PARTS 1000–1009 [RESERVED] 1010.440 Person outside the United States. Subpart E—Special Information Sharing PART 1010—GENERAL PROVISIONS Procedures To Deter Money Laun- dering and Terrorist Activity Subpart A—General Definitions 1010.500 General. Sec. 1010.505 Definitions. 1010.100 General definitions. 1010.520 Information sharing between gov- Subpart B—Programs ernment agencies and financial institu- tions. 1010.200 General. 1010.530 [Reserved] 1010.205 Exempted anti-money laundering 1010.540 Voluntary information sharing programs for certain financial institu- among financial institutions. tions. 1010.210 Anti-money laundering programs. Subpart F—Special Standards of Diligence; 1010.220 Customer identification program Prohibitions; and Special Measures requirements. 1010.230 Beneficial ownership requirements 1010.600 General. for legal entity customers. SPECIAL DUE DILIGENCE FOR CORRESPONDENT Subpart C—Reports Required To Be Made ACCOUNTS AND ACCOUNTS 1010.300 General. 1010.605 Definitions. 1010.301 Determination by the Secretary. 1010.610 Due diligence programs for cor- 1010.305 [Reserved] respondent accounts for foreign financial 1010.306 Filing of reports. institutions. 1010.310 Reports of transactions in currency. 1010.620 Due diligence programs for private 1010.311 Filing obligations for reports of banking accounts. transactions in currency. 1010.630 Prohibition on correspondent ac- 1010.312 Identification required. 1010.313 Aggregation. counts for foreign shell ; records 1010.314 Structured transactions. concerning owners of foreign banks and 1010.315 Exemptions for non- financial agents for service of legal process. institutions. 1010.640 [Reserved] 1010.320 Reports of suspicious transactions. 1010.330 Reports relating to currency in ex- SPECIAL MEASURES UNDER SECTION 311 OF THE cess of $10,000 received in a trade or busi- USA PATRIOT ACT AND LAW ENFORCEMENT ness. ACCESS TO FOREIGN BANK RECORDS 1010.331 Reports relating to currency in ex- 1010.651 Special measures against Burma. cess of $10,000 received as bail by court 1010.653 Special measures against Commer- clerks. cial Bank of . 1010.340 Reports of transportation of cur- 1010.655 Special measures against Banco rency or monetary instruments. Delta Asia. 1010.350 Reports of foreign financial ac- counts. 1010.658 Special measures against FBME 1010.360 Reports of transactions with for- Bank, Ltd. eign financial agencies. 1010.659 Special measures against North 1010.370 Reports of certain domestic coin Korea. and currency transactions. 1010.660 Special measures against Bank of Dandong. Subpart D—Records Required To Be 1010.661 Special measures against Iran. Maintained 1010.670 Summons or subpoena of foreign bank records; termination of cor- 1010.400 General. respondent relationship. 1010.401 Determination by the Secretary. 1010.405 [Reserved] Subpart G—Administrative Rulings 1010.410 Records to be made and retained by financial institutions. 1010.710 Scope. 1010.415 Purchases of bank checks and 1010.711 Submitting requests. drafts, cashier’s checks, money orders 1010.712 Nonconforming requests. and traveler’s checks. 1010.420 Records to be made and retained by 1010.713 Oral communications. persons having financial interests in for- 1010.714 Withdrawing requests. eign financial accounts. 1010.715 Issuing rulings. 1010.430 Nature of records and retention pe- 1010.716 Modifying or rescinding rulings. riod. 1010.717 Disclosing information.

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Subpart H—Enforcement; Penalties; and stitution accepts a transmittal order Forfeiture by paying the recipient, by notifying the recipient of the receipt of the order 1010.810 Enforcement. or by otherwise becoming obligated to 1010.820 Civil penalty. 1010.821 Penalty adjustment and table. carry out the order. 1010.830 Forfeiture of currency or monetary (b) At one time. For purposes of instruments. § 1010.340 of this part, a person who 1010.840 Criminal penalty. transports, mails, ships or receives; is 1010.850 Enforcement authority with respect about to or attempts to transport, mail to transportation of currency or mone- or ship; or causes the transportation, tary instruments. mailing, shipment or receipt of mone- Subpart I—Summons tary instruments, is deemed to do so ‘‘at one time’’ if: 1010.911 General. (1) That person either alone, in con- 1010.912 Persons who may issue summons. junction with or on behalf of others; 1010.913 Contents of summons. 1010.914 Service of summons. (2) Transports, mails, ships or re- 1010.915 Examination of witnesses and ceives in any manner; is about to records. transport, mail or ship in any manner; 1010.916 Enforcement of summons. or causes the transportation, mailing, 1010.917 Payment of expenses. shipment or receipt in any manner of; (3) Monetary instruments; Subpart J—Miscellaneous (4) Into the United States or out of 1010.920 Access to records. the United States; 1010.930 Rewards for informants. (5) Totaling more than $10,000; 1010.940 Photographic or other reproduc- (6)(i) On one calendar day; or tions of Government obligations. (ii) If for the purpose of evading the 1010.950 Availability of information. reporting requirements of § 1010.340, on 1010.960 Disclosure. 1010.970 Exceptions, exemptions, and re- one or more days. ports. (c) Attorney General. The Attorney 1010.980 Dollars as including foreign cur- General of the United States. rency. (d) Bank. Each agent, agency, branch AUTHORITY: 12 U.S.C. 1829b and 1951–1959; 31 or office within the United States of U.S.C. 5311–5314, 5316–5332; Title III, sec. 314, any person doing business in one or Pub. L. 107–56, 115 Stat. 307; sec. 701, Pub. L. more of the capacities listed below: 114–74, 129 Stat. 599. (1) A or trust com- SOURCE: 75 FR 65812, Oct. 26, 2010, unless pany organized under the laws of any otherwise noted. State or of the United States; (2) A private bank; Subpart A—General Definitions (3) A savings and association or a building and loan association orga- § 1010.100 General definitions. nized under the laws of any State or of When used in this chapter and in the United States; forms prescribed under this chapter, (4) An insured institution as defined where not otherwise distinctly ex- in section 401 of the National Housing pressed or manifestly incompatible Act; with the intent thereof, terms shall (5) A savings bank, industrial bank or have the meanings ascribed in this sub- other thrift institution; part. Terms applicable to a particular (6) A credit union organized under type of financial institution or specific the law of any State or of the United part or subpart of this chapter are lo- States; cated in that part or subpart. Terms (7) Any other organization (except a may have different meanings in dif- money services business) chartered ferent parts or subparts. under the banking laws of any state (a) Accept. A receiving financial insti- and subject to the supervision of the tution, other than the recipient’s fi- bank supervisory authorities of a nancial institution, accepts a trans- State; mittal order by executing the trans- (8) A bank organized under foreign mittal order. A recipient’s financial in- law;

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(9) Any national banking association (m) Currency. The coin and paper or corporation acting under the provi- money of the United States or of any sions of section 25(a) of the Act of Dec. other country that is designated as 23, 1913, as added by the Act of Dec. 24, legal tender and that circulates and is 1919, ch. 18, 41 Stat. 378, as amended (12 customarily used and accepted as a me- U.S.C. 611–32). dium of exchange in the country of (e) Bank Secrecy Act. The Currency issuance. Currency includes U.S. silver and Foreign Transactions Reporting certificates, U.S. notes and Federal Re- Act, its amendments, and the other serve notes. Currency also includes of- statutes relating to the subject matter ficial foreign bank notes that are cus- of that Act, have come to be referred to tomarily used and accepted as a me- as the Bank Secrecy Act. These stat- dium of exchange in a foreign country. utes are codified at 12 U.S.C. 1829b, 12 (n) Deposit account. Deposit accounts U.S.C. 1951–1959, 18 U.S.C. 1956, 18 include transaction accounts described U.S.C. 1957, 18 U.S.C. 1960, and 31 U.S.C. in paragraph (ccc) of this section, sav- 5311–5314 and 5316–5332 and notes there- ings accounts, and other time deposits. to. (o) Domestic. When used herein, refers (f) Beneficiary. The person to be paid to the doing of business within the by the beneficiary’s bank. United States, and limits the applica- (g) Beneficiary’s bank. The bank or bility of the provision where it appears foreign bank identified in a payment to the performance by such institu- order in which an account of the bene- tions or agencies of functions within ficiary is to be credited pursuant to the the United States. order or which otherwise is to make (p) Established customer. A person payment to the beneficiary if the order with an account with the financial in- does not provide for payment to an ac- stitution, including a loan account or count. deposit or other asset account, or a (h) Broker or dealer in securities. A person with respect to which the finan- broker or dealer in securities, reg- cial institution has obtained and main- istered or required to be registered tains on file the person’s name and ad- with the Securities and Exchange Com- dress, as well as taxpayer identifica- mission under the Securities Exchange tion number (e.g., social security or Act of 1934, except persons who register employer identification number) or, if pursuant to section 15(b)(11) of the Se- none, alien identification number or curities Exchange Act of 1934. passport number and country of (i) Business day. As used in this chap- issuance, and to which the financial in- ter with respect to banks, business day stitution provides re- means that day, as normally commu- lying on that information. nicated to its depository customers, on (q) Execution date. The day on which which a bank routinely posts a par- the receiving financial institution may ticular transaction to its customer’s properly issue a transmittal order in account. execution of the sender’s order. The (j) Commodity. Any good, article, execution date may be determined by service, right, or interest described in instruction of the sender but cannot be section 1a(4) of the Commodity Ex- earlier than the day the order is re- change Act (‘‘CEA’’), 7 U.S.C. 1a(4). ceived, and, unless otherwise deter- (k) Common carrier. Any person en- mined, is the day the order is received. gaged in the business of transporting If the sender’s instruction states a pay- individuals or goods for a fee who holds ment date, the execution date is the himself out as ready to engage in such payment date or an earlier date on transportation for hire and who under- which execution is reasonably nec- takes to do so indiscriminately for all essary to allow payment to the recipi- persons who are prepared to pay the fee ent on the payment date. for the particular service offered. (r) Federal functional regulator. (l) Contract of sale. Any sale, agree- (1) The Board of Governors of the ment of sale, or agreement to sell as Federal Reserve System; described in section 1a(7) of the CEA, 7 (2) The Office of the Comptroller of U.S.C. 1a(7). the Currency;

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(3) The Board of Directors of the Fed- (iii) Any reference in this chapter, eral Deposit Insurance Corporation; other than in this paragraph (t)(5) and (4) The Office of Thrift Supervision; in paragraph (t)(6) of this section, to a (5) The National Credit Union Admin- casino shall also include a reference to istration; a card club, unless the provision in (6) The Securities and Exchange question contains specific language Commission; or varying its application to card clubs or (7) The Commodity Futures Trading excluding card clubs from its applica- Commission. tion; (s) FinCEN. FinCEN means the Fi- (6)(i) Card club. A card club, gaming nancial Crimes Enforcement Network, club, card room, gaming room, or simi- a bureau of the Department of the lar gaming establishment that is duly Treasury. licensed or authorized to do business as (t) Financial institution. Each agent, such in the United States, whether agency, branch, or office within the under the laws of a State, of a Terri- United States of any person doing busi- tory or Insular Possession of the ness, whether or not on a regular basis United States, or of a political subdivi- or as an organized business concern, in sion of any of the foregoing, or under one or more of the capacities listed the Indian Gaming Regulatory Act or below: other Federal, State, or tribal law or (1) A bank (except bank arrangement affecting Indian lands (in- systems); cluding, without limitation, an estab- (2) A broker or dealer in securities; lishment operating on the assumption (3) A money services business as de- or under the view that no such author- fined in paragraph (ff) of this section; ization is required for operation on In- (4) A telegraph company; dian lands for an establishment of such (5)(i) Casino. A casino or gambling ca- type), and that has gross annual gam- sino that: Is duly licensed or author- ing revenue in excess of $1,000,000. The ized to do business as such in the term includes the principal head- United States, whether under the laws quarters and every domestic branch or of a State or of a Territory or Insular place of business of the establishment. Possession of the United States, or The term ‘‘casino,’’ as used in this under the Indian Gaming Regulatory chapter shall include a reference to Act or other Federal, State, or tribal ‘‘card club’’ to the extent provided in law or arrangement affecting Indian paragraph (t)(5)(iii) of this section. lands (including, without limitation, a casino operating on the assumption or (ii) For purposes of this paragraph under the view that no such authoriza- (t)(6), ‘‘gross annual gaming revenue’’ tion is required for casino operation on means the gross revenue derived from Indian lands); and has gross annual or generated by customer gaming ac- gaming revenue in excess of $1 million. tivity (whether in the form of per-game The term includes the principal head- or per-table fees, however computed, quarters and every domestic branch or rentals, or otherwise) and received by place of business of the casino. an establishment, during either the es- (ii) For purposes of this paragraph tablishment’s previous business year or (t)(5), ‘‘gross annual gaming revenue’’ its current business year. A card club means the gross gaming revenue re- that is a financial institution for pur- ceived by a casino, during either the poses of this chapter solely because its previous business year or the current gross annual revenue exceeds $1,000,000 business year of the casino. A casino or during its current business year, shall gambling casino which is a casino for not be considered a financial institu- purposes of this chapter solely because tion for purposes of this chapter prior its gross annual gaming revenue ex- to the time in its current business year ceeds $1,000,000 during its current busi- when its gross annual revenue exceeds ness year, shall not be considered a ca- $1,000,000; sino for purposes of this chapter prior (7) A person subject to supervision by to the time in its current business year any state or Federal bank supervisory that its gross annual gaming revenue authority; exceeds $1,000,000. (8) A futures commission merchant;

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(9) An introducing broker in com- (aa) Intermediary financial institution. modities; or A receiving financial institution, other (10) A mutual fund. than the transmittor’s financial insti- (u) Foreign bank. A bank organized tution or the recipient’s financial insti- under foreign law, or an agency, branch tution. The term intermediary finan- or office located outside the United cial institution includes an inter- States of a bank. The term does not in- mediary bank. clude an agent, agency, branch or of- (bb) Introducing broker-commodities. fice within the United States of a bank Any person registered or required to be organized under foreign law. registered as an introducing broker (v) Foreign financial agency. A person with the CFTC under the CEA, except acting outside the United States for a persons who register pursuant to sec- person (except for a country, a mone- tion 4f(a)(2) of the CEA, 7 U.S.C. tary or financial authority acting as a 6f(a)(2). monetary or financial authority, or an (cc) Investment security. An instru- international financial institution of ment which: which the United States Government is (1) Is issued in bearer or registered a member) as a financial institution, form; bailee, depository trustee, or agent, or (2) Is of a type commonly dealt in acting in a similar way related to upon securities exchanges or markets money, credit, securities, gold, or a or commonly recognized in any area in transaction in money, credit, securi- which it is issued or dealt in as a me- ties, or gold. dium for investment; (w) Funds transfer. The series of (3) Is either one of a class or series or transactions, beginning with the origi- by its terms is divisible into a class or nator’s payment order, made for the series of instruments; and purpose of making payment to the ben- (4) Evidences a share, participation eficiary of the order. The term includes or other interest in property or in an any payment order issued by the origi- enterprise or evidences an obligation of nator’s bank or an intermediary bank the issuer. intended to carry out the originator’s (dd) Monetary instruments. (1) Mone- payment order. A funds transfer is tary instruments include: completed by acceptance by the bene- (i) Currency; ficiary’s bank of a payment order for (ii) Traveler’s checks in any form; the benefit of the beneficiary of the (iii) All negotiable instruments (in- originator’s payment order. Electronic cluding personal checks, business fund transfers as defined in section checks, official bank checks, cashier’s 903(7) of the Electronic Fund Transfer checks, third-party checks, promissory Act (15 U.S.C. 1693a(7)), as well as any notes (as that term is defined in the other funds transfers that are made Uniform Commercial Code), and money through an automated clearinghouse, orders) that are either in bearer form, an automated teller machine, or a endorsed without restriction, made out point-of-sale system, are excluded from to a fictitious payee (for the purposes this definition. of § 1010.340), or otherwise in such form (x) Futures commission merchant. Any that title thereto passes upon delivery; person registered or required to be reg- (iv) Incomplete instruments (includ- istered as a futures commission mer- ing personal checks, business checks, chant with the Commodity Futures official bank checks, cashier’s checks, Trading Commission (‘‘CFTC’’) under third-party checks, promissory notes the CEA, except persons who register (as that term is defined in the Uniform pursuant to section 4f(a)(2) of the CEA, Commercial Code), and money orders) 7 U.S.C. 6f(a)(2). signed but with the payee’s name omit- (y) Indian Gaming Regulatory Act. The ted; and Indian Gaming Regulatory Act of 1988, (v) Securities or stock in bearer form codified at 25 U.S.C. 2701–2721 and 18 or otherwise in such form that title U.S.C. 1166–68. thereto passes upon delivery. (z) Intermediary bank. A receiving (2) Monetary instruments do not in- bank other than the originator’s bank clude warehouse receipts or bills of lad- or the beneficiary’s bank. ing.

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(ee) [Reserved] (3) Issuer or seller of traveler’s checks or (ff) Money services business. A person money orders. A person that wherever located doing business, (i) Issues traveler’s checks or money whether or not on a regular basis or as orders that are sold in an amount an organized or licensed business con- greater than $1,000 to any person on cern, wholly or in substantial part any day in one or more transactions; or within the United States, in one or (ii) Sells traveler’s checks or money more of the capacities listed in para- orders in an amount greater than $1,000 graphs (ff)(1) through (ff)(7) of this sec- to any person on any day in one or tion. This includes but is not limited to more transactions. maintenance of any agent, agency, (4) Provider of prepaid access—(i) In branch, or office within the United general. A provider of prepaid access is States. the participant within a prepaid pro- (1) Dealer in foreign exchange. A per- gram that agrees to serve as the prin- son that accepts the currency, or other cipal conduit for access to information monetary instruments, funds, or other from its fellow program participants. instruments denominated in the cur- The participants in each prepaid access rency, of one or more countries in ex- program must determine a single par- change for the currency, or other mon- ticipant within the prepaid program to etary instruments, funds, or other in- serve as the provider of prepaid access. struments denominated in the cur- (ii) Considerations for provider deter- rency, of one or more other countries mination. In the absence of registration in an amount greater than $1,000 for as the provider of prepaid access for a any other person on any day in one or prepaid program by one of the partici- more transactions, whether or not for pants in a prepaid access program, the same-day delivery. provider of prepaid access is the person (2) Check casher—(i) In general. A per- with principal oversight and control son that accepts checks (as defined in over the prepaid program. Which per- the Uniform Commercial Code), or son exercises ‘‘principal oversight and monetary instruments (as defined at control’’ is a matter of facts and cir- § 1010.100(dd)(1)(ii), (iii), (iv), and (v)) in cumstances. Activities that indicate return for currency or a combination of ‘‘principal oversight and control’’ in- currency and other monetary instru- clude: ments or other instruments, in an (A) Organizing the prepaid program; amount greater than $1,000 for any per- son on any day in one or more trans- (B) Setting the terms and conditions actions. of the prepaid program and deter- mining that the terms have not been (ii) Facts and circumstances; Limita- exceeded; tions. Whether a person is a check casher as described in this section is a (C) Determining the other businesses matter of facts and circumstances. The that will participate in the prepaid pro- term ‘‘check casher’’ shall not include: gram, which may include the issuing (A) A person that sells prepaid access bank, the payment processor, or the in exchange for a check (as defined in distributor; the Uniform Commercial Code), mone- (D) Controlling or directing the ap- tary instrument or other instrument; propriate party to initiate, freeze, or (B) A person that solely accepts mon- terminate prepaid access; and etary instruments as payment for (E) Engaging in activity that dem- goods or services other than check onstrates oversight and control of the cashing services; prepaid program. (C) A person that engages in check (iii) Prepaid program. A prepaid pro- cashing for the verified maker of the gram is an arrangement under which check who is a customer otherwise one or more persons acting together buying goods and services; provide(s) prepaid access. However, an (D) A person that redeems its own arrangement is not a prepaid program checks; or if: (E) A person that only holds a cus- (A) It provides closed loop prepaid ac- tomer’s check as collateral for repay- cess to funds not to exceed $2,000 max- ment by the customer of a loan. imum value that can be associated

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with a prepaid access device or vehicle (A) Provides the delivery, commu- on any day; nication, or network access services (B) It provides prepaid access solely used by a money transmitter to sup- to funds provided by a Federal, State, port money transmission services; local, Territory and Insular Possession, (B) Acts as a payment processor to or Tribal government agency; facilitate the purchase of, or payment (C) It provides prepaid access solely of a bill for, a good or service through to funds from pre-tax flexible spending a clearance and settlement system by arrangements for health care and de- agreement with the creditor or seller; pendent care expenses, or from Health (C) Operates a clearance and settle- Reimbursement Arrangements (as de- ment system or otherwise acts as an fined in 26 U.S.C. 105(b) and 125) for intermediary solely between BSA regu- health care expenses; or lated institutions. This includes but is (D) (1) It provides prepaid access sole- not limited to the Fedwire system, ly to: electronic funds transfer networks, cer- (i) Employment benefits, incentives, tain registered clearing agencies regu- wages or salaries; or lated by the Securities and Exchange (ii) Funds not to exceed $1,000 max- Commission (‘‘SEC’’), and derivatives imum value and from which no more clearing organizations, or other clear- than $1,000 maximum value can be ini- inghouse arrangements established by tially or subsequently loaded, used, or a financial agency or institution; withdrawn on any day through a device (D) Physically transports currency, or vehicle; and other monetary instruments, other (2) It does not permit: commercial paper, or other value that (i) Funds or value to be transmitted substitutes for currency as a person internationally; primarily engaged in such business, (ii) Transfers between or among users such as an armored car, from one per- of prepaid access within a prepaid pro- son to the same person at another loca- gram; or tion or to an account belonging to the (iii) Loading additional funds or the same person at a financial institution, value of funds from non-depository provided that the person engaged in sources. physical transportation has no more (5) Money transmitter—(i) In general. than a custodial interest in the cur- (A) A person that provides money rency, other monetary instruments, transmission services. The term other commercial paper, or other value ‘‘money transmission services’’ means at any point during the transportation; the acceptance of currency, funds, or other value that substitutes for cur- (E) Provides prepaid access; or rency from one person and the trans- (F) Accepts and transmits funds only mission of currency, funds, or other integral to the sale of goods or the pro- value that substitutes for currency to vision of services, other than money another location or person by any transmission services, by the person means. ‘‘Any means’’ includes, but is who is accepting and transmitting the not limited to, through a financial funds. agency or institution; a Federal Re- (6) U.S. Postal Service. The United serve Bank or other facility of one or States Postal Service, except with re- more Federal Reserve Banks, the Board spect to the sale of postage or phila- of Governors of the Federal Reserve telic products. System, or both; an electronic funds (7) Seller of prepaid access. Any person transfer network; or an informal value that receives funds or the value of transfer system; or funds in exchange for an initial loading (B) Any other person engaged in the or subsequent loading of prepaid access transfer of funds. if that person: (ii) Facts and circumstances; Limita- (i) Sells prepaid access offered under tions. Whether a person is a money a prepaid program that can be used be- transmitter as described in this section fore verification of customer identi- is a matter of facts and circumstances. fication under § 1022.210(d)(1)(iv); or The term ‘‘money transmitter’’ shall (ii) Sells prepaid access (including not include a person that only: closed loop prepaid access) to funds

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that exceed $10,000 to any person dur- pay, or to cause another bank or for- ing any one day, and has not imple- eign bank to pay, a fixed or deter- mented policies and procedures reason- minable amount of money to a bene- ably adapted to prevent such a sale. ficiary if: (8) Limitation. For the purposes of (1) The instruction does not state a this section, the term ‘‘money services condition to payment to the bene- business’’ shall not include: ficiary other than time of payment; (i) A bank or foreign bank; (2) The receiving bank is to be reim- (ii) A person registered with, and bursed by debiting an account of, or functionally regulated or examined by, otherwise receiving payment from, the the SEC or the CFTC, or a foreign fi- sender; and nancial agency that engages in finan- (3) The instruction is transmitted by cial activities that, if conducted in the United States, would require the for- the sender directly to the receiving eign financial agency to be registered bank or to an agent, funds transfer sys- with the SEC or CFTC; or tem, or communication system for (iii) A natural person who engages in transmittal to the receiving bank. an activity identified in paragraphs (mm) Person. An individual, a cor- (ff)(1) through (ff)(5) of this section on poration, a partnership, a trust or es- an infrequent basis and not for gain or tate, a joint stock company, an asso- profit. ciation, a syndicate, joint venture, or (gg) Mutual fund. An ‘‘investment other unincorporated organization or company’’ (as the term is defined in group, an Indian Tribe (as that term is section 3 of the Investment Company defined in the Indian Gaming Regu- Act (15 U.S.C. 80a–3)) that is an ‘‘open- latory Act), and all entities cognizable end company’’ (as that term is defined as legal personalities. in section 5 of the Investment Com- (nn) Receiving bank. The bank or for- pany Act (15 U.S.C. 80a–5)) that is reg- eign bank to which the sender’s in- istered or is required to register with struction is addressed. the Commission under section 8 of the (oo) Receiving financial institution. Investment Company Act (15 U.S.C. The financial institution or foreign fi- 80a–8). nancial agency to which the sender’s (hh) Option on a commodity. Any instruction is addressed. The term re- agreement, contract, or transaction de- ceiving financial institution includes a scribed in section 1a(26) of the CEA, 7 receiving bank. U.S.C. 1a(26). (pp) Recipient. The person to be paid (ii) Originator. The sender of the first by the recipient’s financial institution. payment order in a funds transfer. The term recipient includes a bene- (jj) The receiving Originator’s bank. ficiary, except where the recipient’s fi- bank to which the payment order of nancial institution is a financial insti- the originator is issued if the origi- tution other than a bank. nator is not a bank or foreign bank, or the originator if the originator is a (qq) Recipient’s financial institution. bank or foreign bank. The financial institution or foreign fi- (kk) Payment date. The day on which nancial agency identified in a trans- the amount of the transmittal order is mittal order in which an account of the payable to the recipient by the recipi- recipient is to be credited pursuant to ent’s financial institution. The pay- the transmittal order or which other- ment date may be determined by in- wise is to make payment to the recipi- struction of the sender, but cannot be ent if the order does not provide for earlier than the day the order is re- payment to an account. The term re- ceived by the recipient’s financial in- cipient’s financial institution includes stitution and, unless otherwise pre- a beneficiary’s bank, except where the scribed by instruction, is the date the beneficiary is a recipient’s financial in- order is received by the recipient’s fi- stitution. nancial institution. (rr) Secretary. The Secretary of the (ll) Payment order. An instruction of a Treasury or any person duly authorized sender to a receiving bank, transmitted by the Secretary to perform the func- orally, electronically, or in writing, to tion mentioned.

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(ss) Security. Security means any in- U.S.C. 6109) and the Internal Revenue strument or interest described in sec- Service regulations implementing that tion 3(a)(10) of the Securities Exchange section (e.g., social security number or Act of 1934, 15 U.S.C. 78c(a)(10). employer identification number). (tt) Self-regulatory organization: (zz) Territories and Insular Possessions. (1) Shall have the same meaning as The Commonwealth of Puerto Rico, the provided in section 3(a)(26) of the Secu- United States Virgin Islands, Guam, rities Exchange Act of 1934 (15 U.S.C. the Commonwealth of the Northern 78c(a)(26)); and Mariana Islands, and all other terri- (2) Means a ‘‘registered entity’’ or a tories and possessions of the United ‘‘registered futures association’’ as pro- States other than the Indian lands and vided in section 1a(29) or 17, respec- the District of Columbia. tively, of the Commodity Exchange Act (aaa) [Reserved] (7 U.S.C. 1a(29), 21). (bbb) Transaction. (1) Except as pro- (uu) Sender. The person giving the in- vided in paragraph (bbb)(2) of this sec- struction to the receiving financial in- tion, transaction means a purchase, stitution. sale, loan, pledge, gift, transfer, deliv- (vv) State. The States of the United ery, or other disposition, and with re- States and, wherever necessary to spect to a financial institution includes carry out the provisions of this chap- a deposit, withdrawal, transfer between ter, the District of Columbia. accounts, exchange of currency, loan, (ww) Prepaid access. Access to funds extension of credit, purchase or sale of or the value of funds that have been any stock, bond, certificate of deposit, paid in advance and can be retrieved or or other monetary instrument, secu- transferred at some point in the future rity, contract of sale of a commodity through an electronic device or vehi- for future delivery, option on any con- cle, such as a card, code, electronic se- tract of sale of a commodity for future rial number, mobile identification delivery, option on a commodity, pur- number, or personal identification chase or redemption of any money number. order, payment or order for any money (xx) Structure (structuring). For pur- poses of § 1010.314, a person structures a remittance or transfer, purchase or re- transaction if that person, acting demption of casino chips or tokens, or alone, or in conjunction with, or on be- other gaming instruments or any other half of, other persons, conducts or at- payment, transfer, or delivery by, tempts to conduct one or more trans- through, or to a financial institution, actions in currency, in any amount, at by whatever means effected. one or more financial institutions, on (2) For purposes of §§ 1010.311, 1010.313, one or more days, in any manner, for 1020.315, 1021.311, 1021.313, and other the purpose of evading the reporting provisions of this chapter relating sole- requirements under §§ 1010.311, 1010.313, ly to the report required by those sec- 1020.315, 1021.311 and 1021.313 of this tions, the term ‘‘transaction in cur- chapter. ‘‘In any manner’’ includes, but rency’’ shall mean a transaction in- is not limited to, the breaking down of volving the physical transfer of cur- a single sum of currency exceeding rency from one person to another. A $10,000 into smaller sums, including transaction which is a transfer of funds sums at or below $10,000, or the conduct by means of bank check, bank draft, of a transaction, or series of currency wire transfer, or other written order, transactions at or below $10,000. The and which does not include the phys- transaction or transactions need not ical transfer of currency, is not a exceed the $10,000 reporting threshold transaction in currency for this pur- at any single financial institution on pose. any single day in order to constitute (ccc) Transaction account. Trans- structuring within the meaning of this action accounts include those accounts definition. described in 12 U.S.C. 461(b)(1)(C), (yy) Taxpayer Identification Number. money market accounts and similar Taxpayer Identification Number accounts that take deposits and are (‘‘TIN’’) is defined by section 6109 of subject to withdrawal by check or the Internal Revenue Code of 1986 (26 other negotiable order.

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(ddd) Transmittal of funds. A series of tion or foreign financial agency, or the transactions beginning with the transmittor if the transmittor is a fi- transmittor’s transmittal order, made nancial institution or foreign financial for the purpose of making payment to agency. The term transmittor’s finan- the recipient of the order. The term in- cial institution includes an originator’s cludes any transmittal order issued by bank, except where the originator is a the transmittor’s financial institution transmittor’s financial institution or an intermediary financial institu- other than a bank or foreign bank. tion intended to carry out the (hhh) United States. The States of the transmittor’s transmittal order. The United States, the District of Colum- term transmittal of funds includes a bia, the Indian lands (as that term is funds transfer. A transmittal of funds defined in the Indian Gaming Regu- is completed by acceptance by the re- cipient’s financial institution of a latory Act), and the Territories and In- transmittal order for the benefit of the sular Possessions of the United States. recipient of the transmittor’s trans- (iii) U.S. person. (1) A United States mittal order. Electronic fund transfers citizen; or (2) A person other than an as defined in section 903(7) of the Elec- individual (such as a corporation, part- tronic Fund Transfer Act (15 U.S.C. nership or trust), that is established or 1693a(7)), as well as any other funds organized under the laws of a State or transfers that are made through an the United States. Non-U.S. person automated clearinghouse, an auto- means a person that is not a U.S. per- mated teller machine, or a point-of- son. sale system, are excluded from this def- (jjj) U.S. Postal Service. The United inition. States Postal Service, except with re- (eee) Transmittal order. The term spect to the sale of postage or phila- transmittal order includes a payment telic products. order and is an instruction of a sender (kkk) Closed loop prepaid access. Pre- to a receiving financial institution, paid access to funds or the value of transmitted orally, electronically, or funds that can be used only for goods in writing, to pay, or cause another fi- or services in transactions involving a nancial institution or foreign financial defined merchant or location (or set of agency to pay, a fixed or determinable locations), such as a specific retailer or amount of money to a recipient if: (1) The instruction does not state a retail chain, a college campus, or a condition to payment to the recipient subway system. other than time of payment; (lll) Loan or finance company. A per- (2) The receiving financial institu- son engaged in activities that take tion is to be reimbursed by debiting an place wholly or in substantial part account of, or otherwise receiving pay- within the United States in one or ment from, the sender; and more of the capacities listed below, (3) The instruction is transmitted by whether or not on a regular basis or as the sender directly to the receiving fi- an organized business concern. This in- nancial institution or to an agent or cludes but is not limited to mainte- communication system for transmittal nance of any agent, agency, branch, or to the receiving financial institution. office within the United States. For (fff) Transmittor. The sender of the the purposes of this paragraph (lll), the first transmittal order in a transmittal term ‘‘loan or finance company’’ shall of funds. The term transmittor in- include a sole proprietor acting as a cludes an originator, except where the loan or finance company, and shall not transmittor’s financial institution is a include: A bank, a person registered financial institution or foreign finan- with and functionally regulated or ex- cial agency other than a bank or for- amined by the Securities and Exchange eign bank. Commission or the Commodity Futures (ggg) Transmittor’s financial institu- Trading Commission, any government tion. The receiving financial institu- tion to which the transmittal order of sponsored enterprise regulated by the the transmittor is issued if the Federal Housing Finance Agency, any transmittor is not a financial institu- Federal or state agency or authority

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administering mortgage or housing as- any ‘‘Entity-Affiliated Party,’’ as de- sistance, fraud prevention or fore- fined in 12 U.S.C. 4502(11). closure prevention programs, or an in- [75 FR 65812, Oct. 26, 2010, as amended at 76 dividual employed by a loan or finance FR 43596, July 21, 2011; 76 FR 45419, July 29, company or financial institution under 2011; 77 FR 8157, Feb. 14, 2012; 78 FR 72817, this part. A loan or finance company is Dec. 4, 2013; 79 FR 10375, Feb. 25, 2014] not a financial institution as defined in the regulations in this part at Subpart B—Programs 1010.100(t). (1) Residential mortgage lender or origi- § 1010.200 General. nator. A residential mortgage lender or Each financial institution (as defined originator includes: in 31 U.S.C. 5312(a)(2) or (c)(1)) should (i) Residential mortgage lender. The refer to subpart B of its chapter X Part person to whom the debt arising from a for any additional program require- residential is initially ments. Unless otherwise indicated, the payable on the face of the evidence of program requirements contained in indebtedness or, if there is no such evi- this subpart B apply to all financial in- dence of indebtedness, by agreement, stitutions (as defined in 31 U.S.C. or to whom the obligation is initially 5312(a)(2) or (c)(1)). assigned at or immediately after set- tlement. The term ‘‘residential mort- § 1010.205 Exempted anti-money laun- dering programs for certain finan- gage lender’’ shall not include an indi- cial institutions. vidual who finances the sale of the in- dividual’s own dwelling or real prop- (a) Exempt financial institutions. Sub- ject to the provisions of paragraphs (c) erty. and (d) of this section, the following fi- (ii) A Residential mortgage originator. nancial institutions (as defined in 31 person who accepts a residential mort- U.S.C. 5312(a)(2) or (c)(1)) are exempt gage loan application or offers or nego- from the requirement in 31 U.S.C. tiates terms of a residential mortgage 5318(h)(1) concerning the establishment loan. of anti-money laundering programs: (iii) Residential mortgage loan. A loan (1) An agency of the United States that is secured by a mortgage, deed of Government, or of a State or local gov- trust, or other equivalent consensual ernment, carrying out a duty or power security interest on: of a business described in 31 U.S.C. (A) A residential structure that con- 5312(a)(2); and tains one to four units, including, if (2) [Reserved] used as a residence, an individual con- (b) Temporary exemption for certain fi- dominium unit, cooperative unit, mo- nancial institutions. (1) Subject to the bile home or trailer; or provisions of paragraphs (c) and (d) of (B) Residential real estate upon this section, the following financial in- which such a structure is constructed stitutions (as defined in 31 U.S.C. or intended to be constructed. 5312(a)(2) or (c)(1)) are exempt from the (2) [Reserved] requirement in 31 U.S.C. 5318(h)(1) con- (mmm) Housing government sponsored cerning the establishment of anti- enterprise. (1) A ‘‘housing government money laundering programs: sponsored enterprise’’ is one of the fol- (i) Pawnbroker; (ii) Travel agency; lowing ‘‘Regulated Entities’’ under 12 (iii) Telegraph company; U.S.C. 4502(20) subject to the general (iv) Seller of vehicles, including auto- supervision and regulation of the Fed- mobiles, airplanes, and boats; eral Housing Finance Agency (FHFA): (v) Person involved in real estate (i) The Federal National Mortgage closings and settlements; Association; (vi) Private banker; (ii) The Federal Home Loan Mort- (vii) Commodity pool operator; gage Corporation; or (viii) Commodity trading advisor; or (iii) Each Federal Home Loan Bank. (ix) Investment company. (2) The term ‘‘housing government (2) Subject to the provisions of para- sponsored enterprise’’ does not include graphs (c) and (d) of this section, a

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bank (as defined in § 1010.100(d)) that is (b) Identification and verification. With not subject to regulation by a Federal respect to legal entity customers, the functional regulator (as defined in covered financial institution’s cus- § 1010.100(r)) is exempt from the require- tomer due diligence procedures shall ment in 31 U.S.C. 5318(h)(1) concerning enable the institution to: the establishment of anti-money laun- (1) Identify the beneficial owner(s) of dering programs. each legal entity customer at the time (3) Subject to the provisions of para- a new account is opened, unless the graphs (c) and (d) of this section, a per- customer is otherwise excluded pursu- son described in § 1010.100(t)(7) is ex- ant to paragraph (e) of this section or empt from the requirement in 31 U.S.C. the account is exempted pursuant to 5318(h)(1) concerning the establishment paragraph (h) of this section. A covered of anti-money laundering programs. financial institution may accomplish (c) Limitation on exemption. The ex- this either by obtaining a certification emptions described in paragraph (b) of in the form of appendix A of this sec- this section shall not apply to any fi- tion from the individual opening the nancial institution that is otherwise account on behalf of the legal entity required to establish an anti-money customer, or by obtaining from the in- laundering program by this chapter. dividual the information required by (d) Compliance obligations of deferred the form by another means, provided financial institutions. Nothing in this the individual certifies, to the best of section shall be deemed to relieve an the individual’s knowledge, the accu- exempt financial institution from its racy of the information; and responsibility to comply with any (2) Verify the identity of each bene- other applicable requirement of law or ficial owner identified to the covered regulation, including title 31 of the financial institution, according to risk- U.S.C. and this chapter. based procedures to the extent reason- [75 FR 65812, Oct. 26, 2010, as amended at 77 able and practicable. At a minimum, FR 8157, Feb. 14, 2012] these procedures must contain the ele- ments required for verifying the iden- § 1010.210 Anti-money laundering pro- tity of customers that are individuals grams. under § 1020.220(a)(2) of this chapter (for Each financial institution (as defined banks); § 1023.220(a)(2) of this chapter in 31 U.S.C. 5312(a)(2) or (c)(1)) should (for brokers or dealers in securities); refer to subpart B of its chapter X part § 1024.220(a)(2) of this chapter (for mu- for any additional anti-money laun- tual funds); or § 1026.220(a)(2) of this dering program requirements. chapter (for futures commission mer- chants or introducing brokers in com- § 1010.220 Customer identification pro- modities); provided, that in the case of gram requirements. documentary verification, the financial Each financial institution (as defined institution may use photocopies or in 31 U.S.C. 5312(a)(2) or (c)(1)) should other reproductions of the documents refer to subpart B of its chapter X part listed in paragraph (a)(2)(ii)(A)(1) of for any additional customer identifica- § 1020.220 of this chapter (for banks); tion program requirements. § 1023.220 of this chapter (for brokers or dealers in securities); § 1024.220 of this § 1010.230 Beneficial ownership re- chapter (for mutual funds); or § 1026.220 quirements for legal entity cus- of this chapter (for futures commission tomers. merchants or introducing brokers in (a) In general. Covered financial insti- commodities). A covered financial in- tutions are required to establish and stitution may rely on the information maintain written procedures that are supplied by the legal entity customer reasonably designed to identify and regarding the identity of its beneficial verify beneficial owners of legal entity owner or owners, provided that it has customers and to include such proce- no knowledge of facts that would rea- dures in their anti-money laundering sonably call into question the reli- compliance program required under 31 ability of such information. U.S.C. 5318(h) and its implementing (c) Account. For purposes of this sec- regulations. tion, account has the meaning set forth

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in § 1020.100(a) of this chapter (for gence if it deems appropriate on the basis of banks); § 1023.100(a) of this chapter (for risk. brokers or dealers in securities); (e) Legal entity customer. For the pur- § 1024.100(a) of this chapter (for mutual poses of this section: funds); and § 1026.100(a) of this chapter (1) Legal entity customer means a cor- (for futures commission merchants or poration, limited liability company, or introducing brokers in commodities). other entity that is created by the fil- (d) Beneficial owner. For purposes of ing of a public document with a Sec- this section, beneficial owner means retary of State or similar office, a gen- each of the following: eral partnership, and any similar enti- (1) Each individual, if any, who, di- ty formed under the laws of a foreign rectly or indirectly, through any con- jurisdiction that opens an account. tract, arrangement, understanding, re- (2) Legal entity customer does not in- lationship or otherwise, owns 25 per- clude: cent or more of the equity interests of (i) A financial institution regulated a legal entity customer; and by a Federal functional regulator or a (2) A single individual with signifi- bank regulated by a State bank regu- cant responsibility to control, manage, lator; or direct a legal entity customer, in- (ii) A person described in cluding: § 1020.315(b)(2) through (5) of this chap- (i) An executive officer or senior ter; manager (e.g., a Chief Executive Offi- (iii) An issuer of a class of securities cer, Chief Financial Officer, Chief Oper- registered under section 12 of the Secu- ating Officer, Managing Member, Gen- rities Exchange Act of 1934 or that is eral Partner, President, Vice Presi- required to file reports under section dent, or Treasurer); or 15(d) of that Act; (ii) Any other individual who regu- (iv) An investment company, as de- larly performs similar functions. fined in section 3 of the Investment (3) If a trust owns directly or indi- Company Act of 1940, that is registered rectly, through any contract, arrange- with the Securities and Exchange Com- ment, understanding, relationship or mission under that Act; otherwise, 25 percent or more of the eq- (v) An investment adviser, as defined uity interests of a legal entity cus- in section 202(a)(11) of the Investment tomer, the beneficial owner for pur- Advisers Act of 1940, that is registered poses of paragraph (d)(1) of this section with the Securities and Exchange Com- shall mean the trustee. If an entity mission under that Act; listed in paragraph (e)(2) of this section (vi) An exchange or clearing agency, owns directly or indirectly, through as defined in section 3 of the Securities any contract, arrangement, under- Exchange Act of 1934, that is registered standing, relationship or otherwise, 25 under section 6 or 17A of that Act; percent or more of the equity interests (vii) Any other entity registered with of a legal entity customer, no indi- the Securities and Exchange Commis- vidual need be identified for purposes sion under the Securities Exchange Act of paragraph (d)(1) of this section with of 1934; respect to that entity’s interests. (viii) A registered entity, commodity pool operator, commodity trading advi- NOTE TO PARAGRAPH (d): The number of in- sor, retail foreign exchange dealer, dividuals that satisfy the definition of ‘‘ben- eficial owner,’’ and therefore must be identi- swap dealer, or major swap participant, fied and verified pursuant to this section, each as defined in section 1a of the may vary. Under paragraph (d)(1) of this sec- Commodity Exchange Act, that is reg- tion, depending on the factual cir- istered with the Commodity Futures cumstances, up to four individuals may need Trading Commission; to be identified. Under paragraph (d)(2) of (ix) A public accounting firm reg- this section, only one individual must be istered under section 102 of the Sar- identified. It is possible that in some cir- banes–Oxley Act; cumstances the same person or persons might be identified pursuant to paragraphs (x) A bank holding company, as de- (d)(1) and (2) of this section. A covered finan- fined in section 2 of the Bank Holding cial institution may also identify additional Company Act of 1956 (12 U.S.C. 1841) or individuals as part of its customer due dili- savings and loan holding company, as

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defined in section 10(n) of the Home private label credit cards, solely for Owners’ Loan Act (12 U.S.C 1467a(n)); the purchase of retail goods and/or (xi) A pooled investment vehicle that services at these retailers, up to a limit is operated or advised by a financial in- of $50,000; stitution excluded under paragraph (ii) To finance the purchase of post- (e)(2) of this section; age and for which payments are remit- (xii) An insurance company that is ted directly by the financial institu- regulated by a State; tion to the provider of the postage (xiii) A financial market utility des- products; ignated by the Financial Stability (iii) To finance insurance premiums Oversight Council under Title VIII of and for which payments are remitted the Dodd-Frank Wall Street Reform directly by the financial institution to and Consumer Protection Act of 2010; the insurance provider or broker; (xiv) A foreign financial institution (iv) To finance the purchase or leas- established in a jurisdiction where the ing of equipment and for which pay- regulator of such institution maintains ments are remitted directly by the fi- beneficial ownership information re- nancial institution to the vendor or garding such institution; lessor of this equipment. (xv) A non-U.S. governmental depart- (2) Limitations on Exemptions. (i) The ment, agency or political subdivision exemptions identified in paragraphs that engages only in governmental (h)(1)(ii) through (iv) of this section do rather than commercial activities; and not apply to transaction accounts (xvi) Any legal entity only to the ex- through which a legal entity customer tent that it opens a private banking ac- can make payments to, or receive pay- count subject to § 1010.620 of this chap- ments from, third parties. ter. (ii) If there is the possibility of a (3) The following legal entity cus- cash refund on the account activity tomers are subject only to the control identified in paragraphs (h)(1)(ii) prong of the beneficial ownership re- through (iv) of this section, then bene- quirement: ficial ownership of the legal entity cus- (i) A pooled investment vehicle that tomer must be identified and verified is operated or advised by a financial in- by the financial institution as required stitution not excluded under paragraph by this section, either at the time of (e)(2) of this section; and initial remittance, or at the time such (ii) Any legal entity that is estab- refund occurs. lished as a nonprofit corporation or (i) Recordkeeping. A covered financial similar entity and has filed its organi- institution must establish procedures zational documents with the appro- for making and maintaining a record of priate State authority as necessary. all information obtained under the pro- (f) Covered financial institution. For cedures implementing paragraph (b) of the purposes of this section, covered fi- this section. nancial institution has the meaning set (1) Required records. At a minimum forth in § 1010.605(e)(1) of this chapter. the record must include: (g) New account. For the purposes of (i) For identification, any identifying this section, new account means each information obtained by the covered fi- account opened at a covered financial nancial institution pursuant to para- institution by a legal entity customer graph (b) of this section, including on or after the applicability date. without limitation the certification (if (h) Exemptions. (1) Covered financial obtained); and institutions are exempt from the re- (ii) For verification, a description of quirements to identify and verify the any document relied on (noting the identity of the beneficial owner(s) set type, any identification number, place forth in paragraphs (a) and (b)(1) and of issuance and, if any, date of issuance (2) of this section only to the extent and expiration), of any non-documen- the financial institution opens an ac- tary methods and the results of any count for a legal entity customer that measures undertaken, and of the reso- is: lution of each substantive discrepancy. (i) At the point-of-sale to provide (2) Retention of records. A covered fi- credit products, including commercial nancial institution must retain the

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records made under paragraph (i)(1)(i) gage in services, dealings, or other fi- of this section for five years after the nancial transactions, provided that: date the account is closed, and the (1) Such reliance is reasonable under records made under paragraph (i)(1)(ii) the circumstances; of this section for five years after the (2) The other financial institution is record is made. subject to a rule implementing 31 (j) Reliance on another financial insti- U.S.C. 5318(h) and is regulated by a tution. A covered financial institution Federal functional regulator; and may rely on the performance by an- (3) The other financial institution en- other financial institution (including ters into a contract requiring it to cer- an affiliate) of the requirements of this tify annually to the covered financial section with respect to any legal entity institution that it has implemented its customer of the covered financial insti- anti-money laundering program, and that it will perform (or its agent will tution that is opening, or has opened, perform) the specified requirements of an account or has established a similar the covered financial institution’s pro- business relationship with the other fi- cedures to comply with the require- nancial institution to provide or en- ments of this section.

851

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852

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[81 FR 29451, May 11, 2016, as amended at 82 tary instruments not physically ac- FR 45183, Sept. 28, 2017] companying a person entering or de- parting from the United States, may be Subpart C—Reports Required To filed by mail on or before the date of Be Made entry, departure, mailing or shipping. All reports required by § 1010.340(b) may § 1010.300 General. also be filed by mail. Reports filed by Each financial institution (as defined mail shall be addressed to the Commis- in 31 U.S.C. 5312(a)(2) or (c)(1)) should sioner of Customs and Border Protec- refer to its chapter X part for any addi- tion, Attention: Currency Transpor- tional reporting requirements. Unless tation Reports, Washington, DC 20229. otherwise indicated, the reporting re- (c) Reports required to be filed by quirements contained in this subpart C § 1010.350 shall be filed with FinCEN on apply to all financial institutions. or before June 30 of each calendar year with respect to foreign financial ac- § 1010.301 Determination by the Sec- counts exceeding $10,000 maintained retary. during the previous calendar year. The Secretary hereby determines (d) Reports required by § 1010.311, that the reports required by this chap- § 1010.313, § 1010.340, § 1010.350, § 1020.315, ter have a high degree of usefulness in § 1021.311 or § 1021.313 of this chapter criminal, tax, or regulatory investiga- shall be filed on forms prescribed by tions or proceedings. the Secretary. All information called for in such forms shall be furnished. § 1010.305 [Reserved] (e) Forms to be used in making the reports required by § 1010.311, § 1010.313, § 1010.306 Filing of reports. § 1010.350, § 1020.315, § 1021.311 or § 1021.313 (a)(1) A report required by § 1010.311 of this chapter may be obtained from or § 1021.311, shall be filed by the finan- BSA E-Filing System. Forms to be cial institution within 15 days fol- used in making the reports required by lowing the day on which the reportable § 1010.340 may be obtained from the U.S. transaction occurred. Customs and Border Protection or (2) A copy of each report filed pursu- FinCEN. ant to §§ 1010.311, 1010.313, 1020.315, [75 FR 65812, Oct. 26, 2010, as amended at 81 1021.311 and 1021.313, shall be retained FR 76864, Nov. 4, 2016] by the financial institution for a period of five years from the date of the re- § 1010.310 Reports of transactions in port. currency. (3) All reports required to be filed by Sections 1010.310 through 1010.314 set §§ 1010.311, 1010.313, 1020.315, 1021.311 and forth the rules for the reporting by fi- 1021.313, shall be filed with FinCEN, un- nancial institutions of transactions in less otherwise specified. currency. Unless otherwise indicated, (b)(1) A report required by the transactions in currency reporting § 1010.340(a) shall be filed at the time of requirements in §§ 1010.310 through entry into the United States or at the 1010.314 apply to all financial institu- time of departure, mailing or shipping tions. Each financial institution should from the United States, unless other- refer to subpart C of its chapter X part wise specified by the Commissioner of for any additional transactions in cur- Customs and Border Protection. rency reporting requirements. (2) A report required by § 1010.340(b) shall be filed within 15 days after re- § 1010.311 Filing obligations for re- ceipt of the currency or other mone- ports of transactions in currency. tary instruments. Each financial institution other than (3) All reports required by § 1010.340 a casino shall file a report of each de- shall be filed with the Customs officer posit, withdrawal, exchange of cur- in charge at any port of entry or depar- rency or other payment or transfer, by, ture, or as otherwise specified by the through, or to such financial institu- Commissioner of Customs and Border tion which involves a transaction in Protection. Reports required by currency of more than $10,000, except § 1010.340(a) for currency or other mone- as otherwise provided in this section.

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In the case of the U.S. Postal Service, in currency reporting requirements in the obligation contained in the pre- this chapter. ceding sentence shall not apply to pay- (b) Multiple transactions. In the case ments or transfers made solely in con- of financial institutions other than ca- nection with the purchase of postage or sinos, for purposes of the transactions philatelic products. in currency reporting requirements in this chapter, multiple currency trans- § 1010.312 Identification required. actions shall be treated as a single Before concluding any transaction transaction if the financial institution with respect to which a report is re- has knowledge that they are by or on quired under § 1010.311, § 1010.313, behalf of any person and result in ei- § 1020.315, § 1021.311 or § 1021.313 of this ther cash in or cash out totaling more chapter, a financial institution shall than $10,000 during any one business verify and record the name and address day (or in the case of the U.S. Postal of the individual presenting a trans- Service, any one day). Deposits made action, as well as record the identity, at night or over a weekend or holiday account number, and the social secu- shall be treated as if received on the rity or taxpayer identification number, next business day following the de- if any, of any person or entity on whose posit. behalf such transaction is to be ef- fected. Verification of the identity of § 1010.314 Structured transactions. an individual who indicates that he or No person shall for the purpose of she is an alien or is not a resident of evading the transactions in currency the United States must be made by reporting requirements of this chapter passport, alien identification card, or with respect to such transaction: other official document evidencing na- (a) Cause or attempt to cause a do- tionality or residence (e.g., a Provin- mestic financial institution to fail to cial driver’s license with indication of file a report required under the trans- home address). Verification of identity actions in currency reporting require- in any other case shall be made by ex- ments of this chapter; amination of a document, other than a (b) Cause or attempt to cause a do- bank signature card, that is normally mestic financial institution to file a re- acceptable within the banking commu- port required under the transactions in nity as a means of identification when currency reporting requirements of cashing checks for nondepositors (e.g., this chapter that contains a material a driver’s license or credit card). A omission or misstatement of fact; or bank signature card may be relied upon (c) Structure (as that term is defined only if it was issued after documents in § 1010.100(xx)) or assist in struc- establishing the identity of the indi- turing, or attempt to structure or as- vidual were examined and notation of sist in structuring, any transaction the specific information was made on with one or more domestic financial in- the signature card. In each instance, stitutions. the specific identifying information (i.e., the account number of the credit § 1010.315 Exemptions for non-bank fi- card, the driver’s license number, etc.) nancial institutions. used in verifying the identity of the A non-bank financial institution is customer shall be recorded on the re- not required to file a report otherwise port, and the mere notation of ‘‘known required by § 1010.311 with respect to a customer’’ or ‘‘bank signature card on transaction in currency between the file’’ on the report is prohibited. institution and a commercial bank.

§ 1010.313 Aggregation. § 1010.320 Reports of suspicious trans- (a) Multiple branches. A financial in- actions. stitution includes all of its domestic Each financial institution (as defined branch offices, and any recordkeeping in 31 U.S.C. 5312(a)(2) or (c)(1)) should facility, wherever located, that con- refer to subpart C of its financial insti- tains records relating to the trans- tution part in this chapter for any ad- actions of the institution’s domestic ditional suspicious transaction report- offices, for purposes of the transactions ing requirements.

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§ 1010.330 Reports relating to currency of the currency within 15 days in a cur- in excess of $10,000 received in a rency transaction (the ‘‘second cur- trade or business. rency transaction’’) which is reportable (a) Reporting requirement—(1) Report- under section 5312 of title 31, or 31 able transactions—(i) In general. Any U.S.C. 5331 and this section, and who person (solely for purposes of section discloses the name, address, and TIN of 5331 of title 31, United States Code and the principal to the recipient in the this section, ‘‘person’’ shall have the second currency transaction need not same meaning as under 26 U.S.C. report the initial receipt of currency 7701(a)(1)) who, in the course of a trade under this section. An agent will be or business in which such person is en- deemed to have met the disclosure re- gaged, receives currency in excess of quirements of this paragraph (a)(3)(ii) $10,000 in 1 transaction (or 2 or more re- if the agent discloses only the name of lated transactions) shall, except as oth- the principal and the agent knows that erwise provided, make a report of infor- the recipient has the principal’s ad- mation with respect to the receipt of dress and taxpayer identification num- currency. This section does not apply ber. to amounts received in a transaction (iii) Example. The following example reported under 31 U.S.C. 5313 and illustrates the application of the rules § 1010.311, § 1010.313, § 1020.315, § 1021.311 in paragraphs (a)(3)(i) and (ii) of this or § 1021.313 of this chapter. section: (ii) Certain financial transactions. Sec- Example. B, the principal, gives D, an at- tion 6050I of title 26 of the United torney, $75,000 in currency to purchase real States Code requires persons to report property on behalf of B. Within 15 days D information about financial trans- purchases real property for currency from E, actions to the IRS, and 31 U.S.C. 5331 a real estate developer, and discloses to E, requires persons to report the same in- B’s name, address, and taxpayer identifica- tion number. Because the transaction quali- formation to the Financial Crimes En- fies for the exception provided in paragraph forcement Network. This information (a)(3)(ii) of this section, D need not report shall be reported on the same form as with respect to the initial receipt of cur- prescribed by the Secretary. rency under this section. The exception does (2) Currency received for the account of not apply, however, if D pays E by means another. Currency in excess of $10,000 other than currency, or effects the purchase received by a person for the account of more than 15 days following receipt of the another must be reported under this currency from B, or fails to disclose B’s name, address, and taxpayer identification section. Thus, for example, a person number (assuming D does not know that E who collects delinquent accounts re- already has B’s address and taxpayer identi- ceivable for an automobile dealer must fication number), or purchases the property report with respect to the receipt of from a person whose sale of the property is currency in excess of $10,000 from the not in the course of that person’s trade or collection of a particular account even business. In any such case, D is required to though the proceeds of the collection report the receipt of currency from B under are credited to the account of the auto- this section. mobile dealer (i.e., where the rights to (b) Multiple payments. The receipt of the proceeds from the account are re- multiple currency deposits or currency tained by the automobile dealer and installment payments (or other similar the collection is made on a fee-for-serv- payments or prepayments) relating to ice basis). a single transaction (or two or more re- (3) Currency received by agents— (i) lated transactions), is reported as set General rule. Except as provided in forth in paragraphs (b)(1) through (b)(3) paragraph (a)(3)(ii) of this section, a of this section. person who in the course of a trade or (1) Initial payment in excess of $10,000. business acts as an agent (or in some If the initial payment exceeds $10,000, other similar capacity) and receives the recipient must report the initial currency in excess of $10,000 from a payment within 15 days of its receipt. principal must report the receipt of (2) Initial payment of $10,000 or less. If currency under this section. the initial payment does not exceed (ii) Exception. An agent who receives $10,000, the recipient must aggregate currency from a principal and uses all the initial payment and subsequent

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payments made within one year of the used and accepted as money in the initial payment until the aggregate country in which issued; and amount exceeds $10,000, and report with (ii) A cashier’s check (by whatever respect to the aggregate amount with- name called, including ‘‘treasurer’s in 15 days after receiving the payment check’’ and ‘‘bank check’’), bank draft, that causes the aggregate amount to traveler’s check, or money order hav- exceed $10,000. ing a face amount of not more than (3) Subsequent payments. In addition $10,000— to any other required report, a report (A) Received in a designated report- must be made each time that pre- ing transaction as defined in paragraph viously unreportable payments made (c)(2) of this section (except as provided within a 12-month period with respect in paragraphs (c)(3), (4), and (5) of this to a single transaction (or two or more section), or related transactions), individually or (B) Received in any transaction in in the aggregate, exceed $10,000. The re- which the recipient knows that such port must be made within 15 days after instrument is being used in an attempt receiving the payment in excess of to avoid the reporting of the trans- $10,000 or the payment that causes the action under section 5331 and this sec- aggregate amount received in the 12- tion. month period to exceed $10,000. (If more (2) Designated reporting transaction. A than one report would otherwise be re- designated reporting transaction is a quired for multiple currency payments retail sale (or the receipt of funds by a within a 15-day period that relate to a broker or other intermediary in con- single transaction (or two or more re- nection with a retail sale) of— lated transactions), the recipient may (i) A consumer durable, make a single combined report with re- (ii) A collectible, or spect to the payments. The combined (iii) A travel or entertainment activ- report must be made no later than the ity. date by which the first of the separate (3) Exception for certain . A cash- reports would otherwise be required to ier’s check, bank draft, traveler’s be made.) check, or money order received in a (4) Example. The following example il- designated reporting transaction is not lustrates the application of the rules in treated as currency pursuant to para- paragraphs (b)(1) through (b)(3) of this graph (c)(1)(ii)(A) of this section if the section: instrument constitutes the proceeds of Example. On January 10, Year 1, M receives a loan from a bank. The recipient may an initial payment in currency of $11,000 rely on a copy of the loan document, a with respect to a transaction. M receives written statement from the bank, or subsequent payments in currency with re- similar documentation (such as a writ- spect to the same transaction of $4,000 on ten lien instruction from the issuer of February 15, Year 1, $6,000 on March 20, Year the instrument) to substantiate that 1, and $12,000 on May 15, Year 1. M must the instrument constitutes loan pro- make a report with respect to the payment ceeds. received on January 10, Year 1, by January 25, Year 1. M must also make a report with (4) Exception for certain installment respect to the payments totaling $22,000 re- sales. A cashier’s check, bank draft, ceived from February 15, Year 1, through traveler’s check, or money order re- May 15, Year 1. This report must be made by ceived in a designated reporting trans- May 30, Year 1, that is, within 15 days of the action is not treated as currency pur- date that the subsequent payments, all of suant to paragraph (c)(1)(ii)(A) of this which were received within a 12-month pe- section if the instrument is received in riod, exceeded $10,000. payment on a promissory note or an in- (c) Meaning of terms. The following stallment sales contract (including a definitions apply for purposes of this lease that is considered to be a sale for section— Federal income tax purposes). How- (1) Currency. The term currency ever, the preceding sentence applies means— only if— (i) The coin and currency of the (i) Promissory notes or installment United States or of any other country, sales contracts with the same or sub- which circulate in and are customarily stantially similar terms are used in the

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ordinary course of the recipient’s trade issuing the check. The origin of the proceeds or business in connection with sales to is evident from provisions inserted by the ultimate consumers; and bank on the check that instruct the dealer (ii) The total amount of payments to cause a lien to be placed on the vehicle as security for the loan. The sale of the auto- with respect to the sale that are re- mobile is a designated reporting transaction. ceived on or before the 60th day after However, under paragraph (c)(3) of this sec- the date of the sale does not exceed 50 tion, because E has furnished Q documentary percent of the purchase price of the information establishing that the cashier’s sale. check constitutes the proceeds of a loan (5) Exception for certain down payment from the bank issuing the check, the cash- plans. A cashier’s check, bank draft, ier’s check is not treated as currency pursu- traveler’s check, or money order re- ant to paragraph (c)(1)(ii)(A) of this section. Example 3. F, an individual, purchases an ceived in a designated reporting trans- item of jewelry from S, a retail jeweler, for action is not treated as currency pur- $12,000. F gives S traveler’s checks totaling suant to paragraph (c)(1)(ii)(A) of this $2,400 and pays the balance with a personal section if the instrument is received check payable to S in the amount of $9,600. pursuant to a payment plan requiring Because the sale is a designated reporting one or more down payments and the transaction, the traveler’s checks are treat- payment of the balance of the purchase ed as currency for purposes of section 5331 price by a date no later than the date and this section. However, because the per- sonal check is not treated as currency for of the sale (in the case of an item of purposes of section 5331 and this section, S travel or entertainment, a date no has not received more than $10,000 in cur- later than the earliest date that any rency in the transaction and no report is re- item of travel or entertainment per- quired to be filed under section 5331 and this taining to the same trip or event is fur- section. nished). However, the preceding sen- Example 4. G, an individual, purchases a tence applies only if— boat from T, a boat dealer, for $16,500. G pays T with a cashier’s check payable to T in the (i) The recipient uses payment plans amount of $16,500. The cashier’s check is not with the same or substantially similar treated as currency because the face amount terms in the ordinary course of its of the check is more than $10,000. Thus, no trade or business in connection with report is required to be made by T under sec- sales to ultimate consumers; and tion 5331 and this section. (ii) The instrument is received more Example 5. H, an individual, arranges with than 60 days prior to the date of the W, a travel agent, for the chartering of a pas- sale (in the case of an item of travel or senger aircraft to transport a group of indi- viduals to a sports event in another city. H entertainment, the date on which the also arranges with W for hotel accommoda- final payment is due). tions for the group and for admission tickets (6) Examples. The following examples to the sports event. In payment, H tenders to illustrate the definition of ‘‘currency’’ W money orders which H had previously pur- set forth in paragraphs (c)(1) through chased. The total amount of the money or- (c)(5) of this section: ders, none of which individually exceeds $10,000 in face amount, exceeds $10,000. Be- Example 1. D, an individual, purchases gold cause the transaction is a designated report- coins from M, a coin dealer, for $13,200. D ing transaction, the money orders are treat- tenders to M in payment United States cur- ed as currency for purposes of section 5331 rency in the amount of $6,200 and a cashier’s and this section. Therefore, because W has check in the face amount of $7,000 which D received more than $10,000 in currency with had purchased. Because the sale is a des- respect to the transaction, W must make the ignated reporting transaction, the cashier’s report required by section 5331 and this sec- check is treated as currency for purposes of tion. 31 U.S.C. 5331 and this section. Therefore, be- cause M has received more than $10,000 in (7) Consumer durable. The term con- currency with respect to the transaction, M sumer durable means an item of tan- must make the report required by 31 U.S.C. gible personal property of a type that 5331 and this section. is suitable under ordinary usage for Example 2. E, an individual, purchases an personal consumption or use, that can automobile from Q, an automobile dealer, for reasonably be expected to be useful for $11,500. E tenders to Q in payment United States currency in the amount of $2,000 and at least 1 year under ordinary usage, a cashier’s check payable to E and Q in the and that has a sales price of more than amount of $9,500. The cashier’s check con- $10,000. Thus, for example, a $20,000 stitutes the proceeds of a loan from the bank automobile is a consumer durable

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(whether or not it is sold for business more than 24 hours are related if the use), but a $20,000 dump truck or a recipient knows or has reason to know $20,000 factory machine is not. that each transaction is one of a series (8) Collectible. The term collectible of connected transactions. means an item described in paragraphs (iii) The following examples illus- (A) through (D) of section 408 (m)(2) of trate the definition of paragraphs title 26 of the United States Code (de- (c)(12)(i) and (ii) of this section: termined without regard to section 408 (m)(3) of title 26 of the United States Example 1. A person has a tacit agreement Code). with a gold dealer to purchase $36,000 in gold bullion. The $36,000 purchase represents a (9) Travel or entertainment activity. single transaction under paragraph (c)(12)(i) The term travel or entertainment activity of this section and the reporting require- means an item of travel or entertain- ments of this section cannot be avoided by ment (within the meaning of 26 CFR recasting the single sales transaction into 4 1.274–2(b)(1)) pertaining to a single trip separate $9,000 sales transactions. or event where the aggregate sales Example 2. An attorney agrees to represent price of the item and all other items a client in a criminal case with the attor- pertaining to the same trip or event ney’s fee to be determined on an hourly that are sold in the same transaction basis. In the first month in which the attor- (or related transactions) exceeds ney represents the client, the bill for the at- torney’s services comes to $8,000 which the $10,000. client pays in currency. In the second month (10) Retail sale. The term retail sale in which the attorney represents the client, means any sale (whether for resale or the bill for the attorney’s services comes to for any other purpose) made in the $4,000, which the client again pays in cur- course of a trade or business if that rency. The aggregate amount of currency trade or business principally consists paid ($12,000) relates to a single transaction of making sales to ultimate consumers. as defined in paragraph (c)(12)(i) of this sec- (11) Trade or business. The term trade tion, the sale of legal services relating to the criminal case, and the receipt of currency or business has the same meaning as must be reported under this section. under section 162 of title 26, United Example 3. A person intends to contribute a States Code. total of $45,000 to a trust fund, and the trust- (12) Transaction. (i) Solely for pur- ee of the fund knows or has reason to know poses of 31 U.S.C. 5331 and this section, of that intention. The $45,000 contribution is the term transaction means the under- a single transaction under paragraph lying event precipitating the payer’s (c)(12)(i) of this section and the reporting re- transfer of currency to the recipient. In quirement of this section cannot be avoided this context, transactions include (but by the grantor’s making five separate $9,000 contributions of currency to a single fund or are not limited to) a sale of goods or by making five $9,000 contributions of cur- services; a sale of real property; a sale rency to five separate funds administered by of intangible property; a rental of real a common trustee. or personal property; an exchange of Example 4. K, an individual, attends a one currency for other currency; the estab- day auction and purchases for currency two lishment or maintenance of or con- items, at a cost of $9,240 and $1,732.50 respec- tribution to a custodial, trust, or es- tively (tax and buyer’s premium included). crow arrangement; a payment of a pre- Because the transactions are related trans- existing debt; a conversion of currency actions as defined in paragraph (c)(12)(ii) of this section, the auction house is required to to a negotiable instrument; a reim- report the aggregate amount of currency re- bursement for expenses paid; or the ceived from the related sales ($10,972.50), making or repayment of a loan. A even though the auction house accounts sep- transaction may not be divided into arately on its books for each item sold and multiple transactions in order to avoid presents the purchaser with separate bills for reporting under this section. each item purchased. (ii) The term related transactions Example 5. F, a coin dealer, sells for cur- means any transaction conducted be- rency $9,000 worth of gold coins to an indi- tween a payer (or its agent) and a re- vidual on three successive days. Under para- graph (c)(12)(ii) of this section the three cipient of currency in a 24-hour period. $9,000 transactions are related transactions Additionally, transactions conducted aggregating $27,000 if F knows, or has reason between a payer (or its agent) and a to know, that each transaction is one of a se- currency recipient during a period of ries of connected transactions.

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(13) Recipient. (i) The term recipient entire transaction occurs outside the means the person receiving the cur- United States (the fifty states and the rency. Except as provided in paragraph District of Columbia). An entire trans- (c)(13)(ii) of this section, each store, di- action consists of both the transaction vision, branch, department, head- as defined in paragraph (c)(12)(i) of this quarters, or office (‘‘branch’’) (regard- section and the receipt of currency by less of physical location) comprising a the recipient. If, however, any part of portion of a person’s trade or business an entire transaction occurs in the shall for purposes of this section be Commonwealth of Puerto Rico or a deemed a separate recipient. possession or territory of the United (ii) A branch that receives currency States and the recipient of currency in payments will not be deemed a sepa- that transaction is subject to the gen- rate recipient if the branch (or a cen- eral jurisdiction of the Internal Rev- tral unit linking such branch with other branches) would in the ordinary enue Service under title 26 of the course of business have reason to know United States Code, the recipient is re- the identity of payers making currency quired to report the transaction under payments to other branches of such this section. person. (ii) Example. The following example (iii) Examples. The following exam- illustrates the application of the rules ples illustrate the application of the in paragraph (d)(1)(i) of this section: rules in paragraphs (c)(13)(i) and (ii) of Example. W, an individual engaged in the this section: trade or business of selling aircraft, reaches Example 1. N, an individual, purchases reg- an agreement to sell an airplane to a U.S. ulated futures contracts at a cost of $7,500 citizen living in Mexico. The agreement, no and $5,000, respectively, through two dif- portion of which is formulated in the United ferent branches of Commodities Broker X on States, calls for a purchase price of $125,000 the same day. N pays for each purchase with and requires delivery of and payment for the currency. Each branch of Commodities airplane to be made in Mexico. Upon delivery Broker X transmits the sales information re- of the airplane in Mexico, W receives $125,000 garding each of N’s purchases to a central in currency. W is not required to report unit of Commodities Broker X (which settles under 31 U.S.C. 5331 or this section because the transactions against N’s account). Under the exception provided in paragraph (d)(1)(i) paragraph (c)(13)(ii) of this section the sepa- of this section (‘‘foreign transaction excep- rate branches of Commodities Broker X are tion’’) applies. If, however, any part of the not deemed to be separate recipients; there- agreement to sell had been formulated in the fore, Commodities Broker X must report United States, the foreign transaction excep- with respect to the two related regulated fu- tion would not apply and W would be re- tures contracts sales in accordance with this quired to report the receipt of currency section. under 31 U.S.C. 5331 and this section. Example 2. P, a corporation, owns and oper- ates a racetrack. P’s racetrack contains 100 (2) Receipt of currency not in the course betting windows at which pari-mutuel wa- of the recipient’s trade or business. The gers may be made. R, an individual, places currency wagers of $3,000 each at five sepa- receipt of currency in excess of $10,000 rate betting windows. Assuming that in the by a person other than in the course of ordinary course of business each betting win- the person’s trade or business is not re- dow (or a central unit linking windows) does portable under 31 U.S.C. 5331. Thus, for not have reason to know the identity of per- example, F, an individual in the trade sons making wagers at other betting win- or business of selling real estate, sells dows, each betting window would be deemed to be a separate currency recipient under a motorboat for $12,000, the purchase paragraph (c)(13)(i) of this section. As no in- price of which is paid in currency. F dividual recipient received currency in ex- did not use the motorboat in any trade cess of $10,000, no report need be made by P or business in which F was engaged. F under this section. is not required to report under 31 (d) Exceptions to the reporting require- U.S.C. 5331 or this section because the ments of 31 U.S.C. 5331—(1) Receipt is exception provided in this paragraph made with respect to a foreign currency (d)(2) applies. transaction—(i) In general. Generally, (e) Time, manner, and form of report- there is no requirement to report with ing—(1) In general. The reports required respect to a currency transaction if the by paragraph (a) of this section must

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be made by filing a Form 8300, as speci- require clerks to report the same infor- fied in 26 CFR 1.6050I–1(e)(2). The re- mation to the Financial Crimes En- ports must be filed at the time and in forcement Network. This information the manner specified in 26 CFR 1.6050I– shall be reported on the same form as 1(e)(1) and (3) respectively. prescribed by the Secretary. (2) Verification. A person making a re- (b) Meaning of terms. The following port of information under this section definitions apply for purposes of this must verify the identity of the person section— from whom the reportable currency is (1) The term currency means— received. Verification of the identity of (i) The coin and currency of the a person who purports to be an alien United States, or of any other country, must be made by examination of such that circulate in and are customarily person’s passport, alien identification used and accepted as money in the card, or other official document evi- country in which issued; and dencing nationality or residence. (ii) A cashier’s check (by whatever Verification of the identity of any name called, including treasurer’s other person may be made by examina- check and bank check), bank draft, tion of a document normally accept- traveler’s check, or money order hav- able as a means of identification when ing a face amount of not more than $ cashing or accepting checks (for exam- 10,000. ple, a driver’s license or a credit card). (2) The term specified criminal offense In addition, a report will be considered means— incomplete if the person required to (i) A Federal criminal offense involv- make a report knows (or has reason to ing a controlled substance (as defined know) that an agent is conducting the in section 802 of title 21 of the United transaction for a principal, and the re- States Code), provided the offense is turn does not identify both the prin- described in Part D of Subchapter I or cipal and the agent. Subchapter II of title 21 of the United (3) Retention of reports. A person re- States Code; quired to make a report under this sec- (ii) Racketeering (as defined in sec- tion must keep a copy of each report tion 1951, 1952, or 1955 of title 18 of the filed for five years from the date of fil- United States Code); ing. (iii) Money laundering (as defined in section 1956 or 1957 of title 18 of the [75 FR 65812, Oct. 26, 2010, as amended at 77 United States Code); and FR 33637, June 7, 2012] (iv) Any State criminal offense sub- § 1010.331 Reports relating to currency stantially similar to an offense de- in excess of $10,000 received as bail scribed in this paragraph (b)(2) of this by court clerks. section. (a) Reporting requirement—(1) In gen- (c) Time, form, and manner of report- eral. Any clerk of a Federal or State ing.—(1) In general. The reports re- court who receives more than $10,000 in quired by paragraph (a) of this section currency as bail for any individual must be made by filing a Form 8300, as charged with a specified criminal of- specified in 26 CFR 1.6050I–2(c)(2). The fense must make a report of informa- report must be filed at the time and in tion with respect to that receipt of cur- the manner specified in 26 CFR 1.6050I– rency. For purposes of this section, a 2(c)(1) and (3), respectively. clerk is the clerk’s office or the office, (2) Verification of identity. A clerk re- department, division, branch, or unit of quired to make a report under this sec- the court that is authorized to receive tion must, in accordance with 26 CFR bail. If someone other than a clerk re- 1.6050I–2(c)(3)(ii), verify the identity of ceives bail on behalf of a clerk, the each payor of bail listed in the report. clerk is treated as receiving the bail [77 FR 33637, June 7, 2012] for purposes of this paragraph (a). (2) Certain financial transactions. Sec- § 1010.340 Reports of transportation of tion 6050I of title 26 of the United currency or monetary instruments. States Code requires clerks to report (a) Each person who physically trans- information about financial trans- ports, mails, or ships, or causes to be actions to the IRS, and 31 U.S.C. 5331 physically transported, mailed, or

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shipped, or attempts to physically (5) A common carrier of passengers in transport, mail or ship, or attempts to respect to currency or other monetary cause to be physically transported, instruments in the possession of its mailed or shipped, currency or other passengers; monetary instruments in an aggregate (6) A common carrier of goods in re- amount exceeding $10,000 at one time spect to shipments of currency or mon- from the United States to any place etary instruments not declared to be outside the United States, or into the such by the shipper; United States from any place outside (7) A travelers’ check issuer or its the United States, shall make a report agent in respect to the transportation thereof. A person is deemed to have of travelers’ checks prior to their de- caused such transportation, mailing or livery to selling agents for eventual shipping when he aids, abets, counsels, sale to the public; commands, procures, or requests it to (8) By a person with respect to a re- be done by a financial institution or strictively endorsed traveler’s check any other person. that is in the collection and reconcili- (b) Each person who receives in the ation process after the traveler’s check U.S. currency or other monetary in- has been negotiated; struments in an aggregate amount ex- (9) Nor by a person engaged as a busi- ceeding $10,000 at one time which have ness in the transportation of currency, been transported, mailed, or shipped to monetary instruments and other com- such person from any place outside the mercial papers with respect to the United States with respect to which a transportation of currency or other report has not been filed under para- monetary instruments overland be- graph (a) of this section, whether or tween established offices of banks or not required to be filed thereunder, brokers or dealers in securities and for- shall make a report thereof, stating eign persons. the amount, the date of receipt, the (d) A transfer of funds through nor- form of monetary instruments, and the mal banking procedures which does not person from whom received. involve the physical transportation of (c) This section shall not require re- currency or monetary instruments is ports by: not required to be reported by this sec- (1) A Federal Reserve; tion. This section does not require that (2) A bank, a foreign bank, or a more than one report be filed covering broker or dealer in securities, in re- a particular transportation, mailing or spect to currency or other monetary shipping of currency or other monetary instruments mailed or shipped through instruments with respect to which a the postal service or by common car- complete and truthful report has been rier; filed by a person. However, no person (3) A commercial bank or trust com- required by paragraph (a) or (b) of this pany organized under the laws of any section to file a report shall be excused State or of the United States with re- from liability for failure to do so if, in spect to overland shipments of cur- fact, a complete and truthful report rency or monetary instruments shipped has not been filed. to or received from an established cus- tomer maintaining a deposit relation- § 1010.350 Reports of foreign financial ship with the bank, in amounts which accounts. the bank may reasonably conclude do (a) In general. Each United States not exceed amounts commensurate person having a financial interest in, with the customary conduct of the or signature or other authority over, a business, industry or profession of the bank, securities, or other financial ac- customer concerned; count in a foreign country shall report (4) A person who is not a citizen or such relationship to the Commissioner resident of the United States in respect of Internal Revenue for each year in to currency or other monetary instru- which such relationship exists and ments mailed or shipped from abroad shall provide such information as shall to a bank or broker or dealer in securi- be specified in a reporting form pre- ties through the postal service or by scribed under 31 U.S.C. 5314 to be filed common carrier; by such persons. The form prescribed

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under section 5314 is the Report of For- asset value determination and regular eign Bank and Financial Accounts redemptions; or (TD–F 90–22.1), or any successor form. (B) Other investment fund. [Reserved] See paragraphs (g)(1) and (g)(2) of this (4) Exceptions for certain accounts. (i) section for a special rule for persons An account of a department or agency with a financial interest in 25 or more of the United States, an Indian Tribe, accounts, or signature or other author- or any State or any political subdivi- ity over 25 or more accounts. sion of a State, or a wholly-owned enti- (b) United States person. For purposes ty, agency or instrumentality of any of of this section, the term ‘‘United the foregoing is not required to be re- States person’’ means— ported. In addition, reporting is not re- (1) A citizen of the United States; quired with respect to an account of an (2) A resident of the United States. A entity established under the laws of resident of the United States is an indi- the United States, of an Indian Tribe, vidual who is a resident alien under 26 of any State, or of any political sub- U.S.C. 7701(b) and the regulations division of any State, or under an thereunder but using the definition of intergovernmental compact between ‘‘United States’’ provided in 31 CFR two or more States or Indian Tribes, 1010.100(hhh) rather than the definition that exercises governmental authority of ‘‘United States’’ in 26 CFR on behalf of the United States, an In- 301.7701(b)–1(c)(2)(ii); and dian Tribe, or any such State or polit- (3) An entity, including but not lim- ical subdivision. For this purpose, an ited to, a corporation, partnership, entity generally exercises govern- trust, or limited liability company cre- mental authority on behalf of the ated, organized, or formed under the United States, an Indian Tribe, a laws of the United States, any State, State, or a political subdivision only if the District of Columbia, the Terri- its authorities include one or more of tories and Insular Possessions of the the powers to tax, to exercise the United States, or the Indian Tribes. power of eminent domain, or to exer- (c) Types of reportable accounts. For cise police powers with respect to mat- purposes of this section— ters within its jurisdiction. (ii) An account of an international fi- (1) Bank account. The term ‘‘bank ac- nancial institution of which the United count’’ means a savings deposit, de- States government is a member is not mand deposit, checking, or any other required to be reported. account maintained with a person en- (iii) An account in an institution gaged in the business of banking. known as a ‘‘United States military (2) Securities account. The term ‘‘se- banking facility’’ (or ‘‘United States curities account’’ means an account military finance facility’’) operated by with a person engaged in the business a United States financial institution of buying, selling, holding or trading designated by the United States Gov- stock or other securities. ernment to serve United States govern- (3) Other financial account. The term ment installations abroad is not re- ‘‘other financial account’’ means— quired to be reported even though the (i) An account with a person that is United States military banking facil- in the business of accepting deposits as ity is located in a foreign country. a financial agency; (iv) Correspondent or nostro accounts (ii) An account that is an insurance that are maintained by banks and used or annuity policy with a cash value; solely for bank-to-bank settlements (iii) An account with a person that are not required to be reported. acts as a broker or dealer for futures or (d) Foreign country. A foreign country options transactions in any commodity includes all geographical areas located on or subject to the rules of a com- outside of the United States as defined modity exchange or association; or in 31 CFR 1010.100(hhh). (iv) An account with— (e) Financial interest. A financial in- (A) Mutual fund or similar pooled fund. terest in a bank, securities or other fi- A mutual fund or similar pooled fund nancial account in a foreign country which issues shares available to the means an interest described in this general public that have a regular net paragraph (e):

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(1) Owner of record or holder of legal account in a foreign country for which title. A United States person has a fi- the entity is the owner of record or nancial interest in each bank, securi- holder of legal title. ties or other financial account in a for- (f) Signature or other authority—(1) In eign country for which he is the owner general. Signature or other authority of record or has legal title whether the means the authority of an individual account is maintained for his own ben- (alone or in conjunction with another) efit or for the benefit of others. If an to control the disposition of money, account is maintained in the name of funds or other assets held in a financial more than one person, each United account by direct communication States person in whose name the ac- (whether in writing or otherwise) to count is maintained has a financial in- the person with whom the financial ac- terest in that account. count is maintained. (2) Other financial interest. A United (2) Exceptions—(i) An officer or em- States person has a financial interest ployee of a bank that is examined by in each bank, securities or other finan- the Office of the Comptroller of the cial account in a foreign country for Currency, the Board of Governors of which the owner of record or holder of the Federal Reserve System, the Fed- legal title is— eral Deposit Insurance Corporation, (i) A person acting as an agent, nomi- the Office of Thrift Supervision, or the nee, attorney or in some other capacity National Credit Union Administration on behalf of the United States person need not report that he has signature with respect to the account; or other authority over a foreign finan- (ii) A corporation in which the cial account owned or maintained by United States person owns directly or the bank if the officer or employee has indirectly more than 50 percent of the no financial interest in the account. voting power or the total value of the (ii) An officer or employee of a finan- shares, a partnership in which the cial institution that is registered with United States person owns directly or and examined by the Securities and Ex- indirectly more than 50 percent of the interest in profits or capital, or any change Commission or Commodity Fu- other entity (other than an entity in tures Trading Commission need not re- paragraphs (e)(2)(iii) through (iv) of port that he has signature or other au- this section) in which the United thority over a foreign financial ac- States person owns directly or indi- count owned or maintained by such fi- rectly more than 50 percent of the vot- nancial institution if the officer or em- ing power, total value of the equity in- ployee has no financial interest in the terest or assets, or interest in profits; account. (iii) A trust, if the United States per- (iii) An officer or employee of an Au- son is the trust grantor and has an thorized Service Provider need not re- ownership interest in the trust for port that he has signature or other au- United States Federal tax purposes. See thority over a foreign financial ac- 26 U.S.C. 671–679 and the regulations count owned or maintained by an in- thereunder to determine if a grantor vestment company that is registered has an ownership interest in the trust with the Securities and Exchange Com- for the year; or mission if the officer or employee has (iv) A trust in which the United no financial interest in the account. States person either has a present ben- ‘‘Authorized Service Provider’’ means eficial interest in more than 50 percent an entity that is registered with and of the assets or from which such person examined by the Securities and Ex- receives more than 50 percent of the change Commission and that provides current income. services to an investment company (3) Anti-avoidance rule. A United registered under the Investment Com- States person that causes an entity, in- pany Act of 1940. cluding but not limited to a corpora- (iv) An officer or employee of an enti- tion, partnership, or trust, to be cre- ty with a class of equity securities list- ated for a purpose of evading this sec- ed (or American depository receipts tion shall have a financial interest in listed) on any United States national any bank, securities, or other financial securities exchange need not report

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that he has signature or other author- sections 401(a), 403(a) or 403(b) of the ity over a foreign financial account of Internal Revenue Code as well as own- such entity if the officer or employee ers and beneficiaries of individual re- has no financial interest in the ac- tirement accounts under section 408 of count. An officer or employee of a the Internal Revenue Code or Roth United States subsidiary of a United IRAs under section 408A of the Internal States entity with a class of equity se- Revenue Code are not required to file curities listed on a United States na- an FBAR with respect to a foreign fi- tional securities exchange need not file nancial account held by or on behalf of a report concerning signature or other the retirement plan or IRA. authority over a foreign financial ac- (5) Certain trust beneficiaries. A bene- count of the subsidiary if he has no fi- ficiary of a trust described in para- nancial interest in the account and the graph (e)(2)(iv) of this section is not re- United States subsidiary is included in quired to report the trust’s foreign fi- a consolidated report of the parent nancial accounts if the trust, trustee of filed under this section. the trust, or agent of the trust is a (v) An officer or employee of an enti- United States person that files a report ty that has a class of equity securities under this section disclosing the registered (or American depository re- trust’s foreign financial accounts. ceipts in respect of equity securities registered) under section 12(g) of the [76 FR 10245, Feb. 24, 2011, as amended at 76 Securities Exchange Act need not re- FR 37000, June 24, 2011] port that he has signature or other au- thority over the foreign financial ac- § 1010.360 Reports of transactions with foreign financial agencies. counts of such entity or if he has no fi- nancial interest in the accounts. (a) Promulgation of reporting require- (g) Special rules—(1) Financial interest ments. The Secretary, when he deems in 25 or more foreign financial accounts. appropriate, may promulgate regula- A United States person having a finan- tions requiring specified financial in- cial interest in 25 or more foreign fi- stitutions to file reports of certain nancial accounts need only provide the transactions with designated foreign fi- number of financial accounts and cer- nancial agencies. If any such regula- tain other basic information on the re- tion is issued as a final rule without port, but will be required to provide de- notice and opportunity for public com- tailed information concerning each ac- ment, then a finding of good cause for count when so requested by the Sec- dispensing with notice and comment in retary or his delegate. accordance with 5 U.S.C. 553(b) will be (2) Signature or other authority over 25 included in the regulation. If any such or more foreign financial accounts. A regulation is not published in the FED- United States person having signature ERAL REGISTER, then any financial in- or other authority over 25 or more for- stitution subject to the regulation will eign financial accounts need only pro- be named and personally served or oth- vide the number of financial accounts erwise given actual notice in accord- and certain other basic information on ance with 5 U.S.C. 553(b). If a financial the report, but will be required to pro- institution is given notice of a report- vide detailed information concerning ing requirement under this section by each account when so requested by the means other than publication in the Secretary or his delegate. FEDERAL REGISTER, the Secretary may (3) Consolidated reports. An entity prohibit disclosure of the existence or that is a United States person and provisions of that reporting require- which owns directly or indirectly more ment to the designated foreign finan- than a 50 percent interest in one or cial agency or agencies and to any more other entities required to report other party. under this section will be permitted to (b) Information subject to reporting re- file a consolidated report on behalf of quirements. A regulation promulgated itself and such other entities. pursuant to paragraph (a) of this sec- (4) Participants and beneficiaries in cer- tion shall designate one or more of the tain retirement plans. Participants and following categories of information to beneficiaries in retirement plans under be reported:

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(1) Checks or drafts, including trav- (6) Bonds received or shipped by re- eler’s checks, received by respondent spondent financial institution—includ- financial institution for collection or ing the following information: credit to the account of a foreign finan- (i) Name of issuer; cial agency, sent by respondent finan- (ii) Bond number; cial institution to a foreign country for (iii) Type of bond series; collection or payment, drawn by re- (iv) Date issued; spondent financial institution on a for- (v) Due date; eign financial agency, drawn by a for- (vi) Rate of interest; eign financial agency on respondent fi- (vii) Amount of transaction; nancial institution—including the fol- (viii) Name of registered holder. lowing information. (7) Certificates of deposit received or (i) Name of maker or drawer; shipped by respondent financial insti- (ii) Name of drawee or drawee finan- tution—including the following infor- cial institution; mation: (iii) Name of payee; (i) Name and address of issuer; (iv) Date and amount of instrument; (ii) Date issued; (v) Names of all endorsers. (iii) Dollar amount; (2) Transmittal orders received by a (iv) Name of registered holder; respondent financial institution from a (v) Due date; foreign financial agency or sent by re- (vi) Rate of interest; spondent financial institution to a for- (vii) Certificate number; eign financial agency, including all in- (viii) Name and address of issuing formation maintained by that institu- agent. tion pursuant to §§ 1010.410 and 1020.410. (c) Scope of reports. In issuing regula- (3) Loans made by respondent finan- tions as provided in paragraph (a) of cial institution to or through a foreign this section, the Secretary will pre- financial agency—including the fol- scribe: lowing information: (1) A reasonable classification of fi- (i) Name of borrower; nancial institutions subject to or ex- (ii) Name of person acting for bor- empt from a reporting requirement; rower; (2) A foreign country to which a re- (iii) Date and amount of loan; porting requirement applies if the Sec- (iv) Terms of repayment; retary decides that applying the re- (v) Name of guarantor; quirement to all foreign countries is (vi) Rate of interest; unnecessary or undesirable; (vii) Method of disbursing proceeds; (3) The magnitude of transactions (viii) Collateral for loan. subject to a reporting requirement; and (4) Commercial paper received or (4) The kind of transaction subject to shipped by the respondent financial in- or exempt from a reporting require- stitution—including the following in- ment. formation: (d) Form of reports. Regulations issued (i) Name of maker; pursuant to paragraph (a) of this sec- (ii) Date and amount of paper; tion may prescribe the manner in (iii) Due date; which the information is to be re- (iv) Certificate number; ported. However, the Secretary may authorize a designated financial insti- (v) Amount of transaction. tution to report in a different manner (5) Stocks received or shipped by re- if the institution demonstrates to the spondent financial institution—includ- Secretary that the form of the required ing the following information: report is unnecessarily burdensome on (i) Name of corporation; the institution as prescribed; that a re- (ii) Type of stock; port in a different form will provide all (iii) Certificate number; the information the Secretary deems (iv) Number of shares; necessary; and that submission of the (v) Date of certificate; information in a different manner will (vi) Name of registered holder; not unduly hinder the effective admin- (vii) Amount of transaction. istration of this chapter.

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(e) Limitations. (1) In issuing regula- such order. The order shall contain tions under paragraph (a) of this sec- such information as the Secretary may tion, the Secretary shall consider the describe concerning any transaction in need to avoid impeding or controlling which such financial institution is in- the export or import of monetary in- volved for the payment, receipt, or struments and the need to avoid bur- transfer of United States coins or cur- dening unreasonably a person making a rency (or such other monetary instru- transaction with a foreign financial ments as the Secretary may describe in agency. such order) the total amounts or de- (2) The Secretary shall not issue a nominations of which are equal to or regulation under paragraph (a) of this greater than an amount which the Sec- section for the purpose of obtaining in- retary may prescribe. dividually identifiable account infor- (b) An order issued under paragraph mation concerning a customer, as de- (a) of this section shall be directed to fined by the Right to Financial Privacy the Chief Executive Officer of the fi- Act (12 U.S.C. 3401 et seq.), where that nancial institution and shall designate customer is already the subject of an one or more of the following categories ongoing investigation for possible vio- of information to be reported: Each de- lation of the Currency and Foreign posit, withdrawal, exchange of cur- Transactions Reporting Act, or is rency or other payment or transfer, by, known by the Secretary to be the sub- through or to such financial institu- ject of an investigation for possible tion specified in the order, which in- violation of any other Federal law. volves all or any class of transactions (3) The Secretary may issue a regula- in currency and/or monetary instru- tion pursuant to paragraph (a) of this ments equal to or exceeding an amount section requiring a financial institu- to be specified in the order. tion to report transactions completed (c) In issuing an order under para- prior to the date it received notice of graph (a) of this section, the Secretary the reporting requirement. However, will prescribe: with respect to completed trans- (1) The dollar amount of transactions actions, a financial institution may be subject to the reporting requirement in required to provide information only the order; from records required to be maintained (2) The type of transaction or trans- pursuant to the requirements of this actions subject to or exempt from a re- chapter, or any other provision of state porting requirement in the order; or Federal law, or otherwise main- (3) The appropriate form for report- tained in the regular course of busi- ing the transactions required in the ness. order; (4) The address to which reports re- § 1010.370 Reports of certain domestic quired in the order are to be sent or coin and currency transactions. from which they will be picked up; (a) If the Secretary of the Treasury (5) The starting and ending dates by finds, upon the Secretary’s own initia- which such transactions specified in tive or at the request of an appropriate the order are to be reported; Federal or State law enforcement offi- (6) The name of a Treasury official to cial, that reasonable grounds exist for be contacted for any additional infor- concluding that additional record- mation or questions; keeping and/or reporting requirements (7) The amount of time the reports are necessary to carry out the purposes and records of reports generated in re- of this chapter and to prevent persons sponse to the order will have to be re- from evading the reporting/record- tained by the financial institution; and keeping requirements of this chapter, (8) Any other information deemed the Secretary may issue an order re- necessary to carry out the purposes of quiring any domestic financial institu- the order. tion or group of domestic financial in- (d)(1) No order issued pursuant to stitutions in a geographic area and any paragraph (a) of this section shall pre- other person participating in the type scribe a reporting period of more than of transaction to file a report in the 60 days unless renewed pursuant to the manner and to the extent specified in requirements of paragraph (a).

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(2) Any revisions to an order issued sion of credit is made, the amount under this section will not be effective thereof, the nature or purpose thereof, until made in writing by the Secretary. and the date thereof; (3) Unless otherwise specified in the (b) A record of each advice, request, order, a bank receiving an order under or instruction received or given regard- this section may continue to use the ing any transaction resulting (or in- exemptions granted under § 1020.315 of tended to result and later canceled if this chapter prior to the receipt of the such a record is normally made) in the order, but may not grant additional ex- transfer of currency or other monetary emptions. instruments, funds, checks, investment (4) For purposes of this section, the securities, or credit, of more than term geographic area means any area in one or more States of the United $10,000 to or from any person, account, States, the District of Columbia, the or place outside the United States. Commonwealth of Puerto Rico, the (c) A record of each advice, request, United States Virgin Islands, Guam, or instruction given to another finan- the Commonwealth of the Northern cial institution or other person located Mariana Islands, American Samoa, the within or without the United States, Trust Territory of the Pacific Islands, regarding a transaction intended to re- the territories and possessions of the sult in the transfer of funds, or of cur- United States, and/or political subdivi- rency, other monetary instruments, sion or subdivisions thereof, as speci- checks, investment securities, or cred- fied in an order issued pursuant to it, of more than $10,000 to a person, ac- paragraph (a) of this section. count or place outside the United States. Subpart D—Records Required To (d) A record of such information for Be Maintained such period of time as the Secretary may require in an order issued under § 1010.400 General. § 1010.370(a), not to exceed five years. Each financial institution (as defined (e) Nonbank financial institutions. in 31 U.S.C. 5312(a)(2) or (c)(1)) should Each agent, agency, branch, or office refer to its chapter X part for any addi- located within the United States of a tional recordkeeping requirements. Un- financial institution other than a bank less otherwise indicated, the record- is subject to the requirements of this keeping requirements contained in this paragraph (e) with respect to a trans- subpart D apply to all financial institu- mittal of funds in the amount of $3,000 tions. or more: § 1010.401 Determination by the Sec- (1) Recordkeeping requirements. (i) For retary. each transmittal order that it accepts The Secretary hereby determines as a transmittor’s financial institu- that the records required to be kept by tion, a financial institution shall ob- this chapter have a high degree of use- tain and retain either the original or a fulness in criminal, tax, or regulatory microfilm, other copy, or electronic investigations or proceedings. record of the following information re- lating to the transmittal order: § 1010.405 [Reserved] (A) The name and address of the transmittor; § 1010.410 Records to be made and re- tained by financial institutions. (B) The amount of the transmittal order; Each financial institution shall re- (C) The execution date of the trans- tain either the original or a copy or re- mittal order; production of each of the following: (a) A record of each extension of (D) Any payment instructions re- credit in an amount in excess of $10,000, ceived from the transmittor with the except an extension of credit secured transmittal order; by an interest in real property, which (E) The identity of the recipient’s fi- record shall contain the name and ad- nancial institution; dress of the person to whom the exten-

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(F) As many of the following items as thereof. If the transmittor’s financial are received with the transmittal institution has knowledge that the per- order: 1 son placing the transmittal order is (1) The name and address of the re- not the transmittor, the transmittor’s cipient; financial institution shall obtain and (2) The account number of the recipi- retain a record of the transmittor’s ent; and taxpayer identification number (e.g., (3) Any other specific identifier of the social security or employer identifica- recipient; and tion number) or, if none, alien identi- (G) Any form relating to the trans- fication number or passport number mittal of funds that is completed or and country of issuance, if known by signed by the person placing the trans- the person placing the order, or a nota- mittal order. tion in the record of the lack thereof. (ii) For each transmittal order that it accepts as an intermediary financial (ii) If the transmittal order accepted institution, a financial institution by the transmittor’s financial institu- shall retain either the original or a tion is not made in person, the microfilm, other copy, or electronic transmittor’s financial institution record of the transmittal order. shall obtain and retain a record of the (iii) For each transmittal order that name and address of the person placing it accepts as a recipient’s financial in- the transmittal order, as well as the stitution, a financial institution shall person’s taxpayer identification num- retain either the original or a micro- ber (e.g., social security or employer film, other copy, or electronic record of identification number) or, if none, the transmittal order. alien identification number or passport (2) Transmittors other than established number and country of issuance, or a customers. In the case of a transmittal notation in the record of the lack order from a transmittor that is not an thereof, and a copy or record of the established customer, in addition to method of payment (e.g., check or cred- obtaining and retaining the informa- it card transaction) for the transmittal tion required in paragraph (e)(1)(i) of of funds. If the transmittor’s financial this section: institution has knowledge that the per- (i) If the transmittal order is made in son placing the transmittal order is person, prior to acceptance the not the transmittor, the transmittor’s transmittor’s financial institution financial institution shall obtain and shall verify the identity of the person retain a record of the transmittor’s placing the transmittal order. If it ac- taxpayer identification number (e.g., cepts the transmittal order, the social security or employer identifica- transmittor’s financial institution tion number) or, if none, alien identi- shall obtain and retain a record of the fication number or passport number name and address, the type of identi- and country of issuance, if known by fication reviewed, and the number of the person placing the order, or a nota- the identification document (e.g., driv- tion in the record of the lack thereof. er’s license), as well as a record of the (3) Recipients other than established person’s taxpayer identification num- customers. For each transmittal order ber (e.g., social security or employer that it accepts as a recipient’s finan- identification number) or, if none, cial institution for a recipient that is alien identification number or passport not an established customer, in addi- number and country of issuance, or a tion to obtaining and retaining the in- notation in the record of the lack formation required in paragraph (e)(1)(iii) of this section: 1 For transmittals of funds effected (i) If the proceeds are delivered in through the Federal Reserve’s Fedwire funds person to the recipient or its represent- transfer system by a domestic broker or ative or agent, the recipient’s financial dealers in securities, only one of the items is institution shall verify the identity of required to be retained, if received with the transmittal order, until such time as the the person receiving the proceeds and bank that sends the order to the Federal Re- shall obtain and retain a record of the serve Bank completes its conversion to the name and address, the type of identi- expanded Fedwire message format. fication reviewed, and the number of

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the identification document (e.g., driv- rectly or through reference to some er’s license), as well as a record of the other record maintained by the finan- person’s taxpayer identification num- cial institution. ber (e.g., social security or employer (5) Verification. Where verification is identification number) or, if none, required under paragraphs (e)(2) and alien identification number or passport (e)(3) of this section, a financial insti- number and country of issuance, or a tution shall verify a person’s identity notation in the record of the lack by examination of a document (other thereof. If the recipient’s financial in- than a customer signature card), pref- stitution has knowledge that the per- erably one that contains the person’s son receiving the proceeds is not the name, address, and photograph, that is recipient, the recipient’s financial in- normally acceptable by financial insti- stitution shall obtain and retain a tutions as a means of identification record of the recipient’s name and ad- when cashing checks for persons other dress, as well as the recipient’s tax- than established customers. payer identification number (e.g., so- Verification of the identity of an indi- cial security or employer identification vidual who indicates that he or she is number) or, if none, alien identifica- an alien or is not a resident of the tion number or passport number and United States may be made by pass- country of issuance, if known by the port, alien identification card, or other person receiving the proceeds, or a no- official document evidencing nation- tation in the record of the lack thereof. ality or residence (e.g., a foreign driv- (ii) If the proceeds are delivered er’s license with indication of home ad- other than in person, the recipient’s fi- dress). nancial institution shall retain a copy (6) Exceptions. The following trans- of the check or other instrument used mittals of funds are not subject to the to effect payment, or the information requirements of this section: contained thereon, as well as the name (i) Transmittals of funds where the and address of the person to which it transmittor and the recipient are any was sent. of the following: (4) Retrievability. The information (A) A bank; that a transmittor’s financial institu- (B) A wholly-owned domestic sub- tion must retain under paragraphs sidiary of a bank chartered in the (e)(1)(i) and (e)(2) of this section shall United States; be retrievable by the transmittor’s fi- (C) A broker or dealer in securities; nancial institution by reference to the (D) A wholly-owned domestic sub- name of the transmittor. If the sidiary of a broker or dealer in securi- transmittor is an established customer ties; of the transmittor’s financial institu- (E) A futures commission merchant tion and has an account used for trans- or an introducing broker in commod- mittals of funds, then the information ities; also shall be retrievable by account (F) A wholly-owned domestic sub- number. The information that a recipi- sidiary of a futures commission mer- ent’s financial institution must retain chant or an introducing broker in com- under paragraphs (e)(1)(iii) and (e)(3) of modities; this section shall be retrievable by the (G) The United States; recipient’s financial institution by ref- (H) A state or local government; or erence to the name of the recipient. If (I) A Federal, State or local govern- the recipient is an established cus- ment agency or instrumentality; or tomer of the recipient’s financial insti- (J) A mutual fund; and tution and has an account used for (ii) Transmittals of funds where both transmittals of funds, then the infor- the transmittor and the recipient are mation also shall be retrievable by ac- the same person and the transmittor’s count number. This information need financial institution and the recipi- not be retained in any particular man- ent’s financial institution are the same ner, so long as the financial institution broker or dealer in securities. is able to retrieve the information re- (f) Any transmittor’s financial insti- quired by this paragraph, either by ac- tution or intermediary financial insti- cessing transmittal of funds records di- tution located within the United

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States shall include in any transmittal that sends the order to the Federal Re- order for a transmittal of funds in the serve Bank completes its conversion to amount of $3,000 or more, information the expanded Fedwire format; as required in this paragraph (f): (iii) The amount of the transmittal (1) A transmittor’s financial institu- order; tion shall include in a transmittal (iv) The execution date of the trans- order, at the time it is sent to a receiv- mittal order; ing financial institution, the following (v) The identity of the recipient’s fi- information: nancial institution; (i) The name and, if the payment is (vi) As many of the following items ordered from an account, the account as are received with the transmittal number of the transmittor; order: 3 (ii) The address of the transmittor, (A) The name and address of the re- except for a transmittal order through cipient; Fedwire until such time as the bank (B) The account number of the recipi- that sends the order to the Federal Re- ent; serve Bank completes its conversion to (C) Any other specific identifier of the expanded Fedwire format; the recipient; and (iii) The amount of the transmittal (vii) Either the name and address or order; numerical identifier of the (iv) The execution date of the trans- transmittor’s financial institution. mittal order; (v) The identity of the recipient’s fi- (3) Safe harbor for transmittals of funds nancial institution; prior to conversion to the expanded (vi) As many of the following items Fedwire message format. The following as are received with the transmittal provisions apply to transmittals of order: 2 funds effected through the Federal Re- (A) The name and address of the re- serve’s Fedwire funds transfer system cipient; or otherwise by a financial institution (B) The account number of the recipi- before the bank that sends the order to ent; the Federal Reserve Bank or otherwise (C) Any other specific identifier of completes its conversion to the ex- the recipient; and panded Fedwire message format. (vii) Either the name and address or (i) Transmittor’s financial institution. A numerical identifier of the transmittor’s financial institution will transmittor’s financial institution. be deemed to be in compliance with the (2) A receiving financial institution provisions of paragraph (f)(1) of this that acts as an intermediary financial section if it: institution, if it accepts a transmittal (A) Includes in the transmittal order, order, shall include in a corresponding at the time it is sent to the receiving transmittal order at the time it is sent financial institution, the information to the next receiving financial institu- specified in paragraphs (f)(1)(iii) tion, the following information, if re- through (v), and the information speci- ceived from the sender: fied in paragraph (f)(1)(vi) of this sec- (i) The name and the account number tion to the extent that such informa- of the transmittor; tion has been received by the financial (ii) The address of the transmittor, institution, and except for a transmittal order through (B) Provides the information speci- Fedwire until such time as the bank fied in paragraphs (f)(1)(i), (ii) and (vii)

2 For transmittals of funds effected 3 For transmittals of funds effected through the Federal Reserve’s Fedwire funds through the Federal Reserve’s Fedwire funds transfer system by a financial institution, transfer system by a financial institution, only one of the items is required to be in- only one of the items is required to be in- cluded in the transmittal order, if received cluded in the transmittal order, if received with the sender’s transmittal order, until with the sender’s transmittal order, until such time as the bank that sends the order such time as the bank that sends the order to the Federal Reserve Bank completes its to the Federal Reserve Bank completes its conversion to the expanded Fedwire message conversion to the expanded Fedwire message format. format.

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of this section to a financial institu- paragraph (e)(6) of this section or tion that acted as an intermediary fi- § 1020.410(a)(6) of this chapter. nancial institution or recipient’s finan- [75 FR 65812, Oct. 26, 2010, as amended at 81 cial institution in connection with the FR 76864, Nov. 4, 2016] transmittal order, within a reasonable time after any such financial institu- § 1010.415 Purchases of bank checks tion makes a request therefor in con- and drafts, cashier’s checks, money nection with the requesting financial orders and traveler’s checks. institution’s receipt of a lawful request (a) No financial institution may issue for such information from a Federal, or sell a bank check or draft, cashier’s State, or local law enforcement or fi- check, money order or traveler’s check nancial regulatory agency, or in con- for $3,000 or more in currency unless it nection with the requesting financial maintains records of the following in- institution’s own Bank Secrecy Act formation, which must be obtained for compliance program. each issuance or sale of one or more of (ii) Intermediary financial institution. these instruments to any individual An intermediary financial institution purchaser which involves currency in will be deemed to be in compliance amounts of $3,000–$10,000 inclusive: with the provisions of paragraph (f)(2) (1) If the purchaser has a deposit ac- of this section if it: count with the financial institution: (A) Includes in the transmittal order, (i)(A) The name of the purchaser; at the time it is sent to the receiving (B) The date of purchase; financial institution, the information (C) The type(s) of instrument(s) pur- specified in paragraphs (f)(2)(iii) chased; through (f)(2)(vi) of this section, to the (D) The serial number(s) of each of extent that such information has been the instrument(s) purchased; and received by the intermediary financial (E) The amount in dollars of each of institution; and the instrument(s) purchased. (B) Provides the information speci- (ii) In addition, the financial institu- fied in paragraphs (f)(2)(i), (ii) and (vii) tion must verify that the individual is of this section, to the extent that such a deposit accountholder or must verify information has been received by the the individual’s identity. Verification intermediary financial institution, to a may be either through a signature card financial institution that acted as an or other file or record at the financial intermediary financial institution or institution provided the deposit recipient’s financial institution in con- accountholder’s name and address were nection with the transmittal order, verified previously and that informa- within a reasonable time after any tion was recorded on the signature card such financial institution makes a re- or other file or record; or by examina- quest therefor in connection with the tion of a document which is normally requesting financial institution’s re- acceptable within the banking commu- ceipt of a lawful request for such infor- nity as a means of identification when mation from a Federal, State, or local cashing checks for nondepositors and law enforcement or regulatory agency, which contains the name and address or in connection with the requesting fi- of the purchaser. If the deposit nancial institution’s own Bank Secrecy accountholder’s identity has not been Act compliance program. verified previously, the financial insti- (iii) Obligation of requesting financial tution shall verify the deposit institution. Any information requested accountholder’s identity by examina- under paragraph (f)(3)(i)(B) or tion of a document which is normally (f)(3)(ii)(B) of this section shall be acceptable within the banking commu- treated by the requesting institution, nity as a means of identification when once received, as if it had been in- cashing checks for nondepositors and cluded in the transmittal order to which contains the name and address which such information relates. of the purchaser, and shall record the (4) Exceptions. The requirements of specific identifying information (e.g., this paragraph (f) shall not apply to State of issuance and number of driv- transmittals of funds that are listed in er’s license).

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(2) If the purchaser does not have a tion of such account, the name and ad- deposit account with the financial in- dress of the foreign bank or other per- stitution: son with whom such account is main- (i)(A) The name and address of the tained, the type of such account, and purchaser; the maximum value of each such ac- (B) The social security number of the count during the reporting period. purchaser, or if the purchaser is an Such records shall be retained for a pe- alien and does not have a social secu- riod of 5 years and shall be kept at all rity number, the alien identification times available for inspection as au- number; thorized by law. In the computation of (C) The date of birth of the pur- the period of 5 years, there shall be dis- chaser; regarded any period beginning with a (D) The date of purchase; date on which the taxpayer is indicted (E) The type(s) of instrument(s) pur- or information instituted on account of chased; the filing of a false or fraudulent Fed- (F) The serial number(s) of the in- eral income tax return or failing to file strument(s) purchased; and a Federal income tax return, and end- (G) The amount in dollars of each of ing with the date on which final dis- the instrument(s) purchased. position is made of the criminal pro- (ii) In addition, the financial institu- ceeding. tion shall verify the purchaser’s name and address by examination of a docu- § 1010.430 Nature of records and reten- ment which is normally acceptable tion period. within the banking community as a (a) Wherever it is required that there means of identification when cashing be retained either the original or a checks for nondepositors and which copy or reproduction of a check, draft, contains the name and address of the monetary instrument, investment se- purchaser, and shall record the specific curity, or other similar instrument, identifying information (e.g., State of there shall be retained a copy of both issuance and number of driver’s li- front and back of each such instrument cense). or document, except that no copy need (b) Contemporaneous purchases of be retained of the back of any instru- the same or different types of instru- ment or document which is entirely ments totaling $3,000 or more shall be blank or which contains only standard- treated as one purchase. Multiple pur- ized printed information, a copy of chases during one business day totaling which is on file. $3,000 or more shall be treated as one (b) Records required by this chapter purchase if an individual employee, di- to be retained by financial institutions rector, officer, or partner of the finan- may be those made in the ordinary cial institution has knowledge that course of business by a financial insti- these purchases have occurred. (c) Records required to be kept shall tution. If no record is made in the ordi- be retained by the financial institution nary course of business of any trans- for a period of five years and shall be action with respect to which records made available to the Secretary upon are required to be retained by this request at any time. chapter, then such a record shall be prepared in writing by the financial in- § 1010.420 Records to be made and re- stitution. tained by persons having financial (c) The rules and regulations issued interests in foreign financial ac- by the Internal Revenue Service under counts. 26 U.S.C. 6109 determine what con- Records of accounts required by stitutes a taxpayer identification num- § 1010.350 to be reported to the Commis- ber and whose number shall be ob- sioner of Internal Revenue shall be re- tained in the case of an account main- tained by each person having a finan- tained by one or more persons. cial interest in or signature or other (d) All records that are required to be authority over any such account. Such retained by this chapter shall be re- records shall contain the name in tained for a period of five years. which each such account is main- Records or reports required to be kept tained, the number or other designa- pursuant to an order issued under

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§ 1010.370 of this chapter shall be re- action or asset account and a credit ac- tained for the period of time specified count or other extension of credit. in such order, not to exceed five years. (b) Money laundering means an activ- All such records shall be filed or stored ity criminalized by 18 U.S.C. 1956 or in such a way as to be accessible within 1957, or an activity that would be a reasonable period of time, taking criminalized by 18 U.S.C. 1956 or 1957 if into consideration the nature of the it occurred in the United States. record, and the amount of time expired (c) Terrorist activity means an act of since the record was made. domestic terrorism or international [75 FR 65812, Oct. 26, 2010, as amended at 81 terrorism as those terms are defined in FR 76864, Nov. 4, 2016] 18 U.S.C. 2331. (d) Transaction. (1) Except as provided § 1010.440 Person outside the United in paragraph (d)(2) of this section, the States. term ‘‘transaction’’ shall have the For the purposes of this chapter, a same meaning as provided in remittance or transfer of funds, or of § 1010.100(bbb). currency, other monetary instruments, (2) For purposes of § 1010.520, a trans- checks, investment securities, or credit action shall not mean any transaction to the domestic account of a person conducted through an account. whose address is known by the person making the remittance or transfer, to § 1010.520 Information sharing be- tween government agencies and fi- be outside the United States, shall be nancial institutions. deemed to be a remittance or transfer to a person outside the United States, (a) Definitions. For purposes of this except that, unless otherwise directed section: by the Secretary, this section shall not (1) Financial institution means any fi- apply to a transaction on the books of nancial institution described in 31 a domestic financial institution involv- U.S.C. 5312(a)(2). ing the account of a customer of such (2) Law enforcement agency means a institution whose address is within ap- Federal, State, local, or foreign law en- proximately 50 miles of the location of forcement agency with criminal inves- the institution, or who is known to be tigative authority, provided that in the temporarily outside the United States. case of a foreign law enforcement agen- cy, such agency is from a jurisdiction that is a party to a treaty that pro- Subpart E—Special Information vides, or in the determination of Sharing Procedures To Deter FinCEN is from a jurisdiction that oth- Money Laundering and Ter- erwise allows, law enforcement agen- rorist Activity cies in the United States reciprocal ac- cess to information comparable to that § 1010.500 General. obtained under this section. Sections 1010.505 through 1010.540 of (b) Information requests based on cred- this subpart E were issued pursuant to ible evidence concerning terrorist activity the requirements of section 314 of the or money laundering—(1) In general. A USA PATRIOT Act. Each financial in- law enforcement agency investigating stitution (as defined in 31 U.S.C. terrorist activity or money laundering 5312(a)(2) or (c)(1)) should refer to its may request that FinCEN solicit, on chapter X part for any additional spe- the investigating agency’s behalf, cer- cial information sharing procedures. tain information from a financial insti- tution or a group of financial institu- § 1010.505 Definitions. tions. When submitting such a request For purposes of this subpart E, the to FinCEN, the law enforcement agen- following definitions apply: cy shall provide FinCEN with a written (a) Account means a formal banking certification, in such form and manner or business relationship established to as FinCEN may prescribe. At a min- provide regular services, dealings, and imum, such certification must: State other financial transactions, and in- that each individual, entity, or organi- cludes, but is not limited to, a demand zation about which the law enforce- deposit, savings deposit, or other trans- ment agency is seeking information is

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engaged in, or is reasonably suspected has maintained any account for, or has based on credible evidence of engaging engaged in any transaction with, each in, terrorist activity or money laun- individual, entity, or organization dering; include enough specific identi- named in FinCEN’s request. A financial fiers, such as date of birth, address, and institution may contact the law en- social security number, that would per- forcement agency, FinCEN or request- mit a financial institution to differen- ing Treasury component representa- tiate between common or similar tive, or U.S. law enforcement attache´ names; and identify one person at the in the case of a request by a foreign agency who can be contacted with any law enforcement agency, which has questions relating to its request. Upon been named in the information request receiving the requisite certification provided to the institution by FinCEN from the requesting law enforcement with any questions relating to the agency, FinCEN may require any fi- scope or terms of the request. Except nancial institution to search its as otherwise provided in the informa- records to determine whether the fi- tion request, a financial institution nancial institution maintains or has shall only be required to search its maintained accounts for, or has en- records for: gaged in transactions with, any speci- (A) Any current account maintained fied individual, entity, or organization. for a named suspect; (2) Requests from FinCEN. FinCEN (B) Any account maintained for a may solicit, on its own behalf and on named suspect during the preceding behalf of appropriate components of twelve months; and the Department of the Treasury, (C) Any transaction, as defined by whether a financial institution or a § 1010.505(d), conducted by or on behalf group of financial institutions main- of a named suspect, or any transmittal tains or has maintained accounts for, of funds conducted in which a named or has engaged in transactions with, suspect was either the transmittor or any specified individual, entity, or or- the recipient, during the preceding six ganization. Before an information re- months that is required under law or quest under this section is made to a fi- regulation to be recorded by the finan- nancial institution, FinCEN or the ap- cial institution or is recorded and propriate Treasury component shall maintained electronically by the insti- certify in writing in the same manner tution. as a requesting law enforcement agen- (ii) Report to FinCEN. If a financial cy that each individual, entity or orga- institution identifies an account or nization about which FinCEN or the transaction identified with any indi- appropriate Treasury component is vidual, entity, or organization named seeking information is engaged in, or is in a request from FinCEN, it shall re- reasonably suspected based on credible port to FinCEN, in the manner and in evidence of engaging in, terrorist ac- the time frame specified in FinCEN’s tivity or money laundering. The cer- request, the following information: tification also must include enough (A) The name of such individual, en- specific identifiers, such as date of tity, or organization; birth, address, and social security num- (B) The number of each such account, ber, that would permit a financial in- or in the case of a transaction, the date stitution to differentiate between com- and type of each such transaction; and mon or similar names, and identify one (C) Any Social Security number, tax- person at FinCEN or the appropriate payer identification number, passport Treasury component who can be con- number, date of birth, address, or other tacted with any questions relating to similar identifying information pro- its request. vided by the individual, entity, or orga- (3) Obligations of a financial institution nization when each such account was receiving an information request—(i) opened or each such transaction was Record search. Upon receiving an infor- conducted. mation request from FinCEN under (iii) Designation of contact person. this section, a financial institution Upon receiving an information request shall expeditiously search its records under this section, a financial institu- to determine whether it maintains or tion shall designate one person to be

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the point of contact at the institution deemed satisfied to the extent that a regarding the request and to receive financial institution applies to such in- similar requests for information from formation procedures that the institu- FinCEN in the future. When requested tion has established to satisfy the re- by FinCEN, a financial institution quirements of section 501 of the shall provide FinCEN with the name, Gramm-Leach-Bliley Act (15 U.S.C. title, mailing address, e-mail address, 6801), and applicable regulations issued telephone number, and facsimile num- thereunder, with regard to the protec- ber of such person, in such manner as tion of its customers’ nonpublic per- FinCEN may prescribe. A financial in- sonal information. stitution that has provided FinCEN (v) No other action required. Nothing with contact information must in this section shall be construed to re- promptly notify FinCEN of any quire a financial institution to take changes to such information. any action, or to decline to take any (iv) Use and security of information re- action, with respect to an account es- quest. (A) A financial institution shall tablished for, or a transaction engaged not use information provided by in with, an individual, entity, or orga- FinCEN pursuant to this section for nization named in a request from any purpose other than: FinCEN, or to decline to establish an (1) Reporting to FinCEN as provided account for, or to engage in a trans- in this section; action with, any such individual, enti- (2) Determining whether to establish ty, or organization. Except as other- or maintain an account, or to engage wise provided in an information re- in a transaction; or quest under this section, such a request (3) Assisting the financial institution shall not require a financial institution in complying with any requirement of to report on future account opening ac- this chapter. tivity or transactions or to treat a sus- (B)(1) A financial institution shall pect list received under this section as not disclose to any person, other than a government list for purposes of sec- FinCEN or the requesting Treasury tion 326 of Public Law 107–56. component, the law enforcement agen- cy on whose behalf FinCEN is request- (4) Relation to the Right to Financial ing information, or U.S. law enforce- Privacy Act and the Gramm-Leach-Bliley ment attache´ in the case of a request Act. The information that a financial by a foreign law enforcement agency, institution is required to report pursu- which has been named in the informa- ant to paragraph (b)(3)(ii) of this sec- tion request, the fact that FinCEN has tion is information required to be re- requested or has obtained information ported in accordance with a Federal under this section, except to the extent statute or rule promulgated there- necessary to comply with such an in- under, for purposes of subsection formation request. 3413(d) of the Right to Financial Pri- (2) Notwithstanding paragraph vacy Act (12 U.S.C. 3413(d)) and sub- (b)(3)(iv)(B)(1) of this section, a finan- section 502(e)(8) of the Gramm-Leach- cial institution authorized to share in- Bliley Act (15 U.S.C. 6802(e)(8)). formation under § 1010.540 may share (5) No effect on law enforcement or reg- information concerning an individual, ulatory investigations. Nothing in this entity, or organization named in a re- subpart affects the authority of a Fed- quest from FinCEN in accordance with eral, State, or local law enforcement the requirements of such section. How- agency or officer, or FinCEN or an- ever, such sharing shall not disclose other component of the Department of the fact that FinCEN has requested in- the Treasury, to obtain information di- formation concerning such individual, rectly from a financial institution. entity, or organization. (C) Each financial institution shall § 1010.530 [Reserved] maintain adequate procedures to pro- tect the security and confidentiality of § 1010.540 Voluntary information shar- requests from FinCEN for information ing among financial institutions. under this section. The requirements of (a) Definitions. For purposes of this this paragraph (b)(3)(iv)(C) shall be section:

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(1) Financial institution. (i) Except as a financial institution does not have provided in paragraph (a)(1)(ii) of this Internet access, by mail to: FinCEN, section, the term ‘‘financial institu- P.O. Box 39, Vienna, VA 22183. tion’’ means any financial institution (3) Verification requirement. Prior to described in 31 U.S.C. 5312(a)(2) that is sharing information as described in required under this chapter to estab- paragraph (b)(1) of this section, a finan- lish and maintain an anti-money laun- cial institution or an association of fi- dering program, or is treated under nancial institutions must take reason- this chapter as having satisfied the re- able steps to verify that the other fi- quirements of 31 U.S.C. 5318(h)(1). nancial institution or association of fi- (ii) For purposes of this section, a fi- nancial institutions with which it in- nancial institution shall not mean any tends to share information has sub- institution included within a class of mitted to FinCEN the notice required financial institutions that FinCEN has by paragraph (b)(2) of this section. A fi- designated as ineligible to share infor- nancial institution or an association of mation under this section. financial institutions may satisfy this (2) Association of financial institutions paragraph (b)(3) by confirming that the means a group or organization the other financial institution or associa- membership of which is comprised en- tion of financial institutions appears tirely of financial institutions as de- on a list that FinCEN will periodically fined in paragraph (a)(1) of this section. make available to financial institu- (b) Voluntary information sharing tions or associations of financial insti- among financial institutions—(1) In gen- tutions that have filed a notice with it, eral. Subject to paragraphs (b)(2), (b)(3), or by confirming directly with the and (b)(4) of this section, a financial in- other financial institution or associa- stitution or an association of financial tion of financial institutions that the institutions may, under the protection requisite notice has been filed. of the safe harbor from liability de- (4) Use and security of information. (i) scribed in paragraph (b)(5) of this sec- Information received by a financial in- tion, transmit, receive, or otherwise stitution or an association of financial share information with any other fi- institutions pursuant to this section nancial institution or association of fi- shall not be used for any purpose other nancial institutions regarding individ- than: uals, entities, organizations, and coun- (A) Identifying and, where appro- tries for purposes of identifying and, priate, reporting on money laundering where appropriate, reporting activities or terrorist activities; that the financial institution or asso- (B) Determining whether to establish ciation suspects may involve possible or maintain an account, or to engage terrorist activity or money laundering. in a transaction; or (2) Notice requirement. A financial in- (C) Assisting the financial institution stitution or association of financial in- in complying with any requirement of stitutions that intends to share infor- this chapter. mation as described in paragraph (b)(1) (ii) Each financial institution or as- of this section shall submit to FinCEN sociation of financial institutions that a notice described on FinCEN’s Inter- engages in the sharing of information net Web site, http://www.fincen.gov. pursuant to this section shall maintain Each notice provided pursuant to this adequate procedures to protect the se- paragraph (b)(2) shall be effective for curity and confidentiality of such in- the one year period beginning on the formation. The requirements of this date of the notice. In order to continue paragraph (b)(4)(ii) shall be deemed sat- to engage in the sharing of information isfied to the extent that a financial in- after the end of the one year period, a stitution applies to such information financial institution or association of procedures that the institution has es- financial institutions must submit a tablished to satisfy the requirements of new notice. Completed notices may be section 501 of the Gramm-Leach-Bliley submitted to FinCEN by accessing Act (15 U.S.C. 6801), and applicable reg- FinCEN’s Internet Web site, http:// ulations issued thereunder, with regard www.fincen.gov., and entering the ap- to the protection of its customers’ non- propriate information as directed, or, if public personal information.

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(5) Safe harbor from certain liability— or any other applicable regulations, or (i) In general. A financial institution or to otherwise contact directly a Federal association of financial institutions agency concerning individuals or enti- that shares information pursuant to ties suspected of engaging in terrorist paragraph (b) of this section shall be activity or money laundering. protected from liability for such shar- ing, or for any failure to provide notice Subpart F—Special Standards of of such sharing, to an individual, enti- Diligence; Prohibitions; and ty, or organization that is identified in such sharing, to the full extent pro- Special Measures vided in subsection 314(b) of Public Law § 1010.600 General. 107–56. (ii) Limitation. Paragraph (b)(5)(i) of Each financial institution (as defined this section shall not apply to a finan- in 31 U.S.C. 5312(a)(2) or (c)(1)) should cial institution or association of finan- refer to its Chapter X Part for any ad- cial institutions to the extent such in- ditional special standards of diligence; stitution or association fails to comply prohibitions; and special measures re- with paragraphs (b)(2), (b)(3), or (b)(4) quirements. of this section. SPECIAL DUE DILIGENCE FOR COR- (c) Information sharing between finan- RESPONDENT ACCOUNTS AND PRIVATE cial institutions and the Federal Govern- BANKING ACCOUNTS ment. If, as a result of information shared pursuant to this section, a fi- § 1010.605 Definitions. nancial institution knows, suspects, or has reason to suspect that an indi- Except as otherwise provided, the fol- vidual, entity, or organization is in- lowing definitions apply for purposes of volved in, or may be involved in ter- §§ 1010.610 through 1010.630 and § 1010.670: rorist activity or money laundering, (a) Beneficial owner of an account and such institution is subject to a sus- means an individual who has a level of picious activity reporting requirement control over, or entitlement to, the under this chapter or other applicable funds or assets in the account that, as regulations, the institution shall file a a practical matter, enables the indi- Suspicious Activity Report in accord- vidual, directly or indirectly, to con- ance with those regulations. In situa- trol, manage or direct the account. The tions involving violations requiring ability to fund the account or the enti- immediate attention, such as when a tlement to the funds of the account reportable violation involves terrorist alone, however, without any cor- activity or is ongoing, the financial in- responding authority to control, man- stitution shall immediately notify, by age or direct the account (such as in telephone, an appropriate law enforce- the case of a minor child beneficiary), ment authority and financial institu- does not cause the individual to be a tion supervisory authorities in addi- beneficial owner. tion to filing timely a Suspicious Ac- (b) Certification and recertification tivity Report. A financial institution mean the certification and recertifi- that is not subject to a suspicious ac- cation forms regarding correspondent tivity reporting requirement is not re- accounts for foreign banks located on quired to file a Suspicious Activity Re- FinCEN’s Internet Web site, http:// port or otherwise to notify law enforce- www.fincen.gov. ment of suspicious activity that is de- (c) Correspondent account. (1) The tected as a result of information shared term correspondent account means: pursuant to this section. Such a finan- (i) For purposes of § 1010.610(a), (d) cial institution is encouraged, however, and (e), an account established for a to voluntarily report such activity to foreign financial institution to receive FinCEN. deposits from, or to make payments or (d) No effect on financial institution re- other disbursements on behalf of, the porting obligations. Nothing in this sub- foreign financial institution, or to han- part affects the obligation of a finan- dle other financial transactions related cial institution to file a Suspicious Ac- to such foreign financial institution; tivity Report pursuant to this chapter and

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(ii) For purposes of §§ 1010.610(b) and (e) Covered financial institution means: (c), 1010.630 and 1010.670, an account es- (1) For purposes of § 1010.610 and tablished for a foreign bank to receive 1010.620: deposits from, or to make payments or (i) An insured bank (as defined in sec- other disbursements on behalf of, the tion 3(h) of the Federal Deposit Insur- foreign bank, or to handle other finan- ance Act (12 U.S.C. 1813(h))); cial transactions related to such for- (ii) A commercial bank; eign bank. (iii) An agency or branch of a foreign (2) For purposes of this definition, bank in the United States; the term account: (iv) A federally insured credit union; (i) As applied to banks (as set forth (v) A savings association; in paragraphs (e)(1)(i) through (vii) of (vi) A corporation acting under sec- this section): tion 25A of the Federal Reserve Act (12 (A) Means any formal banking or U.S.C. 611 et seq.); business relationship established by a (vii) A trust bank or trust company bank to provide regular services, deal- that is federally regulated and is sub- ings, and other financial transactions; ject to an anti-money laundering pro- and gram requirement; (B) Includes a demand deposit, sav- (viii) A broker or dealer in securities ings deposit, or other transaction or registered, or required to be registered, asset account and a credit account or with the Securities and Exchange Com- other extension of credit; mission under the Securities Exchange (ii) As applied to brokers or dealers Act of 1934 (15 U.S.C. 78a et seq.), except in securities (as set forth in paragraph persons who register pursuant to sec- (e)(1)(viii) of this section) means any tion 15(b)(11) of the Securities Ex- formal relationship established with a change Act of 1934; broker or dealer in securities to pro- (ix) A futures commission merchant vide regular services to effect trans- or an introducing broker registered, or actions in securities, including, but not required to be registered, with the limited to, the purchase or sale of secu- Commodity Futures Trading Commis- rities and securities loaned and bor- sion under the Commodity Exchange rowed activity, and to hold securities Act (7 U.S.C. 1 et seq.), except persons or other assets for safekeeping or as who register pursuant to section collateral; 4(f)(a)(2) of the Commodity Exchange (iii) As applied to futures commission Act; and merchants and introducing brokers (as (x) A mutual fund; set forth in paragraph (e)(1)(ix) of this (2) For purposes of §§ 1010.630 and section) means any formal relationship 1010.670: established by a futures commission (i) An insured bank (as defined in sec- merchant to provide regular services, tion 3(h) of the Federal Deposit Insur- including, but not limited to, those es- ance Act (12 U.S.C. 1813(h))); tablished to effect transactions in con- (ii) A commercial bank or trust com- tracts of sale of a commodity for future pany; delivery, options on any contract of (iii) A private banker; sale of a commodity for future deliv- (iv) An agency or branch of a foreign ery, or options on a commodity; and bank in the United States; (iv) As applied to mutual funds (as (v) A credit union; set forth in paragraph (e)(1)(x) of this (vi) A savings association; section) means any contractual or (vii) A corporation acting under sec- other business relationship established tion 25A of the Federal Reserve Act (12 between a person and a mutual fund to U.S.C. 611 et seq.); and provide regular services to effect trans- (viii) A broker or dealer in securities actions in securities issued by the mu- registered, or required to be registered, tual fund, including the purchase or with the Securities and Exchange Com- sale of securities. mission under the Securities Exchange (d) Correspondent relationship has the Act of 1934 (15 U.S.C. 78a et seq.), except same meaning as correspondent ac- persons who register pursuant to sec- count for purposes of §§ 1010.630 and tion 15(b)(11) of the Securities Ex- 1010.670. change Act of 1934.

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(f) Foreign financial institution. (1) The (i) Members of the same family shall term foreign financial institution means: be considered to be one person. (i) A foreign bank; (ii) The term same family means par- (ii) Any branch or office located out- ents, spouses, children, siblings, uncles, side the United States of any covered aunts, grandparents, grandchildren, financial institution described in para- first cousins, stepchildren, stepsiblings, graphs (e)(1)(viii) through (x) of this parents-in-law, and spouses of any of section; the foregoing. (iii) Any other person organized (iii) Each member of the same family under foreign law (other than a branch who has an ownership interest in a for- or office of such person in the United eign bank must be identified if the States) that, if it were located in the family is an owner as a result of aggre- United States, would be a covered fi- gating the ownership interests of the nancial institution described in para- members of the family. In determining graphs (e)(1)(viii) through (x) of this the ownership interests of the same section; and family, any voting interest of any fam- (iv) Any person organized under for- ily member shall be taken into ac- eign law (other than a branch or office count. of such person in the United States) that is engaged in the business of, and (iv) Voting securities or other voting in- is readily identifiable as: terests means securities or other inter- (A) A dealer in foreign exchange; or ests that entitle the holder to vote for (B) A money transmitter. or to select directors (or individuals (2) For purposes of paragraph exercising similar functions). (f)(1)(iv) of this section, a person is not (k) Person has the meaning provided ‘‘engaged in the business’’ of a dealer in § 1010.100(mm). in foreign exchange or a money trans- (l) Physical presence means a place of mitter if such transactions are merely business that: incidental to the person’s business. (1) Is maintained by a foreign bank; (g) Foreign shell bank means a foreign (2) Is located at a fixed address (other bank without a physical presence in than solely an electronic address or a any country. post-office box) in a country in which (h) Non-United States person or non- the foreign bank is authorized to con- U.S. person means a natural person who duct banking activities, at which loca- is neither a United States citizen nor is tion the foreign bank: accorded the privilege of residing per- (i) Employs one or more individuals manently in the United States pursu- on a full-time basis; and ant to title 8 of the United States Code. (ii) Maintains operating records re- For purposes of this paragraph (h), the lated to its banking activities; and definition of person in § 1010.100(mm) (3) Is subject to inspection by the does not apply, notwithstanding para- banking authority that licensed the graph (k) of this section. foreign bank to conduct banking ac- (i) Offshore banking license means a li- tivities. cense to conduct banking activities that prohibits the licensed entity from (m) Private banking account means an conducting banking activities with the account (or any combination of ac- citizens of, or in the local currency of, counts) maintained at a covered finan- the jurisdiction that issued the license. cial institution that: (j) Owner. (1) The term owner means (1) Requires a minimum aggregate any person who, directly or indirectly: deposit of funds or other assets of not (i) Owns, controls, or has the power less than $1,000,000; to vote 25 percent or more of any class (2) Is established on behalf of or for of voting securities or other voting in- the benefit of one or more non-U.S. terests of a foreign bank; or persons who are direct or beneficial (ii) Controls in any manner the elec- owners of the account; and tion of a majority of the directors (or (3) Is assigned to, or is administered individuals exercising similar func- or managed by, in whole or in part, an tions) of a foreign bank. officer, employee, or agent of a covered (2) For purposes of this definition: financial institution acting as a liaison

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between the covered financial institu- (ii) Immediate family member means tion and the direct or beneficial owner spouses, parents, siblings, children and of the account. a spouse’s parents and siblings. (n) Regulated affiliate. (1) The term [75 FR 65812, Oct. 26, 2010, as amended at 76 regulated affiliate means a foreign shell FR 43596, July 21, 2011] bank that: (i) Is an affiliate of a depository in- § 1010.610 Due diligence programs for stitution, credit union, or foreign bank correspondent accounts for foreign that maintains a physical presence in financial institutions. the United States or a foreign country, (a) In general. A covered financial in- as applicable; and stitution shall establish a due diligence (ii) Is subject to supervision by a program that includes appropriate, spe- banking authority in the country regu- cific, risk-based, and, where necessary, lating such affiliated depository insti- enhanced policies, procedures, and con- tution, credit union, or foreign bank. trols that are reasonably designed to (2) For purposes of this definition: enable the covered financial institu- (i) Affiliate means a foreign bank that tion to detect and report, on an ongo- is controlled by, or is under common ing basis, any known or suspected control with, a depository institution, money laundering activity conducted credit union, or foreign bank. through or involving any cor- (ii) Control means: respondent account established, main- (A) Ownership, control, or power to tained, administered, or managed by vote 50 percent or more of any class of such covered financial institution in voting securities or other voting inter- the United States for a foreign finan- ests of another company; or cial institution. The due diligence pro- (B) Control in any manner the elec- gram required by this section shall be tion of a majority of the directors (or a part of the anti-money laundering individuals exercising similar func- program otherwise required by this tions) of another company. chapter. Such policies, procedures, and (o) Secretary means the Secretary of controls shall include: the Treasury. (1) Determining whether any such (p) Senior foreign political figure. (1) correspondent account is subject to The term senior foreign political figure paragraph (b) of this section; means: (2) Assessing the money laundering (i) A current or former: risk presented by such correspondent (A) Senior official in the executive, account, based on a consideration of all legislative, administrative, military, relevant factors, which shall include, or judicial branches of a foreign gov- as appropriate: ernment (whether elected or not); (i) The nature of the foreign financial (B) Senior official of a major foreign institution’s business and the markets political party; or it serves; (C) Senior executive of a foreign gov- (ii) The type, purpose, and antici- ernment-owned commercial enterprise; pated activity of such correspondent (ii) A corporation, business, or other account; entity that has been formed by, or for (iii) The nature and duration of the the benefit of, any such individual; covered financial institution’s rela- (iii) An immediate family member of tionship with the foreign financial in- any such individual; and stitution (and any of its affiliates); (iv) A person who is widely and pub- (iv) The anti-money laundering and licly known (or is actually known by supervisory regime of the jurisdiction the relevant covered financial institu- that issued the charter or license to tion) to be a close associate of such in- the foreign financial institution, and, dividual. to the extent that information regard- (2) For purposes of this definition: ing such jurisdiction is reasonably (i) Senior official or executive means an available, of the jurisdiction in which individual with substantial authority any company that is an owner of the over policy, operations, or the use of foreign financial institution is incor- government-owned resources; and porated or chartered; and

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(v) Information known or reasonably account maintained by a covered finan- available to the covered financial insti- cial institution for a foreign bank by tution about the foreign financial in- means of which the foreign bank per- stitution’s anti-money laundering mits its customers to engage, either di- record; and rectly or through a subaccount, in (3) Applying risk-based procedures banking activities usual in connection and controls to each such cor- with the business of banking in the respondent account reasonably de- United States. signed to detect and report known or (2) Determine whether the foreign suspected money laundering activity, bank for which the correspondent ac- including a periodic review of the cor- count is established or maintained in respondent account activity sufficient turn maintains correspondent accounts to determine consistency with informa- for other foreign banks that use the tion obtained about the type, purpose, foreign correspondent account estab- and anticipated activity of the ac- lished or maintained by the covered fi- count. nancial institution and, if so, take rea- (b) Enhanced due diligence for certain sonable steps to obtain information foreign banks. In the case of a cor- relevant to assess and mitigate money respondent account established, main- laundering risks associated with the tained, administered, or managed in foreign bank’s correspondent accounts the United States for a foreign bank for other foreign banks, including, as described in paragraph (c) of this sec- appropriate, the identity of those for- tion, the due diligence program re- eign banks. quired by paragraph (a) of this section (3)(i) Determine, for any cor- shall include enhanced due diligence respondent account established or procedures designed to ensure that the maintained for a foreign bank whose covered financial institution, at a min- shares are not publicly traded, the imum, takes reasonable steps to: identity of each owner of the foreign (1) Conduct enhanced scrutiny of bank and the nature and extent of each such correspondent account to guard owner’s ownership interest. against money laundering and to iden- (ii) For purposes of paragraph (b)(3)(i) tify and report any suspicious trans- of this section: actions in accordance with applicable (A) Owner means any person who di- law and regulation. This enhanced rectly or indirectly owns, controls, or scrutiny shall reflect the risk assess- has the power to vote 10 percent or ment of the account and shall include, more of any class of securities of a for- as appropriate: eign bank. For purposes of this para- (i) Obtaining and considering infor- graph (b)(3)(ii)(A): mation relating to the foreign bank’s (1) Members of the same family shall anti-money laundering program to as- be considered to be one person; and sess the risk of money laundering pre- (2) Same family has the meaning pro- sented by the foreign bank’s cor- vided in § 1010.605(j)(2)(ii). respondent account; (B) Publicly traded means shares that (ii) Monitoring transactions to, from, are traded on an exchange or an orga- or through the correspondent account nized over-the-counter market that is in a manner reasonably designed to de- regulated by a foreign securities au- tect money laundering and suspicious thority as defined in section 3(a)(50) of activity; and the Securities Exchange Act of 1934 (15 (iii)(A) Obtaining information from U.S.C. 78c(a)(50)). the foreign bank about the identity of (c) Foreign banks to be accorded en- any person with authority to direct hanced due diligence. The due diligence transactions through any cor- procedures described in paragraph (b) respondent account that is a payable- of this section are required for any cor- through account, and the sources and respondent account maintained for a beneficial owner of funds or other as- foreign bank that operates under: sets in the payable-through account. (1) An offshore banking license; (B) For purposes of paragraph (2) A banking license issued by a for- (b)(1)(iii)(A) of this section, a payable- eign country that has been designated through account means a correspondent as non-cooperative with international

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anti-money laundering principles or applicable as set forth in paragraph procedures by an intergovernmental (e)(1) of this section. group or organization of which the (f) Applicability rules for enhanced due United States is a member and with diligence. The provisions of paragraph which designation the U.S. representa- (b) of this section apply to covered fi- tive to the group or organization con- nancial institutions as follows: curs; or (1) General rules—(i) Correspondent ac- (3) A banking license issued by a for- counts established on or after February 5, eign country that has been designated 2008. Effective February 5, 2008, the re- by the Secretary as warranting special quirements of paragraph (b) of this sec- measures due to money laundering con- tion shall apply to each correspondent cerns. account established on or after such (d) Special procedures when due dili- date. gence or enhanced due diligence cannot (ii) Correspondent accounts established be performed. The due diligence pro- before February 5, 2008. Effective May 5, gram required by paragraphs (a) and (b) 2008, the requirements of paragraph (b) of this section shall include procedures of this section shall apply to each cor- to be followed in circumstances in respondent account established before which a covered financial institution February 5, 2008. cannot perform appropriate due dili- (2) Special rules for certain banks. gence or enhanced due diligence with Until the requirements of paragraph (b) respect to a correspondent account, in- of this section become applicable as set cluding when the covered financial in- forth in paragraph (f)(1) of this section, stitution should refuse to open the ac- the enhanced due diligence require- count, suspend transaction activity, ments of 31 U.S.C. 5318(i)(2) shall con- file a suspicious activity report, or tinue to apply to any covered financial close the account. institutions listed in § 1010.605(e)(1)(i) (e) Applicability rules for general due through (vi). diligence. The provisions of paragraph (3) Special rules for all other covered fi- (a) of this section apply to covered fi- nancial institutions. The enhanced due nancial institutions as follows: diligence requirements of 31 U.S.C. (1) General rules—(i) Correspondent ac- 5318(i)(2) shall not apply to a covered fi- counts established on or after July 5, 2006. nancial institution listed in Effective July 5, 2006, the requirements § 1010.605(e)(1)(vii) through (x) until the of paragraph (a) of this section shall requirements of paragraph (b) of this apply to each correspondent account section become applicable, as set forth established on or after that date. in paragraph (f)(1) of this section. (ii) Correspondent accounts established (g) Exemptions—(1) Exempt financial before July 5, 2006. Effective October 2, institutions. Except as provided in this 2006, the requirements of paragraph (a) section, a financial institution defined of this section shall apply to each cor- in 31 U.S.C. 5312(a)(2) or (c)(1), or respondent account established before § 1010.100(t) is exempt from the require- July 5, 2006. ments of 31 U.S.C. 5318(i)(1) and (i)(2) (2) Special rules for certain banks. pertaining to correspondent accounts. Until the requirements of paragraph (a) (2) Other compliance obligations of fi- of this section become applicable as set nancial institutions unaffected. Nothing forth in paragraph (e)(1) of this section, in paragraph (g) of this section shall be the due diligence requirements of 31 construed to relieve a financial institu- U.S.C. 5318(i)(1) shall continue to apply tion from its responsibility to comply to any covered financial institution with any other applicable requirement listed in § 1010.605(e)(1)(i) through (vi). of law or regulation, including title 31, (3) Special rules for all other covered fi- United States Code, and this chapter. nancial institutions. The due diligence requirements of 31 U.S.C. 5318(i)(1) § 1010.620 Due diligence programs for shall not apply to a covered financial private banking accounts. institution listed in § 1010.605(e)(1)(vii) (a) In general. A covered financial in- through (x) until the requirements of stitution shall maintain a due dili- paragraph (a) of this section become gence program that includes policies,

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procedures, and controls that are rea- version of property of a foreign govern- sonably designed to detect and report ment, or through acts of bribery or ex- any known or suspected money laun- tortion, and shall include any other dering or suspicious activity conducted property into which any such assets through or involving any private bank- have been transformed or converted. ing account that is established, main- (d) Special procedures when due dili- tained, administered, or managed in gence cannot be performed. The due dili- the United States by such financial in- gence program required by paragraph stitution. The due diligence program (a) of this section shall include proce- required by this section shall be a part dures to be followed in circumstances of the anti-money laundering program in which a covered financial institution otherwise required by this chapter. cannot perform appropriate due dili- (b) Minimum requirements. The due gence with respect to a private banking diligence program required by para- account, including when the covered fi- graph (a) of this section shall be de- nancial institution should refuse to signed to ensure, at a minimum, that the financial institution takes reason- open the account, suspend transaction able steps to: activity, file a suspicious activity re- (1) Ascertain the identity of all nomi- port, or close the account. nal and beneficial owners of a private (e) Applicability rules. The provisions banking account; of this section apply to covered finan- (2) Ascertain whether any person cial institutions as follows: identified under paragraph (b)(1) of this (1) General rules—(i) Private banking section is a senior foreign political fig- accounts established on or after July 5, ure; 2006. Effective July 5, 2006, the require- (3) Ascertain the source(s) of funds ments of this section shall apply to deposited into a private banking ac- each private banking account estab- count and the purpose and expected use lished on or after such date. of the account; and (ii) Private banking accounts estab- (4) Review the activity of the account lished before July 5, 2006. Effective Oc- to ensure that it is consistent with the tober 2, 2006, the requirements of this information obtained about the client’s section shall apply to each private source of funds, and with the stated banking account established before purpose and expected use of the ac- July 5, 2006. count, as needed to guard against (2) Special rules for certain banks and money laundering, and to report, in ac- for brokers or dealers in securities, futures cordance with applicable law and regu- commission merchants, and introducing lation, any known or suspected money brokers. Until the requirements of this laundering or suspicious activity con- section become applicable as set forth ducted to, from, or through a private in paragraph (e)(1) of this section, the banking account. requirements of 31 U.S.C. 5318(i)(3) (c) Special requirements for senior for- shall continue to apply to a covered fi- eign political figures. (1) In the case of a nancial institution listed in private banking account for which a senior foreign political figure is a § 1010.605(e)(1)(i) through (vi), (viii), or nominal or beneficial owner, the due (ix). diligence program required by para- (3) Special rules for federally regulated graph (a) of this section shall include trust banks or trust companies, and mu- enhanced scrutiny of such account that tual funds. Until the requirements of is reasonably designed to detect and re- this section become applicable as set port transactions that may involve the forth in paragraph (e)(1) of this section, proceeds of foreign corruption. the requirements of 31 U.S.C. 5318(i)(3) (2) For purposes of this paragraph (c), shall not apply to a covered financial the term proceeds of foreign corruption institution listed in § 1010.605(e)(1)(vii) means any asset or property that is ac- or (x). quired by, through, or on behalf of a (4) Exemptions—(i) Exempt financial in- senior foreign political figure through stitutions. Except as provided in this misappropriation, theft, or embezzle- section, a financial institution defined ment of public funds, the unlawful con- in 31 U.S.C. 5312(a)(2) or (c)(1) or

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§ 1010.100(t) is exempt from the require- fies the current owners of the foreign ments of 31 U.S.C. 5318(i)(3) pertaining bank as required by such form. to private banking accounts. (iii) For purposes of paragraph (ii) Other compliance obligations of fi- (a)(2)(i) of this section, publicly traded nancial institutions unaffected. Nothing refers to shares that are traded on an in paragraph (e)(4) of this section shall exchange or on an organized over-the- be construed to relieve a financial in- counter market that is regulated by a stitution from its responsibility to foreign securities authority as defined comply with any other applicable re- in section 3(a)(50) of the Securities Ex- quirement of law or regulation, includ- change Act of 1934 (15 U.S.C. 78c(a)(50)). ing title 31, United States Code, and (b) Safe harbor. Subject to paragraphs this chapter. (c) and (d) of this section, a covered fi- § 1010.630 Prohibition on cor- nancial institution will be deemed to respondent accounts for foreign be in compliance with the require- shell banks; records concerning ments of paragraph (a) of this section owners of foreign banks and agents with respect to a foreign bank if the for service of legal process. covered financial institution obtains, (a) Requirements for covered financial at least once every three years, a cer- institutions—(1) Prohibition on cor- tification or recertification from the respondent accounts for foreign shell foreign bank. banks. (i) A covered financial institu- (c) Interim verification. If at any time tion shall not establish, maintain, ad- a covered financial institution knows, minister, or manage a correspondent suspects, or has reason to suspect, that account in the United States for, or on any information contained in a certifi- behalf of, a foreign shell bank. cation or recertification provided by a (ii) A covered financial institution foreign bank, or otherwise relied upon shall take reasonable steps to ensure by the covered financial institution for that any correspondent account estab- purposes of this section, is no longer lished, maintained, administered, or correct, the covered financial institu- managed by that covered financial in- tion shall request that the foreign stitution in the United States for a for- bank verify or correct such informa- eign bank is not being used by that for- tion, or shall take other appropriate eign bank to indirectly provide bank- measures to ascertain the accuracy of ing services to a foreign shell bank. the information or to obtain correct in- (iii) Nothing in paragraph (a)(1) of formation, as appropriate. See para- this section prohibits a covered finan- graph (d)(3) of this section for addi- cial institution from providing a cor- tional requirements if a foreign bank respondent account or banking services fails to verify or correct the informa- to a regulated affiliate. tion or if a covered financial institu- (2) Records of owners and agents. (i) Except as provided in paragraph tion cannot ascertain the accuracy of (a)(2)(ii) of this section, a covered fi- the information or obtain correct in- nancial institution that maintains a formation. correspondent account in the United (d) Closure of correspondent accounts— States for a foreign bank shall main- (1) Accounts existing on October 28, 2002. tain records in the United States iden- In the case of any correspondent ac- tifying the owners of each such foreign count that was in existence on October bank whose shares are not publicly 28, 2002, if the covered financial institu- traded and the name and street address tion has not obtained a certification of a person who resides in the United (or recertification) from the foreign States and is authorized, and has bank, or has not otherwise obtained agreed to be an agent to accept service documentation of the information re- of legal process for records regarding quired by such certification (or recer- each such account. tification), on or before March 31, 2003, (ii) A covered financial institution and at least once every three years need not maintain records of the own- thereafter, the covered financial insti- ers of any foreign bank that is required tution shall close all correspondent ac- to have on file with the Federal Re- counts with such foreign bank within a serve Board a Form FR Y–7 that identi- commercially reasonable time, and

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shall not permit the foreign bank to es- the certification or the recertification, tablish any new positions or execute as appropriate. any transaction through any such ac- (5) Limitation on liability. A covered fi- count, other than transactions nec- nancial institution shall not be liable essary to close the account. to any person in any court or arbitra- (2) Accounts established after October tion proceeding for terminating a cor- 28, 2002. In the case of any cor- respondent account in accordance with respondent account established after this paragraph (d). October 28, 2002, if the covered finan- (e) Recordkeeping requirement. A cov- cial institution has not obtained a cer- ered financial institution shall retain tification (or recertification), or has the original of any document provided not otherwise obtained documentation by a foreign bank, and the original or of the information required by such a copy of any document otherwise re- certification (or recertification) within lied upon by the covered financial in- 30 calendar days after the date the ac- stitution, for purposes of this section, count is established, and at least once for at least 5 years after the date that every three years thereafter, the cov- the covered financial institution no ered financial institution shall close longer maintains any correspondent all correspondent accounts with such account for such foreign bank. A cov- foreign bank within a commercially ered financial institution shall retain reasonable time, and shall not permit such records with respect to any for- the foreign bank to establish any new eign bank for such longer period as the positions or execute any transaction Secretary may direct. through any such account, other than (f) Special rules concerning information transactions necessary to close the ac- requested prior to October 28, 2002—(1) count. Definition. For purposes of this para- (3) Verification of previously provided graph (f) the term ‘‘Interim Guidance’’ information. In the case of a foreign means: bank with respect to which the covered (i) The Interim Guidance of the De- financial institution undertakes to partment of the Treasury dated No- verify information pursuant to para- vember 20, 2001 and published in the graph (c) of this section, if the covered FEDERAL REGISTER on November 27, financial institution has not obtained, 2001; or from the foreign bank or otherwise, (ii) The guidance issued in a docu- verification of the information or cor- ment published in the FEDERAL REG- rected information within 90 calendar ISTER on December 28, 2001. days after the date of undertaking the (2) Use of Interim Guidance certifi- verification, the covered financial in- cation. In the case of a correspondent stitution shall close all correspondent account in existence on October 28, accounts with such foreign bank within 2002, the term ‘‘certification’’ as used a commercially reasonable time, and in paragraphs (b), (c), (d)(1), and (d)(3) shall not permit the foreign bank to es- of this section shall also include the tablish any new positions or execute certification appended to the Interim any transaction through any such ac- Guidance, provided that such certifi- count, other than transactions nec- cation was requested prior to October essary to close the account. 28, 2002 and obtained by the covered fi- (4) Reestablishment of closed accounts nancial institution on or before Decem- and establishment of new accounts. A ber 26, 2002. covered financial institution shall not (3) Recordkeeping requirement. Para- reestablish any account closed pursu- graph (e) of this section shall apply to ant to this paragraph (d), and shall not any document provided by a foreign establish any other correspondent ac- bank, or otherwise relied upon by a count with the concerned foreign bank, covered financial institution, for pur- until it obtains from the foreign bank poses of the Interim Guidance.

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§ 1010.640 [Reserved] provide such services, including, where necessary, terminating the cor- SPECIAL MEASURES UNDER SECTION 311 respondent account; and OF THE USA PATRIOT ACT AND LAW (ii) A covered financial institution ENFORCEMENT ACCESS TO FOREIGN required to terminate an account pur- BANK RECORDS suant to paragraph (b)(2)(i) of this sec- tion: § 1010.651 Special measures against (A) Shall do so within a commer- Burma. cially reasonable time, and shall not (a) Definitions. For purposes of this permit the foreign bank to establish section: any new positions or execute any (1) Burmese banking institution means transactions through such account, any foreign bank, as that term is de- other than those necessary to close the fined in § 1010.100(u), chartered or li- account; and censed by Burma, including branches (B) May reestablish an account and offices located outside Burma. closed pursuant to this paragraph if it (2) Correspondent account has the determines that the account will not same meaning as provided in be used to provide banking services in- § 1010.605(c). directly to a Burmese banking institu- (3) Covered financial institution has tion. the same meaning as provided in (3) Exception. The provisions of para- § 1010.605(e)(2) and also includes the fol- graphs (b)(1) and (2) of this section lowing: shall not apply to a correspondent ac- (i) A futures commission merchant or count provided that the operation of an introducing broker registered, or re- such account is not prohibited by Exec- quired to register, with the Commodity utive Order 13310 and the transactions Futures Trading Commission under the involving Burmese banking institu- Commodity Exchange Act (7 U.S.C. 1 et tions that are conducted through the seq.); and correspondent account are limited (ii) An investment company (as de- solely to transactions that are exempt- fined in section 3 of the Investment ed from, or otherwise authorized by Company Act of 1940 (15 U.S.C. 80a–5)) regulation, order, directive, or license that is an open-end company (as de- pursuant to, Executive Order 13310. fined in section 5 of the Investment (4) Reporting and recordkeeping not re- Company Act (15 U.S.C. 80a–5)) and quired. Nothing in this section shall re- that is registered, or required to reg- quire a covered financial institution to ister, with the Securities and Exchange maintain any records, obtain any cer- Commission pursuant to that Act. tification, or report any information (b) Requirements for covered financial not otherwise required by law or regu- institutions—(1) Prohibition on cor- lation. respondent accounts. A covered financial institution shall terminate any cor- § 1010.653 Special measures against respondent account that is established, Commercial Bank of Syria. maintained, administered, or managed (a) Definitions. For purposes of this in the United States for, or on behalf section: of, a Burmese banking institution. (1) Commercial Bank of Syria means (2) Prohibition on indirect cor- any branch, office, or subsidiary of respondent accounts. (i) If a covered fi- Commercial Bank of Syria operating in nancial institution has or obtains Syria or in any other jurisdiction, in- knowledge that a correspondent ac- cluding Syrian Lebanese Commercial count established, maintained, admin- Bank. istered, or managed by that covered fi- (2) Correspondent account has the nancial institution in the United same meaning as provided in States for a foreign bank is being used § 1010.605(c)(1)(ii). by the foreign bank to provide banking (3) Covered financial institution in- services indirectly to a Burmese bank- cludes: ing institution, the covered financial (i) An insured bank (as defined in sec- institution shall ensure that the cor- tion 3(h) of the Federal Deposit Insur- respondent account is no longer used to ance Act (12 U.S.C. 1813(h)));

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(ii) A commercial bank; Commercial Bank of Syria. At a min- (iii) An agency or branch of a foreign imum, that due diligence must include: bank in the United States; (A) Notifying correspondent account (iv) A federally insured credit union; holders that the correspondent account (v) A savings association; may not be used to provide Commercial (vi) A corporation acting under sec- Bank of Syria with access to the cov- tion 25A of the Federal Reserve Act (12 ered financial institution; and U.S.C. 611 et seq.); (B) Taking reasonable steps to iden- (vii) A trust bank or trust company tify any indirect use of its cor- that is federally regulated and is sub- respondent accounts by Commercial ject to an anti-money laundering pro- Bank of Syria, to the extent that such gram requirement; indirect use can be determined from (viii) A broker or dealer in securities transactional records maintained in registered, or required to be registered, the covered financial institution’s nor- with the Securities and Exchange Com- mal course of business. mission under the Securities Exchange (ii) A covered financial institution Act of 1934 (15 U.S.C. 78a et seq.), except shall take a risk-based approach when persons who register pursuant to sec- deciding what, if any, additional due tion 15(b)(11) of the Securities Ex- diligence measures it should adopt to change Act of 1934; guard against the indirect use of its (ix) A futures commission merchant correspondent accounts by Commercial or an introducing broker registered, or Bank of Syria. required to be registered, with the (iii) A covered financial institution Commodity Futures Trading Commis- that obtains knowledge that a cor- sion under the Commodity Exchange respondent account is being used by Act (7 U.S.C. 1 et seq.), except persons the foreign bank to provide indirect ac- who register pursuant to section cess to Commercial Bank of Syria shall 4(f)(a)(2) of the Commodity Exchange take all appropriate steps to prevent Act; and such indirect access, including, where (x) A mutual fund, which means an necessary, terminating the cor- investment company (as defined in sec- respondent account. tion 3(a)(1) of the Investment Company (iv) A covered financial institution Act of 1940 ((‘‘Investment Company required to terminate a correspondent Act’’) (15 U.S.C. 80a–3(a)(1))) that is an account pursuant to paragraph open-end company (as defined in sec- (b)(2)(iii) of this section: tion 5(a)(1) of the Investment Company (A) Should do so within a commer- Act (15 U.S.C. 80a–5(a)(1))) and that is cially reasonable time, and should not registered, or is required to register permit the foreign bank to establish with the Securities and Exchange Com- any new positions or execute any mission pursuant to the Investment transaction through such cor- Company Act. respondent account, other than those (4) Subsidiary means a company of necessary to close the correspondent which more than 50 percent of the vot- account; and ing stock or analogous equity interest (B) May reestablish a correspondent is owned by another company. account closed pursuant to this para- (b) Requirements for covered financial graph if it determines that the cor- institutions—(1) Prohibition on direct use respondent account will not be used to of correspondent accounts. A covered fi- provide banking services indirectly to nancial institution shall terminate any Commercial Bank of Syria. correspondent account that is open or (3) Recordkeeping and reporting. (i) A maintained in the United States for, or covered financial institution is re- on behalf of, Commercial Bank of quired to document its compliance Syria. with the notice requirement set forth (2) Due diligence of correspondent ac- in paragraph (b)(2)(i)(A) of this section. counts to prohibit indirect use. (i) A cov- (ii) Nothing in this section shall re- ered financial institution shall apply quire a covered financial institution to due diligence to its correspondent ac- report any information not otherwise counts that is reasonably designed to required to be reported by law or regu- guard against their indirect use by lation.

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§ 1010.655 Special measures against (4) Subsidiary means a company of Banco Delta Asia. which more than 50 percent of the vot- (a) Definitions. For purposes of this ing stock or analogous equity interest section: is owned by another company. (b) Requirements for covered financial (1) Banco Delta Asia means all —(1) branches, offices, and subsidiaries of institutions Prohibition on direct use A covered fi- Banco Delta Asia operating in any ju- of correspondent accounts. nancial institution shall terminate any risdiction, including its subsidiaries correspondent account that is estab- Delta Asia Credit Limited and Delta lished, maintained, administered, or Asia Insurance Limited. managed in the United States for, or (2) Correspondent account has the on behalf of, Banco Delta Asia. same meaning as provided in (2) Due diligence of correspondent ac- § 1010.605(c)(1)(ii). counts to prohibit indirect use. (i) A cov- (3) Covered financial institution in- ered financial institution shall apply cludes: due diligence to its correspondent ac- (i) An insured bank (as defined in sec- counts that is reasonably designed to tion 3(h) of the Federal Deposit Insur- guard against their indirect use by ance Act (12 U.S.C. 1813(h))); Banco Delta Asia. At a minimum, that (ii) A commercial bank; due diligence must include: (iii) An agency or branch of a foreign (A) Notifying correspondent bank in the United States; accountholders the correspondent ac- (iv) A federally insured credit union; count may not be used to provide (v) A savings association; Banco Delta Asia with access to the (vi) A corporation acting under sec- covered financial institution; and tion 25A of the Federal Reserve Act (12 (B) Taking reasonable steps to iden- U.S.C. 611 et seq.); tify any indirect use of its cor- (vii) A trust bank or trust company respondent accounts by Banco Delta that is federally regulated and is sub- Asia, to the extent that such indirect ject to an anti-money laundering pro- use can be determined from trans- gram requirement; actional records maintained in the cov- (viii) A broker or dealer in securities ered financial institution’s normal registered, or required to be registered, course of business. with the U.S. Securities and Exchange (ii) A covered financial institution Commission under the Securities Ex- shall take a risk-based approach when change Act of 1934 (15 U.S.C. 78a et deciding what, if any, additional due seq.), except persons who register pur- diligence measures it should adopt to suant to section 15(b)(11) of the Securi- guard against the indirect use of its ties Exchange Act of 1934; correspondent accounts by Banco Delta (ix) A futures commission merchant Asia. or an introducing broker registered, or (iii) A covered financial institution required to register, with the Com- that obtains knowledge that a cor- modity Futures Trading Commission respondent account is being used by under the Commodity Exchange Act (7 the foreign bank to provide indirect ac- U.S.C. 1 et seq.), except persons who cess to Banco Delta Asia shall take all register pursuant to section 4(f)(a)(2) of appropriate steps to prevent such indi- the Commodity Exchange Act; and rect access, including, where necessary, (x) A mutual fund, which means an terminating the correspondent ac- investment company (as defined in sec- count. tion 3(a)(1) of the Investment Company (iv) A covered financial institution Act of 1940 ((‘‘Investment Company required to terminate a correspondent Act’’) (15 U.S.C. 80a–3(a)(1))) that is an account pursuant to paragraph open-end company (as defined in sec- (b)(2)(iii) of this section: tion 5(a)(1) of the Investment Company (A) Should do so within a commer- Act (15 U.S.C. 80a–5(a)(1))) and that is cially reasonable time, and should not registered, or is required to register permit the foreign bank to establish with the Securities and Exchange Com- any new positions or execute any mission pursuant to the Investment transaction through such cor- Company Act. respondent account, other than those

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necessary to close the correspondent Ltd., that such correspondents may not account; and provide FBME Bank, Ltd. with access (B) May reestablish a correspondent to the correspondent account main- account closed pursuant to this para- tained at the covered financial institu- graph if it determines that the cor- tion; and respondent account will not be used to (B) Taking reasonable steps to iden- provide banking services indirectly to tify any use of its foreign cor- Banco Delta Asia. respondent accounts by FBME Bank, (3) Recordkeeping and reporting. (i) A Ltd., to the extent that such use can be covered financial institution is re- determined from transactional records quired to document its compliance maintained in the covered financial in- with the notice requirement set forth stitution’s normal course of business. in paragraph (b)(2)(i)(A) of this section. (ii) A covered financial institution (ii) Nothing in this section shall re- shall take a risk-based approach when quire a covered financial institution to report any information not otherwise deciding what, if any, other due dili- required to be reported by law or regu- gence measures it reasonably must lation. adopt to guard against the use of its foreign correspondent accounts to § 1010.658 Special measures against process transactions involving FBME FBME Bank, Ltd. Bank, Ltd. (a) Definitions. For purposes of this (iii) A covered financial institution section: that obtains knowledge that a foreign (1) FBME Bank, Ltd. means all correspondent account may be being branches, offices, and subsidiaries of used to process transactions involving FBME Bank, Ltd. operating in any ju- FBME Bank, Ltd. shall take all appro- risdiction. priate steps to further investigate and (2) Correspondent account has the prevent such access, including the noti- same meaning as provided in fication of its correspondent account § 1010.605(c)(1)(ii). holder under paragraph (b)(2)(i)(A) of (3) Covered financial institution has this section and, where necessary, ter- the same meaning as provided in mination of the correspondent account. § 1010.605(e)(1). (iv) A covered financial institution (4) Subsidiary means a company of required to terminate a correspondent which more than 50 percent of the vot- account pursuant to paragraph ing stock or analogous equity interest (b)(2)(iii) of this section: is owned by another company. (A) Should do so within a commer- (b) Prohibition on accounts and due cially reasonable time, and should not diligence requirements for covered finan- permit the foreign bank to establish cial institutions—(1) Prohibition on use of any new positions or execute any correspondent accounts. A covered finan- transaction through such cor- cial institution shall not open or main- respondent account, other than those tain a correspondent account in the necessary to close the correspondent United States for, or on behalf of, account; and FBME Bank, Ltd. (2) Special due diligence of cor- (B) May reestablish a correspondent respondent accounts to prohibit use—(i) A account closed pursuant to this para- covered financial institution shall graph if it determines that the cor- apply special due diligence to its for- respondent account will not be used to eign correspondent accounts that is provide banking services indirectly to reasonably designed to guard against FBME Bank Ltd. their use to process transactions in- (3) Recordkeeping and reporting. (i) A volving FBME Bank, Ltd. At a min- covered financial institution is re- imum, that special due diligence must quired to document its compliance include: with the notice requirement set forth (A) Notifying those correspondent ac- in paragraph (b)(2)(i)(A) of this section. count holders that the covered finan- (ii) Nothing in this paragraph (b) cial institution knows or has reason to shall require a covered financial insti- know provide services to FBME Bank, tution to report any information not

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otherwise required to be reported by eign correspondent accounts that is law or regulation. reasonably designed to guard against [81 FR 18493, Mar. 31, 2016] their use to process transactions in- volving North Korean financial institu- § 1010.659 Special measures against tions. At a minimum, that special due North Korea. diligence must include: (a) Definitions. For purposes of this (A) Notifying those foreign cor- section: respondent account holders that the (1) North Korean banking institution covered financial institution knows or means any bank organized under North has reason to believe provide services Korean law, or any agency, branch, or to a North Korean financial institution office located outside the United that such correspondents may not pro- States of such a bank. vide a North Korean financial institu- (2) North Korean financial institution tion with access to the correspondent means all branches, offices, or subsidi- account maintained at the covered fi- aries of any foreign financial institu- nancial institution; and tion, as defined at § 1010.605(f), char- tered or licensed by North Korea, wher- (B) Taking reasonable steps to iden- ever located, including any branches, tify any use of its foreign cor- offices, or subsidiaries of such a finan- respondent accounts by a North Korean cial institution operating in any juris- financial institution, to the extent diction, and any branch or office with- that such use can be determined from in North Korea of any foreign financial transactional records maintained in institution. the covered financial institution’s nor- (3) Foreign bank has the same mean- mal course of business. ing as provided in § 1010.100(u). (ii) A covered financial institution (4) Correspondent account has the shall take a risk-based approach when same meaning as provided in deciding what, if any, other due dili- § 1010.605(c)(1)(i). gence measures it reasonably must (5) Covered financial institution has adopt to guard against the use of its the same meaning as provided in foreign correspondent accounts to § 1010.605(e)(1). process transactions involving North (6) Subsidiary means a company of Korean financial institutions. which more than 50 percent of the vot- (iii) A covered financial institution ing stock or analogous equity interest is owned by another company. that knows or has reason to believe (b) Prohibition on accounts and due that a foreign bank’s correspondent ac- diligence requirements for covered finan- count has been or is being used to proc- cial institutions—(1) Opening or mainte- ess transactions involving a North Ko- nance of correspondent accounts for a rean financial institution shall take all North Korean banking institution. A cov- appropriate steps to further investigate ered financial institution shall not and prevent such access, including the open or maintain in the United States notification of its correspondent ac- a correspondent account for, or on be- count holder under paragraph half of, a North Korean banking insti- (b)(3)(i)(A) of this section and, where tution. necessary, termination of the cor- (2) Prohibition on use of correspondent respondent account. accounts involving North Korean finan- (4) Recordkeeping and reporting. (i) A cial institutions. A covered financial in- covered financial institution is re- stitution shall take reasonable steps to quired to document its compliance not process a transaction for the cor- with the notice requirement set forth respondent account of a foreign bank in paragraph (b)(3)(i)(A) of this section. in the United States if such a trans- (ii) Nothing in this paragraph (b) action involves a North Korean finan- shall require a covered financial insti- cial institution. tution to report any information not (3) Special due diligence of cor- otherwise required to be reported by respondent accounts to prohibit use. (i) A law or regulation. covered financial institution shall apply special due diligence to its for- [81 FR 78721, Nov. 9, 2016]

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§ 1010.660 Special measures against Dandong with access to the cor- Bank of Dandong. respondent account maintained at the (a) Definitions. For purposes of this covered financial institution; and section: (B) Taking reasonable steps to iden- (1) Bank of Dandong means all sub- tify any use of its foreign cor- sidiaries, branches, and offices of Bank respondent accounts by Bank of of Dandong Co., Ltd. operating in any Dandong, to the extent that such use jurisdiction. can be determined from transactional (2) Correspondent account has the records maintained in the covered fi- same meaning as provided in nancial institution’s normal course of § 1010.605(c)(1)(ii). business. (3) Covered financial institution has (ii) A covered financial institution the same meaning as provided in shall take a risk-based approach when § 1010.605(e)(1). deciding what, if any, other due dili- (4) Foreign banking institution means a gence measures it reasonably must bank organized under foreign law, or adopt to guard against the use of its an agency, branch, or office located foreign correspondent accounts to outside the United States of a bank. process transactions involving Bank of The term does not include an agent, Dandong. agency, branch, or office within the (iii) A covered financial institution United States of a bank organized that knows or has reason to believe under foreign law. that a foreign bank’s correspondent ac- (5) Subsidiary means a company of count has been or is being used to proc- which more than 50 percent of the vot- ess transactions involving Bank of ing stock or analogous equity interest Dandong shall take all appropriate is owned by another company. steps to further investigate and pre- (b) Prohibition on accounts and due vent such access, including the notifi- diligence requirements for covered finan- cation of its correspondent account cial institutions—(1) Opening or main- holder under paragraph (b)(3)(i)(A) of taining correspondent accounts for Bank this section and, where necessary, ter- of Dandong. A covered financial insti- mination of the correspondent account. tution shall not open or maintain in (4) Recordkeeping and reporting. (i) A the United States a correspondent ac- covered financial institution is re- count for, or on behalf of, Bank of quired to document its compliance Dandong. with the notice requirement set forth (2) Prohibition on use of correspondent in paragraph (b)(3)(i)(A) of this section. accounts involving Bank of Dandong. A (ii) Nothing in this paragraph (b) covered financial institution shall take shall require a covered financial insti- reasonable steps not to process a trans- tution to report any information not action for the correspondent account of otherwise required to be reported by a foreign banking institution in the law or regulation. United States if such a transaction in- [82 FR 51765, Nov. 8, 2017] volves Bank of Dandong. (3) Special due diligence of cor- § 1010.661 Special measures against respondent accounts to prohibit use. (i) A Iran. covered financial institution shall (a) Definitions. For purposes of this apply special due diligence to its for- section: eign correspondent accounts that is (1) Iranian financial institution means reasonably designed to guard against any foreign financial institution, as de- their use to process transactions in- fined at § 1010.605(f), organized under volving Bank of Dandong. At a min- Iranian law wherever located, includ- imum, that special due diligence must ing any agency, branch, office, or sub- include: sidiary of such a financial institution (A) Notifying those foreign cor- operating in any jurisdiction, and any respondent account holders that the branch or office within Iran of any for- covered financial institution knows or eign financial institution. has reason to believe provide services (2) Correspondent account has the to Bank of Dandong that such cor- same meaning as provided in respondents may not provide Bank of § 1010.605(c).

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(3) Covered financial institution has to, or any other sanctions program ad- the same meaning as provided in ministered by the Department of the § 1010.605(e)(1). Treasury’s Office of Foreign Asset Con- (4) Foreign bank has the same mean- trol (‘‘prohibited transactions’’). At a ing as provided in § 1010.100. minimum, that special due diligence (5) Subsidiary means a company of must include: which more than 50 percent of the vot- (A) Notifying those foreign cor- ing stock or analogous equity interest respondent account holders that the is owned by another company. covered financial institution knows or (b) Prohibition on accounts and due has reason to believe the correspondent diligence requirements for covered finan- account is being used to process trans- cial institutions—(1) Opening or main- taining correspondent accounts for Ira- actions involving Iranian financial in- nian financial institutions. A covered fi- stitutions that such prohibited trans- nancial institution shall not open or actions may not take place; and maintain in the United States a cor- (B) Taking reasonable steps to iden- respondent account for, or on behalf of, tify any use of its foreign cor- an Iranian financial institution, unless respondent accounts for prohibited such account is authorized by United transactions involving Iranian finan- States Department of the Treasury’s cial institutions, to the extent that Office of Foreign Assets Control such use can be determined from trans- (OFAC). actional records maintained in the cov-

NOTE 1 TO PARAGRAPH (b)(1): Note that cov- ered financial institution’s normal ered financial institutions should block and re- course of business. port to OFAC any accounts that are blocked (ii) A covered financial institution pursuant to any OFAC sanctions authority and shall take a risk-based approach when therefore should continue to maintain such ac- deciding what, if any, other due dili- counts in accordance with the Reporting Proce- dures and Penalties Regulations, 31 CFR part gence measures it reasonably must 501. adopt to guard against the use of its foreign correspondent accounts to (2) Prohibition on use of correspondent process prohibited transactions involv- accounts. A covered financial institu- ing Iranian financial institutions. tion shall take reasonable steps to not (iii) A covered financial institution process a transaction for the cor- respondent account of a foreign bank that knows or has reason to believe in the United States if such a trans- that a foreign bank’s correspondent ac- action involves an Iranian financial in- count has been or is being used to proc- stitution, unless the transaction is au- ess prohibited transactions involving thorized by, exempt from, or not pro- Iranian financial institutions shall hibited under the International Emer- take all appropriate steps to further in- gency Economic Powers Act (IEEPA) vestigate and prevent such access, in- (50 U.S.C. 1701 et seq.), any regulation, cluding the notification of its cor- order, directive, or license issued pur- respondent account holder under para- suant thereto, or any other sanctions graph (b)(3)(i)(A) of this section and, program administered by the Depart- where necessary, termination of the ment of the Treasury’s Office of For- correspondent account. eign Asset Control. (4) Recordkeeping and reporting. (i) A (3) Special due diligence of cor- covered financial institution is re- respondent accounts to prohibit use. (i) A quired to document its compliance covered financial institution shall with the notice requirement set forth apply special due diligence to the cor- in this section. respondent accounts of a foreign bank (ii) Nothing in this section shall re- that is reasonably designed to guard quire a covered financial institution to against their use to process trans- report any information not otherwise actions involving Iranian financial in- stitutions that are prohibited, and not required to be reported by law or regu- authorized or exempt, pursuant to the lation. IEEPA, any regulation, order, direc- [84 FR 59313, Nov. 14, 2019] tive, or license issued pursuant there-

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§ 1010.670 Summons or subpoena of alty of up to $10,000 per day until the foreign bank records; termination correspondent relationship is so termi- of correspondent relationship. nated. (a) Definitions. The definitions in § 1010.605 apply to this section. Subpart G—Administrative Rulings (b) Issuance to foreign banks. The Sec- retary or the Attorney General may § 1010.710 Scope. issue a summons or subpoena to any This subpart provides that the Direc- foreign bank that maintains a cor- tor, FinCEN, or his designee, either respondent account in the United unilaterally or upon request, may issue States and may request records related administrative rulings interpreting the to such correspondent account, includ- application of this chapter. ing records maintained outside of the United States relating to the deposit of § 1010.711 Submitting requests. funds into the foreign bank. The sum- (a) Each request for an administra- mons or subpoena may be served on the tive ruling must be in writing and con- foreign bank in the United States if the tain the following information: foreign bank has a representative in the United States, or in a foreign coun- (1) A complete description of the sit- try pursuant to any mutual legal as- uation for which the ruling is re- sistance treaty, multilateral agree- quested, ment, or other request for inter- (2) A complete statement of all mate- national law enforcement assistance. rial facts related to the subject trans- (c) Issuance to covered financial insti- action, tutions. Upon receipt of a written re- (3) A concise and unambiguous ques- quest from a Federal law enforcement tion to be answered, officer for information required to be (4) A statement certifying, to the maintained by a covered financial in- best of the requestor’s knowledge and stitution under paragraph (a)(2) of belief, that the question to be answered § 1010.630, the covered financial institu- is not applicable to any ongoing state tion shall provide the information to or Federal investigation, litigation, the requesting officer not later than 7 grand jury proceeding, or proceeding days after receipt of the request. before any other governmental body in- (d) Termination upon receipt of notice. volving either the requestor, any other A covered financial institution shall party to the subject transaction, or terminate any correspondent relation- any other party with whom the re- ship with a foreign bank not later than questor has an agency relationship, 10 business days after receipt of writ- (5) A statement identifying any infor- ten notice from the Secretary or the mation in the request that the re- Attorney General (in each case, after questor considers to be exempt from consultation with the other) that the disclosure under the Freedom of Infor- foreign bank has failed: mation Act, 5 U.S.C. 552, and the rea- (1) To comply with a summons or son therefor, subpoena issued under paragraph (b) of (6) If the subject situation is hypo- this section; or thetical, a statement justifying why (2) To initiate proceedings in a the particular situation described war- United States court contesting such rants the issuance of a ruling, summons or subpoena. (7) The signature of the person mak- (e) Limitation on liability. A covered fi- ing the request, or nancial institution shall not be liable (8) If an agent makes the request, the to any person in any court or arbitra- signature of the agent and a statement tion proceeding for terminating a cor- certifying the authority under which respondent relationship in accordance the request is made. with paragraph (d) of this section. (b) A request filed by a corporation (f) Failure to terminate relationship. shall be signed by a corporate officer Failure to terminate a correspondent and a request filed by a partnership relationship in accordance with this shall be signed by a partner. section shall render the covered finan- (c) A request may advocate a par- cial institution liable for a civil pen- ticular proposed interpretation and

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may set forth the legal and factual the requester at the meeting must be basis for that interpretation. reduced to writing by the requester and (d) Requests shall be addressed to: submitted in conformity with § 1010.711 Director, Financial Crimes Enforce- before they may be considered in con- ment Network, P.O. Box 39, Vienna, VA nection with the request. 22183. (e) The requester shall advise the Di- § 1010.714 Withdrawing requests. rector, FinCEN, immediately in writ- A person may withdraw a request for ing of any subsequent change in any an administrative ruling at any time material fact or statement submitted before the ruling has been issued. with a ruling request in conformity with paragraph (a) of this section. § 1010.715 Issuing rulings. § 1010.712 Nonconforming requests. The Director, FinCEN, or his des- ignee may issue a written ruling inter- The Director, FinCEN, or his des- preting the relationship between this ignee shall notify the requester if the chapter and each situation for which ruling request does not conform with such a ruling has been requested in the requirements of § 1010.711. The no- conformity with § 1010.711. A ruling tice shall be in writing and shall de- issued under this section shall bind scribe the requirements that have not FinCEN only in the event that the re- been met. A request that is not brought quest describes a specifically identified into conformity with such require- actual situation. A ruling issued under ments within 30 days from the date of this section shall have precedential such notice, unless extended for good value, and hence may be relied upon by cause by FinCEN, shall be treated as others similarly situated, only if though it were withdrawn. FinCEN makes it available to the pub- lic through publication on the FinCEN § 1010.713 Oral communications. Web site under the heading ‘‘Adminis- (a) The Director of FinCEN or his trative rulings’’ or other appropriate designee will not issue administrative forum. All rulings with precedential rulings in response to oral requests. value will be available by mail to any Oral opinions or advice by Treasury, person upon written request specifi- Customs and Border Protection, the In- cally identifying the ruling sought. ternal Revenue Service, the Office of FinCEN will make every effort to re- the Comptroller of the Currency, or spond to each requestor within 90 days any other bank supervisory agency per- of receiving a request. sonnel, regarding the interpretation and application of this chapter, do not (Approved by the Office of Management and bind FinCEN and carry no precedential Budget under control number 1506–0050) value. [75 FR 65812, Oct. 26, 2010, as amended at 81 (b) A person who has made a ruling FR 76864, Nov. 4, 2016] request in conformity with § 1010.711 may request an opportunity for oral § 1010.716 Modifying or rescinding rul- discussion of the issues presented in ings. the request. The request should be (a) The Director, FinCEN, or his des- made to the Director, FinCEN, and any ignee may modify or rescind any ruling decision to grant such a conference is made pursuant to § 1010.715: wholly within the discretion of the Di- (1) When, in light of changes in the rector. Personal conferences or tele- statute or regulations, the ruling no phone conferences may be scheduled longer sets forth the interpretation of only for the purpose of affording the re- the Director, FinCEN with respect to quester an opportunity to discuss free- the described situation, ly and openly the matters set forth in (2) When any fact or statement sub- the administrative ruling request. Ac- mitted in the original ruling request is cordingly, the conferees will not be found to be materially inaccurate or bound by any argument or position ad- incomplete, or vocated or agreed to, expressly or (3) For other good cause. impliedly, during the conference. Any (b) Any person may submit to the Di- new arguments or facts put forth by rector, FinCEN a written request that

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an administrative ruling be modified or Subpart H—Enforcement; rescinded. The request should conform Penalties; and Forfeiture to the requirements of § 1010.711, ex- plain why rescission or modification is § 1010.810 Enforcement. warranted, and refer to any reasons in (a) Overall authority for enforcement paragraph (a) of this section that are and compliance, including coordination relevant. The request may advocate an and direction of procedures and activi- alternative interpretation and may set ties of all other agencies exercising forth the legal and factual basis for delegated authority under this chapter, that interpretation. is delegated to the Director, FinCEN. (c) FinCEN shall modify an existing (b) Authority to examine institutions administrative ruling by issuing a new to determine compliance with the re- ruling that rescinds the relevant prior quirements of this chapter is delegated ruling. Once rescinded, an administra- as follows: tive ruling shall no longer have any (1) To the Comptroller of the Cur- precedential value. rency with respect to those financial (d) An administrative ruling may be institutions regularly examined for modified or rescinded retroactively safety and soundness by national bank with respect to one or more parties to examiners; the original ruling request if the Direc- (2) To the Board of Governors of the tor, FinCEN, determines that: Federal Reserve System with respect (1) A fact or statement in the origi- to those financial institutions regu- nal ruling request was materially inac- larly examined for safety and sound- curate or incomplete, ness by Federal Reserve bank exam- iners; (2) The requestor failed to notify in (3) To the Federal Deposit Insurance writing FinCEN of a material change Corporation with respect to those fi- to any fact or statement in the original nancial institutions regularly exam- request, or ined for safety and soundness by FDIC (3) A party to the original request bank examiners; acted in bad faith when relying upon (4) To the Federal Home Loan Bank the ruling. Board with respect to those financial institutions regularly examined for § 1010.717 Disclosing information. safety and soundness by FHLBB bank (a) Any part of any administrative examiners; ruling, including names, addresses, or (5) To the Chairman of the Board of information related to the business the National Credit Union Administra- transactions of private parties, may be tion with respect to those financial in- disclosed pursuant to a request under stitutions regularly examined for safe- the Freedom of Information Act, 5 ty and soundness by NCUA examiners. U.S.C. 552. If the request for an admin- (6) To the Securities and Exchange istrative ruling contains information Commission with respect to brokers which the requestor wishes to be con- and dealers in securities and invest- sidered for exemption from disclosure ment companies as that term is defined under the Freedom of Information Act, in the Investment Company Act of 1940 the requestor should clearly identify (15 U.S.C. 80–1 et seq.); such portions of the request and the (7) To the Commissioner of Customs and Border Protection with respect to reasons why such information should §§ 1010.340 and 1010.830; be exempt from disclosure. (8) To the Commissioner of Internal (b) A requestor claiming an exemp- Revenue with respect to all financial tion from disclosure will be notified, at institutions, except brokers or dealers least 10 days before the administrative in securities, mutual funds, futures ruling is issued, of a decision not to ex- commission merchants, introducing empt any of such information from dis- brokers in commodities, and com- closure so that the underlying request modity trading advisors, not currently for an administrative ruling can be examined by Federal bank supervisory withdrawn if the requestor so chooses. agencies for soundness and safety; and

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(9) To the Commodity Futures Trad- this part 1010; and take any other ac- ing Commission with respect to futures tion reasonably necessary for the en- commission merchants, introducing forcement of these and related provi- brokers in commodities, and com- sions, including pursuit of injunctions. modity trading advisors. (10) To the Federal Housing Finance [75 FR 65812, Oct. 26, 2010, as amended at 79 FR 103755, Feb. 25, 2014] Agency with respect to the housing government sponsored enterprises, as § 1010.820 Civil penalty. defined in § 1010.100(mmm) of this part. (c) Authority for investigating crimi- (a) For any willful violation, com- nal violations of this chapter is dele- mitted on or before October 12, 1984, of gated as follows: any reporting requirement for financial (1) To the Commissioner of Customs institutions under this chapter or of and Border Protection with respect to any recordkeeping requirements of § 1010.340; §§ 1010.311, 1010.313, 1020.315, 1021.311 or (2) To the Commissioner of Internal 1021.313, the Secretary may assess upon Revenue except with respect to any domestic financial institution, and § 1010.340. upon any partner, director, officer, or (d) Authority for the imposition of employee thereof who willfully partici- civil penalties for violations of this pates in the violation, a civil penalty chapter lies with the Director of not to exceed $1,000. FinCEN. (b) For any willful violation com- (e) Periodic reports shall be made to mitted after October 12, 1984 and before the Director, FinCEN by each agency October 28, 1986, of any reporting re- to which compliance authority has quirement for financial institutions been delegated under paragraph (b) of under this chapter or of the record- this section. These reports shall be in keeping requirements of § 1010.420, the such a form and submitted at such in- Secretary may assess upon any domes- tervals as the Director, FinCEN may tic financial institution, and upon any direct. Evidence of specific violations partner, director, officer, or employee of any of the requirements of this chap- thereof who willfully participates in ter may be submitted to the Director, the violation, a civil penalty not to ex- FinCEN at any time. ceed $10,000. (f) The Director, FinCEN or his dele- (c) For any willful violation of any gate, and any agency to which compli- recordkeeping requirement for finan- ance has been delegated under para- cial institutions, except violations of graph (b) of this section, may examine § 1010.420, under this chapter, the Sec- any books, papers, records, or other retary may assess upon any domestic data of domestic financial institutions financial institution, and upon any relevant to the recordkeeping or re- partner, director, officer, or employee porting requirements of this chapter. thereof who willfully participates in (g) The authority to enforce the pro- the violation, a civil penalty not to ex- visions of 31 U.S.C. 5314 and §§ 1010.350 ceed $1,000. and 1010.420 of this chapter has been re- (d) For any failure to file a report re- delegated from FinCEN to the Commis- quired under § 1010.340 or for filing such sioner of Internal Revenue by means of a report containing any material omis- a Memorandum of Agreement between sion or misstatement, the Secretary FinCEN and IRS. Such authority in- may assess a civil penalty up to the cludes, with respect to 31 U.S.C. 5314 amount of the currency or monetary and 1010.350 and 1010.420 of this chapter, instruments transported, mailed or the authority to: assess and collect shipped, less any amount forfeited civil penalties under 31 U.S.C. 5321 and under § 1010.830. 31 CFR 1010.820; investigate possible (e) For any willful violation of civil violations of these provisions (in § 1010.314 committed after January 26, addition to the authority already pro- 1987, the Secretary may assess upon vided at paragraph (c)(2)) of this sec- any person a civil penalty not to ex- tion); employ the summons power of ceed the amount of coins and currency subpart I of this part 1010; issue admin- involved in the transaction with re- istrative rulings under subpart G of spect to which such penalty is imposed.

898

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The amount of any civil penalty as- retary may assess upon any financial sessed under this paragraph shall be re- institution a civil penalty not to ex- duced by the amount of any forfeiture ceed $500. to the United States in connection (i) For penalties that are assessed with the transaction for which the pen- after August 1, 2016, see § 1010.821 for alty was imposed. rules relating to the maximum amount (f) For any willful violation com- of the penalty. mitted after October 27, 1986, of any re- porting requirement for financial insti- [75 FR 65812, Oct. 26, 2010, as amended at 81 tutions under this chapter (except FR 42505, June 30, 2016] § 1010.350, § 1010.360 or § 1010.420), the § 1010.821 Penalty adjustment and Secretary may assess upon any domes- table. tic financial institution, and upon any partner, director, officer, or employee (a) Inflation adjustments. In accord- thereof who willfully participates in ance with the Federal Civil Penalties the violation, a civil penalty not to ex- Inflation Adjustment Act of 1990, 28 ceed the greater of the amount (not to U.S.C. 2461 note, (‘‘FCPIA Act’’), as fur- exceed $100,000) involved in the trans- ther amended by the Federal Civil Pen- action or $25,000. alties Inflation Adjustment Act Im- (g) For any willful violation com- provements Act of 2015, FinCEN has set mitted after October 27, 1986, of any re- forth in paragraph (b) of this section quirement of § 1010.350, § 1010.360 or adjusted maximum penalty amounts § 1010.420, the Secretary may assess for each civil monetary penalty pro- upon any person, a civil penalty: vided by law within its jurisdiction (1) In the case of a violation of that is subject to the FCPIA Act. The § 1010.360 involving a transaction, a adjusted civil monetary penalty civil penalty not to exceed the greater amounts replace the amounts pub- of the amount (not to exceed $100,000) lished in the statutes authorizing the of the transaction, or $25,000; and assessment of penalties. (2) In the case of a violation of (b) Maximum civil monetary penalties. § 1010.350 or § 1010.420 involving a failure The statutory penalty provisions and to report the existence of an account or their adjusted maximum amounts or any identifying information required range of minimum and maximum to be provided with respect to such ac- amounts are set out in Table 1. The count, a civil penalty not to exceed the last column in the table provides the greater of the amount (not to exceed newly effective maximum penalty $100,000) equal to the balance in the ac- amounts or range of minimum and count at the time of the violation, or maximum amounts. These maximum $25,000. penalty amounts do not, however, limit (h) For each negligent violation of the total amount of a penalty in the any requirement of this chapter, com- case of a penalty that may be imposed mitted after October 27, 1986, the Sec- for each day a violation continues.

TABLE 1 OF § 1010.821—PENALTY ADJUSTMENT TABLE

Maximum penalty amounts or range of minimum and Civil monetary penalty descrip- Penalties as last maximum penalty U.S. Code citation tion amended by amounts for pen- statute alties assessed on or after February 19, 2020

12 U.S.C. 1829b(j) ...... Relating to Recordkeeping Viola- $10,000 $21,410 tions For Funds Transfers. 12 U.S.C. 1955 ...... Willful or Grossly Negligent Rec- 10,000 21,410 ordkeeping Violations. 31 U.S.C. 5318(k)(3)(C)...... Failure to Terminate Cor- 10,000 14,482 respondent Relationship with Foreign Bank. 31 U.S.C. 5321(a)(1)...... General Civil Penalty Provision 25,000 58,328 for Willful Violations of Bank ¥100,000 ¥233,313 Secrecy Act Requirements.

899

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TABLE 1 OF § 1010.821—PENALTY ADJUSTMENT TABLE—Continued

Maximum penalty amounts or range of minimum and Civil monetary penalty descrip- Penalties as last maximum penalty U.S. Code citation tion amended by amounts for pen- statute alties assessed on or after February 19, 2020

31 U.S.C. 5321(a)(5)(B)(i) ...... Foreign Financial Agency Trans- 10,000 13,481 action—Non-Willful Violation of Transaction. 31 U.S.C. 5321(a)(5)(C)(i)(I) ...... Foreign Financial Agency Trans- 100,000 134,806 action—Willful Violation of Transaction. 31 U.S.C. 5321(a)(6)(A) ...... Negligent Violation by Financial 500 1,166 Institution or Non-Financial Trade or Business. 31 U.S.C. 5321(a)(6)(B) ...... Pattern of Negligent Activity by 50,000 90,743 Financial Institution or Non-Fi- nancial Trade or Business. 31 U.S.C. 5321(a)(7)...... Violation of Certain Due Dili- 1,000,000 1,448,191 gence Requirements, Prohibi- tion on Correspondent Ac- counts for Shell Banks, and Special Measures. 31 U.S.C. 5330(e) ...... Civil Penalty for Failure to Reg- 5,000 8,606 ister as Money Transmitting Business.

[81 FR 42505, June 30, 2016, as amended at 82 prisonment for more than 1 year, be FR 10439, Feb. 10, 2017; 83 FR 11881, Mar. 19, fined not more than $10,000 or be im- 2018; 85 FR 9371, Feb. 19, 2020] prisoned not more than 5 years, or both. § 1010.830 Forfeiture of currency or monetary instruments. (b) Any person who willfully violates any provision of Title II of Public Law Any currency or other monetary in- 91–508, or of this chapter authorized struments which are in the process of thereby, may, upon conviction thereof, any transportation with respect to be fined not more than $250,000 or be which a report is required under § 1010.340 are subject to seizure and for- imprisoned not more than 5 years, or feiture to the United States if such re- both. port has not been filed as required in (c) Any person who willfully violates § 1010.360, or contains material omis- any provision of Title II of Public Law sions or misstatements. The Secretary 91–508, or of this chapter authorized may, in his sole discretion, remit or thereby, where the violation is either mitigate any such forfeiture in whole (1) Committed while violating an- or in part upon such terms and condi- other law of the United States, or tions as he deems reasonable. (2) Committed as part of a pattern of any illegal activity involving more § 1010.840 Criminal penalty. than $100,000 in any 12-month period, (a) Any person who willfully violates may, upon conviction thereof, be fined any provision of Title I of Public Law not more than $500,000 or be imprisoned 91–508, or of this chapter authorized not more than 10 years, or both. thereby may, upon conviction thereof, (d) Any person who knowingly makes be fined not more than $1,000 or be im- any false, fictitious or fraudulent prisoned not more than 1 year, or both. statement or representation in any re- Such person may in addition, if the port required by this chapter may, violation is of any provision authorized upon conviction thereof, be fined not by Title I of Public Law 91–508 and if more than $10,000 or be imprisoned not the violation is committed in further- more than 5 years, or both. ance of the commission of any viola- tion of Federal law punishable by im-

900

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§ 1010.850 Enforcement authority with retary or his delegate, at a time and respect to transportation of cur- place named in the summons, and to rency or monetary instruments. give testimony, under oath, and be ex- (a) If a customs officer has reason- amined, and to produce such books, pa- able cause to believe that there is a pers, records, or other data as may be monetary instrument being trans- relevant or material to such investiga- ported without the filing of the report tion. required by §§ 1010.340 and 1010.360 of this chapter, he may stop and search, § 1010.912 Persons who may issue sum- without a search warrant, a vehicle, mons. vessel, aircraft, or other conveyance, For purposes of this chapter, the fol- envelope or other container, or person lowing officials are hereby designated entering or departing from the United as delegates of the Secretary who are States with respect to which or whom authorized to issue a summons under the officer reasonably believes is trans- § 1010.911, solely for the purposes of porting such instrument. civil enforcement of this chapter: (b) If the Secretary has reason to be- (a) FinCEN. The Director, FinCEN. lieve that currency or monetary in- (b) Internal Revenue Service. Except struments are in the process of trans- with respect to § 1010.340 of this chap- portation and with respect to which a ter, the Commissioner, the Deputy report required under § 1010.340 has not Commissioner, or a delegate of either been filed or contains material omis- official, and, for the purposes of per- sions or misstatements, he may apply fecting seizures and forfeitures related to any court of competent jurisdiction to civil enforcement of this chapter, for a search warrant. Upon a showing the Chief (Criminal Investigation) or a of probable cause, the court may issue delegate. a warrant authorizing the search of (c) Customs and Border Protection. any or all of the following: With respect to § 1010.340 of this chap- (1) One or more designated persons. ter, the Commissioner, the Deputy (2) One or more designated or de- Commissioner, the Assistant Commis- scribed places or premises. sioner (Enforcement), Regional Com- (3) One or more designated or de- missioners, Assistant Regional Com- scribed letters, parcels, packages, or missioners (Enforcement), and Special other physical objects. Agents in Charge. (4) One or more designated or de- scribed vehicles. Any application for a § 1010.913 Contents of summons. search warrant pursuant to this section (a) Summons for testimony. Any sum- shall be accompanied by allegations of mons issued under § 1010.911 of this fact supporting the application. chapter to compel the appearance and (c) This section is not in derogation testimony of a person shall state: of the authority of the Secretary under (1) The name, title, address, and tele- any other law or regulation. phone number of the person before whom the appearance shall take place Subpart I—Summons (who may be a person other than the persons who are authorized to issue § 1010.911 General. such a summons under § 1010.912 of this For any investigation for the purpose chapter); of civil enforcement of violations of (2) The address to which the person the Bank Secrecy Act, or any regula- summoned shall report for the appear- tion issued pursuant to the Bank Se- ance; crecy Act, the Secretary or delegate of (3) The date and time of the appear- the Secretary may summon a financial ance; and institution or an officer or employee of (4) The name, title, address, and tele- a financial institution (including a phone number of the person who has former officer or employee), or any per- issued the summons. son having possession, custody, or care (b) Summons of books, papers, records, of any of the records and reports re- or data. Any summons issued under quired under the Bank Secrecy Act or § 1010.911 of this chapter to require the this chapter to appear before the Sec- production of books, papers, records, or

901

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other data shall describe the materials Department or any component thereof to be produced with reasonable speci- who is designated by that person ficity, and shall state: (whether in the summons or other- (1) The name, title, address, and tele- wise), is hereby authorized to receive phone number of the person to whom evidence and to examine witnesses pur- the materials shall be produced (who suant to the summons. Any person au- may be a person other than the persons thorized by law may administer any who are authorized to issue such a oaths and affirmations that may be re- summons under § 1010.912 of this chap- quired under this subpart. ter); (b) Testimony taken under oath. Testi- (2) The address at which the person mony of any person under this chapter summoned shall produce the materials, may be taken under oath, and shall be not to exceed 500 miles from any place taken down in writing by the person where the financial institution oper- examining the person summoned or ates or conducts business in the United shall be otherwise transcribed. After States; the testimony of a witness has been (3) The specific manner of produc- transcribed, a copy of that transcript tion, whether by personal delivery, by shall be made available to the witness mail, or by messenger service; upon request, unless for good cause the (4) The date and time for production; person issuing the summons deter- and mines, under 5 U.S.C. 555, that a copy (5) The name, title, address, and tele- should not be provided. If such a deter- phone number of the person who has mination has been made, the witness issued the summons. shall be limited to inspection of the of- ficial transcript of the testimony. § 1010.914 Service of summons. (c) Disclosure of summons, testimony, or (a) Who may serve. Any delegate of records. Unless the Secretary or a dele- the Secretary authorized under gate of the Secretary listed under § 1010.912 of this chapter to issue a sum- § 1010.912(a) of this chapter so author- mons, or any other person authorized izes in writing, or it is otherwise re- by law to serve summonses or other quired by law, no delegate of the Sec- process, is hereby authorized to serve a retary listed under § 1010.912 (b) or (c) of summons issued under this chapter. this chapter or other officer or em- (b) Manner of service. Service of a ployee of the Treasury Department or summons may be made— any component thereof shall— (1) Upon any person, by registered (1) Make public the name of any per- mail, return receipt requested, directed son to whom a summons has been to the person summoned; issued under this chapter, or release (2) Upon a natural person by personal any information to the public con- delivery; or cerning that person or the issuance of (3) Upon any other person by delivery a summons to that person prior to the to an officer, managing or general time and date set for that person’s ap- agent, or any other agent authorized to pearance or production of records; or receive service of process. (2) Disclose any testimony taken (in- (c) Certificate of service. The summons cluding the name of the witness) or shall contain a certificate of service to material presented pursuant to the be signed by the server of the sum- summons, to any person other than an mons. On the hearing of an application officer or employee of the Treasury De- for enforcement of the summons, the partment or of any component thereof. certificate of service signed by the per- Nothing in the preceding sentence shall son serving the summons shall be evi- preclude a delegate of the Secretary, or dence of the facts it states. other officer or employee of the Treas- ury Department or any component § 1010.915 Examination of witnesses thereof, from disclosing testimony and records. taken, or material presented pursuant (a) General. Any delegate of the Sec- to a summons issued under this chap- retary authorized under § 1010.912 of ter, to any person in order to obtain this chapter to issue a summons, or necessary information for investigative any officer or employee of the Treasury purposes relating to the performance of

902

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official duties, or to any officer or em- Subpart J—Miscellaneous ployee of the Department of Justice in connection with a possible violation of § 1010.920 Access to records. Federal law. Except as provided in §§ 1020.410(b)(1), 1021.410(a), and 1023.410(a)(1), and except § 1010.916 Enforcement of summons. for the purpose of assuring compliance In the case of contumacy by, or re- with the recordkeeping and reporting fusal to obey a summons issued to, any requirements of this chapter, this person under this chapter, the Sec- chapter does not authorize the Sec- retary or any delegate of the Secretary retary or any other person to inspect listed under § 1010.912 of this chapter or review the records required to be shall refer the matter to the Attorney maintained by this chapter. Other in- General or delegate of the Attorney spection, review or access to such General (including any United States records is governed by other applicable Attorney or Assistant United States law. Attorney, as appropriate), who may bring an action to compel compliance § 1010.930 Rewards for informants. with the summons in any court of the (a) If an individual provides original United States within the jurisdiction information which leads to a recovery of which the investigation which gave of a criminal fine, civil penalty, or for- rise to the summons being or has been feiture, which exceeds $50,000, for a vio- carried on, the jurisdiction in which lation of the provisions of the Bank Se- the person summoned is a resident, or crecy Act or of this chapter, the Sec- the jurisdiction in which the person retary may pay a reward to that indi- summoned carries on business or may vidual. be found. When a referral is made by a (b) The Secretary shall determine the delegate of the Secretary other than a amount of the reward to be paid under delegate named in § 1010.912(a) of this this section; however, any reward paid chapter, prompt notification of the re- may not be more than 25 percent of the net amount of the fine, penalty or for- ferral must be made to the Director, feiture collected, or $150,000, whichever FinCEN. The court may issue an order is less. requiring the person summoned to ap- (c) An officer or employee of the pear before the Secretary or delegate United States, a State, or a local gov- of the Secretary to produce books, pa- ernment who provides original infor- pers, records, or other data, to give tes- mation described in paragraph (a) in timony as may be necessary in order to the performance of official duties is explain how such material was com- not eligible for a reward under this sec- piled and maintained, and to pay the tion. costs of the proceeding. Any failure to obey the order of the court may be § 1010.940 Photographic or other re- punished by the court as a contempt productions of Government obliga- thereof. All process in any case under tions. this section may be served in any judi- Nothing herein contained shall re- cial district in which such person may quire or authorize the reproduction of: be found. (a) Currency or other obligation or security of the United States as defined § 1010.917 Payment of expenses. in 18 U.S.C. 8, or Persons summoned under this chap- (b) Any obligation or other security ter shall be paid the same fees and of any foreign government, the repro- mileage for travel in the United States duction of which is prohibited by law. that are paid witnesses in the courts of [75 FR 65812, Oct. 26, 2010, as amended at 81 the United States. The United States FR 76864, Nov. 4, 2016] shall not be liable for any other ex- pense incurred in connection with the § 1010.950 Availability of information. production of books, papers, records, or (a) The Secretary may within his dis- other data under this chapter. cretion disclose information reported

903

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under this chapter for any reason con- such disclosure. The amount of such sistent with the purposes of the Bank fees will be set in accordance with the Secrecy Act, including those set forth statute on fees for government serv- in paragraphs (b) through (d) of this ices, 31 U.S.C. 9701. section. (b) The Secretary may make any in- § 1010.960 Disclosure. formation set forth in any report re- All reports required under this chap- ceived pursuant to this chapter avail- ter and all records of such reports are able to another agency of the United specifically exempted from disclosure States, to an agency of a state or local under section 552 of Title 5, United government or to an agency of a for- States Code. eign government, upon the request of the head of such department or agency § 1010.970 Exceptions, exemptions, and made in writing and stating the par- reports. ticular information desired, the crimi- (a) The Secretary, in his sole discre- nal, tax or regulatory purpose for tion, may by written order or author- which the information is sought, and ization make exceptions to or grant ex- the official need for the information. emptions from the requirements of this (c) The Secretary may make any in- chapter. Such exceptions or exemp- formation set forth in any report re- tions may be conditional or uncondi- ceived pursuant to this chapter avail- tional, may apply to particular persons able to the Congress, or any committee or to classes of persons, and may apply or subcommittee thereof, upon a writ- to particular transactions or classes of ten request stating the particular in- transactions. They shall, however, be formation desired, the criminal, tax or applicable only as expressly Stated in regulatory purpose for which the infor- the order of authorization, and they mation is sought, and the official need shall be revocable in the sole discretion for the information. of the Secretary. (d) The Secretary may make any in- (b) The Secretary shall have author- formation set forth in any report re- ity to further define all terms used ceived pursuant to this chapter avail- herein. able to any other department or agen- (c)(1) The Secretary may, as an alter- cy of the United States that is a mem- native to the reporting and record- ber of the Intelligence Community, as keeping requirements for casinos in defined by Executive Order 12333 or any §§ 1010.306(a), 1021.311, and 1021.410, succeeding executive order, upon the grant exemptions to the casinos in any request of the head of such department State whose regulatory system sub- or agency made in writing and stating stantially meets the reporting and rec- the particular information desired, the ordkeeping requirements of this chap- national security matter with which ter. the information is sought and the offi- (2) In order for a State regulatory cial need therefor. system to qualify for an exemption on (e) Any information made available behalf of its casinos, the State must under this section to other department provide: or agencies of the United States, any (i) That the Treasury Department be state or local government, or any for- allowed to evaluate the effectiveness of eign government shall be received by the State’s regulatory system by peri- them in confidence, and shall not be odic oversight review of that system; disclosed to any person except for offi- (ii) That the reports required under cial purposes relating to the investiga- the State’s regulatory system be sub- tion, proceeding or matter in connec- mitted to the Treasury Department tion with which the information is within 15 days of receipt by the State; sought. (iii) That any records required to be (f) The Secretary may require that a maintained by the casinos relevant to State or local government department any matter under this chapter and to or agency requesting information which the State has access or main- under paragraph (b) of this section pay tains under its regulatory system be fees to reimburse the Department of made available to the Treasury Depart- the Treasury for costs incidental to ment within 30 days of request;

904

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(iv) That the Treasury Department 1020.313 Aggregation. be provided with periodic status re- 1020.314 Structured transactions. ports on the State’s compliance efforts 1020.315 Transactions of exempt persons. 1020.320 Reports by banks of suspicious and findings; transactions. (v) That all but minor violations of the State requirements be reported to Subpart D—Records Required To Be Treasury within 15 days of discovery; Maintained by Banks and (vi) That the State will initiate com- 1020.400 General. pliance examinations of specific insti- 1020.410 Records to be made and retained by banks. tutions at the request of Treasury within a reasonable time, not to exceed Subpart E—Special Information Sharing 90 days where appropriate, and will Procedures To Deter Money Laun- provide reports of these examinations dering and Terrorist Activity to Treasury within 15 days of comple- tion or periodically during the course 1020.500 General. of the examination upon the request of 1020.520 Special information sharing proce- dures to deter money laundering and ter- the Secretary. If for any reason the rorist activity for banks. State were not able to conduct an in- 1020.530 [Reserved] vestigation within a reasonable time, 1020.540 Voluntary information sharing the State will permit Treasury to con- among financial institutions. duct the investigation. (3) Revocation of any exemption Subpart F—Special Standards of Diligence; under this subsection shall be in the Prohibitions, and Special Measures for sole discretion of the Secretary. Banks 1020.600 General. § 1010.980 Dollars as including foreign 1020.610 Due diligence programs for cor- currency. respondent accounts for foreign financial Wherever in this chapter an amount institutions. is Stated in dollars, it shall be deemed 1020.620 Due diligence programs for private to mean also the equivalent amount in banking accounts. 1020.630 Prohibition on correspondent ac- any foreign currency. counts for foreign shell banks; records concerning owners of foreign banks and PARTS 1011–1019 [RESERVED] agents for service of legal process. 1020.640 [Reserved] 1020.670 Summons or subpoena of foreign PART 1020—RULES FOR BANKS bank records; termination of cor- respondent relationship. Subpart A—Definitions AUTHORITY: 12 U.S.C. 1829b and 1951–1959; 31 Sec. U.S.C. 5311–5314 and 5316–5332; title III, sec. 1020.100 Definitions. 314, Pub. L. 107–56, 115 Stat. 307; sec. 701, Pub. L. 114–74, 129 Stat. 599. Subpart B—Programs SOURCE: 75 FR 65812, Oct. 26, 2010, unless 1020.200 General. otherwise noted. 1020.210 Anti-money laundering program re- quirements for financial institutions reg- Subpart A—Definitions ulated only by a Federal functional regu- lator, including banks, savings associa- § 1020.100 Definitions. tions, and credit unions. 1020.220 Customer identification programs Refer to § 1010.100 of this Chapter for for banks, savings associations, credit general definitions not noted herein. unions, and certain non-Federally regu- To the extent there is a differing defi- lated banks. nition in § 1010.100 of this chapter, the definition in this Section is what ap- Subpart C—Reports Required To Be Made plies to part 1020. Unless otherwise in- by Banks dicated, for purposes of this part: 1020.300 General. (a) Account. For purposes of § 1020.220: 1020.310 Reports of transactions in currency. (1) Account means a formal banking 1020.311 Filing obligations. relationship established to provide or 1020.312 Identification required. engage in services, dealings, or other

905

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