[Federal Register Volume 68, Number 27 (Monday, February 10, 2003)]
[Rules and Regulations]
[Pages 6613-6617]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3112]


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DEPARTMENT OF THE TREASURY

31 CFR Part 103

RIN 1506-AA34


Financial Crimes Enforcement Network; Amendment to the Bank 
Secrecy Act Regulations--Requirement That Currency Dealers and 
Exchangers Report Suspicious Transactions

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

ACTION: Final rule.

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SUMMARY: This document contains amendments to the regulations 
implementing the statute generally referred to as the Bank Secrecy Act. 
The amendments require currency dealers and exchangers to report 
suspicious transactions to the Department of the Treasury. Further, the 
amendments require all money services businesses to which the 
suspicious transaction reporting rule applies to report transactions 
involving suspected use of the money services business to facilitate 
criminal activity. The amendments constitute a further step in the 
creation of a comprehensive system for the reporting of suspicious 
transactions by the major categories of financial institutions 
operating in the United States, as a part of the counter-money 
laundering program of the Department of the Treasury. This document 
also contains a technical correction to 31 CFR 103.19, changing the 
name of the form by which brokers and dealers in securities shall 
report suspicious transactions.

DATES: Effective Date: March 12, 2003.
    Applicability Date: The applicability date is August 11, 2003.

FOR FURTHER INFORMATION CONTACT: David M. Vogt, Acting Executive 
Associate Director, Office of Regulatory Programs, FinCEN, (202) 354-
6400; and Judith R. Starr, Chief Counsel, and Christine L. Schuetz, 
Attorney-Advisor,

[[Page 6614]]

Office of Chief Counsel, FinCEN, at (703) 905-3590.

SUPPLEMENTARY INFORMATION:

I. Background

A. Statutory Provisions

    The Bank Secrecy Act (``BSA''), Public Law 91-508, as amended, 
codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-
5314, 5316-5332, authorizes the Secretary of the Treasury, inter alia, 
to issue regulations requiring financial institutions to keep records 
and to file reports that are determined to have a high degree of 
usefulness in criminal, tax, and regulatory matters, or in the conduct 
of intelligence or counter-intelligence activities to protect against 
international terrorism, and to implement counter-money laundering 
programs and compliance procedures.\1\ Regulations implementing Title 
II of the BSA (codified at 31 U.S.C. 5311-5314, 5316-5332) appear at 31 
CFR Part 103. The authority of the Secretary to administer the BSA has 
been delegated to the Director of FinCEN.
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    \1\ Language expanding the scope of the BSA to intelligence or 
counter-intelligence activities to protect against international 
terrorism was added by section 358 of the Uniting and Strengthening 
America by Providing Appropriate Tools Required to Intercept and 
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Public Law 107-56.
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    With the enactment of 31 U.S.C. 5318(g) in 1992,\2\ Congress 
authorized the Secretary of the Treasury to require financial 
institutions to report suspicious transactions. As amended by the USA 
PATRIOT ACT, subsection (g)(1) states generally:
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    \2\ 31 U.S.C. 5318(g) was added to the BSA by section 1517 of 
the Annunzio-Wylie Anti-Money Laundering Act, Title XV of the 
Housing and Community Development Act of 1992, Public Law 102-550; 
it was expanded by section 403 of the Money Laundering Suppression 
Act of 1994, Title IV of the Riegle Community Development and 
Regulatory Improvement Act of 1994, Public Law 103-325, to require 
designation of a single government recipient for reports of 
suspicious transactions.

    The Secretary may require any financial institution, and any 
director, officer, employee, or agent of any financial institution, 
to report any suspicious transaction relevant to a possible 
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violation of law or regulation.

Subsection (g)(2)(A) provides further that

    If a financial institution or any director, officer, employee, 
or agent of any financial institution, voluntarily or pursuant to 
this section or any other authority, reports a suspicious 
transaction to a government agency--
    (i) The financial institution, director, officer, employee, or 
agent may not notify any person involved in the transaction that the 
transaction has been reported; and
    (ii) No officer or employee of the Federal Government or of any 
State, local, tribal, or territorial government within the United 
States, who has any knowledge that such report was made may disclose 
to any person involved in the transaction that the transaction has 
been reported, other than as necessary to fulfill the official 
duties of such officer or employee.

Subsection (g)(3)(A) provides that neither a financial institution, nor 
any director, officer, employee, or agent of any financial institution

that makes a voluntary disclosure of any possible violation of law 
or regulation to a government agency or makes a disclosure pursuant 
to this subsection or any other authority * * * shall * * * be 
liable to any person under any law or regulation of the United 
States, any constitution, law, or regulation of any State or 
political subdivision of any State, or under any contract or other 
legally enforceable agreement (including any arbitration agreement), 
for such disclosure or for any failure to provide notice of such 
disclosure to the person who is the subject of such disclosure or 
any other person identified in the disclosure.

Finally, subsection (g)(4) requires the Secretary of the Treasury, ``to 
the extent practicable and appropriate,'' to designate ``a single 
officer or agency of the United States to whom such reports shall be 
made.'' \3\ The designated agency is in turn responsible for referring 
any report of a suspicious transaction to ``any appropriate law 
enforcement, supervisory agency, or United States intelligence agency 
for use in the conduct of intelligence or counterintelligence 
activities, including analysis, to protect against international 
terrorism.'' Id., at subsection (g)(4)(B).
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    \3\ This designation does not preclude the authority of 
supervisory agencies to require financial institutions to submit 
other reports to the same agency or another agency ``pursuant to any 
other applicable provision of law.'' 31 U.S.C. 5318(g)(4)(C).
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B. Suspicious Activity Reporting by Money Services Businesses

    For purposes of regulations implementing the BSA, a ``money 
services business'' includes each agent, agency, branch, or office 
within the United States of any person (except a bank or person 
registered with, and regulated or examined by, the Securities and 
Exchange Commission or the Commodity Futures Trading Commission) doing 
business in one or more of the following capacities:
    [sbull] Currency dealer or exchanger;
    [sbull] Check casher;
    [sbull] Issuer of traveler's checks, money orders, or stored value;
    [sbull] Seller or redeemers of traveler's checks, money orders, or 
stored value;
    [sbull] Money transmitter; and
    [sbull] The United States Postal Service (except with regard to the 
sale of postage or philatelic products).
    Persons who do not exchange currency, cash checks, or issue, sell, 
or redeem traveler's checks, money orders, or stored value in an amount 
greater than $1,000 to any person on any day in one or more 
transactions are not money services businesses for purposes of the 
BSA.\4\
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    \4\ See 31 CFR 103.11(uu).
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    On March 14, 2000, FinCEN published a final rule requiring certain 
money services business to report suspicious transactions to FinCEN 
beginning January 1, 2002 (the ``MSB SAR rule'').\5\ The MSB SAR rule 
as originally promulgated, found at 31 CFR 103.20, required certain 
money services businesses to file a report of any transaction conducted 
or attempted by, at, or through the money services business, involving 
or aggregating at least $2,000 (or $5,000 to the extent that the 
identification of transactions required to be reported is derived from 
a review of clearance records of money orders or traveler's checks that 
have been sold or processed), when the money services business knows, 
suspects, or has reason to suspect that the transaction falls into one 
of three reporting categories contained in the rule. The first 
reporting category, described in 31 CFR 103.20(a)(2)(i), includes 
transactions involving funds derived from illegal activity or intended 
or conducted in order to hide or disguise funds or assets derived from 
illegal activity. The second category, described in 31 CFR 
103.20(a)(2)(ii), involves transactions designed to evade the 
requirements of the BSA. The third category, described in 31 CFR 
103.20(a)(2)(iii), involves transactions that appear to have no 
business purpose or that vary so substantially from normal commercial 
activities or

[[Page 6615]]

activities appropriate for the particular customer or type of customer 
as to have no reasonable explanation.
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    \5\ See 65 FR 13683 (March 14, 2000). Banks, thrift 
institutions, and credit unions have been subject to the suspicious 
transaction reporting requirement since April 1, 1996, pursuant to 
regulations issued concurrently by FinCEN and the federal bank 
supervisors (the Board of Governors of the Federal Reserve System 
(``Federal Reserve''), the Office of the Comptroller of the Currency 
(``OCC''), the Federal Deposit Insurance Corporation (``FDIC''), the 
Office of Thrift Supervision (``OTS''), and the National Credit 
Union Administration (``NCUA'')). See 31 CFR 103.18 (FinCEN); 12 CFR 
208.62 (Federal Reserve Board); 12 CFR 21.11 (OCC); 12 CFR 353.3 
(FDIC); 12 CFR 563.180 (OTS); and 12 CFR 748.1 (NCUA). On July 1, 
2002, FinCEN published a final rule, found at 31 CFR 103.19, 
requiring broker-dealers to file reports of suspicious transactions 
beginning after December 30, 2002. See 67 FR 44048. On September 26, 
2002, FinCEN published a final rule, found at 31 CFR 103.21, 
requiring casinos and card clubs to file reports of suspicious 
transactions. See 67 FR 60722.
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    Although the rule does not require the filing of multiple reports 
of suspicious activity by both a money services businesses and its 
agent with respect to the same reportable transaction, the obligation 
to identify and report suspicious transactions rests with each money 
services business involved in a particular transaction.
    In accordance with paragraph 103.20(b) of the MSB SAR rule, money 
services businesses must report a suspicious transaction within 30 days 
after the money services business becomes aware of the suspicious 
transaction, by completing a Suspicious Activity Report-MSB (``SAR-
MSB''). FinCEN published for comment on July 25, 2002, a draft SAR-MSB, 
which is now final and available for use.\6\ FinCEN has made special 
provision for situations requiring immediate attention (e.g., where 
delay in reporting might hinder law enforcement's ability to fully 
investigate the activity), in which case money services businesses are 
immediately to notify, by telephone, the appropriate law enforcement 
authority in addition to filing a SAR-MSB. Reports filed under the 
terms of the MSB SAR rule are lodged in a central database. Information 
contained in the database is made available electronically to federal 
and state law enforcement and regulatory agencies, to enhance their 
ability to fight financial crime and terrorism.
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    \6\ See 67 FR 48704 (July 25, 2002). The SAR\1\ MSB and advice 
on how to complete it can be viewed on FinCEN's Web site (http://www.fincen.gov) under the categories of ``What's New'' and 
``Regulatory.''
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    Paragraph 103.20(c) of the MSB SAR rule requires money services 
businesses to maintain copies of each filed SAR-MSB for five years. In 
addition, money services businesses must collect and maintain for five 
years supporting documentation relating to each SAR-MSB and make such 
documentation available to law enforcement and regulatory agencies upon 
request.
    Paragraph 103.20(d) of the MSB SAR rule incorporates the terms of 
31 U.S.C. 5318(g)(2) and (g)(3), and specifically prohibits persons 
filing reports in compliance with the MSB SAR rule (or voluntary 
reports of suspicious transactions) from disclosing, except to 
appropriate law enforcement and regulatory agencies, that a report has 
been prepared or filed. The paragraph also restates the BSA's broad 
protection from liability for making reports of suspicious transactions 
(whether such reports are required by the MSB SAR rule or made 
voluntarily), and for declining to disclose the fact of such reporting. 
The regulatory provisions do not extend the scope of either the 
statutory prohibition or the statutory protection; however, because 
FinCEN recognizes the importance of these statutory provisions in the 
overall effort to encourage meaningful reports of suspicious 
transactions and to protect the legitimate privacy expectations of 
those who may be named in such reports, they are repeated in the rule 
to remind compliance officers and others of their existence.
    Paragraph 103.20(e) of the MSB SAR rule provides that compliance 
with the MSB SAR rule will be audited by the Department of the Treasury 
through FinCEN or its delegee. Failure to comply with the rule may 
constitute a violation of the BSA regulations, which may subject non-
complying money services businesses to enforcement action under the 
BSA.
    As originally promulgated, the MSB SAR rule only applied to certain 
categories of money services businesses including issuers, sellers, and 
redeemers (for monetary value) of traveler's checks and money orders, 
money transmitters, and the United States Postal Service.\7\ The 
original MSB SAR rule did not apply to either check cashers or to 
currency dealers/exchangers. This rulemaking is based on FinCEN's 
determination that it is now appropriate to extend to currency dealers 
and exchangers the requirement to report suspicious transactions. 
FinCEN has determined that such reports will have a high degree of 
usefulness in criminal, tax, and regulatory investigations and 
proceedings, and in the conduct of intelligence and counter-
intelligence activities, including analysis, to protect against 
international terrorism.
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    \7\ The rule required money services businesses described in 31 
CFR 103.11(uu)(3) (the money services business category that 
includes issuers of traveler's checks, money orders, or stored 
value), 103.11(uu)(4) (sellers or redeemers of traveler's checks, 
money orders, or stored value), 103.11(uu)(5) (money transmitters), 
and 103.11(uu)(6) (the United States Postal Service) to file reports 
of suspicious activity. Given the infancy of the use of stored value 
products in the United States at the time of issuance of the final 
rule, issuers, sellers, and redeemers of stored value were 
explicitly carved out of the final MSB SAR rule. See 31 CFR 
103.20(a)(5).
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C. Importance of Suspicious Transaction Reporting in Treasury's Counter 
Money-Laundering Program

    The Congressional authorization of reporting of suspicious 
transactions recognizes two basic points that are central to Treasury's 
counter-money laundering and counter-financial crime programs. First, 
to realize full use of their ill-gotten gains, money launderers at some 
point must turn to financial institutions, either initially to conceal 
their illegal funds, or eventually to recycle those funds back into the 
economy. Second, the employees and officers of those institutions are 
often more likely than government officials to have a sense as to which 
transactions appear to lack commercial justification or otherwise 
cannot be explained as constituting a legitimate use of the financial 
institution's products and services.
    The importance of extending suspicious transaction reporting to all 
relevant financial institutions, including non-bank financial 
institutions, derives from the concentrated scrutiny to which banks 
have been subject with respect to money laundering. This attention, 
combined with the cooperation that banks have given to law enforcement 
agencies and banking regulators to root out money laundering, has made 
it far more difficult than in the past to pass large amounts of cash 
directly into the nation's banks unnoticed. As it has become 
increasingly difficult to launder large amounts of cash through banks, 
criminals have turned to non-bank financial institutions in their 
attempts to launder funds. Indeed, many non-bank financial institutions 
have come to recognize the increased pressure that money launderers 
have placed upon their operations and the need for innovative programs 
of training and monitoring necessary to counter that pressure.
    The reporting of suspicious transactions is also recognized as 
essential to an effective counter-money laundering program in the 
international consensus on the prevention and detection of money 
laundering. One of the central recommendations of the Financial Action 
Task Force Against Money Laundering (``FATF'') is that:

    If financial institutions suspect that funds stem from a 
criminal activity, they should be required to report promptly their 
suspicions to the competent authorities.

Financial Action Task Force Annual Report (June 28, 1996),\8\ Annex 1

[[Page 6616]]

(Recommendation 15). The recommendation applies equally to banks and 
non-banks.\9\
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    \8\ FATF is an inter-governmental body whose purpose is 
development and promotion of policies to combat money laundering. 
Originally created by the G-7 nations, its membership now includes 
Argentina, Australia, Austria, Belgium, Brazil, Canada, Denmark, 
Finland, France, Germany, Greece, Hong Kong, Iceland, Ireland, 
Italy, Japan, Luxembourg, Mexico, the Kingdom of the Netherlands, 
New Zealand, Norway, Portugal, Singapore, Spain, Sweden, 
Switzerland, Turkey, the United Kingdom, and the United States, as 
well as the European Commission and the Gulf Cooperation Council.
    \9\ This recommendation revises the original recommendation, 
issued in 1990, that required institutions to be either ``permitted 
or required'' to make such reports. (Emphasis supplied.) The revised 
recommendation reflects the international consensus that a mandatory 
suspicious transaction reporting system is essential to an effective 
national counter-money laundering program and to the success of 
efforts of financial institutions themselves to prevent and detect 
the use of their services or facilities by money launderers and 
others engaged in financial crime.
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    Extending counter-money laundering controls to ``non-traditional'' 
financial institutions, not simply to banks, is necessary both to 
ensure fair competition in the marketplace and because non-bank 
providers of financial services as well as depository institutions are 
an attractive mechanism for, and are threatened by, money launderers. 
See, e.g., Financial Action Task Force Annual Report, supra, Annex 1 
(Recommendation 8). For example, the international consensus is that 
currency dealers and exchangers are vulnerable to abuse not only by 
money launderers but also by those wishing to finance terrorist 
activity. On October 31, 2001, FATF issued its Special Recommendations 
on Terrorist Financing. Special Recommendation Four provides that:

    [i]f financial institutions, or other businesses or entities 
subject to anti-money laundering obligations, suspect or have 
reasonable grounds to suspect that funds are linked or related to, 
or are to be used for terrorism, terrorist acts or by terrorist 
organisations, they should be required to report promptly their 
suspicions to the competent authorities.

For purposes of FATF's Special Recommendation Four, the term 
``financial institutions'' is intended to refer to both banks and non-
bank financial institutions including, among other non-bank financial 
institutions, bureaux de change.\10\ On December 4, 2001, the European 
Parliament and the Council of the European Union issued Directive 2001/
97/EC amending Directive on Prevention of the Use of the Financial 
System for the Purpose of Money Laundering for the purpose of, among 
other things, reinforcing that anti-money laundering provisions should 
apply to currency exchange offices.
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    \10\ See Guidance Notes for the Special Recommendations on 
Terrorist Financing and the Self-Assessment Questionnaire, Special 
Recommendation Four, paragraph 19 (March 27, 2002). FATF defines 
``bureaux de change'' as ``institutions which carry out retail 
foreign exchange operations.'' See also Financial Action Task Force 
Annual Report, supra, Annex 1 (Interpretive Note to Recommendations 
8 and 9 (Bureaux de Change)).
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II. Notice of Proposed Rulemaking

    The final rule contained in this document is based on the notice of 
proposed rulemaking published October 17, 2002 (the ``Notice'') (67 FR 
64075). The Notice proposed the following amendments to the MSB SAR 
rule found at 31 CFR 103.20: (1) Adding currency dealers and exchangers 
to the list of money services businesses required to report suspicious 
transactions to the Department of the Treasury under 31 CFR 103.20, (2) 
adding a fourth reporting category to the suspicious transaction 
reporting rule applicable to money services businesses, and (3) adding 
to the rule the telephone number for FinCEN's Financial Institutions 
Hotline (1-866-556-3974).
    The comment period for the Notice ended on December 16, 2002. 
FinCEN received one comment letter, submitted by a trade association of 
community banks. The commenter discussed the importance of ensuring 
adequate scrutiny of MSBs for compliance with the requirement to report 
suspicious activity, and advised that FinCEN should monitor for 
evidence of money laundering activity through check cashers in order to 
determine whether to extend the suspicious transaction reporting 
requirement to such entities. FinCEN is committed to ensuring fairness 
in examining for, and enforcing, compliance with BSA regulations, and 
will continue to review whether it is appropriate to extend the 
suspicious activity reporting requirement to other categories of money 
services businesses not currently subject to the rule.

III. Section-by-Section Analysis

    In light of the fact that FinCEN did not receive any comments 
directly dealing with the language contained in the Notice, the format 
and terms of the final rule are consistent with the format and terms of 
the rule proposed in the Notice.

A. 103.20(a)--General

    Paragraph 103.20(a)(1) generally sets forth the requirement that 
certain money services businesses, including currency dealers and 
exchangers,\11\ issuers, sellers, and redeemers of traveler's checks 
and money orders, and money transmitters, report suspicious 
transactions to the Department of the Treasury. It should be noted that 
a money services business is subject to suspicious transaction 
reporting only with respect to transactions that involve or relate to 
the business activities described in 103.11(uu)(1), (3), (4), (5), or 
(6). Thus, for example, a currency dealer or exchanger (a money 
services business described in 103.11(uu)(1)) that is also a check 
casher (a money services business described in 103.11(uu)(2)) would not 
be required to report under the MSB SAR rule with respect to its check 
cashing activities in general, although it would be required to report 
check cashing activity that was part of a series of transactions that 
led to, for example, a suspicious currency exchange.
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    \11\ The terms currency ``dealer'' and ``exchanger'' in 31 CFR 
103.11(uu)(1) were intended to be interchangeable to ensure that the 
regulation captured the same type of activity whether denominated as 
exchanging or dealing--the physical exchange of currency for retail 
customers.
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B. 103.20(a)(2)--Reportable Transactions

    This document amends the MSB SAR rule by adding a fourth reporting 
category, described at 31 CFR 103.20(a)(2)(iv), for transactions 
involving use of the money services business to facilitate criminal 
activity. The addition of a fourth category of reportable transactions 
to the rule is intended to ensure that transactions involving legally-
derived funds that the money services business suspects are being used 
for a criminal purpose, such as terrorist financing, are reported under 
the rule.\12\ The addition of this reporting category is not intended 
to effect a substantive change in the rule. Rather, the fourth category 
has been added to make explicit that transactions being carried out for 
the purpose of conducting illegal activities, whether or not funded 
from illegal activities, must be reported under the rule.
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    \12\ The fourth reporting category has been added to the 
suspicious activity reporting rules promulgated since the passage of 
the USA PATRIOT ACT to make this point clear. See 31 CFR 103.19 and 
103.21.
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C. 103.20(b)(3)--Filing Instructions

    This document amends paragraph 103.20(b)(3) to include FinCEN's 
Financial Institution Hotline (1-866-556-3974) for use by financial 
institutions wishing voluntarily to report to law enforcement 
suspicious transactions that may relate to terrorist activity. Money 
services businesses reporting suspicious activity by calling the 
Financial Institutions Hotline must still file a timely SAR-MSB to the 
extent required by 31 CFR 103.20.

[[Page 6617]]

D. 103.19--Reports by Brokers or Dealers in Securities of Suspicious 
Transactions

    Section 103.19 instructs broker and dealers in securities to report 
suspicious transactions using a ``Suspicious Activity Report--Brokers 
or Dealers in Securities'' (SAR-BD) form. Because the name of the form 
has been changed to ``Suspicious Activity Report by the Securities and 
Futures Industries'' (SAR-SF), section 103.19 is being amended to 
reflect the new name of the form.

IV. Regulatory Flexibility Act

    FinCEN certifies that this final regulation will not have a 
significant economic impact on a substantial number of small entities. 
The average currency exchange is approximately $300, an amount which is 
substantially below the $2,000 threshold that triggers reporting under 
the amendments to 31 CFR 103.20. Thus, FinCEN believes the rule will 
not have a significant economic burden on small entities.

V. Executive Order 12866

    The Department of the Treasury has determined that this final rule 
is not a significant regulatory action under Executive Order 12866.

VI. Paperwork Reduction Act

    The collection of information contained in this final regulation 
has been approved by the Office of Management and Budget (``OMB'') in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) 
under control number 1506-0015. An agency may not conduct or sponsor, 
and a person is not required to respond to, a collection of information 
unless it displays a valid control number assigned by OMB.
    The collection of information in this final rule is in 31 CFR 
103.20(b)(3) and (c). This information is required to be provided 
pursuant to 31 U.S.C. 5318(g) and 31 CFR 103.20. This information will 
be used by law enforcement agencies in the enforcement of criminal and 
regulatory laws. The collection of information is mandatory. The likely 
recordkeepers are businesses.
    The estimated average recordkeeping burden associated with the 
collection of information in this final rule is 20 minutes per 
recordkeeper. The burden estimate relates to the recordkeeping 
requirement contained in the final rule. The reporting burden of 31 CFR 
103.20 will be reflected in the burden of the SAR-MSB form. FinCEN 
anticipates that the final rule will result in an annual filing of a 
total of 3,100 SAR-MSB forms. This result is an estimate, based on a 
projection of the size and volume of the industry.
    Comments concerning the accuracy of this burden estimate should be 
directed to the Financial Crimes Enforcement Network, Department of the 
Treasury, Post Office Box 39, Vienna, VA 22183, and to the Office of 
Management and Budget, Attn: Joseph F. Lackey, Jr., Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
New Executive Office Building, Room 3208, Washington, DC 20503.

List of Subjects in 31 CFR Part 103

    Authority delegations (Government agencies), Banks and banking, 
Currency, Investigations, Law enforcement, Reporting and recordkeeping 
requirements.

Amendments to the Regulations

    For the reasons set forth above in the preamble, 31 CFR Part 103 is 
amended as follows:

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

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

    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311--314, 
5316-5332; title III, secs. 314, 352, Pub. L. 107-56, 115 Stat. 307.


    2. In Subpart B, amend Sec. Sec.  103.19(b)(1), (b)(2), (b)(3), 
(c)(1), (d), and (e) by removing the word ``SAR-BD'' each place it 
occurs and adding in its place the word ``SAR-S-F.''

    3. In Subpart B, amend Sec.  103.20 as follows:
    a. Revise the first sentence of paragraph (a)(1),
    b. Add new paragraph (a)(2)(iv), and
    c. Add a new sentence to the end of paragraph (b)(3).
    The additions and revisions read as follows:


Sec.  103.20  Reports by money services businesses of suspicious 
transactions.

    (a) General. (1) Every money services business, described in Sec.  
103.11(uu) (1), (3), (4), (5), or (6), shall file with the Treasury 
Department, to the extent and in the manner required by this section, a 
report of any suspicious transaction relevant to a possible violation 
of law or regulation. * * *
    (2) * * *
    (iv) Involves use of the money services business to facilitate 
criminal activity.
* * * * *
    (b) * * *
    (3) * * * Money services businesses wishing voluntarily to report 
suspicious transactions that may relate to terrorist activity may call 
FinCEN's Financial Institutions Hotline at 1-866-556-3974 in addition 
to filing timely a SAR-MSB if required by this section.
* * * * *

    Dated: January 31, 2003.
James F. Sloan,
Director, Financial Crimes Enforcement Network.
[FR Doc. 03-3112 Filed 2-7-03; 8:45 am]
BILLING CODE 4810-02-P