[Federal Register Volume 67, Number 82 (Monday, April 29, 2002)]
[Rules and Regulations]
[Pages 21110-21113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10452]



[[Page 21109]]

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Part IV





Department of the Treasury





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31 CFR Part 103



Financial Crimes Enforcement Network; Anti-Money Laundering Programs; 
Final Rules

  Federal Register / Vol. 67, No. 82 / Monday, April 29, 2002 / Rules 
and Regulations  

[[Page 21110]]


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DEPARTMENT OF THE TREASURY

31 CFR Part 103

RIN 1506-AA28


Financial Crimes Enforcement Network; Anti-Money Laundering 
Programs for Financial Institutions

AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.

ACTION: Interim final rule.

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SUMMARY: FinCEN is issuing a series of interim final rules to provide 
guidance to financial institutions concerning the provision in the Bank 
Secrecy Act (BSA), added by section 352 of the Uniting and 
Strengthening America by Providing Appropriate Tools Required to 
Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, that 
requires financial institutions to establish anti-money laundering 
programs. This interim final rule provides that banks, savings 
associations, credit unions, registered brokers and dealers in 
securities, futures commission merchants, and casinos, will be deemed 
to be in compliance with section 352 if they establish and maintain 
anti-money laundering programs as required by existing FinCEN 
regulations, or their respective Federal regulator or self-regulatory 
organization. The establishment of anti-money laundering programs by 
money services businesses, operators of credit card systems, and mutual 
funds are the subject of separate rules published in this separate part 
of this issue of the Federal Register. This rule temporarily exempts, 
pending further analysis and review by Treasury and FinCEN, all other 
financial institutions (as defined in the BSA) from the requirement in 
section 352 that they establish anti-money laundering programs.

DATES: This interim final rule is effective April 24, 2002. Written 
comments may be submitted to FinCEN on or before May 29, 2002.

ADDRESSES: Submit comments (preferably an original and four copies) to 
FinCEN, P.O. Box 39, Vienna, VA 22183, Attn: Section 352 AMLP 
Regulations. Comments may also be submitted by electronic mail to 
[email protected] with the caption in the body of the text, 
``Attention: Section 352 AMLP Regulations.'' Comments may be inspected 
at FinCEN between 10 a.m. and 4 p.m. in the FinCEN Reading Room in 
Washington, DC. Persons wishing to inspect the comments submitted must 
request an appointment by telephoning (202) 354-6400 (not a toll-free 
number).

FOR FURTHER INFORMATION CONTACT: Office of the Chief Counsel (FinCEN), 
(703) 905-3590; Office of the Assistant General Counsel for Enforcement 
(Treasury), (202) 622-1927; or the Office of the Assistant General 
Counsel for Banking & Finance (Treasury), (202) 622-0480 (not toll-free 
numbers).

SUPPLEMENTARY INFORMATION:

I. Background

    On October 26, 2001, the President signed into law the USA PATRIOT 
Act (Public Law 107-56) (the Act). Title III of the Act makes a number 
of amendments to the anti-money laundering provisions of the BSA, which 
is codified in subchapter II of chapter 53 of title 31, United States 
Code. These amendments are intended to make it easier to prevent, 
detect, and prosecute international money laundering and the financing 
of terrorism. Section 352(a) of the Act, which becomes effective on 
April 24, 2002, amended section 5318(h) of the BSA. As amended, section 
5318(h)(1) requires every financial institution to establish an anti-
money laundering program that includes, at a minimum (i) the 
development of internal policies, procedures, and controls; (ii) the 
designation of a compliance officer; (iii) an ongoing employee training 
program; and (iv) an independent audit function to test programs.
    The definition of ``financial institution'' in sections 5312(a)(2) 
and (c)(1) is extremely broad. It includes institutions that are 
already subject to Federal regulation such as banks, savings 
associations, credit unions, money services businesses (such as money 
transmitters and currency exchanges), and registered securities broker-
dealers and futures commission merchants. The definition also includes 
dealers in precious metals, stones, or jewels; pawnbrokers; loan or 
finance companies; private bankers; insurance companies; travel 
agencies; telegraph companies; sellers of vehicles, including 
automobiles, airplanes, and boats; persons engaged in real estate 
closings and settlements; investment bankers; investment companies; and 
commodity pool operators and commodity trading advisors that are 
registered or required to register under the Commodity Exchange Act (7 
U.S.C. 1 et seq). Section 5318(h)(1) requires all of these businesses 
to establish anti-money laundering programs.
    Section 5318(h)(2) authorizes Treasury, after consulting with the 
appropriate Federal functional regulator,\1\ to prescribe minimum 
standards for anti-money laundering programs. This section also 
authorizes Treasury to exempt from the application of those minimum 
standards any financial institution that is not subject to the rules 
implementing the BSA for so long as it is not subject to such rules. 
Section 352(c) of the Act directs the Secretary of the Treasury to 
prescribe regulations by April 24, 2002 that ``consider the extent to 
which [the requirements of section 5318(h)(1)] are commensurate with 
the size, location, and activities'' of financial institutions. BSA 
section 5318(a)(6) provides that the Secretary may exempt any financial 
institution from any BSA statutory requirement. Taken together, these 
provisions authorize the issuance of regulations that may prescribe 
different requirements for anti-money laundering programs under, and 
that may exempt certain financial institutions from the requirements 
of, section 5318(h)(1).
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    \1\ These are defined by reference to section 509 of the Gramm-
Leach-Bliley Act (Public Law 106-102) to include the Board of 
Governors of the Federal Reserve System (FRB), the Office of the 
Comptroller of the Currency (OCC), the Board of Directors of the 
Federal Deposit Insurance Corporation (FDIC), the Office of Thrift 
Supervision (OTS), the National Credit Union Administration (NCUA), 
and the Securities and Exchange Commission (SEC), and, pursuant to 
section 321(c) of the Act, the Commodity Futures Trading Commission 
(CFTC).
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    Accordingly, and as described below, this interim final rule 
prescribes anti-money laundering program requirements for banks, 
savings associations, registered brokers and dealers in securities, 
futures commission merchants, and casinos. The establishment of anti-
money laundering programs by money services businesses, operators of 
credit card systems, and mutual funds are the subject of interim final 
rules published in this separate part of this issue of the Federal 
Register. Thus, by virtue of the interim final rules published today, 
all financial institutions presently subject to FinCEN's existing BSA 
regulations are now subject to anti-money laundering program 
requirements, as are three new types of financial institutions not 
previously regulated under the BSA: futures commission merchants, 
mutual funds, and operators of credit card systems.
    In order to ensure the issuance of well-considered regulations 
tailored to the unique money laundering risks associated with the 
remaining financial institutions, this rule temporarily exempts, until 
not later than October 24, 2002, all other financial institutions from 
the requirement that they establish anti-money laundering programs. 
During the next six months Treasury

[[Page 21111]]

and FinCEN will continue studying the money laundering risks posed by 
these institutions in order to develop appropriate anti-money 
laundering program requirements. During this period, Treasury and 
FinCEN expect to issue a series of regulations, focusing first on those 
exempted financial institutions that appear to pose the greatest 
potential for money laundering, that will further define the exempted 
financial institutions and delineate minimum standards for their anti-
money laundering programs.

II. Analysis of the Interim Final Rule

A. Banks, Savings Associations, and Credit Unions

    Following the enactment of the Act, Treasury established a working 
group that includes representatives of the Federal functional 
regulators and the Department of Justice to assist in implementing 
section 352 of the Act and in determining the appropriate minimum 
standards for anti-money laundering programs for financial institutions 
regulated by a Federal functional regulator. Certain financial 
institutions are already required to have anti-money laundering 
programs. Since 1987, all federally insured depository institutions and 
credit unions have been required by their federal regulators to have 
anti-money laundering programs. These programs contain the same 
elements that are required by section 5318(h)(1).\2\ Accordingly, 
section 103.120(b) provides that a financial institution that is 
subject to regulation by a Federal functional regulator will be deemed 
to be in compliance with the requirements of section 5318(h)(1) if it 
complies with the regulations of its regulator governing the 
establishment and maintenance of anti-money laundering programs. 
Examination of these financial institutions by their Federal functional 
regulators will continue to ensure compliance with those regulations.
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    \2\ 12 CFR 21.21 (OCC); 12 CFR 208.63 (FRB); 12 CFR 326.8 
(FDIC); 12 CFR 563.177 (OTS); 12 CFR 748.2 (NCUA).
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B. Registered Securities Broker-Dealers and Futures Commission 
Merchants

    Similarly, Treasury and FinCEN also believe it is appropriate to 
implement section 5318(h)(1) with respect to registered securities 
brokers and dealers and to futures commission merchants through their 
respective self-regulatory organizations (SROs). Indeed, the initiative 
demonstrated by the SEC, CFTC and their SROs in advancing anti-money 
laundering programs has significantly accelerated the implementation of 
section 352. Accordingly, section 103.120(c) provides that a registered 
securities broker-dealer or a futures commission merchant will be 
deemed in compliance with the requirements of section 5318(h)(1) if it 
complies with the rules, regulations, or requirements of its SRO 
concerning the establishment and maintenance of anti-money laundering 
programs.
    Following consultation between Treasury and the SEC, the two 
principal securities industry SROs \3\ have each adopted a rule 
requiring their members to implement anti-money laundering programs.\4\ 
These rules, which incorporate the requirements of section 5318(h)(1), 
apply to essentially all securities broker-dealers that do business 
with the public and were approved by the SEC on April 22, 2002 (see 
Securities Exchange Act Release No. 45798).
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    \3\ The National Association of Securities Dealers (NASD) and 
the New York Stock Exchange (NYSE).
    \4\ See 67 FR 8565 and 8567 (Feb. 25, 2002).
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    The SROs will examine their members for compliance with these 
requirements and take appropriate enforcement action in cases of 
noncompliance. In addition, the SEC has authority to examine registered 
broker-dealers for compliance with these, as well as all other SRO 
rules. Utilizing the examination, enforcement, and outreach 
capabilities of the SROs and the SEC is an effective means to ensure 
meaningful compliance with the anti-money laundering program 
requirement, and is consistent with the objectives of section 352 of 
the Act. However, in the unlikely event that Treasury were to determine 
it necessary, Treasury specifically reserves its right to issue 
regulations prescribing minimum standards under section 352 for 
securities brokers and dealers.
    Treasury and FinCEN, in consultation with the CFTC, are 
implementing section 5318(h)(1) with respect to the futures industry in 
a similar manner. The National Futures Association (NFA), which is the 
futures industry SRO whose members include all registered futures 
commission merchants, empowered its Executive Committee on February 21, 
2002 to develop and adopt a rule requiring all futures commission 
merchants and introducing broker members \5\ to establish anti-money 
laundering programs that satisfy the requirements of section 
5318(h)(1). The CFTC approved this rule on April 23, 2002. The NFA will 
examine its members for compliance with this requirement and take 
enforcement actions in cases of noncompliance. The CFTC, in turn, will 
examine the NFA for its enforcement of the anti-money laundering 
program rule and take enforcement action against the NFA in cases of 
non-enforcement. As with securities brokers and dealers, Treasury 
reserves its right to issue regulations prescribing minimum standards 
for futures commission merchants should it be deemed necessary.
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    \5\ ``Introducing brokers'' (defined in section 1a(23) of the 
Commodity Exchange Act (7 U.S.C. 1a(23))) play a crucial role in 
preventing money laundering in the futures industry. BSA section 
5312(a)(2)(H) defines ``financial institution'' to include ``a 
broker or dealer in securities or commodities,'' and Treasury 
believes that introducing brokers are included within this 
definition. Accordingly, NFA has included introducing brokers in its 
anti-money laundering program requirement. Sections 5312(a)(2)(Y) 
and (Z) authorize Treasury to include additional businesses within 
the BSA's definition of financial institution. Treasury is 
considering whether it is necessary to clarify formally that section 
5312(a)(2)(H) includes ``introducing brokers'' within the definition 
of ``financial institution.''
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C. Casinos

    In 1993, FinCEN issued regulations requiring casinos to establish 
written anti-money laundering compliance programs.\6\ Each compliance 
program must include internal controls to assure ongoing compliance, 
internal or external independent testing for compliance, training for 
casino personnel, and one or more compliance officers. In addition, 
casinos that have automated data processing systems are required to use 
automated programs to aid in assuring compliance. Accordingly, section 
103.120(d) provides that a casino that is in compliance with these 
regulations will be deemed to be in compliance with the requirements of 
section 5318(h)(1).
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    \6\ 31 CFR 103.64.
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D. Money Services Businesses, Mutual Funds, Operators of Credit Card 
Systems

    Anti-money laundering program requirements for money services 
businesses, mutual funds, and operators of credit card systems are 
described in separate interim final rules published in this separate 
part of this issue of the Federal Register.

E. All Other BSA Financial Institutions

    Treasury and FinCEN are exercising the authority under BSA section 
5318(a)(6) to temporarily exempt all other financial institutions from 
the requirement in section 5318(h)(1) that they establish anti-money 
laundering programs. The temporary exemption in section 103.170 applies 
to dealers in precious metals, stones, or jewels; pawnbrokers; loan or 
finance

[[Page 21112]]

companies; private bankers; insurance companies; travel agencies; 
telegraph companies; sellers of vehicles, including automobiles, 
airplanes, and boats; persons engaged in real estate closings and 
settlements; certain investment companies \7\; commodity pool 
operators; and commodity trading advisors. The exemption does not 
extend to ``investment bankers'' because all such entities are either 
depository institutions or securities broker-dealers that are subject 
to anti-money laundering program requirements by section 103.120(b) or 
(c), respectively. \8\
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    \7\ The principal statute governing investment companies is the 
Investment Company Act of 1940 (codified at 15 U.S.C. 80a1-80a64) 
(the 1940 Act), which defines investment company broadly. However, 
entities commonly known as hedge funds, private equity funds and 
venture capital funds are specifically excluded from the definition 
of investment company for purposes of the 1940 Act. Section 356 of 
the USA PATRIOT Act requires that the Treasury, the Federal Reserve, 
and the SEC submit a joint report to Congress, not later than 
October 26, 2002, on recommendations for effective regulations to 
apply the requirements of the BSA to investment companies, including 
persons that, but for the noted exceptions, would be investment 
companies. Treasury anticipates that the CFTC will participate in 
;the development of this report because a significant percentage of 
hedge funds are registered and regulated as commodity pool 
operators. Section 356 also requires that the report include 
recommendations whether personal holding companies should be treated 
as investment companies under the BSA. Pending further review and 
analysis, Treasury is temporarily exempting investment companies, 
other than ``open-end companies'' (as defined in section 5(a)(1) of 
the 1940 Act), from the requirements of BSA section 5318(h)(1). The 
applicability of these requirements to ``open-end companies'' is 
addressed in the interim final rule concerning mutual funds 
published in this separate part of this issue of the Federal 
Register. Pending further review and analysis, Treasury is also 
deferring determination of the scope of the BSA definition of 
``investment company,'' but anticipates that it is likely that the 
referenced entities excluded from application ;of the 1940 Act will 
be subject to anti-money laundering program requirements.
    \8\ See Davenport Management, Inc. 1993 SEC No-Act. Lexis 624 
(April 13, 1993) (stating that a corporation would be required to 
register as a broker-dealer if it acted as an intermediary in 
securities transactions, negotiated the terms of securities 
transactions, received transaction-based compensation, had direct 
contact with outside investors, and provided ``investment banking 
services''); See also Securities Exchange Act Release No. 11742 
(October 5, 1975) (noting that a bank might be subject to 
registration as a municipal securities dealer if it engages in 
underwriting or otherwise holds itself out as a dealer).
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    The need for the temporary exemption is a practical one. First, 
although included within the list of financial institutions in the BSA, 
these businesses have never been defined for purposes of the BSA. For 
example, does a ``dealer in precious metals, stones, or jewels'' 
include a jewelry counter at a department store and a kiosk in a 
shopping mall that sells gold and silver earrings, bracelets, and 
necklaces, as well as a diamond merchant? Similarly, does ``a business 
engaged in ``vehicle sales, including automobile, airplane, and boat 
sales `` include businesses selling motorcycles, motorbikes, or 
snowmobiles? Treasury and FinCEN do not believe it is sound regulatory 
policy to subject the broad categories of BSA ``financial 
institutions'' to the requirements of BSA section 5318(h)(1) without 
specifically defining the businesses that will be subject to those 
requirements. Second, in the six months since the enactment of the Act, 
Treasury and FinCEN have not had sufficient time and opportunity to 
analyze the nature of the businesses of the remaining financial 
institutions. More importantly, Treasury and FinCEN have not had the 
opportunity to identify the nature and scope of the money laundering or 
terrorist financing risks associated with these businesses. The 
extension of the anti-money laundering program requirement to all the 
remaining financial institutions, most of which have never been subject 
to federal financial regulation, raises many significant practical and 
policy issues. An inadequate understanding of the affected industries 
could result in poorly conceived regulations that impose unreasonable 
regulatory burdens with little or no corresponding anti-money 
laundering benefits. Finally, Treasury and FinCEN are aware that many 
of these financial institutions are sole proprietors or small 
businesses, and that any regulations affecting them must recognize this 
fact.
    For these reasons, Treasury and FinCEN believe that a temporary 
exemption from the requirements of section 5318(h)(1) is appropriate at 
this time. During the next six months, Treasury and FinCEN will review 
and analyze the extent to which these businesses may be used by money 
launderers or terrorist financiers, and will issue a series of 
additional rules requiring that they establish anti-money laundering 
programs where appropriate, and delineating minimum standards for those 
programs. Treasury and FinCEN have been examining the money laundering 
risks associated with insurance products and will issue in the near 
future a proposed rule governing the establishment of anti-money 
laundering programs by insurance companies. Although Treasury and 
FinCEN intend to issue regulations addressing anti-money laundering 
programs for all exempted financial institutions by October 24, 2002, 
any category of financial institution for which regulations have not 
been proposed or promulgated by that date will be required to establish 
anti-money laundering programs that comply with the requirements of 31 
U.S.C. 5318(h)(1).
    Treasury and FinCEN emphasize that the exemption from the 
requirement to establish anti-money laundering programs does not in any 
way relieve any business from the existing requirements in 31 U.S.C. 
5331 and 26 U.S.C. 6050I that they report transactions in cash or 
currency, or certain monetary instruments, that exceed $10,000. The 
regulations under these sections are codified at 31 CFR 103.30 and 26 
CFR 1.6050I, respectively. Every temporarily exempted business must 
ensure that it has appropriate procedures to report such transactions 
to FinCEN and the IRS using the single Form 8300 jointly prescribed by 
those agencies. In addition, all financial institutions are reminded of 
the importance of reporting suspected terrorist activities or otherwise 
suspicious transactions to the appropriate law enforcement authorities. 
Form 8300 contains a check box to indicate that a particular 
transaction, whether or not required to be reported, otherwise appears 
suspicious.

III. Administrative Procedure Act

    The provisions of 31 U.S.C. 5318(h)(1), requiring all financial 
institutions to establish anti-money laundering programs with at least 
four identified elements, become effective April 24, 2002. This interim 
rule exempts certain financial institutions from these requirements and 
deems other financial institutions to be in compliance with these 
requirements. Accordingly, good cause is found to dispense with notice 
and public procedure as unnecessary pursuant to 5 U.S.C. 553(b)(B), and 
to make the provisions of the interim rule effective in less than 30 
days pursuant to 5 U.S.C. 553(d)(1) and (3).

IV. Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required for this 
interim final rule, the provisions of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.) do not apply.

V. Executive Order 12866

    This interim final rule is not a ``significant regulatory action'' 
as defined in Executive Order 12866. Accordingly, a regulatory 
assessment is not required.

List of Subjects in 31 CFR Part 103

    Banks, banking, Brokers, Counter money laundering, Counter-
terrorism,

[[Page 21113]]

Currency, Foreign banking, Reporting and recordkeeping requirements.

Authority and Issuance

    For the reasons set forth above, FinCEN is amending 31 CFR Part 103 
as follows:

PART 103--FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND 
FOREIGN TRANSACTIONS

    1. The authority citation for part 103 is revised to read as 
follows:

    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5331; 
title III, secs. 314, 352, Pub. L. 107-56, 115 Stat. 307.


    2. Add new subpart I to part 103 to read as follows:

Subpart I--Anti-Money Laundering Programs

Sec.
103.120  Anti-money laundering program requirements for financial 
institutions regulated by a Federal functional regulator or a self-
regulatory organization, and casinos.
103.125  [Reserved]
103.130  [Reserved]
103.135  [Reserved]
103.170  Deferred anti-money laundering programs for certain 
financial institutions.

Subpart I--Anti-Money Laundering Programs


Sec. 103.120  Anti-money laundering program requirements for financial 
institutions regulated by a Federal functional regulator or a self-
regulatory organization, and casinos.

    (a) Definitions. For purposes of this section:
    (1) Financial institution means a financial institution defined in 
31 U.S.C. 5312(a)(2) or (c)(1) that is subject to regulation by a 
Federal functional regulator or a self-regulatory organization.
    (2) Federal functional regulator means:
    (i) The Board of Governors of the Federal Reserve System;
    (ii) The Office of the Comptroller of the Currency;
    (iii) The Board of Directors of the Federal Deposit Insurance 
Corporation;
    (iv) The Office of Thrift Supervision;
    (v) The National Credit Union Administration;
    (vi) The Securities and Exchange Commission; or
    (vii) The Commodity Futures Trading Commission.
    (3) Self-regulatory organization:
    (i) Shall have the same meaning as provided in section 3(a)(26) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(26)); and
    (ii) Means a ``registered entity'' or a ``registered futures 
association'' as provided in section 1a(29) or 17, respectively, of the 
Commodity Exchange Act (7 U.S.C. 1a(29), 21).
    (4) Casino has the same meaning as provided in Sec. 103.11(n)(5).
    (b) Requirements for financial institutions regulated only by a 
Federal functional regulator, including banks, savings associations, 
and credit unions. A financial institution regulated by a Federal 
functional regulator that is not subject to the regulations of a self 
regulatory organization shall be deemed to satisfy the requirements of 
31 U.S.C. 5318(h)(1) if it implements and maintains an anti-money 
laundering program that complies with the regulation of its Federal 
functional regulator governing such programs.
    (c) Requirements for financial institutions regulated by a self-
regulatory organization, including registered securities broker-dealers 
and futures commission merchants. A financial institution regulated by 
a self-regulatory organization shall be deemed to satisfy the 
requirements of 31 U.S.C. 5318(h)(1) if:
    (1) The financial institution complies with any applicable 
regulation of its Federal functional regulator governing the 
establishment and implementation of anti-money laundering programs; and
    (2)(i) The financial institution implements and maintains an anti-
money laundering program that complies with the rules, regulations, or 
requirements of its self-regulatory organization governing such 
programs; and
    (ii) The rules, regulations, or requirements of the self-regulatory 
organization have been approved, if required, by the appropriate 
Federal functional regulator.
    (d) Requirements for casinos. A casino shall be deemed to satisfy 
the requirements of 31 U.S.C. 5318(h)(1) if it implements and maintains 
a compliance program described in Sec. 103.64.


Sec. 103.125  [Reserved]


Sec. 103.130  [Reserved]


Sec. 103.135  [Reserved]


Sec. 103.170  Deferred anti-money laundering programs for certain 
financial institutions.

    (a) Exempt financial institutions. Subject to the provisions of 
paragraph (b) of this section, the following financial institutions (as 
defined in 31 U.S.C. 5312(a)(2) or (c)(1)) are exempt from the 
requirement in 31 U.S.C. 5318(h)(1) concerning the establishment of 
anti-money laundering programs:
    (1) An agency of the United States Government, or of a State or 
local government, carrying out a duty or power of a business described 
in 31 U.S.C. 5312(a)(2); and
    (2) Any of the following businesses or activities that is not 
described in Sec. 103.120(b) or (c), or subject to the requirements of 
Sec. 103.125 or Sec. 103.130:
    (i) Dealer in precious metals, stones, or jewels;
    (ii) Pawnbroker;
    (iii) Loan or finance company;
    (iv) Travel agency;
    (v) Telegraph company;
    (vi) Seller of vehicles, including automobiles, airplanes, and 
boats;
    (vii) Persons involved real estate closings and settlements;
    (viii) Private banker;
    (ix) Insurance company;
    (x) Commodity pool operator;
    (xi) Commodity trading advisor; or
    (xii) Investment company.
    (b) Termination of exemption. (1) In general. Subject to paragraph 
(b)(2) of this section, a financial institution described in paragraph 
(a)(2) of this section shall, effective October 24, 2002, establish and 
maintain an anti-money laundering program as required by 31 U.S.C. 
5318(h)(1).
    (2) Exception. The provisions of paragraph (b)(1) of this section 
shall not apply to any financial institution to the extent:
    (i) Provided in guidance issued in a document published in the 
Federal Register by the Department of the Treasury (including FinCEN) 
on or before October 24, 2002, governing the application of 31 U.S.C. 
5318(h)(1) to such financial institution; or
    (ii) That the Secretary determines that the application of any or 
all of the requirements of 31 U.S.C. 5318(h)(1) to such financial 
institution is unnecessary or should continue to be deferred pending 
further analysis and review.
    (c) Compliance obligations of deferred financial institutions. 
Nothing in this section shall be deemed to relieve an exempt financial 
institution from its responsibility to comply with the applicable 
requirements of law concerning the reporting of certain transactions in 
cash, currency, or monetary instruments in accordance with Sec. 103.30 
or 26 CFR 1.6050I.

    Dated: April 23, 2002.
James F. Sloan,
Director, Financial Crimes Enforcement Network.
[FR Doc. 02-10452 Filed 4-24-02; 4:09 pm]
BILLING CODE 4810-02-P