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drain is ‘‘unblockable’’ if the suction DEPARTMENT OF THE TREASURY Analyses’’, lines 6 and 7 from the outlet, including the sump, has a bottom of the second paragraph, the perforated (open) area that cannot be Internal Revenue Service phrase ‘‘$2.80 and registered mail can shadowed by the area of the 18″ x 23″ be used for as little as $10.60’’ is Body Blocking Element of ANSI/APSP– 26 CFR Part 301 corrected to read ‘‘$2.85 and registered 16 2011 and the rated flow through any [TD 9543] mail can be used for as little as $10.75.’’ portion of the remaining open area 4. On page 52562, column 3, in the RIN 1545–BA99 (beyond the shadowed portion) cannot preamble, the caption ‘‘List of Subjects in 26 CFR part 301’’ is corrected to read create a suction force in excess of the Timely Mailing Treated as Timely Filing removal force values in Table 1 of that as follows: AGENCY: Standard. The Staff Technical Guidance Internal Revenue Service (IRS), List of Subjects of June 2008 will be updated to clarify Treasury. 26 CFR Part 301 that placing a removable, unblockable ACTION: Correction to final regulations. Employment taxes, Estate taxes, Gift drain cover over a blockable drain does SUMMARY: This document contains taxes, Income taxes, Penalties, Reporting not constitute an unblockable drain. corrections to final regulations that were This revocation corrects the previous published in the Federal Register on and recordkeeping requirements. interpretation, which the Commission Tuesday, August 23, 2011, the 26 CFR Part 602 now believes was in error and thwarts regulations provide that the proper use Reporting and recordkeeping the intent of the law to require layers of of registered or certified mail, or a requirements. protection in cases where a drain cover, service of a private delivery service 5. On page 52562, column 3, in the regardless of its size, can be removed, designated under criteria established by preamble under the caption ‘‘Adoption broken, or otherwise expose a blockable the Internal Revenue Service, will of Amendments to the Regulations’’, drain and present an entrapment constitute prima facie evidence of line 1, the phrase ‘‘Accordingly, 26 CFR delivery. The regulations affect hazard. The Commission has set a part 301 is amended as follows:’’ is taxpayers who mail Federal tax compliance date of May 28, 2012, to corrected to read ‘‘Accordingly, 26 CFR documents to the Internal Revenue allow time for firms that require parts 301 and 602 are amended as service or the United States Tax Court. modifications as a result of this follows:’’. revocation to bring their pools into DATES: This correction is effective on Diane O. Williams, compliance with the statute as written. October 11, 2011 and applies to any In addition, the Commission invites payment or document mailed and Federal Register Liaison, Publications and Regulations Branch, Legal Processing written comments regarding the ability delivered in accordance with the requirements of § 301.7502–1 in an Division, Associate Chief Counsel, (Procedure of those who have installed VGBA envelope bearing a postmark dated after and Administration). compliant unblockable drain covers as September 21, 2004. [FR Doc. 2011–26187 Filed 10–7–11; 8:45 am] described at 16 CFR 1450.2(b) to come FOR FURTHER INFORMATION CONTACT: BILLING CODE 4830–01–P into compliance with our revocation by Steven Karon, (202) 622–4570 (not a May 28, 2012. toll-free number). List of Subjects in 16 CFR Part 1450 SUPPLEMENTARY INFORMATION: DEPARTMENT OF THE TREASURY Consumer protection, Infants and Background Financial Crimes Enforcement Network children, Law enforcement. The final regulations (TD 9543) that is 31 CFR Part 1060 For the reasons stated above, the the subject of this correction is under sections 301 and 602 of the Internal Commission amends part 1450 of title RIN 1506–AB12 Revenue Code. 16 of the Code of Federal Regulations as Comprehensive Iran Sanctions, set forth below: Need for Correction Accountability, and Divestment As published on August 23, 2011 (76 Reporting Requirements PART 1450—VIRGINIA GRAEME FR 52561), the final regulations (TD BAKER POOL AND SPA SAFETY ACT 9543) contains errors that may prove to AGENCY: Financial Crimes Enforcement REGULATIONS be misleading and is in need of Network (‘‘FinCEN’’), Treasury. clarification. ACTION: Final rule. ■ 1. The authority citation for part 1450 continues to read as follows: Correction of Publication SUMMARY: FinCEN, to comply with the Accordingly, the final regulations (TD congressional mandate to prescribe Authority: 15 U.S.C. 2051–2089, 86 Stat. regulations under section 104(e) of the 1207; 15 U.S.C. 8001–8008, 121 Stat. 1794. 9543), that were the subject of FR Doc. 2011–21416, are corrected as follows: Comprehensive Iran Sanctions, § 1450.2 [Removed and Reserved] 1. On page 52561, column 1, in the Accountability, and Divestment Act of regulation heading, the CFR Title and 2010 (‘‘CISADA’’) and consistent with ■ 2. Remove and reserve § 1450.2. part Number, line 3, the phrase ‘‘26 CFR its statutory mission under 31 U.S.C. 310, is issuing this final rule. The rule Dated: September 29, 2011. part 301’’ is corrected to read ‘‘26 CFR parts 301 and 602’’. requires a U.S. bank that maintains a Todd A. Stevenson, 2. On page 52561, column 2, in the correspondent account for a foreign Secretary, Consumer Product Safety preamble, under the caption ‘‘FOR bank to inquire of the foreign bank, and Commission. FURTHER INFORMATION CONTACT’’, line 1, report to FinCEN certain information [FR Doc. 2011–25601 Filed 10–7–11; 8:45 am] the phrase ‘‘(202) 622- 4570’’ is with respect to transactions or other BILLING CODE 6355–01–P corrected to read ‘‘(202) 622–4570’’. financial services provided by that 3. On page 52562, column 3, in the foreign bank. Under the rule, U.S. banks preamble under the caption ‘‘Special will only be required to report this

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information to FinCEN upon receiving a (C) engages in money laundering to carry (A) Perform an audit of activities described specific written request from FinCEN. out an activity described in subparagraph (A) in subsection (c)(2) that may be carried out This final rule follows publication of a or (B); by the foreign financial institution. May 2, 2011 proposed rule, takes into (D) facilitates efforts by the Central Bank of (B) Report to the Department of the Iran or any other Iranian financial institution Treasury with respect to transactions or other account the public comments received, to carry out an activity described in financial services provided with respect to and adopts the provisions of the subparagraph (A) or (B); or any such activity. proposed rule with minor modifications (E) facilitates a significant transaction or (C) Certify, to the best of the knowledge of described in the preamble. transactions or provides significant financial the domestic financial institution, that the services for— DATES: Effective Date: October 11, 2011. foreign financial institution is not knowingly (i) Iran’s Revolutionary Guard Corps or any engaging in any such activity. FOR FURTHER INFORMATION CONTACT: The of its agents or affiliates whose property or (D) Establish due diligence policies, FinCEN regulatory helpline at (800) interests in property are blocked pursuant to procedures, and controls, such as the due 949–2732 and select Option 6. the International Emergency Economic diligence policies, procedures, and controls Powers Act (50 U.S.C. 1701 et seq.); or SUPPLEMENTARY INFORMATION: described in section 5318(i) of title 31, (ii) a financial institution whose property United States Code, reasonably designed to I. Statutory Provisions or interests in property are blocked pursuant detect whether the Secretary of the Treasury to that Act in connection with— has found the foreign financial institution to On July 1, 2010, the President signed (I) Iran’s proliferation of weapons of mass knowingly engage in any such activity. CISADA 1 into law. Section 104(c) of destruction or delivery systems for weapons (2) PENALTIES.—The penalties provided CISADA requires the Secretary of the of mass destruction; or for in sections 5321(a) and 5322 of title 31, Treasury (‘‘the Secretary’’) to prescribe (II) Iran’s support for international United States Code, shall apply to a person regulations to prohibit, or impose strict terrorism. that violates a regulation prescribed under (3) PENALTIES.—The penalties provided paragraph (1) of this subsection, in the same conditions on, the opening or for in subsections (b) and (c) of section 206 maintaining in the United States of manner and to the same extent as such of the International Emergency Economic penalties would apply to any person that is correspondent accounts and payable- Powers Act (50 U.S.C. 1705) shall apply to otherwise subject to such section 5321(a) or through accounts for foreign financial a person that violates, attempts to violate, 5322.’’ institutions that the Secretary finds conspires to violate, or causes a violation of knowingly engage in sanctionable regulations prescribed under paragraph (1) of In order to comply with the activities described in section 104(c)(2) this subsection to the same extent that such congressional mandate to prescribe penalties apply to a person that commits an regulations under section 104(e) of of CISADA. The relevant statutory unlawful act described in section 206(a) of language reads as follows: CISADA, and consistent with its that Act.’’ statutory mission under 31 U.S.C. 310, ‘‘(c) PROHIBITIONS AND CONDITIONS On August 16, 2010, the Office of FinCEN is implementing section WITH RESPECT TO CERTAIN ACCOUNTS Foreign Assets Control (‘‘OFAC’) 104(e)(1)(B) of CISADA. FinCEN HELD BY FOREIGN FINANCIAL published the Iranian Financial INSTITUTIONS.— considered implementing any one or (1) IN GENERAL.—Not later than 90 days Sanctions Regulations, 31 CFR Part 561 more of the options under section after the date of the enactment of this Act, (the ‘‘IFSR’’). Section 561.201 of the 104(e)(1) of CISADA, and determined the Secretary of the Treasury shall prescribe IFSR implements section 104(c) of that implementing section 104(e)(1)(B) regulations to prohibit, or impose strict CISADA. It states that the Secretary will, is the most useful vehicle for effecting conditions on, the opening or maintaining in consistent with authorities under the intent of section 104(e) at this time. the United States of a correspondent account CISADA, prohibit or impose strict Section 104(e)(1)(B) of CISADA or a payable-through account by a foreign conditions on the opening or authorizes the Secretary to prescribe financial institution that the Secretary finds maintaining in the United States of regulations that require a domestic knowingly engages in an activity described in correspondent accounts or payable- paragraph (2). financial institution maintaining a (2) ACTIVITIES DESCRIBED.—A foreign through accounts for a foreign financial correspondent account in the United financial institution engages in an activity institution that the Secretary finds States for a foreign financial institution described in this paragraph if the foreign knowingly engages in one or more of the to report to the Department of the financial institution— sanctionable activities described in Treasury with respect to transactions or (A) facilitates the efforts of the Government section 561.201(a) of the IFSR. other financial services provided with of Iran (including efforts of Iran’s Section 104(e) of CISADA requires the respect to sanctionable activities Revolutionary Guard Corps or any of its Secretary to prescribe regulations to described in section 104(c)(2) of agents or affiliates)— establish one or more specific CISADA that may be carried out by the (i) to acquire or develop weapons of mass requirements for U.S. financial foreign financial institution. destruction or delivery systems for weapons institutions maintaining correspondent of mass destruction; or FinCEN believes that among the (ii) to provide support for organizations accounts for foreign financial services included within the concept of designated as foreign terrorist organizations institutions, in connection with the ‘‘transactions or other financial services under section 219(a) of the Immigration and sanctionable activities described in provided’’ by a foreign financial Nationality Act (8 U.S.C. 1189(a)) or support section 104(c)(2) of CISADA. The institution are correspondent accounts for acts of international terrorism (as defined relevant statutory language reads as the foreign financial institution in section 14 of the Iran Sanctions Act of follows: maintains for other foreign financial 1996 (Public Law 104–172; 50 U.S.C. 1701 ‘‘(e) REQUIREMENTS FOR FINANCIAL institutions and transfers of funds the note)); INSTITUTIONS MAINTAINING ACCOUNTS foreign financial institution processes (B) facilitates the activities of a person FOR FOREIGN FINANCIAL subject to financial sanctions pursuant to for or on behalf of other foreign INSTITUTIONS.— United Nations Security Council Resolution financial institutions, individuals, or (1) IN GENERAL.—The Secretary of the 1737 (2006), 1747 (2007), 1803 (2008), or entities. A foreign financial institution’s Treasury shall prescribe regulations to provision of correspondent account 1929 (2010), or any other resolution that is require a domestic financial institution agreed to by the Security Council and maintaining a correspondent account or services and transfer of funds services to imposes sanctions with respect to Iran; payable-through account in the United States a financial institution designated by the for a foreign financial institution to do one U.S. Government in connection with 1 Public Law No. 111–195, 124 Stat. 1312 (2010). or more of the following: Iran’s proliferation of weapons of mass

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destruction or delivery systems for new correspondent account for an potentially useful information from U.S. weapons of mass destruction, or in Iranian-linked financial institution banks regarding the nature of foreign connection with Iran’s support for designated under IEEPA at any time bank activities that may be relevant to international terrorism, may be relevant within 365 calendar days from the date CISADA. Based on the reports, to the sanctionable activities described of the foreign bank’s initial response, immediate action may be taken under under section 104(c)(2) of CISADA. As and report such information to FinCEN. section 104(c) of CISADA, or, among a result, FinCEN is focusing this The rule also requires a bank to report other things, there may be consultation reporting requirement on the provision to FinCEN instances in which the bank with those foreign banks that maintain of information relating to such does not maintain a correspondent correspondent accounts for Iranian- correspondent accounts and transfers of account for a foreign bank specified in linked financial institutions designated funds.2 In addition, because a foreign a written request from FinCEN. This under IEEPA, that have processed one financial institution’s provision of requirement will only apply when or more transfers of funds for or on transfer of funds services to Iran’s FinCEN specifically requests in writing behalf of, directly or indirectly, an Islamic Revolutionary Guard Corps that the bank report such information. Iranian-linked financial institution or an (‘‘IRGC’’) or any of its agents or affiliates To the extent possible and based on all IRGC-linked person designated under designated by the U.S. Government may available information, FinCEN intends IEEPA, or that have been unwilling to also be relevant to the sanctionable to send requests directly to banks that respond to inquiries from the banks at activities described under section FinCEN believes may maintain which the foreign banks maintain 104(c)(2) of CISADA, FinCEN is also correspondent accounts for the specified correspondent accounts. An focusing this reporting requirement on foreign bank(s). The number of banks investigation by OFAC into the the provision of information relating to that receive a request may vary in each activities of such foreign banks could such transfers of funds.3 specific case, based on the availability result in a finding by the Secretary FinCEN is implementing section of information to FinCEN and other under section 104(c) of CISADA and 104(e)(1)(B) of CISADA by issuing circumstances. section 561.201 of the IFSR. For regulations that require a bank, upon example, when a bank reports that a receiving a written request from II. Background Information foreign bank maintains a correspondent FinCEN, to inquire of a specified foreign A. 31 CFR Part 561 Iranian Financial account for an Iranian-linked financial bank for which it maintains a Sanctions Regulations—Office of institution designated under IEEPA, or correspondent account, and report to Foreign Assets Control has processed one or more transfers of FinCEN, with respect to the following: funds for or on behalf of, directly or (1) Whether the foreign bank maintains On August 16, 2010, OFAC published indirectly, an Iranian-linked financial a correspondent account for an Iranian- the IFSR, 31 CFR part 561. As noted institution or an IRGC-linked person linked financial institution designated above, section 561.201 of the IFSR designated under IEEPA, OFAC could under the International Emergency implements section 104(c) of CISADA. It use the information to corroborate or Economic Powers Act (‘‘IEEPA’’); 4 (2) states that the Secretary will, consistent supplement data derived from other whether the foreign bank has processed with authorities under CISADA, sources and may request further one or more transfers of funds within prohibit or impose strict conditions on information from the foreign bank to the preceding 90 calendar days for or on the opening or maintaining in the clarify whether the foreign bank is behalf of, directly or indirectly,5 an United States of correspondent accounts facilitating significant transactions or Iranian-linked financial institution or payable-through accounts for a providing significant financial services designated under IEEPA, other than foreign financial institution that the for an Iranian-linked financial through a correspondent account; and Secretary finds knowingly engages in institution or an IRGC-linked person (3) whether the foreign bank has one or more of the sanctionable designated under IEEPA. Such processed one or more transfers of funds activities described in section transactions or services can be the basis within the preceding 90 calendar days 561.201(a) of the IFSR. The names of for prohibiting or imposing strict for or on behalf of, directly or indirectly, foreign financial institutions that are conditions on the foreign bank’s an IRGC-linked person designated under found by the Secretary to knowingly correspondent or payable-through IEEPA.6 engage in such sanctionable activities, accounts in the United States under In addition, the rule requires a bank and for which U.S. financial institutions section 104(c) of CISADA and section to request, when making its inquiry of may not open or maintain 561.201 of the IFSR. a specified foreign bank, that the foreign correspondent accounts or payable- bank agree to notify the bank if the through accounts in the United States, III. Notice of Proposed Rulemaking foreign bank subsequently establishes a will be published in the Federal The final rule contained in this Register and listed in appendix A to the document is based on the Notice of 2 See, e.g., CISADA subsection 104(c)(2)(E)(ii), IFSR. If the Secretary decides to impose Proposed Rulemaking published in the which includes focus on the provision by foreign strict conditions on the opening or Federal Register on May 2, 2011 financial institutions of significant financial 7 services to financial institutions that are of concern maintaining of a correspondent account (‘‘Notice’’). With the intent of under CISADA. or a payable-through account for a implementing section 104(e) of 3 See, e.g., CISADA subsection 104(c)(2)(E)(i), foreign financial institution, the actual CISADA, the Notice proposed to require which includes focus on the provision by foreign condition(s) to be imposed will be a U.S. bank that maintains a financial institutions of significant financial specified upon the identification of the correspondent account for a foreign services to individuals or entities that are of concern under CISADA. foreign financial institution in an order bank to inquire of the foreign bank and 4 See below Section V. A. for the definition of or regulation published in the Federal report to FinCEN certain information Iranian-linked financial institution designated Register. with respect to transactions or other under IEEPA. financial services provided by that 5 B. Use of CISADA Reports See below Section IV. D. for the rationale for foreign bank. The Notice also proposed replacing the terminology ‘‘related to’’ with ‘‘for or on behalf of, directly or indirectly.’’ The CISADA reports received as a that banks would only be required to 6 See below Section V. A. for the definition of result of this rulemaking will be used IRGC-linked person designated under IEEPA. primarily to provide FinCEN with 7 See 76 FR 24410 (May 2, 2011).

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report this information to FinCEN upon achieve our policy aims, in a complex relevant Iranian-linked designated receiving a specific written request from and novel context. Because we were entities and individuals upon a written FinCEN. mindful of the need to obtain this inquiry from FinCEN. Another information expeditiously, we issued commenter suggested that the proposed IV. Comments on the Notice—Overview the Notice with a 30-day comment rule would not meet the requirements of and General Issues period. The quality and scope of the the statute, as domestic financial The comment period for the Notice comments convinces us that 30 days institutions should be required to ended on June 1, 2011. We received a was sufficient. We have drafted the final provide information to FinCEN, not total of seven comment letters from 14 rule as promptly as possible, while only when asked, but as soon as they are entities and individuals.8 Of the seven taking into consideration all of the aware that the foreign financial comment letters, five were submitted by comments received and ensuring that institution is engaged in a ‘‘prohibited trade groups or associations,9 one was we have established a rule that most activity.’’ FinCEN does not interpret submitted by a group of seven U.S. effectively implements section 104(e) of 104(e) to be discretionary. To the Senators, and one was submitted by an CISADA. contrary, we understand 104(e) to advocacy group. The comments were Section 104(e) of CISADA offers require the Secretary to prescribe generally supportive of the Notice but FinCEN four options for rulemaking. regulations mandating that domestic sought additional clarification on One commenter requested clarification financial institutions take one or more certain aspects of the Notice. Comments regarding how FinCEN determined that actions, one of which is to provide received covered a broad and varied implementing section 104(e)(1)(B) requested reports to FinCEN, and we range of topics. Although most of these would be the most useful way to believe the final rule reflects this comments are addressed directly below, implement section 104(e) of CISADA. understanding. We also note that the a few others are covered in the section- As noted above, FinCEN considered a activities described in section 104(c)(2) by-section analysis. number of different approaches to of CISADA are not ‘‘prohibited Comments on the Notice focused on implementing section 104(e) of activities.’’ Instead they are activities the following general matters: (A) The CISADA. We believe that implementing that can be grounds for imposing the approach to implementing section section 104(e)(1)(B) will produce the sanctions described in section 104(c)(1) 104(e) of CISADA; (B) the ability of a most useful information in the most of CISADA. foreign bank to respond to a CISADA workable manner and will best achieve FinCEN proposed to target this request; (C) the impact of the rule on our policy aims. In fact, this belief is reporting requirement on those foreign foreign correspondent account echoed in a number of comments banks that there is some basis to suspect relationships; (D) the scope of FinCEN received. One commenter may be engaged in activities that may be information to be reported by a foreign asserted that section 104(e) of CISADA sanctionable under section 104(c) of bank; (E) the timeframe for a foreign allows FinCEN to implement any one or CISADA. We considered requiring every bank and a U.S. bank to respond to a more of four requirements, some of U.S. bank to provide periodic reports CISADA request; (F) clarification which the commenter believes are from every foreign bank for which they regarding the proposed model potentially very burdensome to maintain correspondent accounts, but certification; (G) clarification regarding industry. The commenter believes the concluded that we would be better certain definitions and terms; (H) record proposed requirements appropriately served by a rule that focused on those retention and supporting balance the need of the U.S. government foreign banks that are of interest for documentation; (I) sharing information to isolate Iran from the global financial purposes of CISADA. By requiring regarding a CISADA request; and (J) system with the need to maintain an reports from those U.S. banks that estimate of burden. effectively functioning correspondent maintain correspondent accounts for the banking system. Another commenter specific foreign banks that are of interest A. The Approach to Implementing asserted that FinCEN has taken elements for purposes of CISADA Section 104(e) of CISADA of the four options Congress outlined in implementation, we believe that we will One of the comments asserted that the the statute and incorporated them with receive the information needed without Notice was not published in the Federal existing requirements to develop a rule generating a multitude of unnecessary Register until 10 months after the that considers the costs to industry, the and uninformative reports. President signed CISADA, which led the ability of the industry to comply, The reporting requirement in the final commenter to call into question the appropriate use of limited enforcement rule is scalable. Based on the seriousness of enforcing comprehensive resources, and the need for information. circumstances, it permits FinCEN to expand the number of U.S. banks that sanctions against Iran. Two commenters Yet another commenter asserted that would be required to file reports, as well urged that the final rule should be banks providing correspondent as the number of foreign banks from implemented as soon as possible. relationships in the U.S. are not in a whom information would be sought. Conversely, another commenter asserted position to speak to the overall activities This means that FinCEN may ask any that allowing only a 30-day comment of their foreign counterparts. The number of U.S. banks about any number period for the Notice was inadequate. In commenter further asserted that as such, of foreign banks as is necessary, based drafting the Notice, we considered a if those activities are at issue under section 104(e) of CISADA, it is more on the number of foreign banks there is number of different approaches before appropriate to ask the U.S.-based banks some basis to suspect may be engaged settling on the one that we believe will to transmit inquiries to their foreign in activities that may be sanctionable produce the most useful information in correspondents than to ask them to under section 104(c) of CISADA. the most workable manner. The time it conduct independent investigations for The targeted approach that FinCEN took to publish the Notice reflected the which they are ill-suited. has proposed is supported by a number need to craft a rule that would best One commenter believes that the of commenters. One commenter strongly proposed rule treats section 104(e) of recommended incorporating the concept 8 All comments to the Notice are available for public viewing at http://www.regulations.gov. CISADA as a discretionary provision in of targeted requests in the final rule. 9 One comment letter was submitted on behalf of which banks will only have to certify That same commenter noted that it two trade groups or associations. they are not doing business with appreciated FinCEN’s effort to craft a

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regulation that focuses on developing financial institutions designated under may be taken under section 104(c) of meaningful and properly targeted IEEPA and IRGC-linked persons CISADA, or, among other things, there information. Another commenter designated under IEEPA will provide may be consultation with foreign banks, expressed support for a request-driven the most beneficial information for including those that have been model as an appropriate means of purposes of implementing section unwilling to respond to inquiries. An focusing industry and governmental 104(c) of CISADA. investigation by OFAC into the resources on information of value. Yet One commenter suggested that activities of such foreign banks could another commenter asserted that in alternative resources might better serve result in a finding by the Secretary proposing a reporting requirement that the same purpose as the proposed rule. under section 104(c) of CISADA and would be imposed only when The commenter encouraged FinCEN to section 561.201 of the IFSR. specifically requested, FinCEN has place greater reliance on government-to- One commenter suggested that the struck an appropriate balance between government requests given the proposed rule should clearly outline the the need of the U.S. government to commenter’s belief that such requests ramifications for foreign banks that fail isolate Iran from the global financial are likely to be far more reliable when to provide the required information or system with the need to maintain an collecting information to identify provide incorrect information. The effectively functioning correspondent sanctions targets. The same commenter commenter suggested that those banking system. asserted that the benefit of an inter- ramifications should mirror the One commenter correctly noted that governmental approach is the sanctions outlined in section 104(c)(1) banks are only required to request opportunity to urge other countries to of CISADA. If a foreign bank fails to information from a foreign bank for adopt and implement similar sanctions. respond or provides incorrect which they maintain a correspondent FinCEN clarifies that this rule is one information an investigation may be account upon receiving a written tool that is being utilized to collect conducted into the activities of such request from FinCEN regarding that information as it relates to identifying foreign bank which could, in turn, result specific foreign bank. This rule does not potential sanctions targets under in a finding under section 104(c) of require a bank to proactively inquire of CISADA. As the commenter correctly CISADA. any one or more of the foreign banks for suggested, additional methods of One commenter contended that the which it maintains correspondent information collection are being utilized proposed rule does not take into accounts. to identify sanctions targets. The account the fact that a foreign bank may One commenter suggested that under commenter also suggested that FinCEN conduct legitimate business with an CISADA, a foreign financial institution utilize existing Bank Secrecy Act Iranian-linked financial institution should be required to report if it has (‘‘BSA’’) reporting tools as necessary to designated under IEEPA, through facilitated the activities of a person implement this reporting requirement. licensed transactions and clearing. The subject to financial sanctions pursuant FinCEN agrees, and will leverage commenter further asserted that for this to United Nations (‘‘U.N.’’) Security existing BSA reporting tools as reason, it would be possible for a U.S. Council Resolutions with respect to appropriate. authority to impose a penalty under Iran. The commenter suggested that the CISADA on a foreign bank for proposed rule should be amended to B. The Ability of a Foreign Bank To undertaking transactions which had require this additional disclosure. We Respond to a CISADA Request been licensed by its own competent recognize that foreign banks’ Four commenters asserted that authority. If a foreign bank wishes to transactions involving persons subject privacy legislation in certain explain that a correspondent account or to financial sanctions pursuant to U.N. jurisdictions may prohibit foreign banks transfer of funds identified in a Security Council Resolutions with from providing the requested certification was licensed by a respect to Iran are among the information with respect to individual competent authority in the foreign sanctionable activities described in customer accounts and transactions. bank’s home jurisdiction, the foreign section 104(c)(2) of CISADA; however, Three of these same commenters bank may provide this explanatory there are other avenues for obtaining asserted that under CISADA banks have information in the certification form. information on such transactions and no legal authority to compel foreign Such explanatory information may be FinCEN has determined that this banks to provide the requested taken into account when the foreign specific reporting mechanism is not the information. FinCEN acknowledges that bank’s certification is reviewed and it is most efficacious means to obtain such some foreign banks may choose not to determined what further action, if any, information at this time. However, as respond or may not be able to respond is appropriate under section 104(c) of FinCEN collects and assesses the due to their own jurisdictions’ privacy CISADA. The model certification has information required under this rule, we legislation. For this reason the rule been revised to include language that will continue to consider whether incorporates an option for U.S. banks to identifies this type of circumstance as expanding the scope of this rule to report to FinCEN instances in which an example of information a foreign include information pertaining to they have not received a response from bank can include in its certification. whether a foreign bank has facilitated a foreign bank. the activities of a person subject to Although foreign banks are not C. The Impact of the Rule on Foreign financial sanctions pursuant to U.N. necessarily required to respond under Correspondent Account Relationships Security Council Resolutions with CISADA authority, those foreign banks One commenter requested that respect to Iran would provide additional may feel compelled to respond in order FinCEN clarify that a request for useful information as it relates to to maintain good relationships with the information regarding a foreign bank or CISADA. If that is determined to be the U.S. banks with which they maintain even a positive report from a foreign case, FinCEN will consider proposing correspondent accounts. Even in bank is not a mandate to close or restrict an expansion of this reporting instances in which a foreign bank does an account. The commenter asserted requirement to include such not respond to a bank’s inquiry, that that one option under the rule is for a information. At this time, FinCEN information is still valuable. As noted bank to report that it cannot determine believes that a focus on foreign banks’ elsewhere in this rulemaking, based on to its satisfaction that the foreign bank transactions involving Iranian-linked the reports received, immediate action does not maintain a relevant account or

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has not processed relevant transfers of economy and the decreasing ability of funds among participants without funds. The commenter requested that the United States to receive valuable requiring bilateral correspondent FinCEN acknowledge in the final rule information on international account relationships. If a foreign bank that this option meets compliance transactions. As stated elsewhere in the is reporting that it maintains a expectations for the bank, and the bank rulemaking, FinCEN proposed to target correspondent account for a specific is not expected to take further action. this reporting requirement on those Iranian-linked financial institution Another commenter similarly suggested foreign banks that there is some basis to designated under IEEPA, the foreign that the rule should clarify that a bank suspect may be engaged in activities bank does not also have to report that that does not receive a response from a that may be sanctionable under section it has processed transfers of funds for foreign bank is merely required to report 104(c) of CISADA. We considered that specific Iranian-linked financial that and does not have to take any other requiring every U.S. bank to provide institution, as that is assumed within action, including closing the account. periodic reports from every foreign bank the context of the reported As explained elsewhere in the for which they maintain correspondent correspondent account. Alternatively, rulemaking, this rule does not require a accounts, but concluded that we would for example, in instances in which a bank to take any steps with respect to be better served by a rule that focused foreign bank is part of a common the foreign bank other than those on those foreign banks that are of payments or clearing mechanism that relating to the collection of information interest for purposes of CISADA. We provides for transfers of funds among outlined in the rule, regardless of the believe that by taking a targeted participants without requiring bilateral response received from the foreign bank. approach we will avoid alienating correspondent account relationships, While the rule does not preclude a bank foreign banks for which we have no those foreign banks should report from taking any other action based on concern regarding sanctionable Iranian- whether they have processed transfers the bank’s assessment of the facts and related activities. For these reasons, we of funds for an Iranian-linked financial bank policy, including restricting or believe the commenter’s concerns are institution designated under IEEPA terminating a correspondent account unfounded. through such common payments or relationship with a foreign bank or filing clearing mechanisms. This type of a suspicious activity report, a bank is D. The Scope of Information To Be Reported by a Foreign Bank example is the reason we used the not required to take any additional terminology processed one or more action based solely upon the fact that FinCEN requested comment as to transfers of funds within the preceding the bank: (i) Has received a request for whether the terminology ‘‘processed one 90 calendar days related to an Iranian- information under this regulation; (ii) or more transfers of funds’’ should be linked financial institution designated has received a response from the foreign further clarified, and if so, how and under IEEPA, ‘‘other than through a bank; or (iii) has not received a response what terms should be used in the correspondent account.’’ 10 from the foreign bank. alternative. A few commenters If a foreign bank does not respond to requested further clarification; however 10 As it relates to the model certification, a foreign an inquiry made by a bank under this FinCEN did not receive any suggestions bank should fill out each section of the model rule, the bank will be in compliance regarding alternative terminology. certification by selecting one box in each section of with these reporting requirements so One commenter asserted that the the model certification. For example, if a foreign broad definition of the term ‘‘processed bank has a correspondent account for an Iranian- long as the bank timely reports to linked financial institution designated under FinCEN that the foreign bank did not one or more transfers of funds’’ appears IEEPA, the foreign bank will select the second box respond to the bank’s inquiry. In problematic. The commenter suggested under section B of the model certification: ‘‘Foreign addition, if a bank cannot determine that according to the definition, this Bank hereby certifies that it does maintain a term would include each and every correspondent account(s) for an Iranian-Linked that the foreign bank does not maintain Financial Institution Designated Under IEEPA.’’ a relevant account or has not processed transaction, in particular those that do The foreign bank will also fill out the corresponding relevant transfers of funds, the bank will not require using a correspondent chart in section B of the model certification for each be in compliance with these reporting account. Another commenter suggested applicable correspondent account. The language in that it would need further clarity the first box under section C of the model requirements so long as the bank timely certification states ‘‘Foreign Bank hereby certifies reports such information to FinCEN, regarding the term ‘‘processed one or that to its knowledge it has not processed one or together with the reason(s) for this, such more transfers of funds’’ to identify more transfers of funds within the preceding 90 as the failure of the foreign bank to which transactions FinCEN intends to calendar days for or on behalf of, directly or respond to the inquiry by or a request reach. Another commenter questioned indirectly, an Iranian-Linked Financial Institution Designated Under IEEPA, other than through a from the bank, the failure of the foreign what is meant by the term ‘‘other than correspondent account detailed above.’’ The bank to certify its response, or if the through a correspondent account,’’ in language ‘‘other than through a correspondent bank has information that is the context of a request that a foreign account detailed above’’ is intended to direct the inconsistent with the certification. bank certify whether it has processed foreign bank not to reenter the information that was already entered in section B of the model FinCEN requested comment regarding one or more transfers of funds within certification in section C of the model certification. the impact of this information collection the preceding 90 calendar days related However, regardless of which box the foreign bank on banks’ correspondent account to an Iranian-linked financial institution selects in section B of the model certification, the relationships with foreign banks. One designated under IEEPA, ‘‘other than foreign bank should also select one box from section C of the model certification. If a foreign commenter suggested that a barrage of through a correspondent account.’’ bank has not processed any transfers of funds requests from the United States could As explained in the Notice, the outside of a correspondent account relationship create, over time, an unintended terminology ‘‘processed one or more with an Iranian-linked financial institution consequence of alienating foreign transfers of funds’’ is meant to address designated under IEEPA, the foreign bank will select the first box under section C of the model correspondents. The commenter also circumstances through which transfers certification. If the foreign bank has processed asserted that foreign banks might be of funds are made without requiring a transfers of funds for or on behalf of, directly or driven to find alternate ways to direct correspondent account, specifically indirectly, an Iranian-linked financial institution transactions to avoid dealing with the including circumstances in which designated under IEEPA outside of a correspondent account relationship, the foreign bank will select United States. The commenter sees this financial institutions are part of a the second box under section C of the model as having a two-part negative impact: common payments or clearing certification: ‘‘Foreign Bank hereby certifies that it the immediate detriment to the mechanism that provides for transfers of has processed one or more transfers of funds within

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FinCEN also clarifies that in the qualification that it is not aware of, or has also incorporated the phrase ‘‘to its context of a request that a foreign bank should not necessarily have been aware knowledge’’ into the model certification certify whether it has processed one or of, such circumstance. in the following places: ‘‘Foreign Bank more transfers of funds within the In the context of the request that a hereby certifies that to its knowledge it preceding 90 calendar days related to an foreign bank certify whether it has has not processed one or more transfers IRGC-linked person designated under processed one or more transfers of funds of funds within the preceding 90 IEEPA, the foreign bank should report within the preceding 90 calendar days calendar days for or on behalf of, whether it has processed any transfers ‘‘related to’’ an Iranian-linked financial directly or indirectly, an Iranian-Linked of funds related to an IRGC-linked institution designated under IEEPA, Financial Institution Designated Under person designated under IEEPA, other than through a correspondent IEEPA, other than through a regardless of whether the transfers of account, and whether it has processed correspondent account detailed above;’’ funds were processed through a one or more transfers of funds within [emphasis added] and ‘‘Foreign Bank correspondent account or through some the preceding 90 calendar days ‘‘related hereby certifies that to its knowledge it other common payments or clearing to’’ an IRGC-linked person designated has not processed one or more transfers mechanism. under IEEPA, FinCEN has agreed to of funds within the preceding 90 One commenter noted that under replace ‘‘related to’’ with ‘‘for or on calendar days for or on behalf of, section 1060.300(b), the foreign bank is behalf of, directly or indirectly.’’ The directly or indirectly, an IRGC–Linked requested to certify that it has not terminology ‘‘for or on behalf of, Person Designated Under IEEPA.’’ ‘‘processed one or more transfers of directly or indirectly,’’ is meant to [Emphasis added.] funds within the preceding 90 calendar include situations where a foreign bank One commenter noted that when days related to an Iranian-linked has knowledge that a transfer of funds inquiring of a foreign bank, the U.S. financial institution’’ or ‘‘related to an it is processing is for or on behalf of an bank would also be required to ask the IRGC-linked person.’’ The commenter Iranian-linked financial institution foreign bank to agree to report if it contended that this concept is broader designated under IEEPA, or an IRGC- establishes a new correspondent than can reasonably be expected. The linked person designated under IEEPA, account for an Iranian-linked financial commenter explained that while the but where the designated entity or institution designated under IEEPA foreign bank could reasonably individual does not appear on the face within 365 calendar days after its initial determine whether such relevant of the transaction. In other words, the response and that would in turn be designated entities and individuals were phrase is meant to include those reported to FinCEN by the U.S. bank. parties to a transaction, it has no reliable situations in which the processing is The commenter believes this is the most way of ascertaining whether a being done with knowledge based on a difficult element of the proposal. The transaction with a third party has a relationship that exists through a third commenter asserted that a request is relationship to such relevant designated party such as a money exchange or based on whether the United States has entities and individuals. The trading house. designated an entity under IEEPA. The commenter provided the following Consistent with the above mentioned commenter further suggested that since example: if the head office of a foreign revision and based on comments IEEPA is a U.S. law, and the IEEPA lists bank processes a non-USD-denominated received, FinCEN has also incorporated are constantly changing, any affected payment from its customer in another the phrase ‘‘to its knowledge’’ into the foreign bank would be required to country outside the United States to a reporting requirement that upon develop systems to monitor and track Middle Eastern trading company, it receiving a written request from whether or not a transaction might be would have no way of knowing whether FinCEN, a bank shall report to FinCEN, covered. The commenter also suggested the trading company may in turn be in such format and manner as may be that foreign banks would have to sort acting on behalf of a relevant designated prescribed by FinCEN, the following through the entire OFAC list as a first entity or individual. The commenter information for any specified foreign step to identify which entities are suggested that the requested bank the name of any specified foreign covered and then apply it to its own certification relate to payments ‘‘to or bank, for which the bank maintains a records. The commenter recommended from’’ the relevant designated entities or correspondent account, that certifies that FinCEN or OFAC create a special individuals as opposed to ‘‘related to.’’ that it does not maintain a section/list for IEEPA designations that Another commenter noted that it is correspondent account for an Iranian- is easily accessed by foreign banks conceivable that transactions can be linked financial institution designated around the world. conducted that are settled through under IEEPA, that certifies that to its FinCEN clarifies that the rule does not correspondent accounts held for other knowledge it has not processed one or call on a foreign bank to report on new credit institutions where the foreign more transfers of funds within the transfers of funds processed for a bank does not or cannot recognize that preceding 90 calendar days for or on relevant designated entity or individual a relevant transaction is conducted on behalf of, directly or indirectly, an following its initial response. The rule behalf of or in the interest of an Iranian- Iranian-linked financial institution only calls on a foreign bank to report linked financial institution designated designated under IEEPA, other than any new correspondent accounts under IEEPA. The commenter suggested through a correspondent account, and/ opened for an Iranian-linked financial that the certification from the foreign or that certifies that to its knowledge it institution designated under IEEPA bank, therefore, must at least contain the has not processed one or more transfers within 365 calendar days after the of funds within the preceding 90 foreign bank’s initial response. Also, as the preceding 90 calendar days for or on behalf of, calendar days for or on behalf of, noted elsewhere in the rulemaking and directly or indirectly, an Iranian-Linked Financial directly or indirectly, an IRGC-linked in the model certification, a list of Institution Designated Under IEEPA, other than 11 through a correspondent account detailed above.’’ person designated under IEEPA.’’ financial institutions that meet the In this case the foreign bank also will fill out the [Emphasis added.] criteria of Iranian-linked financial corresponding chart in section C of the model In order to be consistent with the institutions designated under IEEPA certification for each applicable Iranian-linked ([IFSR] tags) are included at the financial institution designated under IEEPA. revisions to the regulation text, FinCEN Similarly, the foreign bank will also select one box following link on OFAC’s Web site: from section D of the model certification. 11 See section 1060.300(c)(1)(iv). http://www.treasury.gov/resource-

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center/sanctions/Programs/Documents/ determination of significance will be information required by this rule within irgc_ifsr.pdf. As of June 27, 2011, there decided on a case-by-case basis. Neither 10 calendar days of receiving that were 22 financial institutions with IFSR section 104 of CISADA nor the IFSR notification. FinCEN requested tags, meaning 22 Iranian-linked defines a minimum dollar threshold for comment as to whether these proposed financial institutions designated under ‘‘significant transactions.’’ 13 Neither of timeframes were appropriate. IEEPA.12 The foreign bank can go to the these commenters suggested what the Four commenters contended that 30 link to look for updates to the site when minimum dollar threshold should be. calendar days to report the information they open a new correspondent account. Only one commenter proposed what required by this rule to FinCEN is not In addition, as part of standard that minimum dollar threshold should sufficient. Three of these commenters practices, banks globally should perform be. The commenter suggested that proposed that the timeframe be some type of customer identification or FinCEN should apply the $3,000 extended to 90 calendar days. Two of verification, customer due diligence, threshold that exists in some other anti- these commenters asserted that it will and/or ‘‘know your customer’’ policy in money laundering rules because take a foreign bank time to research opening new accounts. In light of the monitoring transactions of lesser value whether it maintains a correspondent global awareness of risks in conjunction can be overly burdensome with little account or has processed transfers of with certain transactions related to Iran, benefit. The commenter also suggested funds in the previous 90 calendar days it does not appear to be unreasonable to that a threshold for minimum aggregate for the relevant designated entities and expect that a foreign bank that has through-put in a correspondent account individuals. Two of these commenters received a request under this can also serve to better focus resources asserted that foreign banks’ responses rulemaking could report on new on identifying the riskiest may be subject to legal review by local correspondent accounts within the correspondent accounts. However, the regulators prior to submission to the succeeding 365 calendar days. commenter further asserted that it is bank. One of these commenters The commenter also suggested that mindful that parsing activity at the suggested that a bank will have to do FinCEN call on a foreign bank to margins of the threshold can incur its some level of due diligence to ‘‘certify’’ respond to these requests within 30 own compliance costs and therefore that it does not know that the foreign calendar days after the foreign bank thresholds should always be applied bank’s certification is incorrect. Another identifies a new correspondent account permissively and not as technical one of these commenters asserted that it with an Iranian-linked financial standards that generate compliance would be unfortunate if a U.S. bank had institution designated under IEEPA. complexities. to report to FinCEN that a foreign bank This comment is addressed by text in Considering the fact that a threshold has not replied in time, specifically in the model certification, which provides of $3,000 is unlikely to eliminate a instances in which the foreign bank is as follows: ‘‘Foreign Bank hereby agrees substantial number of responses from making efforts to do so, as this could to notify in writing the Bank if Foreign foreign banks, and considering the cast a bad and perhaps false light on the Bank establishes a new Correspondent commenter’s proposal that utilizing the foreign bank. Another commenter Account for an Iranian-Linked Financial minimum threshold should be at the suggested that a 30-day timeframe to Institution Designated Under IEEPA at foreign bank’s discretion due to the respond will likely produce a significant any time within 365 calendar days from potential burden of added compliance number of ‘‘no response’’ reports to the date of this response. Foreign Bank costs, FinCEN has determined that it FinCEN. agrees to provide such notification will not set a minimum threshold for FinCEN has taken these comments within 30 calendar days of the reporting on transfers of funds. In into consideration. For this reason, establishment of the new correspondent addition, for these same reasons, FinCEN is revising the timeframe to account.’’ FinCEN will not set a minimum respond to 45 calendar days from the FinCEN requested comment regarding threshold for reporting on date of the written request from FinCEN. whether setting a minimum dollar correspondent accounts. This rule calls FinCEN acknowledges the concerns threshold for a foreign bank to report on for reports on all correspondent raised by the commenters; however, transfers of funds processed within the accounts with Iranian-linked financial these requests are time-sensitive by preceding 90 calendar days related to an institutions designated under IEEPA nature and extending the timeframe for Iranian-linked financial institution regardless of the volume of transactions a response to 90 days is not feasible. In designated under IEEPA or related to an conducted through the correspondent addition, as noted elsewhere in this IRGC-linked person designated under accounts. rulemaking, a U.S. bank is not expected to independently verify the information IEEPA would lessen the reporting E. The Timeframe for a Foreign Bank obligations, while still providing useful provided by a foreign bank. This should and a U.S. Bank To Respond to a lessen the amount of time necessary for information. FinCEN also requested CISADA Request comment regarding what that minimum a U.S. bank to review a foreign bank’s dollar threshold should be. In the Notice, FinCEN proposed that response prior to submission to FinCEN. Three commenters suggested that a a bank would be required to report the FinCEN does recognize the possibility threshold should be set. Two of these information required by this rule to that there may be certain situations in commenters asserted that section 104 of FinCEN within 30 calendar days of the which additional time for a foreign bank CISADA applies to a ‘‘significant date of the written request from FinCEN. to respond is needed. For this reason, transaction or transactions.’’ For this In addition, FinCEN proposed that if a we are amending the final rule to reason, the commenters suggested that a bank receives notification from a foreign require that if a U.S. bank receives a threshold should be set to require bank that the foreign bank has certification from a foreign bank after foreign banks to only report on established a new correspondent the 45 calendar day deadline, the U.S. significant transactions. As it relates to account for an Iranian-linked financial bank is required to report that section 104(c) of CISADA, a institution designated under IEEPA, the information to FinCEN within 10 bank is required to report the calendar days of receiving that 12 It is important to note that the list is dynamic certification. This additional obligation and should be referenced regularly to ensure the 13 See 31 CFR 561.404 for interpretations of does not relieve the U.S. bank of its most up-to-date information. ‘‘significant transaction or transactions.’’ obligation to report to FinCEN within 45

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calendar days the results of the U.S. evaluating the truthfulness of the as the failure of the foreign bank to bank’s inquiry, regardless of whether foreign bank’s response. respond to the inquiry by or a request the foreign bank has responded. Another commenter noted that a U.S. from the bank, the failure of the foreign One commenter suggested that a bank bank has no ability to verify the bank to certify its response, or if the should be given 30 days to respond to information reported by a foreign bank. bank knows, suspects, or has reason to FinCEN upon receiving a notification The commenter recommended that the suspect that the certification is from a foreign bank that it has opened final rule acknowledge that the only incorrect.’’ [Emphasis added.] a new account with an Iranian-linked obligation of the U.S. bank is to request FinCEN is amending section financial institution designated under the data and pass along the information 1060.300(c)(1)(v) by revising the phrase IEEPA. As has been clarified elsewhere it receives as received. An additional ‘‘about which the bank has not been in this rulemaking, a U.S. bank is not commenter expressed similar concerns. able to establish to its satisfaction that expected to independently verify the FinCEN clarifies that our expectation the foreign bank’’ to read as follows: information provided by a foreign bank. with regard to knowledge is only ‘‘that the bank cannot determine;’’ and For this reason, FinCEN believes that if knowledge a U.S. bank would have revising the phrase ‘‘or if the bank a bank receives notification from a based on the monitoring it already knows, suspects, or has reason to foreign bank that the foreign bank has conducts to comply with OFAC suspect that the certification is established a new correspondent requirements and BSA requirements incorrect’’ to read as follows: ‘‘or if the account for an Iranian-linked financial regarding due diligence over foreign bank has information that is institution designated under IEEPA, the correspondent accounts. We also clarify inconsistent with the certification.’’ bank will have sufficient time to report that we do not expect a U.S. bank to In addition, FinCEN is also revising the information required by this rule independently verify the information the corresponding portion of the model provided by a foreign bank. However, within 10 calendar days of receiving certification to be completed by the we do expect a bank to report if it has that notification. bank. The proposed language in the information that is inconsistent with the model certification stated as follows: ‘‘I, F. Clarification Regarding the Proposed foreign bank’s certification. An example ______(name of Model Certification of a situation in which information is signatory), have read and understand inconsistent with the certification might FinCEN requested comment as to the this Certification; the statements made involve a scenario where a U.S. bank’s effectiveness of the proposed model in this Certification are complete and transaction monitoring software recently certification. One commenter noted that correct, to the best of the knowledge of blocked a transaction on behalf of a under the proposed rule, the person the Bank; and the Bank does not know, certain foreign bank, but that foreign suspect, or have reason to suspect that signing on behalf of the U.S. bank bank does not include such transaction the Certification made by Foreign Bank would be required to state that he has in the report provided to the U.S. bank. read and understood the foreign bank’s To reflect these clarifications in the is incorrect. I am authorized to submit certification, that the statements made final rule more clearly, FinCEN has this document on behalf of the Bank.’’ are complete and correct, and that the decided to make revisions to section In the final rule, FinCEN is revising U.S. bank does not know or suspect, or 1060.300(c)(1)(v) and to the portion of the portion of the model certification to have reason to suspect that the foreign the model certification to be completed be completed by the bank to read as ______bank’s certification is incorrect. The by the bank. These revisions directly follows: ‘‘I, commenter suggested that a statement address the recommendations offered by (name of signatory), have received and that the foreign bank’s response is these commenters. reviewed this Certification. To the best complete and correct would require the FinCEN is revising the language in of its knowledge, the Bank has no certifying U.S. officer to have intimate section 1060.300(c)(1)(v) of the final information that is inconsistent with the knowledge of the foreign bank’s rule to clarify our expectations with Certification made by Foreign Bank. I customers and activities, something that regard to the U.S. bank’s responsibilities am authorized to submit this document the U.S. bank will never have. The as they relate to the information on behalf of the Bank.’’ commenter also suggested that the reported by a foreign bank. Section This revision is consistent with the terminology ‘‘know, suspect, and reason 1060.300(c)(1)(v) proposed that a bank revisions made to section to suspect’’ raises questions about the report to FinCEN the following 1060.300(c)(1)(v). FinCEN believes that level of due diligence a U.S. bank is information regarding a specified this revision to the model certification, expected to perform under the proposed foreign bank: The name of any specified together with the amendments to rule. foreign bank, for which the bank section 1060.300(c)(1)(v) discussed Another commenter noted that maintains a correspondent account, above, will alleviate the concerns raised section 1060.300(c)(1)(v) requires that about which the bank has not been able by commenters and more accurately the reporting U.S. bank identify any to establish to its satisfaction that the describe FinCEN’s expectations with specified foreign bank for which the foreign bank does not maintain a regard to the U.S. bank’s obligations as inquiring U.S. bank ‘‘has not been able correspondent account for an Iranian- they relate to information received from to establish to its satisfaction’’ does not linked financial institution designated a foreign bank. engage in the listed activities and, under IEEPA, has not processed one or Furthermore, as requested by three further, certify to FinCEN that it does more transfers of funds within the commenters, FinCEN clarifies that the not ‘‘know[], suspect[], or ha[ve] reason preceding 90 calendar days related to an individual signing the model to suspect’’ that any certification Iranian-linked financial institution certification is only signing on behalf of provided by the foreign bank is designated under IEEPA, other than the relevant bank in his capacity as a incorrect. With these few words, the through a correspondent account, and/ duly authorized officer of the bank and commenter suggested, the proposed rule or has not processed one or more not in his personal capacity. As noted would appear to shift the burden on the transfers of funds within the preceding in the language in the model inquiring bank from simply acting as a 90 calendar days related to an IRGC- certification, the individual signing on conduit for FinCEN’s inquiries to linked person designated under IEEPA, behalf of the bank is submitting the independently investigating and together with the reason(s) for this, such ‘‘document on behalf of the Bank.’’

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Similarly, as requested by one H. Record Retention and Supporting J. Estimate of Burden commenter, FinCEN clarifies that the Documentation Refer to Section IX., below, for a individual signing the model One commenter requested summary of comments regarding the certification is only signing on behalf of clarification regarding a number of burden estimates. the relevant foreign bank in his capacity aspects of the record retention V. Section-by-Section Analysis as a duly authorized officer of the requirement, including the record foreign bank and not in his personal retention period and supporting A. General (§ 1060.300(a)) capacity. As noted in the language in documentation to be maintained as part the model certification, the individual As proposed, section 31 CFR of the record retention. The commenter 1060.300(a) requires that, upon signing on behalf of the foreign bank is requested that the record retention ‘‘authorized to execute this certification receiving a written request from period be reduced from five years. on behalf of Foreign Bank.’’ FinCEN, a bank that maintains a FinCEN clarifies that the record One commenter requested that correspondent account for a specified FinCEN clarify how foreign banks retention period for this rulemaking will foreign bank shall inquire of the foreign should convert foreign currency as it remain five years consistent with bank, and report to FinCEN with respect relates to the foreign banks’ reporting on FinCEN’s other record retention to any correspondent account the approximate value of transactions requirements. FinCEN also clarifies that maintained by such foreign bank for an processed through a correspondent this specific recordkeeping requirement Iranian-linked financial institution account or transfer(s) of funds processed does not serve to change any other designated under IEEPA, any transfer of within the preceding 90 calendar days. applicable recordkeeping requirements. funds for or on behalf of, directly or FinCEN will not prescribe any specific The record retention period will begin indirectly, an Iranian-linked financial method or reference rate for the on the date the request from FinCEN is institution designated under IEEPA conversion of foreign exchange, but issued. If the bank receives notification processed by such foreign bank within rather leaves it to the foreign bank to from a foreign bank that the foreign the preceding 90 calendar days, other convert the sums using a reasonable rate bank has established a new than through a correspondent account, informed by good banking practices. correspondent account with an Iranian- and any transfer of funds for or on The purpose of this conversion is to linked financial institution designated behalf of, directly or indirectly, an help in assessing the significance of the under IEEPA at any time within 365 IRGC-linked person designated under transaction(s) at issue. Examples of calendar days from the date of the IEEPA processed by such foreign bank reasonable rates may include the rate foreign bank’s initial response, this will within the preceding 90 calendar days. that the foreign bank would have not affect the beginning of the record The language in this section of the applied to convert the respective retention period. The record retention final rule is substantially the same as payment into U.S. dollars on the date of period with regard to that specific proposed. However, for purposes of the transaction, or, in the case of foreign bank will still begin on the date providing additional clarity as requested aggregation of multiple transactions the request from FinCEN was issued. by commenters, FinCEN modified the over a time period, the average exchange FinCEN clarifies that supporting final rule language in the following rate over the applicable time period. documentation related to this ways: the phrase ‘‘to the best of the One commenter asserted that while rulemaking includes any and all knowledge of the bank’’ was removed, the proposed model certification correspondence between the bank and consistent with revisions to section includes links to websites with FinCEN, or between the bank and the 1060.300(c)(1)(v); 14 and ‘‘for or on information about relevant designated foreign bank, regarding a request for behalf of, directly or indirectly,’’ entities and individuals, the commenter information under this rulemaking. For replaced ‘‘related to.’’ 15 believes that the process of responding example, this would include the initial would be simpler and produce better request from FinCEN to the bank, the Definitions information if requests to foreign banks request from the bank to the foreign Bank also included a list of relevant bank, the response from the foreign For the purpose of this rule the term designated entities and individuals bank to the bank, the report to FinCEN ‘‘bank’’ is defined in 31 CFR covered by that particular request. The from the bank, and any correspondence 1010.100(d). A bank includes each model certification includes a link to associated with any one of these agent, agency, branch, or office within the list of relevant designated entities requests/reports. FinCEN also clarifies the United States of persons doing and individuals exclusively applicable that although we will maintain a copy business in one or more of the following to this reporting requirement. FinCEN of the report the bank submits to capacities: commercial banks or trust believes that providing access to this FinCEN, the bank must also maintain a companies, private banks, savings and link is sufficient to assist foreign banks copy of that report in order to confirm loan associations, national banks, thrift in clearly identifying the designated compliance with this regulation. institutions, credit unions, other entities and individuals relevant to a I. Sharing Information Regarding a organizations chartered under banking request. CISADA Request As requested by one commenter, laws and supervised by banking FinCEN will consider evaluating the One of the commenters questioned in supervisors of any State, and banks adequacy of the model certification in what instances it would be appropriate organized under foreign law. 12 to 18 months in order to determine for a bank to inform others internally or FinCEN proposed to limit the if revisions are necessary. externally that it has received a request reporting requirement in this from FinCEN regarding a specific rulemaking to banks, as opposed to all G. Clarification Regarding Certain foreign bank. To the extent that FinCEN U.S. financial institutions that could fall Definitions and Terms would require a request regarding a Refer to Section V.A., below, for specific foreign bank remain 14 See above Section IV. F. for the rationale for the revisions to section 1060.300(c)(1)(v). confidential, we will explicitly state the clarification regarding the terms bank, 15 See above Section IV. D. for the rationale for correspondent account, and foreign requirement for confidentiality in the replacing the terminology ‘‘related to’’ with ‘‘for or bank. request sent to the bank. on behalf of, directly, or indirectly.’’

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within the scope of this rule. FinCEN apply to depository institutions and not CFR 1010.100(u) and means a bank requested comment as to whether this to non-depository institutions, even if organized under foreign law, or an rulemaking should be expanded to the two may be within the same bank agency, branch, or office located outside include other types of financial holding company structure. Another the United States of a bank. The term institutions, such as those financial commenter requested clarification does not include an agent, agency, institutions included in FinCEN’s regarding whether this rule would apply branch, or office within the United definition of ‘‘covered financial to U.S. branches of foreign banks. States of a bank organized under foreign institution.’’ 16 FinCEN clarifies that this rule will only law. Two commenters requested apply to banks as defined in 31 CFR FinCEN proposed to limit the clarification as to why FinCEN proposed 1010.100(d), and will not apply to any reporting requirement in this to limit this reporting requirement to other type of non-bank financial rulemaking to information pertaining to banks instead of the broader category of institution that may fall within the same the activities of foreign banks, as U.S. financial institutions as would be bank holding company structure. In opposed to the activities of all foreign permissible under CISADA. One of addition, U.S. branches of foreign banks financial institutions that could fall these commenters also requested are included within the definition of within the scope of this rule. FinCEN clarification as to how FinCEN would ‘‘bank’’ in 31 CFR 1010.100(d). requested comment as to whether this determine whether to expand the rulemaking should be expanded to reporting requirement to other domestic Correspondent Account include information pertaining to the financial institutions. For the purpose of this rule, the term activities of other types of foreign As explained in the Notice, FinCEN ‘‘correspondent account’’ is defined in financial institutions, such as those determined that limiting the reporting 31 CFR 1010.605(c)(1)(ii) and means an included in FinCEN’s definition of requirement in this rule to banks will account established for a foreign bank to ‘‘foreign financial institution,’’ 19 or provide useful information as it relates receive deposits from, or to make OFAC’s definition of ‘‘foreign financial to CISADA, while limiting the payments or other disbursements on institution’’ 20 in the IFSR. obligations of the financial industry. behalf of, the foreign bank, or to handle As explained in the Notice, FinCEN Although there are other financial other financial transactions related to has determined that limiting the institutions that could fall within the such foreign bank.17 Although there is a reporting requirement in this rule to scope of this rule in light of the breadth reference in section 104(e) of CISADA to information pertaining to the activities of the definition of financial institution payable-through accounts, as FinCEN is of foreign banks will provide useful in CISADA and the breadth of the incorporating this requirement into its information as it relates to CISADA, definition of correspondent account, regulations, such payable-through while limiting the obligations of the this rule focuses on those financial accounts are subsumed within the financial industry. Although there are institutions deemed to provide the definition of a correspondent account at other foreign financial institutions that services most traditionally associated 31 CFR 1010.610(b)(1)(iii)(B).18 The maintain correspondent accounts with with correspondent banking. definition of correspondent account is U.S. financial institutions that could Two trade associations commented on being adopted in the final rule as provide useful information with respect this aspect of the rulemaking. These proposed. to CISADA-relevant activities, this rule commenters were in favor of limiting Three commenters requested focuses on those foreign financial the rulemaking to banks, in order to clarification regarding the scope of institutions deemed to receive the avoid redundancy and overlapping accounts that are included within the services most traditionally associated information. FinCEN did not receive breadth of the definition of the term with correspondent banking. any comments that provided correspondent account. The definition Two trade associations commented on justification for expanding this reporting of correspondent account that is this aspect of the rule. The commenters requirement to include other domestic included within this rule is the same asserted that limiting the scope of the financial institutions. Based on the definition of correspondent account as rule to inquiries regarding foreign banks comments received, and FinCEN’s prior in 31 CFR 1010.610—Due diligence was appropriate. FinCEN did not statements regarding the scope of programs for correspondent accounts for receive any comments that provided affected U.S. financial institutions, the foreign financial institutions. The same justification for expanding this reporting reporting requirements in the final rule scope of accounts included within the requirement to include information will be limited to banks as proposed. requirements of 31 CFR 1010.610 are pertaining to the activities of other As FinCEN collects and assesses the included within the requirements of this foreign financial institutions. Based on information required under this rule, we rulemaking, except that the term only the comments received, and FinCEN’s will continue to consider whether applies to such accounts maintained by prior statements regarding the scope of expanding the scope of this rule to any bank for any foreign bank. affected foreign financial institutions, include other domestic financial the reporting requirements in the final institutions would provide additional Foreign Bank rule will be limited to foreign banks as useful information as it relates to For the purpose of this rulemaking the proposed. CISADA. If that is determined to be the term ‘‘foreign bank’’ is defined in 31 As FinCEN collects and assesses the case, FinCEN will consider proposing information required under this rule, we an expansion of this reporting 17 This definition of correspondent account is will continue to consider whether requirement to include other domestic consistent with the rule’s focus on U.S. banks’ expanding the scope of this rule to financial institutions. correspondent account relationships with foreign include information pertaining to the One commenter requested banks. 18 31 CFR 1010.610(b)(1)(iii)(B) states ‘‘* * * a activities of other foreign financial clarification that the rule will only payable-through account means a correspondent institutions would provide additional account maintained by a covered financial useful information as it relates to 16 See 31 CFR 1010.605(e) (defining a ‘‘covered institution for a foreign bank by means of which the CISADA. If that is determined to be the financial institution’’ as any one of a number of foreign bank permits its customers to engage, either specific U.S. financial institutions, including banks, directly or through a subaccount, in banking broker-dealers, futures commission merchants, and activities usual in connection with the business of 19 See 31 CFR 1010.605(f). mutual funds). banking in the United States.’’ 20 See 31 CFR 561.308.

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case, FinCEN will consider proposing IEEPA (or listed in an annex to an IRGC-linked person designated under an expansion of this reporting Executive order issued pursuant to such IEEPA. Upon receiving a written request requirement to include information Act).22 The definition of ‘‘IRGC-linked from FinCEN, a bank that maintains a pertaining to the activities of other person designated under IEEPA’’ is correspondent account for a specified foreign financial institutions. being adopted in the final rule as foreign bank shall inquire of such One commenter asked that FinCEN proposed. foreign bank for the purpose of having clarify that the definition of foreign The names of persons whose property such foreign bank certify: (1) Whether it bank excludes U.S. representative and interests in property are blocked maintains a correspondent account for offices of foreign banks. The commenter pursuant to IEEPA are published on an Iranian-linked financial institution also asked for clarification regarding OFAC’s Specially Designated Nationals designated under IEEPA; (2) whether it whether subsidiaries or branches of a and Blocked Persons List (‘‘SDN List’’). has processed one or more transfers of single bank operating in different Iranian-linked financial institutions funds within the preceding 90 calendar countries are one foreign bank or designated under IEEPA are those days for or on behalf of, directly or separate foreign banks for the purpose of whose property and interests in indirectly, an Iranian-linked financial a CISADA request. For purposes of this property are blocked pursuant to 31 CFR institution designated under IEEPA, rulemaking, U.S. representative offices part 544 or 31 CFR part 594 in other than through a correspondent are not included within our definition connection with Iran’s proliferation of account; and (3) whether it has of foreign bank at 31 CFR 1010.100(u), weapons of mass destruction or delivery processed one or more transfers of funds which excludes offices within the systems for weapons of mass within the preceding 90 calendar days United States of a bank organized under destruction or Iran’s support for for or on behalf of, directly or indirectly, foreign law. Although representative international terrorism and are an IRGC-linked person designated under offices cannot offer banking services in identified by ‘‘[IFSR]’’ tags located at the IEEPA. In addition, when the bank the United States, they nevertheless are end of their entries on the SDN List makes its inquiry, the bank shall request offices of banks organized under foreign (e.g., [NPWMD][IFSR] or [SDGT][IFSR]). that the foreign bank agree to notify the law, and therefore are not foreign banks IRGC-linked persons designated under bank if the foreign bank subsequently for purposes of the BSA rules. FinCEN IEEPA are those whose property and establishes a new correspondent will only be sending requests to banks interests in property are blocked account for an Iranian-linked financial that it knows or believes maintain a pursuant to one or more parts of 31 CFR institution designated under IEEPA at correspondent account for the specific Chapter V and are identified by any time within 365 calendar days from foreign bank, specific foreign bank ‘‘[IRGC]’’ tags located at the end of their the date of the foreign bank’s initial branch, or specific foreign bank entries on the SDN List (e.g., response. subsidiary at issue. This means that the [NPWD][IRGC] or [SDGT][IRGC]). The language in this section of the extent of the inquiry will be specific to OFAC’s electronic SDN List can be final rule is substantially the same as the correspondent account about which found at the following URL: http:// proposed. However, for purposes of a request is made. In the case of a www.treasury.gov/resource-center/ providing additional clarity as requested foreign bank subsidiary, FinCEN would sanctions/SDN–List/Pages/default.aspx. by commenters, FinCEN modified the only be requesting information The following financial institutions final rule language in the following way: regarding a foreign bank subsidiary if meet the criteria of Iranian-linked ‘‘for or on behalf of, directly or that subsidiary is itself a foreign bank. financial institutions designated under indirectly,’’ replaced ‘‘related to.’’ 23 IEEPA ([IFSR] tags), and the following To assist a bank in obtaining the Iranian-Linked Financial Institution persons meet the criteria of IRGC-linked required information from a specified Designated Under IEEPA persons designated under IEEPA ([IRGC] foreign bank, FinCEN proposed a model For the purpose of this rule the term tags): http://www.treasury.gov/resource- certification format for a bank to provide ‘‘Iranian-linked financial institution center/sanctions/Programs/Documents/ to a specified foreign bank when the designated under IEEPA’’ means a irgc_ifsr.pdf. These listings are part of bank makes its inquiry regarding financial institution designated by the the SDN List, administered by OFAC. whether the specified foreign bank United States Government pursuant to Please note that OFAC’s SDN List is maintains a correspondent account for IEEPA (or listed in an annex to an dynamic and should be reviewed an Iranian-linked financial institution Executive order issued pursuant to such regularly for the most current designated under IEEPA, and/or has Act) in connection with Iran’s information regarding Iranian-linked processed one or more transfers of funds proliferation of weapons of mass financial institutions designated under within the preceding 90 calendar days destruction or delivery systems for IEEPA and IRGC-linked persons for or on behalf of, directly or indirectly, weapons of mass destruction, or in designated under IEEPA. an Iranian-linked financial institution or connection with Iran’s support for B. Duty To Inquire (§ 1060.300(b)) an IRGC-linked person designated under international terrorism.21 The definition IEEPA. The model certification will not of ‘‘Iranian-linked financial institution This section describes a bank’s duty appear in the Code of Federal designated under IEEPA’’ is being to inquire of a specified foreign bank for Regulations (‘‘CFR’’); however, it is adopted in the final rule as proposed. which the bank maintains a included at Appendix A to this Federal correspondent account, as to whether Register notice. While the model IRGC–Linked Person Designated Under such foreign bank maintains a IEEPA certification will not be included in the correspondent account for an Iranian- CFR, it is still subject to the Paperwork For the purpose of this rule the term linked financial institution designated Reduction Act (‘‘PRA’’), and therefore ‘‘IRGC-linked person designated under under IEEPA, and/or has processed one any material changes made to the model IEEPA’’ means Iran’s Islamic or more transfers of funds within the certification will go through public Revolutionary Guard Corps or any of its preceding 90 calendar days for or on notice and comment as required under agents or affiliates designated by the behalf of, directly or indirectly, an United States Government pursuant to Iranian-linked financial institution or an 23 See above Section IV. D. for the rationale for replacing the terminology ‘‘related to’’ with ‘‘for or 21 See CISADA subsection 104(c)(2)(E)(ii). 22 See CISADA subsection 104(c)(2)(E)(i). on behalf of, directly or indirectly.’’

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the PRA. In addition, FinCEN will use transfers of funds within the preceding or has not processed one or more its website to make the model 90 calendar days for or on behalf of, transfers of funds within the preceding certification available to the public. directly or indirectly, an Iranian-linked 90 calendar days for or on behalf of, FinCEN requested comment as to the financial institution designated under directly or indirectly, an IRGC-linked effectiveness of the proposed model IEEPA, other than through a person designated under IEEPA, certification.24 correspondent account, together with together with the reason(s) for this, such As part of the model certification, the the name of the Iranian-linked financial as the failure of the foreign bank to foreign bank is asked to agree to notify, institution designated under IEEPA, the respond to the inquiry by or a request in writing, the bank at which it identity of the system or means by from the bank, the failure of the foreign maintains a correspondent account if which such transfer(s) of funds was bank to certify its response, or if the the foreign bank establishes a new processed, the full name on the bank has information that is correspondent account for an Iranian- account(s) and the account number(s), if inconsistent with the certification; linked financial institution designated applicable, other applicable identifying • The name of any specified foreign under IEEPA at any time within 365 information for such transfer(s) of funds, bank, for which the bank maintains a calendar days from the date of the and the approximate value in USD of correspondent account, that notifies the foreign bank’s response. The model such transfer(s) of funds processed bank that it has established a new certification sets forth the expectation within the preceding 90 calendar days; correspondent account for an Iranian- that the notification shall be due to the • The name of any specified foreign linked financial institution designated bank within 30 calendar days of the bank, for which the bank maintains a under IEEPA at any time within 365 establishment of the new correspondent correspondent account, that certifies calendar days from the date of the account. If a bank does not utilize the that it has processed one or more foreign bank’s initial response, together model certification, the bank will need transfers of funds within the preceding with the name of the Iranian-linked to request separately that the foreign 90 calendar days for or on behalf of, financial institution designated under bank provide such information with directly or indirectly, an IRGC-linked IEEPA, the full name(s) on the respect to the establishment of a new person designated under IEEPA, correspondent account and the correspondent account for an Iranian- together with the name of the IRGC- correspondent account number(s), linked financial institution designated linked person designated under IEEPA, applicable information regarding under IEEPA. the identity of the system or means by whether the correspondent account has which such transfer(s) of funds was been blocked or otherwise restricted, C. Filing Procedures (§ 1060.300(c)) processed, the full name on the and other applicable identifying What To File (§ 1060.300(c)(1)) account(s) and the account number(s), if information for the correspondent This section describes the filing applicable, other applicable identifying account; • If applicable, confirmation that the procedures a bank shall follow to report information for such transfer(s) of funds, bank does not maintain a correspondent to FinCEN information required by this and the approximate value in USD of account for the specified foreign rule. Upon receiving a written request such transfer(s) of funds processed bank(s), but only in instances in which from FinCEN, a bank is required to within the preceding 90 calendar days; • The name of any specified foreign FinCEN specifically requests that the report to FinCEN, in such format and bank, for which the bank maintains a bank report such information; and manner as may be prescribed by correspondent account, that certifies • If applicable, the name of any FinCEN, the following information for that it does not maintain a specified foreign bank, for which the any specified foreign bank: correspondent account for an Iranian- bank maintains a correspondent • The name of any specified foreign linked financial institution designated account, that provides a certification to bank, for which the bank maintains a under IEEPA, that certifies that to its the bank after the 45 calendar day correspondent account, that certifies knowledge it has not processed one or deadline, along with all applicable that it maintains a correspondent more transfers of funds within the related information associated with that account for an Iranian-linked financial preceding 90 calendar days for or on certification. institution designated under IEEPA, behalf of, directly or indirectly, an The language in this section of the together with the name of the Iranian- Iranian-linked financial institution final rule is substantially the same as linked financial institution designated designated under IEEPA, other than proposed. However, for purposes of under IEEPA, the full name(s) on the through a correspondent account, and/ providing additional clarity as requested correspondent account and the or that certifies that to its knowledge it by commenters, FinCEN modified the correspondent account number(s), has not processed one or more transfers final rule language in the following applicable information regarding of funds within the preceding 90 ways: ‘‘for or on behalf of, directly or whether the correspondent account has calendar days for or on behalf of, indirectly,’’ replaced ‘‘related to;’’ 25 been blocked or otherwise restricted, directly or indirectly, an IRGC-linked ‘‘that the bank cannot determine’’ other applicable identifying information person designated under IEEPA; replaced ‘‘about which the bank has not for the correspondent account, and the • The name of any specified foreign been able to establish to its satisfaction approximate value in U.S. dollars bank, for which the bank maintains a that the foreign bank;’’ and ’’ if the bank (‘‘USD’’) of transactions processed correspondent account, that the bank has information that is inconsistent with through the correspondent account cannot determine does not maintain a the certification’’ replaced ‘‘if the bank within the preceding 90 calendar days; • correspondent account for an Iranian- knows, suspects, or has reason to The name of any specified foreign linked financial institution designated suspect that the certification is bank, for which the bank maintains a under IEEPA, has not processed one or incorrect.’’ 26 correspondent account, that certifies more transfers of funds within the that it has processed one or more preceding 90 calendar days for or on 25 See above Section IV. D. for the rationale for behalf of, directly or indirectly, an replacing the terminology ‘‘related to’’ with ‘‘for or 24 See above Section IV. F. for a summary of on behalf of, directly or indirectly.’’ comments associated with the model certification, Iranian-linked financial institution 26 See above Section IV. F. for the rationale for along with an explanation of slight revisions to the designated under IEEPA, other than replacing the terminology ‘‘about which the bank language in the final model certification. through a correspondent account, and/ Continued

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FinCEN also incorporated the phrase by FinCEN, the information required by In addition, FinCEN added a 10- ‘‘to its knowledge’’ into the reporting this rule. calendar-day deadline for a bank to requirement that upon receiving a If a specified foreign bank, for which report if it receives a certification from written request from FinCEN, a bank the bank maintains a correspondent a foreign bank after the 45-calendar-day shall report to FinCEN, in such format account, does not adequately respond to deadline. This corresponds with the and manner as may be prescribed by the bank’s inquiry, the bank shall report following reporting requirement added FinCEN, the following information for to FinCEN, in such format and manner to the final rule: Upon receiving a any specified foreign bank the name of as may be prescribed by FinCEN, the written request from FinCEN, a bank any specified foreign bank, for which information required by this rule. If a shall report to FinCEN, in such format the bank maintains a correspondent bank receives a notification from a and manner as may be prescribed by account, that certifies that it does not specified foreign bank regarding the FinCEN, the following information for maintain a correspondent account for an establishment of a new correspondent any specified foreign bank, if applicable, Iranian-linked financial institution account for an Iranian-linked financial the name of any specified foreign bank, designated under IEEPA, that certifies institution designated under IEEPA, the for which the bank maintains a that to its knowledge it has not bank shall report to FinCEN, in such correspondent account, that provides a processed one or more transfers of funds format and manner as may be prescribed certification to the bank after the 45- within the preceding 90 calendar days by FinCEN, the information required by calendar-day deadline, along with all for or on behalf of, directly or indirectly, this rule. If a bank receives a applicable related information 30 an Iranian-linked financial institution certification from a specified foreign associated with that certification.’’ designated under IEEPA, other than bank after the 45-calendar-day deadline, D. Record Retention (§ 1060.300(d)) through a correspondent account, and/ the bank shall report to FinCEN, in such This section describes the or that certifies that to its knowledge it format and manner as may be prescribed recordkeeping requirements applicable has not processed one or more transfers by FinCEN, the information required by to this rule. A bank shall maintain for of funds within the preceding 90 this rule. calendar days for or on behalf of, a period of five years a copy of any If a bank receives a written request report filed and the original or any directly or indirectly, an IRGC-linked from FinCEN regarding a specified 27 business record equivalent of any person designated under IEEPA.’’ foreign bank, for which the bank does [Emphasis added.] supporting documentation for a report, not maintain a correspondent account, including a foreign bank certification or In addition, FinCEN added the and FinCEN has specifically requested other responses to an inquiry under this following reporting requirement in the that the bank report instances in which rule. This section of the final rule is final rule in order to provide additional the bank does not maintain a being adopted as proposed. clarity as requested by commenters: correspondent account for such Upon receiving a written request from specified foreign bank, the bank shall E. No Other Action Required FinCEN, a bank shall report to FinCEN, report this information to FinCEN, in (§ 1060.300(e)) in such format and manner as may be such format and manner as may be Paragraph (e) states that ‘‘[n]othing in prescribed by FinCEN, the following prescribed by FinCEN. this section shall be construed to require information for any specified foreign a bank to take any action, or to decline When To File (§ 1060.300(c)(2)) bank, if applicable, the name of any to take any action, other than the specified foreign bank, for which the A bank is required to report the requirements identified in this section, bank maintains a correspondent information required by this rule to with respect to an account established account, that provides a certification to FinCEN within 45 calendar days of the for, or a transaction engaged in with, a the bank after the 45-calendar-day date of the written request from FinCEN. foreign bank. However, nothing in this deadline, along with all applicable If a bank receives notification from a section relieves a bank of any other related information associated with that foreign bank that the foreign bank has applicable regulatory obligation.’’ While certification.’’ 28 established a new correspondent this paragraph clarifies that the section If a bank utilizes the model account for an Iranian-linked financial does not require a bank to take any steps certification to inquire of a specified institution designated under IEEPA, the with respect to the foreign bank other foreign bank, the bank can submit the bank is required to report the than those relating to the collection of certification from the specified foreign information required by this rule within information outlined in this section, it bank to FinCEN in order to comply with 10 calendar days of receiving that also clarifies that this section does not this reporting requirement. If a bank notification. If a bank receives a preclude a bank from taking any other does not utilize the model certification certification from a foreign bank after action, including restricting or to inquire of a specified foreign bank, the 45-calendar-day deadline, the bank terminating a correspondent account the bank shall report to FinCEN, in such is required to report the information relationship with a foreign bank, or format and manner as may be prescribed required by this rule within 10 calendar filing a suspicious activity report, based days of receiving that certification. on the bank’s assessment of the facts and bank policy. However, a bank is not has not been able to establish to its satisfaction that The language in this section of the the foreign bank’’ with ‘‘that the bank cannot final rule is substantially the same as required to restrict or terminate a determine;’’ and for the rationale for replacing the proposed. However, for purposes of correspondent account relationship terminology ‘‘if the bank knows, suspects, or has with a foreign bank, or to file a reason to suspect that the certification is incorrect’’ providing relief as requested by commenters, FinCEN modified the final suspicious activity report, based solely with ‘‘if the bank has information that is upon the fact that the bank: (i) Has inconsistent with the certification.’’ rule language in the following way: 45 27 See section 1060.300(c)(1)(iv). Also see above calendar days replaced 30 calendar received a request for information under Section IV. D. for the rationale for incorporating the days.29 phrase ‘‘to its knowledge’’ into this reporting 30 See section 1060.300(c)(1)(viii). Also see above requirement. Section IV. E. for the rationale for implementing 28 See section 1060.300(c)(1)(viii). Also see above 29 See above Section IV. E. for the rationale for the this additional reporting requirement, along with Section IV. E. for the rationale for implementing extension of time to comply with this reporting the rationale for the corresponding timeframe for this additional reporting requirement. requirement. reporting.

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this regulation; (ii) has received a 319(b) 33 of the Uniting and Reporting Requirements Under Section response from the foreign bank; or (iii) Strengthening America by Providing 104(e) of CISADA has not received a response from the Appropriate Tools Required to Intercept The collection of information in this foreign bank. This section of the final and Obstruct Terrorism Act of 2001, rule is in 31 CFR 1060.300. The rule is being adopted as proposed. Public Law 107–56, most banks that information may be transmitted to one maintain correspondent accounts for VI. Executive Order 12866 or more departments or agencies of the foreign banks tend to be large banks. We United States of America for the Executive Orders 13563 and 12866 expect that small banks will be less purpose of fulfilling such departments’ direct agencies to assess all costs and likely to maintain correspondent and agencies’ governmental functions. benefits of available regulatory accounts for foreign banks. In most The collection of information is cases, small banks utilize their domestic alternatives and, if regulation is mandatory. FinCEN is issuing this final correspondent accounts with large necessary, to select regulatory rule that will require a bank to report to banks to conduct transactions with approaches that maximize net benefits FinCEN, upon request, certain foreign banks. (including potential economic, information regarding certain foreign environmental, public health and safety FinCEN invited comment on the impact of this proposal on small banks specified by FinCEN. effects, distributive impacts, and Description of Affected Financial entities. One commenter suggested that equity). Executive Order 13563 Institutions: Banks as defined in 31 CFR emphasizes the importance of FinCEN provided no data to support the conclusion that the regulation would 1010.100(d). quantifying both costs and benefits, of Estimated Number of Affected not have a significant economic impact reducing costs, of harmonizing rules, Financial Institutions: 350 banks. on a substantial number of small and of promoting flexibility. It has been FinCEN estimates that approximately entities. However, no other commenters determined that the final rule is 350 banks maintain correspondent expressed concern that this rule would designated a ‘‘significant regulatory accounts for foreign banks.34 However, have a significant economic impact on action’’ although not economically FinCEN estimates that on average a substantial number of small entities. significant, under section 3(f) of around five percent of banks that The rule applies to banks that maintain Executive Order 12866. Accordingly, maintain correspondent accounts for correspondent accounts for foreign the rule has been reviewed by the Office foreign banks will have an account with banks. As stated above, and in our of Management and Budget. any one specific foreign bank about previous rules regarding foreign which FinCEN is requesting VII. Unfunded Mandates Reform Act of correspondent accounts, we believe information. This smaller proportion of 1995 Statement most banks that maintain correspondent actual affected financial institutions in accounts for foreign banks are large Section 202 of the Unfunded each case of a request is based on the banks. In addition, as noted elsewhere Mandates Reform Act of 1995 fact that foreign banks generally only in this rulemaking, FinCEN estimates (‘‘Unfunded Mandates Act’’), Public hold a limited number of correspondent Law 104–4 (March 22, 1995), requires that approximately 350 banks maintain correspondent accounts for foreign that an agency prepare a budgetary 34 177 banks reported a balance due as of impact statement before promulgating a banks. FinCEN further estimates that on September 30, 2010 in either line item 3.a. or 3.b. rule that may result in expenditure by average approximately five percent of of Schedule RC–A—Cash and Balances Due From Depository Institutions on the Consolidated Reports State, local, and Tribal governments, in banks that maintain correspondent accounts for foreign banks will have an of Condition and Income for a Bank with Domestic the aggregate, or by the private sector, of and Foreign Offices—FFIEC 031, or on the $100 million or more in any one year. account with any one specific foreign Consolidated Reports of Condition and Income for If a budgetary impact statement is bank about which FinCEN is requesting a Bank with Domestic Offices Only—FFIEC 041. Line item 3.a. represents balances due from foreign required, section 205 of the Unfunded information. Furthermore, as noted elsewhere in this rulemaking, a bank branches of other U.S. banks and line item 3.b. Mandates Act also requires an agency to represents balances due from other banks in foreign identify and consider a reasonable will only be required to comply with countries and foreign central banks. As of number of regulatory alternatives before this reporting requirement upon September 30, 2010, 7,020 banks, regulated by either the Board of Governors of the Federal Reserve promulgating a rule. FinCEN has receiving a specific written request from FinCEN. Therefore, a substantial System, the Federal Deposit Insurance Corporation, determined that it is not required to or the Office of the Comptroller of the Currency, prepare a written statement under number of small entities would not be filed either FFIEC 031 or FFIEC 041. 177 of those section 202. affected. Accordingly, a regulatory 7,020 banks reported a balance due for a flexibility analysis is not required. correspondent account for a foreign bank. These VIII. Regulatory Flexibility Act numbers do not include agents, agencies, branches, IX. Paperwork Reduction Act or offices within the U.S. of a bank organized under Pursuant to the Regulatory Flexibility foreign law, which are also included within the The collection of information definition of bank for purposes of this rulemaking. Act (‘‘RFA’’) (5 U.S.C. 601 et seq.), contained in this rule has been According to the Federal Reserve Board Structure FinCEN certifies that this final rule will approved by the Office of Management Data for U.S. Banking Offices of Foreign Entities, not have a significant economic impact and Budget in accordance with the there are approximately 214 U.S. Offices of Foreign on a substantial number of small Banking Organizations, as of September 30, 2010. Paperwork Reduction Act of 1995 (44 See http://www.federalreserve.gov/releases/iba/ entities. The final rule will apply to U.S.C. 3507(d)) under control number 201009/bycntry.htm. Of those 214 U.S. Offices of banks that maintain correspondent 1506–0066. Under the Paperwork Foreign Banking Organizations, approximately 43 accounts for foreign banks. As Reduction Act, an agency may not only operate in the U.S. as representative offices. See http://www.federalreserve.gov/releases/iba/ previously stated in our final rules conduct or sponsor, and an individual 31 32 201009/bytype.htm. Representative offices do not implementing sections 312, 313, and is not required to respond to, a maintain correspondent accounts. For this reason, collection of information unless it FinCEN is conservatively estimating that it is likely 31 Anti-Money Laundering Programs; Special Due displays a valid OMB control number. the remaining 171 U.S. Offices of Foreign Banking Diligence Programs for Certain Foreign Accounts, Organizations do maintain some form of 71 FR 496 (Jan. 4, 2006). correspondent account for a foreign bank. This 32 Anti-Money Laundering Requirements— Accounts for Foreign Banks, 67 FR 60562 (Sept. 26, results in a total estimate of 348 U.S. banks and Correspondent Accounts for Foreign Shell Banks; 2002). foreign banks operating in the U.S. that maintain a Recordkeeping and Termination of Correspondent 33 Id. correspondent account for a foreign bank.

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account relationships with separate U.S. recordkeeping burden associated with to a large number of banks that we are banks. For this reason, the estimated section 1060.300(d) (record retention). not certain maintain a correspondent number of financial institutions that The estimated average reporting account for the specified foreign bank may maintain a correspondent account burden associated with section for which we are requesting for any one specific foreign bank 1060.300(b) for one request from information. In those rare cases, FinCEN identified in any one request from FinCEN is one hour per responding U.S. would most likely not ask those banks FinCEN will be in the range of 18 banks. bank with respect to each specific to report if they do not maintain a In order to further reduce the number of foreign bank about which FinCEN is correspondent account for such foreign affected financial institutions, when requesting information. The estimated bank. One commenter noted support for possible, FinCEN will rely on average reporting burden associated this element of the proposal. The information available to help limit the with section 1060.300(c) for one request commenter asserted that barring number of banks requested to provide from FinCEN is one hour per bank. The significant need, asking for a written information with respect to the foreign estimated average recordkeeping burden negative confirmation should be banks that are the subject of specific associated with section 1060.300(d) for unnecessary because banks are subject requests. In turn, FinCEN intends to one request from FinCEN is one hour to extensive supervision and the send requests directly to banks that per bank. This results in a total banking agencies should be able to FinCEN, based on all available estimated average burden of three hours assess appropriate compliance. information, believes maintain per bank with respect to each foreign FinCEN believes that the estimated correspondent accounts for the specified bank about which FinCEN is requesting average reporting burden for a bank to foreign bank(s). The number of banks information. In the unlikely scenario in report to FinCEN that it does not that receive a request may vary in each which the same bank were required to maintain a correspondent account for specific case, based on the availability respond to FinCEN with respect to each the foreign bank specified in a request of information to FinCEN and other foreign bank about which FinCEN is from FinCEN will be approximately 30 circumstances. seeking information in any given year, minutes per request. FinCEN also Estimated Average Annual Burden the estimated annual burden hours estimates that across the 50 requests Hours per Affected Financial would be 150. FinCEN believes that FinCEN anticipates making annually, on Institution: 31 hours per bank. even with respect to the banks that are average two to five banks will receive a most active in the provision of request from FinCEN regarding a foreign The scope of any request may be with correspondent accounts to foreign bank for which they do not maintain a respect to one foreign bank or a number banks, they are likely to be required to correspondent account, and for which of foreign banks (for example, a number respond to FinCEN with respect to one FinCEN requests that they report such of foreign banks operating in the same fifth of the foreign banks about which information. This means that jurisdiction). FinCEN believes that FinCEN is seeking information, which approximately 250 banks will be regardless of the number of requests corresponds to roughly 30 burden hours required to report that they do not transmitted, such requests will pertain per year based on the above maintain a correspondent account for a to approximately 50 foreign banks in calculations. foreign bank specified in a request from any given year. FinCEN in any given year. This also Financial Institutions That Do Not means that approximately 125 estimated Financial Institutions That Maintain a Maintain a Correspondent Account for a annual burden hours will be expended Correspondent Account for a Specified Specified Foreign Bank Foreign Bank each year. FinCEN also estimates that no In certain instances FinCEN may single bank will receive a request from A bank will only be required to request that if a bank receives a written FinCEN more than two times per year comply with the requirements of this request from FinCEN regarding a regarding a specified foreign bank for rule if the bank receives a written specified foreign bank, and the bank which it does not maintain a request from FinCEN. As noted above, does not maintain a correspondent correspondent account, and for which FinCEN estimates that on average account for such specified foreign bank, FinCEN requests that it report such approximately five percent of the banks the bank report this information to information. This corresponds to that maintain correspondent accounts FinCEN. As noted above, FinCEN roughly one estimated average annual for foreign banks, i.e., approximately 18 intends to send requests to banks that burden hour per bank. banks, will maintain correspondent FinCEN is aware have a correspondent Estimated Total Annual Burden: 2825 accounts for any one specific foreign account for a specified foreign bank as total annual burden hours. bank about which FinCEN is requesting often as possible. In instances in which Approximately 900 CISADA-related information. If FinCEN makes requests FinCEN is not aware of which banks reports anticipated each year (provided with respect to approximately 50 foreign maintain a correspondent account for a by a varying number of banks) banks per year and on average 18 banks specified foreign bank, FinCEN may multiplied by three burden hours per are required to respond, per request, send requests to those banks FinCEN report. (2700 total annual burden with regard to a correspondent account believes might have a correspondent hours). Approximately 250 reports from they maintain for any one specified account for a specified foreign bank. banks that do not maintain a foreign bank, there will be In instances in which FinCEN is correspondent account with a specified approximately 900 CISADA-related sending a request to a small number of foreign bank (provided by a varying reports per year. banks that FinCEN believes might number of banks) multiplied by Each time a bank receives a request maintain a correspondent account for a 30 minutes of burden per report. (125 from FinCEN regarding a specific specified foreign bank, FinCEN may total annual burden hours). foreign bank for which it maintains a request, in the written request sent to In the Notice, FinCEN specifically correspondent account, it will incur a those banks, that the banks that do not requested comment concerning the reporting burden associated with maintain a correspondent account for following: section 1060.300(b) (inquiry); a the specified foreign bank report such (a) Whether the proposed collection of reporting burden associated with information to FinCEN. FinCEN believes information is necessary for the proper section 1060.300(c) (reporting); and a that we will rarely be sending a request performance of the functions of FinCEN,

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including whether the information will requested to report. As suggested by the cause.35 In order to comply with the have practical utility. commenter, FinCEN will track and congressional mandate to prescribe FinCEN received no specific consider reporting on the effectiveness regulations under section 104(e) of comments regarding this request. of the reporting mechanism. CISADA, which will work in tandem (b) The accuracy of the estimated The commenter also suggested that with the regulations implementing burden associated with the proposed the regulatory burden estimates are section 104(c) of CISADA, FinCEN finds collection of information. inadequate and do not seem to be a good that there is good cause for making this One commenter questioned the faith effort to fulfill requirements to amendment effective on October 11, estimate that of the approximately 350 assess adequately the regulatory burden. 2011. Regulations implementing section banks that maintain correspondent However the commenter did not 104(c) of CISADA were required to be accounts for foreign banks, only five provide any alternative burden prescribed within 90 days of the percent are likely to have an account estimates. In addition, FinCEN did not enactment of the Act on July 1, 2010. As affected by any single written request receive any other comments which noted above, on August 16, 2010, OFAC from FinCEN. The commenter raised concerns regarding the adequacy published the IFSR. Section 561.201 of contended that there is nothing of the burden estimates. the IFSR implements section 104(c) of provided to support the five percent CISADA. The reports received as a Based on two comments received, estimate. As noted above, in order to result of this regulation will assist in the FinCEN clarifies that in evaluating the reduce the number of affected financial implementation of the IFSR. institutions, when possible, FinCEN effect of this rule on banks, we In finding good cause, FinCEN will rely on information available to estimated that approximately 18 U.S. considered the possible effect of help limit the number of banks banks would be required to file reports providing less than 30 days notice to requested to provide information with with FinCEN for each request regarding affected persons. FinCEN determined respect to the foreign banks that are the a single foreign bank. We reached this that immediate implementation would subject of specific requests. The number estimate based on the following not unfairly burden these persons of banks that receive a request may vary calculation: FinCEN estimates that 350 because, as explained above, U.S. banks in each specific case, based on the U.S. banks maintain correspondent will only be required to report to availability of information to FinCEN accounts for foreign banks, and FinCEN upon receiving a specific and other circumstances. This means approximately five percent of the U.S. written request from FinCEN. As also that although FinCEN has the discretion banks that maintain correspondent noted above, FinCEN will only request to send a request to every U.S. bank that accounts for foreign banks will have a reports from those U.S. banks that maintains a correspondent account for a correspondent account with any given maintain correspondent accounts for the specific foreign bank, in circumstances foreign bank about which FinCEN is specific foreign banks that are of interest in which we feel it is appropriate, we requesting information. Five percent of for purposes of CISADA may choose to only send a request to 350 is 18 (rounded up). In any given implementation, and as a result we some of the U.S. banks that maintain a request, the actual number of U.S. banks believe that we will receive the correspondent account for a specific that would be required to report will, of information needed without generating foreign bank. For this reason, we can course, vary. a multitude of unnecessary and reasonably estimate that on average (c) How the quality, utility, and uninformative reports. approximately five percent of banks that clarity of the information to be collected maintain correspondent accounts for may be enhanced. List of Subjects in 31 CFR Part 1060 foreign banks will have an account with FinCEN received various comments Banks, Banking, Counter-terrorism, the any one specific foreign bank about regarding clarification associated with Foreign banking, Reporting and which FinCEN is requesting the collection of information. Those recordkeeping requirements, Terrorism. information. comments are addressed throughout the Authority and Issuance The commenter also noted that preamble of this rulemaking. FinCEN estimates the impact of a For the reasons set forth above, (d) How the burden of complying request about a specific foreign bank 31 CFR part 1060 is added to read as with the proposed collection of will require no more than three hours follows: for a U.S. bank to comply. The information may be minimized, commenter noted that although there is including through the application of PART 1060—PROVISIONS RELATING no way to verify these estimates, it automated collection techniques or TO THE COMPREHENSIVE IRAN believes that this rule has the potential other forms of information technology. SANCTIONS, ACCOUNTABILITY, AND to be burdensome and complex. In order One commenter requested that DIVESTMENT ACT OF 2010 to manage the burden of this reporting FinCEN utilize e-filing to collect the required information from banks. At this Sec. requirement, FinCEN has proposed a 1060.100 [Reserved] model certification for a bank to utilize time, FinCEN cannot utilize e-filing for 1060.200 [Reserved] in order to inquire of a foreign bank. this collection of information. This is 1060.300 Reporting obligations on foreign The model certification includes something we may consider in the bank relationships with Iranian-linked language identifying the purpose for future. FinCEN will prescribe the format financial institutions designated under which the bank is requesting and manner in which information will IEEPA and IRGC-linked persons designated under IEEPA. information from the foreign bank. In be collected from banks in the requests FinCEN sends to those banks. 1060.400 [Reserved] addition, the model certification defines 1060.500 [Reserved] the key terms applicable to this X. Effective Date 1060.600 [Reserved] reporting request. The model 1060.700 [Reserved] certification clearly outlines the Publication of a substantive rule not 1060.800 Penalties information a foreign bank is requested less than 30 days before its effective Authority: Pub. L. 111–195, 124 Stat. to report and provides links to the list date is required by the Administrative 1312. of relevant designated entities and Procedure Act except as otherwise individuals on which a foreign bank is provided by the agency for good 35 5 U.S.C. 553(d).

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§ 1060.100 [Reserved] services for a financial institution whose (E) The approximate value in U.S. property or interests in property are blocked dollars of transactions processed § 1060.200 [Reserved] pursuant to the International Emergency through the correspondent account Economic Powers Act (50 U.S.C. 1701 et seq.) § 1060.300 Reporting obligations on within the preceding 90 calendar days; in connection with Iran’s proliferation of foreign bank relationships with Iranian- (ii) The name of any specified foreign weapons of mass destruction or delivery linked financial institutions designated systems for weapons of mass destruction, or bank, for which the bank maintains a under IEEPA and IRGC-linked persons correspondent account, that certifies designated under IEEPA. in connection with Iran’s support for international terrorism, or for Iran’s Islamic that it has processed one or more (a) General. Revolutionary Guard Corps or any of its transfers of funds within the preceding (1) Upon receiving a written request agents or affiliates whose property or 90 calendar days for or on behalf of, from FinCEN, a bank (as defined in 31 interests in property are blocked pursuant to directly or indirectly, an Iranian-linked CFR 1010.100(d)) that maintains a that Act. financial institution designated under correspondent account (as defined in 31 (b) Duty to inquire. Upon receiving a IEEPA, other than through a CFR 1010.605(c)(1)(ii)) for a specified written request from FinCEN, a bank correspondent account, and the foreign bank (as defined in 31 CFR that maintains a correspondent account following related information: 1010.100(u)) shall inquire of the foreign for a specified foreign bank shall inquire (A) The name of the Iranian-linked bank, and report to FinCEN, with of such foreign bank for the purpose of financial institution designated under respect to any correspondent account having such foreign bank certify: IEEPA; maintained by such foreign bank for an whether it maintains a correspondent (B) The identity of the system or Iranian-linked financial institution means by which such transfer(s) of designated under IEEPA; any transfer of account for an Iranian-linked financial institution designated under IEEPA; funds was processed; funds for or on behalf of, directly or (C) The full name on the account(s) indirectly, an Iranian-linked financial whether it has processed one or more transfers of funds within the preceding and the account number(s), if institution designated under IEEPA applicable; processed by such foreign bank within 90 calendar days for or on behalf of, directly or indirectly, an Iranian-linked (D) Other applicable identifying the preceding 90 calendar days, other information for such transfer(s) of funds; than through a correspondent account; financial institution designated under IEEPA, other than through a and and any transfer of funds for or on (E) The approximate value in U.S. correspondent account; and whether it behalf of, directly or indirectly, an dollars of such transfer(s) of funds has processed one or more transfers of IRGC-linked person designated under processed within the preceding 90 funds within the preceding 90 calendar IEEPA processed by such foreign bank calendar days; within the preceding 90 calendar days. days for or on behalf of, directly or (iii) The name of any specified foreign (2) For the purposes of this section, an indirectly, an IRGC-linked person bank, for which the bank maintains a ‘‘Iranian-linked financial institution designated under IEEPA. Upon such correspondent account, that certifies designated under IEEPA’’ means a inquiry, a bank shall request that the that it has processed one or more financial institution designated by the foreign bank agree to notify the bank if transfers of funds within the preceding United States Government pursuant to the foreign bank subsequently 90 calendar days for or on behalf of, the International Emergency Economic establishes a new correspondent directly or indirectly, an IRGC-linked Powers Act (or listed in an annex to an account for an Iranian-linked financial person designated under IEEPA, and the Executive order issued pursuant to such institution designated under IEEPA at following related information: Act) in connection with Iran’s any time within 365 calendar days from (A) The name of the IRGC-linked proliferation of weapons of mass the date of the foreign bank’s initial person designated under IEEPA; destruction or delivery systems for response. (B) The identity of the system or weapons of mass destruction, or in (c) Filing Procedures. means by which such transfer(s) of connection with Iran’s support for (1) What to file. Upon receiving a funds was processed; international terrorism. For the written request from FinCEN, a bank (C) The full name on the account(s) purposes of this section, an ‘‘IRGC- shall report to FinCEN, in such format and the account number(s), if linked person designated under IEEPA’’ and manner as may be prescribed by applicable; means Iran’s Islamic Revolutionary FinCEN, the following information for (D) Other applicable identifying Guard Corps or any of its agents or any specified foreign bank: information for such transfer(s) of funds; affiliates designated by the United (i) The name of any specified foreign and States Government pursuant to the bank, for which the bank maintains a (E) The approximate value in U.S. International Emergency Economic correspondent account, that certifies dollars of such transfer(s) of funds Powers Act (or listed in an annex to an that it maintains a correspondent processed within the preceding 90 Executive order issued pursuant to such account for an Iranian-linked financial calendar days; Act). institution designated under IEEPA, and (iv) The name of any specified foreign the following related information: bank, for which the bank maintains a Note to paragraph (a)(2): Section 104(c) of (A) The name of the Iranian-linked correspondent account, that certifies the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 financial institution designated under that it does not maintain a (‘‘CISADA’’), Public Law 111–195, 124 Stat. IEEPA; correspondent account for an Iranian- 1312, provides the Secretary of the Treasury (B) The full name(s) on the linked financial institution designated with authority to prohibit, or impose strict correspondent account and the under IEEPA, that certifies that to its conditions on, the opening or maintaining in correspondent account number(s); knowledge it has not processed one or the United States of a correspondent account (C) Applicable information regarding more transfers of funds within the or a payable-through account by a foreign whether the correspondent account has preceding 90 calendar days for or on financial institution that the Secretary finds knowingly engages in certain specified been blocked or otherwise restricted; behalf of, directly or indirectly, an activities. Those specified activities include (D) Other applicable identifying Iranian-linked financial institution facilitating a significant transaction or information for the correspondent designated under IEEPA, other than transactions or providing significant financial account; and through a correspondent account, and/

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or that certifies that to its knowledge it (A) The name of the Iranian-linked within 10 calendar days of receipt of the has not processed one or more transfers financial institution designated under certification. of funds within the preceding 90 IEEPA; (d) Retention of records. A bank shall calendar days for or on behalf of, (B) The full name(s) on the maintain for a period of five years a directly or indirectly, an IRGC-linked correspondent account and the copy of any report filed and the original person designated under IEEPA; correspondent account number(s); or any business record equivalent of any (v) The name of any specified foreign (C) Applicable information regarding supporting documentation for a report, bank, for which the bank maintains a whether the correspondent account has including a foreign bank certification or correspondent account, that the bank been blocked or otherwise restricted; other responses to an inquiry under this cannot determine does not maintain a and section. (D) Other applicable identifying correspondent account for an Iranian- (e) No other action required. Nothing information for the correspondent linked financial institution designated in this section shall be construed to account; under IEEPA, has not processed one or require a bank to take any action, or to (vii) If applicable, confirmation that more transfers of funds within the decline to take any action, other than the bank does not maintain a preceding 90 calendar days for or on the requirements identified in this correspondent account for the specified behalf of, directly or indirectly, an section, with respect to an account foreign bank(s), but only in instances in Iranian-linked financial institution established for, or a transaction engaged which FinCEN specifically requests that designated under IEEPA, other than in with, a foreign bank. However, the bank report such information; and nothing in this section relieves a bank through a correspondent account, and/ (viii) If applicable, the name of any or has not processed one or more of any other applicable regulatory specified foreign bank, for which the obligation. transfers of funds within the preceding bank maintains a correspondent 90 calendar days for or on behalf of, account, that provides a certification to § 1060.400 [Reserved] directly or indirectly, an IRGC-linked the bank after the 45-calendar-day § 1060.500 [Reserved] person designated under IEEPA, deadline, along with all applicable together with the reason(s) for this, such related information associated with that § 1060.600 [Reserved] as the failure of the foreign bank to certification. respond to the inquiry by or a request (2) When to file. (i) A bank shall § 1060.700 [Reserved] from the bank, the failure of the foreign report to FinCEN within 45-calendar- § 1060.800 Penalties. bank to certify its response, or if the days of the date of the request from A person violating any requirement bank has information that is FinCEN. inconsistent with the certification; (ii) Reports based on subsequent under this part is subject to the (vi) The name of any specified foreign notifications received from a foreign penalties provided for in sections bank, for which the bank maintains a bank regarding the establishment of a 5321(a) and 5322 of title 31, United correspondent account, that notifies the new correspondent account for an States Code, in the same manner and to bank that it has established a new Iranian-linked financial institution the same extent as such penalties would correspondent account for an Iranian- designated under IEEPA shall be due apply to any person that is otherwise linked financial institution designated within 10 calendar days of receipt of the subject to such section 5321(a) or 5322. under IEEPA at any time within 365 notification. Dated: October 3, 2011. calendar days from the date of the (iii) Reports based on certifications James H. Freis, Jr., foreign bank’s initial response, and the received from a foreign bank after the 45 Director, Financial Crimes Enforcement following related information: calendar day deadline shall be due Network.

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[FR Doc. 2011–26204 Filed 10–7–11; 8:45 am] which the regulations are based has Administrative Procedures Act, 5 U.S.C. BILLING CODE 4810–02–P been superseded, and the regulations 533(b)(3)(A) for rules of agency are no longer needed. procedure and interpretation and DATES: Effective October 11, 2011. Section 6 of the CIA Act as amended, 50 CENTRAL INTELLIGENCE AGENCY FOR FURTHER INFORMATION CONTACT: U.S.C. 403g. Joseph W. Lambert, (703) 613–1379. List of Subjects in 32 CFR Part 1902 32 CFR Part 1902 SUPPLEMENTARY INFORMATION: Under the Information security regulations. Information Security Regulations authority of Executive Order 13526, the CIA is removing and reserving 32 CFR PART 1902 [REMOVED AND AGENCY: Central Intelligence Agency. part 1902. This part relies on authority RESERVED] ACTION: Final rule. that is no longer in force and established criteria and procedures that are § 1902.13 [Removed and Reserved] SUMMARY: The Central Intelligence superseded by Executive Order 13526. agency is removing certain information This rule is being issued as final rule ■ Accordingly, under the authority of security regulations which have become without prior notice of proposed Executive Order 13526, the CIA removes outdated. The Executive Order upon rulemaking as allowed by the and reserves part 32 CFR part 1902.

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