinCEN has analyzed this proposed rule under Executive Orders
12866, 13563, the Regulatory Flexibility Act,\59\ the Unfunded Mandates
Reform Act,\60\ and the Paperwork Reduction Act.\61\
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\59\ 5 U.S.C. 603.
\60\ 2 U.S.C. 1532.
\61\ 44 U.S.C. 3507(a)(1)(D).
---------------------------------------------------------------------------
The intended effects of the imposition of special measure five on
the Gambling Establishments' transactions that, directly or indirectly,
involve the use of foreign correspondent accounts with covered
financial institutions, as described above, are twofold. The rule is
expected to: (1) combat and deter money laundering by the Sinaloa
Cartel through the Gambling Establishments; and (2) prevent the
Gambling Establishments from using the U.S. financial system to enable
their illicit finance activities. In the analysis below, FinCEN
discusses the economic effects that are expected to accompany adoption
of the rule as proposed and assesses such expectations in more granular
detail. This discussion includes an explanation of how FinCEN's
assumptions and methodological choices have influenced FinCEN's
conclusions. The public is invited to comment on all aspects of
FinCEN's practice.\62\
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\62\ See supra Section VII; see also infra Section VIII.D.
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A. Executive Orders
Executive Orders 12866 and 13563 direct agencies to assess costs
and benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). Executive Order 13563
emphasizes the importance of quantifying both costs and benefits,
reducing costs, harmonizing rules, and promoting flexibility.
A regulatory impact analysis pursuant to Executive Orders 12866 and
13563 is not required because it has been determined that this proposed
rule is not a significant regulatory action under section 3(f) of
Executive Order 12866. The basis for this determination includes both
the estimated size of the population of expected affected parties and
the estimated incremental economic costs the proposed rule is expected
to impose.
As discussed in further detail below,\63\ of the 15,710 entities
that meet the proposed definitional criteria as covered financial
institutions,\64\ FinCEN estimates that only approximately 127 maintain
correspondent accounts to which the proposed rule would apply.\65\
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\63\ See infra Section VIII.D. discussion of potentially
affected parties and expected affected parties.
\64\ See supra Section VI.A.3.
\65\ See supra Section VI.A.2.
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Additionally, as described above,\66\ the incremental activities an
affected covered financial institution would need to undertake to
comply with the proposed rule are so aligned with pre-existing general
anti-money laundering and countering the financing of terrorism (AML/
CFT) program and suspicious activity report (SAR) reporting
requirements, other section 311 compliance activities, OFAC compliance
obligations,\67\ and other specialized foreign correspondent account
due diligence activities that the additional burden is expected to be
minimal both per affected covered financial institution and on
aggregate.
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\66\ See supra Section IV.B; see also supra Section VI.B.2.
\67\ All U.S. persons, including U.S. financial institutions,
currently must comply with OFAC sanctions, and U.S. financial
institutions generally have systems in place to screen transactions
to comply with OFAC sanctions.
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B. Regulatory Flexibility Act
When an agency issues a rulemaking proposal, the Regulatory
Flexibility Act (RFA) requires the agency to ``prepare and make
available for public comment an initial regulatory flexibility
analysis'' (IRFA) that will ``describe the impact of the proposed rule
on small entities.'' \68\ However, section 605 of the RFA allows an
agency to certify a rule, in lieu of preparing an analysis, if the
proposed rulemaking is not expected to have a significant economic
impact on a substantial number of small entities.
---------------------------------------------------------------------------
\68\ 5 U.S.C. 603(a).
---------------------------------------------------------------------------
The population of affected covered financial institutions under the
proposed rule is limited to those financial institutions that maintain
foreign correspondent accounts. FinCEN is not in possession of any
data, studies, or qualitative evidence that any such covered financial
institution meets the respective definitional criteria to be deemed a
``small entity'' under the RFA.\69\ Moreover, FinCEN assesses that, if
such a small entity did exist, the changes in activity necessary to
comply with proposed rule would be unlikely to have a significant
economic impact on such entity.
---------------------------------------------------------------------------
\69\ See 5 U.S.C. 601(3)-(5) for the applicable categorical
definitions of ``entity''; see also 13 CFR 121.201 for the
applicable threshold values of ``small.''
---------------------------------------------------------------------------
Under the proposed rule, covered financial institutions would be
prohibited from opening or maintaining any correspondent account in the
United States that is used to process a transaction involving any of
the Gambling Establishments and would
[[Page 51244]]
also be required to take reasonable measures to prevent use of their
correspondent accounts to process transactions involving any of the
Gambling Establishments. Affected U.S. financial institutions,
irrespective of size, are already obligated to comply with broader
regulatory requirements, and they typically maintain compliance systems
that can utilized to ensure compliance with this proposed rule. As a
result, the special due diligence that would be required under the
proposed rule--i.e., preventing the processing of transactions
involving any the Gambling Establishments and the transmittal of
notification to certain correspondent account holders--is not expected
to impose a significant additional economic burden upon any U.S.
financial institution, including any that would qualify as a small
entity under the RFA. For these reasons, FinCEN certifies that the
proposals contained in this rulemaking would not have a significant
impact on a substantial number of small businesses.
Its own determination notwithstanding, FinCEN invites comments from
members of the public who believe certification is not appropriate
because there would be a significant economic impact on a substantial
number of small entities from the imposition of a prohibition under the
fifth special measure on the Gambling Establishments as defined.
C. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 \70\
(Unfunded Mandates Reform Act), requires that an agency prepare a
budgetary impact statement before promulgating a rule that may result
in expenditure by state, local, and tribal governments, in the
aggregate, or by the private sector, of USD 100 million or more in any
one year, adjusted for inflation.\71\ If a budgetary impact statement
is required, section 202 of the Unfunded Mandates Reform Act also
requires an agency to identify and consider a reasonable number of
regulatory alternatives before promulgating a rule.\72\
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\70\ 2 U.S.C. 1532.
\71\ Id.
\72\ Id.
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FinCEN has determined that this proposed rule will not result in
expenditures by state, local, and tribal governments in the aggregate,
or by the private sector, of an annual USD 100 million or more,
adjusted for inflation (USD 187 million).\73\ Accordingly, FinCEN has
not prepared a budgetary impact statement. The regulatory alternatives
considered are discussed above.\74\
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\73\ The Unfunded Mandates Reform Act requires an assessment of
mandates that will result in an annual expenditure of USD 100
million or more, adjusted for inflation. The U.S. Bureau of Economic
Analysis reports the annual value of the gross domestic product
(GDP) deflator for calendar year 1995, the year of the Unfunded
Mandates Reform Act, as 66.939, and as 125.428 for the calendar year
2024, the most recent available. See U.S. Bureau of Economic
Analysis, Table 1.1.9. Implicit Price Deflators for Gross Domestic
Product, <a href="https://www.bea.gov/itable/">https://www.bea.gov/itable/</a> (last accessed Oct. 3, 2025).
Thus, the inflation adjusted estimate for USD 100 million is
125.428/66.939 x 100 = USD 187.377 million.
\74\ See supra Section IV.E.
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D. Paperwork Reduction Act
The recordkeeping requirements contained in this proposed rule,
which qualify as ``collections of information'' under the Paperwork
Reduction Act of 1995 \75\ (PRA), will be submitted to the Office of
Management and Budget (OMB) for review in accordance with the PRA.
Under the PRA, an agency may not conduct or sponsor a collection of
information unless it obtains and displays a valid control number
assigned by the OMB.\76\ Written comments and recommendations for the
proposed prohibition can be submitted by visiting <a href="http://www.reginfo.gov/public/do/PRAMain">www.reginfo.gov/public/do/PRAMain</a>. Find this particular document by selecting
``Currently under Review--Open for Public Comments'' or by using the
search function. Comments are welcome and must be received by December
17, 2025. In accordance with requirements of the PRA and its
implementing regulations, 5 CFR part 1320, the following information
concerning the collection of information as required by 31 CFR 1010.665
is presented to assist those persons wishing to comment on the
information collections.
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\75\ 44 U.S.C. 3507(a)(1)(D).
\76\ 44 U.S.C. 3507(a)(3).
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The provisions in this proposed rule pertaining to the collection
of information can be found in sections 1010.665(b)(2)(i)(A) and
1010.665(b)(3). The notification requirement in section
1010.665(b)(2)(i)(A) is intended to aid cooperation from foreign
correspondent account holders in preventing transactions involving the
Gambling Establishments from being processed by the U.S. financial
system. The information required to be maintained by section
1010.665(b)(3) will be used by federal agencies and certain self-
regulatory organizations to verify compliance by covered financial
institutions with the notification requirement in section
1010.665(b)(2)(i)(A). The collection of information would be mandatory.
Frequency: As required.
Description of Affected Financial Institutions: Only those covered
financial institutions defined in section 1010.665(a)(3) that are
engaged in processing transactions potentially involving the Gambling
Establishments as defined in section 1010.665(b)(1) would be affected.
Estimated Number of Potential Respondents: Approximately
15,710.\77\
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\77\ This estimate is informed by public and non-public data
sources regarding both an expected maximum number of entities that
may be affected and the number of active, or currently reporting,
registered financial institutions.
Table 1--Estimates of Covered Financial Institutions by Type
------------------------------------------------------------------------
Financial institution type Number of entities
------------------------------------------------------------------------
Banks with a federal functional regulator (FFR) \b\ 8,995
\a\..............................................
Banks without an FFR \c\.......................... \d\ 395
Broker-dealers in securities \e\.................. \f\ 3,320
Open end mutual funds \g\......................... \h\ 2,036
Futures commission merchants \i\.................. \j\ 65
Introducing brokers in commodities \k\............ \l\ 899
------------------------------------------------------------------------
\a\ See 31 CFR 1010.100(t)(1); see also 31 CFR 1010.100(d).
\b\ Bank data is as of Jan. 17, 2025, from Federal Deposit Insurance
Corporation BankFind, <a href="https://banks.data.fdic.gov/bankfind-suite/bankfind">https://banks.data.fdic.gov/bankfind-suite/bankfind</a> bankfind. Credit union data is as of September 2024 from the National
Credit Union Administration Quarterly Data Summary Reports, <a href="https://ncua.gov/analysis/credit-union-corporate-call-report-data/quarterly-data-summary-reports">https://ncua.gov/analysis/credit-union-corporate-call-report-data/quarterly-data-summary-reports</a>.
\c\ 31 CFR 1020.210(b).
[[Page 51245]]
\d\ The Board of Governors of the Federal Reserve System Master Account
and Services Database contains data on financial institutions that
utilize Reserve Bank financial services, including those with no
federal regulator. FinCEN used this data to identify 395 banks and
credit unions utilizing Reserve Bank financial services with no
federal regulator. See Board of Governors of the Federal Reserve
System, Master Account and Services Database, <a href="https://www.federalreserve.gov/paymentsystems/master-account-and-services-database-existing-access.htm">https://www.federalreserve.gov/paymentsystems/master-account-and-services-database-existing-access.htm</a>.
\e\ 31 CFR 1010.100(t)(2).
\f\ According to the Securities and Exchange Commission (SEC), there are
3,320 broker-dealers in securities as of March 2025 from website
``Company Information About Active Broker-Dealers,'' <a href="https://www.sec.gov/foia-services/frequently-requested-documents/company-information-about-active-broker-dealers">https://www.sec.gov/foia-services/frequently-requested-documents/company-information-about-active-broker-dealers</a>.
\g\ See 31 CFR 1010.100(t)(10); see also 31 CFR 1010.100(gg).
\h\ According to the SEC, in 2024 there were 2,036 open-end registered
investment companies that report on Form N-CEN. SEC, ``Form N-CEN Data
Sets,'' <a href="https://www.sec.gov/dera/data/form-ncen-data-sets">https://www.sec.gov/dera/data/form-ncen-data-sets</a>.
\i\ 31 CFR 1010.100(t)(8).
\j\ According to the Commodity Futures Trading Commission (CFTC), there
are 65 futures commission merchants as of November 30, 2024. See CFTC,
``Financial Data for FCMs,'' <a href="https://www.cftc.gov/MarketReports/financialfcmdata/index.htm">https://www.cftc.gov/MarketReports/financialfcmdata/index.htm</a>.
\k\ 31 CFR 1010.100(t)(9).
\l\ According to the National Futures Association, there are 899
introducing brokers in commodities as of Dec. 31, 2024 from website
``NFA Membership Totals,'' <a href="https://www.nfa.futures.org/registration-membership/membership-and-directories.html">https://www.nfa.futures.org/registration-membership/membership-and-directories.html</a>.
Estimated Number of Expected Respondents: Approximately 127.\78\
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\78\ While this regulation applies to all covered institutions
described in Table 1, in practice the burden will only fall on those
institutions that actually maintain correspondent accounts for
foreign banking institutions. Table 2 below presents an estimate of
this subpopulation of banks, brokers or dealers in securities,
mutual funds, futures commission merchants, and introducing brokers
in commodities based on data from the most recent calendar year end.
Table 2--Estimates of Affected Financial Institutions by Type
------------------------------------------------------------------------
Financial institution type Number of entities
------------------------------------------------------------------------
Banks with a FFR.................................. \a\ 60
Banks without a FFR............................... \b\ 17
Broker-dealers in securities...................... \c\ 26
Open end mutual funds............................. \d\ 16
Futures commission merchants...................... \e\ 1
Introducing brokers in commodities................ \f\ 7
------------------------------------------------------------------------
\a\ Data are from the FFIEC Central Data Repository for Reports of
Condition and Income (Call Reports) and Uniform Bank Performance
Reports (UBPRs), available for most FDIC-insured institutions. Using
this source of data, FinCEN determines that as of Q3 2024,
approximately 60 banks (as defined by FinCEN regulations, see 31 CFR
1010.100(d)) will be affected by this rule on any given year.
Specifically, we determine that there are approximately 60 banks that
report non-zero values for deposit liabilities of banks in foreign
countries. Deposit liabilities in a foreign country is an indication
that a bank maintains correspondent accounts with a foreign financial
institution.
\b\ The Board of Governors of the Federal Reserve System Master Account
and Services Database contains data on financial institutions that
utilize Reserve Bank financial services, including those with no
federal regulator. FinCEN used this data to identify an additional 17
international banking entities with no federal regulator and that do
not file Call Reports, but that are also likely to maintain
correspondent accounts with a foreign financial institution.
\c\ Broker dealers, unless they are publicly traded, are not required to
make reports indicating whether they have foreign correspondent
accounts or hold foreign deposits. FinCEN reviewed financial statement
data from 10-Q and 6-K filings with the SEC and identified nine
publicly traded broker dealers with US operations that reported
foreign deposits. FinCEN also examined SARs filed by broker dealers in
2024 to identify another two non-publicly traded broker dealers who
appeared likely to be maintaining foreign deposits. However, because
many broker dealers are not publicly traded and did not file SARs,
FinCEN conservatively estimates that the proportion of broker dealers
with foreign correspondent accounts will be similar to the proportion
for banks (approximately 0.8%). 0.8% of 3,320 active broker dealers is
approximately 26 broker dealers assumed to have foreign correspondent
accounts.
\d\ Mutual funds, futures commission merchants, and introducing brokers
in commodities generally use intermediary U.S. banks to move and
maintain client deposits and funds for investment. Therefore, it is
unlikely that many of these institutions will maintain direct
correspondent accounts with foreign financial institutions outside of
their existing upstream banking relationships. However, because these
institutions may in some cases receive deposits from, make payments or
other disbursements, or otherwise transact directly with foreign
financial institutions, FinCEN conservatively estimates that the
proportion of mutual funds with foreign correspondent accounts will be
similar to the proportion for banks (approximately 0.8%). 0.8% of
2,036 active mutual funds is approximately 16 mutual funds assumed to
have foreign correspondent accounts.
\e\ 0.8% of 65 active futures commission merchants is approximately one
futures commission merchant assumed to have foreign correspondent
accounts.
\f\ 0.8% of 899 active introducing brokers in commodities is
approximately seven introducing brokers in commodities assumed to have
foreign correspondent accounts.
Estimated Average Annual Burden in Hours per Affected Financial
Institution:
Imposing special measure five requirements as described in this
proposed rule is expected to result in a new, incremental recordkeeping
burden on certain covered financial institutions as described above.
Each anticipated component of this is outlined below.
Each affected covered financial institution is expected to incur a
recordkeeping burden associated with preparing and retaining the
materials necessary to demonstrate compliance with the proposed
requirements. This is expected to include records related to:
A. Documenting the reasonable steps the financial institution
undertakes to ensure no transactions involving any of the Gambling
Establishments are processed for a foreign correspondent account,
including:
1. Any investigative activities undertaken when the financial
institution knows or has reason to believe that a foreign bank's
correspondent account has been or is being used to process transactions
involving any of the Gambling Establishments.
2. Any subsequent activities undertaken to prevent such access,
including, where necessary, termination of the correspondent account.
[[Page 51246]]
B. Notifying, and documenting that the financial institution has
provided notice to, foreign correspondent account holders that the
financial institution knows or has reason to believe provide services
to any of the Gambling Establishments, that such correspondents may not
provide any of the Gambling Establishments with access to the
correspondent account maintained at the financial institution.
C. Documenting the reasonable steps it took with respect to special
due diligence requirements, including but not limited to, the reasoning
that informed decisions to adopt (or not adopt) new measures adding to
its existing risk-based approach, and those new measures, if adopted.
The estimated average annual burden associated with the collection
of information in this proposed rule in the first year of operations
is, in total, one business day, or eight hours per affected financial
institution.
Estimated Total Annual Burden in Year One: Approximately 1,016
hours.\79\
---------------------------------------------------------------------------
\79\ 127 expected respondents multiplied by eight hours per
respondent equals 1,016 total annual burden hours.
---------------------------------------------------------------------------
Estimated Total Annual Cost in Year One: Approximately
$121,920.\80\
---------------------------------------------------------------------------
\80\ The wage rate applied here is a general composite hourly
wage ($84.55), scaled by a private-sector benefits factor of 1.42
($120.07 = $84.55 x 1.42), that incorporates the mean wage data
(available for download at <a href="https://www.bls.gov/oes/tables.htm">https://www.bls.gov/oes/tables.htm</a>, ``May
2023--National industry-specific and by ownership'') associated with
the six occupational codes (11-1010: Chief Executives; 11-3021:
Computer and Information Systems Managers; 11-3031: Financial
Managers; 13-1041: Compliance Officers; 23-1010: Lawyers and
Judicial Law Clerks; 43-3099: Financial Clerks, All Other) for each
of the nine groupings of NAICS industry codes that FinCEN determined
are most directly comparable to its eleven categories of covered
financial institutions as delineated in 31 CFR parts 1020 to 1030.
The benefit factor is 1 plus the benefit/wages ratio, where as of
June 2023, Total Benefits = 29.4 and Wages and salaries = 70.6
(29.4/70.6 = 0.42) based on the private industry workers series data
downloaded from <a href="https://www.bls.gov/news.release/archives/ecec_09122023.pdf">https://www.bls.gov/news.release/archives/ecec_09122023.pdf</a> (accessed Dec. 22, 2024). Given that many
occupations provide benefits beyond cash wages (e.g., insurance,
paid leave, etc.), the private sector benefit is applied to reflect
the total cost to the employer. 1,016 total annual burden hours
multiplied by $120 per hour equals a total annual cost of $121,920.
---------------------------------------------------------------------------
In subsequent years, FinCEN estimates that the average annual
burden associated with the collection of information will be
significantly reduced.\81\ FinCEN expects that the ongoing burden of
compliance with FinCEN special measures would primarily accrue in
connection with the opening of new foreign correspondent accounts, at
which point a covered financial institution would need to ensure that
new account holders receive information on entities subject to special
measures and agree not to conduct transactions on their behalf. FinCEN
has previously estimated that financial institutions that maintain
foreign correspondent accounts will open an average of 10 new accounts
per year.\82\ FinCEN expects the time burden of special measure
compliance associated with these new accounts will not exceed 15
minutes (0.25 hours) per affected financial institution.
---------------------------------------------------------------------------
\81\ See supra Section VI.B. discussion of how compliance with
the final rule is expected to be integrated into covered financial
institutions' broader OFAC sanctions and 311 special measures
compliance activities.
\82\ See FinCEN, Renewal Without Change of Prohibition on
Correspondent Accounts for Foreign Shell Banks; Records Concerning
Owners of Foreign Banks and Agents for Service of Legal Process, 90
FR 21987 at 21994 (May 22, 2025), <a href="https://www.federalregister.gov/d/2025-09162/p-134">https://www.federalregister.gov/d/2025-09162/p-134</a>.
---------------------------------------------------------------------------
Table 3 presents a summary of FinCEN's estimates of PRA Burden as
expected to accrue during the first three years in which the final rule
is effective and provides a basis for the expected average annual costs
as estimated over the same time horizon.
Table 3--PRA Three-Year Pro Forma Burden Estimates
----------------------------------------------------------------------------------------------------------------
Number of Hours per Total burden
Year respondents respondent hours
----------------------------------------------------------------------------------------------------------------
1............................................................ 127 8.00 1,016.00
2............................................................ 127 0.25 31.75
3............................................................ 127 0.25 31.75
Average...................................................... 127 2.83 359.83
----------------------------------------------------------------------------------------------------------------
Estimated Three-Year Average Aggregate Annual Burden: Approximately
360 \83\ hours on average, per year.
---------------------------------------------------------------------------
\83\ This estimate is the average of 1,016 expected burden hours
in year one of implementation and 31.75 hours in years two and
three, respectively, rounded to the nearest whole hour.
---------------------------------------------------------------------------
Estimated Three-Year Average Aggregate Annual Cost: Approximately
$43,277.16.\84\
---------------------------------------------------------------------------
\84\ An average annual burden of 63.5 hours over 3 years
multiplied by $120.07 per hour equals an average annual cost of
$43,277.16.
---------------------------------------------------------------------------
FinCEN invites comments on: (1) whether the proposed collection of
information found in 31 CFR 1010.665(b)(3) is necessary for the proper
performance of the mission of FinCEN, including whether the information
would have practical utility; (2) the accuracy of FinCEN's estimate of
the burden of the proposed collection of information; (3) ways to
enhance the quality, utility, and clarity of the information required
to be maintained; (4) ways to minimize the burden of the required
collection of information, 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 report the information.
IX. Regulatory Text
List of Subjects in 31 CFR Part 1010
Administrative practice and procedure, Banks, Banking, Brokers,
Crime, Foreign banking, Terrorism.
Authority and Issuance
For the reasons set forth in the preamble, FinCEN proposes amending
31 CFR part 1010 as follows:
PART 1010--GENERAL PROVISIONS
0
1. The authority citation for part 1010 continues to read as follows:
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314,
5316-5336; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307; sec.
2006, Pub. L. 114-41, 129 Stat. 457; sec. 701 Pub. L. 114-74, 129
Stat. 599; sec. 6403, Pub. L. 116-283, 134 Stat. 3388.
0
2. Add 1010.665 to read as follows:
Sec. 1010.665 Special measures regarding the Gambling Establishments.
(a) Definitions. For purposes of this section, the following terms
have the following meanings.
(1) Gambling Establishments. The term ``Gambling Establishments''
means the following 10 financial institutions operating outside of the
United States that engage in activity in Mexico which is similar to,
related to, or a substitute for activities in which casinos, gambling
casinos, and/or gaming establishments, as defined in 31 U.S.C.
5312(a)(2)(X), engage, as well as all subsidiaries,
[[Page 51247]]
branches, and offices of those gambling establishments operating as in
any jurisdiction outside of the United States:
(i) Casino Emine (San Luis Rio Colorado, Sonora);
(ii) Casino Mirage (Culiacan, Sinaloa);
(iii) Midas Casino (Agua Prieta, Sonora);
(iv) Midas Casino (Guamuchil, Sinaloa);
(v) Midas Casino (Los Mochis, Sinaloa);
(vi) Midas Casino (Mazatlan, Sinaloa);
(vii) Midas Casino (Rosarito, Baja California);
(viii) Palermo Casino (Nogales, Sonora);
(ix) Skampa Casino (Ensenada, Baja California); and,
(x) Skampa Casino (Villahermosa, Tabasco).
(2) Correspondent account. The term ``correspondent account'' has
the same meaning as provided in 1010.605(c)(l)(ii).
(3) Covered financial institution. The term ``covered financial
institution'' has the same meaning as provided in 1010.605(e)(1).
(4) Foreign banking institution. The term ``foreign banking
institution'' means a bank organized under foreign law, or an agency,
branch, or office located outside the United States of a bank. The term
does not include an agent, agency, branch, or office within the United
States of a bank organized under foreign law.
(5) Financial institution operating outside of the United States.
The term ``financial institution operating outside of the United
States'' means any business or agency operating, in whole or in part,
outside of the United States that engages in any activity which is
similar to, related to, or a substitute for any activity in which any
financial institution, as defined in 31 U.S.C. 5312(a)(2), engages.
(6) Subsidiary. The term ``subsidiary'' means a company of which
more than 50 percent of the voting stock or an otherwise controlling
interest is owned by another company.
(b) Prohibition on accounts and due diligence requirements for
covered financial institutions.
(1) Prohibition on use of correspondent accounts. A covered
financial institution shall not open or maintain in the United States a
correspondent account that is established, maintained, administered, or
managed for, or on behalf of, a foreign banking institution if such
correspondent account is used to process a transaction involving any of
the Gambling Establishments.
(2) Special due diligence of correspondent accounts to prohibit
use.
(i) A covered financial institution shall apply special due
diligence to its foreign correspondent accounts that is reasonably
designed to guard against their use to process transactions involving
any of the Gambling Establishments. At a minimum, that special due
diligence must include:
(A) Notifying those foreign correspondent account holders that the
covered financial institution knows or has reason to believe provide
services to any of the Gambling Establishments that such correspondents
may not provide any of the Gambling Establishments with access to the
correspondent account maintained at the covered financial institution;
and
(B) Taking reasonable steps to identify any use of its foreign
correspondent accounts by any of the Gambling Establishments, to the
extent that such use can be determined from transactional records
maintained in the covered financial institution's normal course of
business.
(ii) A covered financial institution shall take a risk-based
approach when deciding what, if any, other due diligence measures it
reasonably must adopt to guard against the use of its foreign
correspondent accounts to process transactions involving any of the
Gambling Establishments.
(iii) A covered financial institution that knows or has reason to
believe that a foreign bank's correspondent account has been or is
being used to process transactions involving any of the Gambling
Establishments shall take all appropriate steps to further investigate
and prevent such access, including the notification of its
correspondent account holder under paragraph (b)(2)(i)(A) of this
section and, where necessary, termination of the correspondent account.
(3) Recordkeeping and reporting.
(i) A covered financial institution is required to document its
compliance with the notification requirement set forth in paragraph
(b)(2)(i)(A) of this section.
(ii) Nothing in paragraph (b) of this section shall require a
covered financial institution to report any information not otherwise
required to be reported by law or regulation.
Dated: November 13, 2025.
Andrea M. Gacki,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2025-19927 Filed 11-14-25; 8:45 am]
BILLING CODE 4810-02-P
</pre></body>
</html>Indexed from Federal Register on November 17, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.