[Federal Register Volume 61, Number 163 (Wednesday, August 21, 1996)]
[Proposed Rules]
[Pages 43195-43196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21264]


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FEDERAL RESERVE SYSTEM

12 CFR Part 219

[Regulation S; Docket No. R-0934]


Reimbursement for Providing Financial Records; Recordkeeping 
Requirements for Certain Financial Records

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Proposed rule.

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SUMMARY: The Board is proposing an amendment to subpart B of its 
Regulation S. Subpart B cross-references the substantive provisions of 
a joint rule adopted by the Board and the Department of the Treasury 
relating to the recordkeeping requirements for funds transfers and 
transmittals of funds. The proposed amendment would clarify that 
Regulation S does not apply to any person or transaction or class of 
persons or transactions that the Treasury has exempted from the joint 
rule.

DATES: Comments must be submitted on or before September 20, 1996.

ADDRESSES: Comments, which should refer to Docket No. R-0934, may be 
mailed to Mr. William W. Wiles, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue, NW., 
Washington, DC 20551. Comments addressed to Mr. Wiles also may be 
delivered to the Board's mail room between 8:45 a.m. and 5:15 p.m. and 
to the security control room outside of those hours. Both the mail room 
and the security control room are accessible from the courtyard 
entrance on 20th Street between Constitution Avenue and C Street, NW. 
Comments may be inspected in Room MP-500 between 9:00 a.m. and 5:00 
p.m.

FOR FURTHER INFORMATION CONTACT: Louise Roseman, Associate Director, 
(202/452-2789), Division of Reserve Bank Operations and Payment 
Systems; Oliver Ireland, Associate General Counsel (202/452-3625), or 
Elaine Boutilier, Senior Counsel (202/452-2418); Legal Division. For 
the hearing impaired only, contact Dorothea Thompson, 
Telecommunications Device for the Deaf (TDD) (202/452-3544), Board of 
Governors of the Federal Reserve System, 20th and C Streets, NW., 
Washington, DC 20551.

SUPPLEMENTARY INFORMATION: The Bank Secrecy Act,1 as amended by 
the Annunzio-Wylie Anti-Money-Laundering Act of 1992,2 authorizes, 
and in some cases requires, the Secretary of the Treasury 3 and 
the Board to prescribe recordkeeping rules for domestic and 
international funds transfers and money transmittals. The Board and the 
Treasury issued a joint rule,4 effective May 28, 1996, that sets 
forth recordkeeping and reporting requirements for funds transfers and 
money transmittals by banks and nonbank financial institutions. These 
requirements are intended to assist in the investigation and 
prosecution of money-laundering activities. In promulgating these 
rules, the Board and the Treasury determined that the requirements 
would have a high degree of usefulness in criminal, tax, or regulatory 
investigations or proceedings. The substance of the joint rule is 
codified with the Treasury's Bank Secrecy Act regulations in 31 CFR 
part 103.5 At the same time, the Board added subpart B to its 
Regulation S (12 CFR part 219) to cross-reference the joint rule.
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    \1\ Pub. L. 91-508, codified at 12 U.S.C. 1829b and 1951-1959, 
and 31 U.S.C. 5311-5329.
    \2\ Pub. L. 102-550, title XV.
    \3\ The Secretary of the Treasury has delegated the authority to 
administer the Bank Secrecy Act to the Director of the Financial 
Crimes Enforcement Network.
    \4\ 60 FR 231 (January 3, 1995), as amended by 60 FR 44144 
(August 24, 1995) and 61 FR 14382 (April 1, 1996).
    \5\ 31 CFR 103.11 and 103.33 (e) and (f).
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    Under its general Bank Secrecy Act regulations, the Treasury may 
make exceptions or grant exemptions from the requirements in 31 CFR 
part 103 for particular persons or classes of persons or particular 
transactions or classes of transactions.6 The Board has no similar 
exemptive provisions in Regulation S. The Board recognizes the 
possibility that the Treasury could grant an exception or exemption for 
a person or transaction subject to the joint rule. Therefore, to avoid 
confusion and to ensure consistent application of the joint rule and 
subpart B of Regulation S, the Board requests comment on an amendment 
to Regulation S to clarify that subpart B does not apply to a 
particular person or class of persons or particular transaction or 
class of transactions to the extent that the Treasury has determined 
that the joint rule does not apply to that person,

[[Page 43196]]

transaction, or class of persons or transactions.
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    \6\ See 31 CFR Sec. 103.45.
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Initial Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (5 U.S.C. 601-612) requires an 
agency to publish an initial regulatory flexibility analysis with any 
notice of proposed rulemaking. Two of the requirements of an initial 
regulatory flexibility analysis (5 U.S.C. 603(b)), a description of the 
reasons why action by the agency is being considered and a statement of 
the objectives of, and legal basis for, the proposed rule, are 
contained in the supplementary material above.
    The proposed rule requires no additional reporting or recordkeeping 
requirements and does not overlap with other federal rules. Rather, the 
proposal clarifies the relationship between the Regulation S and the 
joint rule. Another requirement for the initial regulatory flexibility 
analysis is a description of and, where feasible, an estimate of the 
number of small entities to which the proposed rule will apply. The 
proposal will apply to all institutions subject to the regulation, 
regardless of size, but would not result in any increased compliance or 
other burden for affected institutions, and may result in reduced 
compliance burden to the extent that the Treasury exempts persons or 
transactions that would otherwise be subject to Regulation S.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Ch. 3506; 5 CFR 1320 Appendix A.1), the Board reviewed the proposed 
rule under the authority delegated to the Board by the Office of 
Management and Budget. No collections of information pursuant to the 
Paperwork Reduction Act are contained in the proposed rule.

List of Subjects in 12 CFR Part 219

    Banks, banking, Currency, Foreign banking, Reporting and 
recordkeeping requirements.

    For the reasons set out in the preamble, 12 CFR part 219 is 
proposed to be amended as set forth below.

PART 219--REIMBURSEMENT FOR PROVIDING FINANCIAL RECORDS; 
RECORDKEEPING REQUIREMENTS FOR CERTAIN FINANCIAL RECORDS 
(REGULATION S)

Subpart B--Recordkeeping and Reporting Requirements for Funds 
Transfers and Transmittals of Funds

    1. The authority citation for subpart B is revised to read as 
follows:

    Authority: 12 U.S.C. 1829b(b)(2) and (3).

    2. In Sec. 219.21, the first word ``Such'' in the last sentence is 
revised to read ``These'' and a new sentence is added immediately 
preceding the last sentence to read as follows:


Sec. 219.21  Authority, purpose, and scope.

    * * * This subpart does not apply to a particular person or class 
of persons or a particular transaction or class of transactions to the 
extent that the Treasury has determined that 31 CFR 103.33(e) and (f) 
do not apply to that person, transaction, or class of persons or 
transactions. * * *

    By order of the Board of Governors of the Federal Reserve 
System, August 15, 1996.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 96-21264 Filed 8-20-96; 8:45 am]
BILLING CODE 6210-01-P