[Federal Register Volume 74, Number 219 (Monday, November 16, 2009)]
[Proposed Rules]
[Pages 58926-58931]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-27447]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

31 CFR Part 103

RIN 1506-AB04


Financial Crimes Enforcement Network; Expansion of Special 
Information Sharing Procedures To Deter Money Laundering and Terrorist 
Activity

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

ACTION: Notice of proposed rulemaking and request for comments.

-----------------------------------------------------------------------

SUMMARY: FinCEN is issuing this notice of proposed rulemaking to amend 
the relevant Bank Secrecy Act (``BSA'') information sharing rules to 
allow certain foreign law enforcement agencies, and State and local law 
enforcement agencies, to submit requests for information to financial 
institutions. The rule also clarifies that FinCEN itself, on its own 
behalf and on behalf of other appropriate components of the Department 
of the Treasury, may submit such requests. Modification of the 
information sharing rules is a part of the Department of the Treasury's 
continuing effort to increase the efficiency and effectiveness of its 
anti-money laundering and counter-terrorist financing policies.

DATES: Written comments are welcome and must be received on or before 
December 16, 2009.

ADDRESSES: Those submitting comments are encouraged to do so via the 
Internet. Comments submitted via the Internet may be submitted at 
http://www.regulations.gov/search/index.jsp, Docket number Fincen-2009-
0005, with the caption in the body of the text, ``Attention: Special 
Information Sharing Procedures to Deter Money Laundering and Terrorist 
Activity, RIN 1506-XXXX.'' Comments may also be submitted by written 
mail to: Financial Crimes Enforcement Network, Department of the 
Treasury, P.O. Box 39, Vienna, VA 22183, Attention: Special Information 
Sharing Procedures to Deter Money Laundering and Terrorist Activity, 
RIN 1506-AB04. Please submit comments by one method only. All comments 
submitted in response to this notice of proposed rulemaking will become 
a matter of public record; therefore, you should submit only 
information that you wish to make available publicly.
    Inspection of comments: Public comments received electronically or 
through the U.S. Postal Service sent in response to a ``Notice and 
Request for Comment'' will be made available for public review as soon 
as possible on http://www.regulations.gov. All comments received may be 
physically inspected in the FinCEN reading room located in Vienna, VA. 
Reading room appointments are available weekdays (excluding holidays) 
between 10 a.m. and 3 p.m., by calling the Disclosure Officer at (703) 
905-5034 (not a toll free call).

FOR FURTHER INFORMATION CONTACT: The FinCEN regulatory helpline at 
(800) 949-2732 and select Option 3.

SUPPLEMENTARY INFORMATION:

I. Background

A. Statutory Provisions

    On October 26, 2001, the President signed into law 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 (``the Act''). Title III of the Act amends the anti-
money laundering provisions of the Bank Secrecy Act, codified at 12 
U.S.C. 1829b and 1951-1959 and 31 U.S.C. 5311-5314 and 5316-5332, to 
promote the prevention, detection, and prosecution of international 
money laundering and the financing of terrorism. Regulations 
implementing the BSA appear at 31 CFR part 103. The authority of the 
Secretary of the Treasury (``the Secretary'') to administer the BSA has 
been delegated to the Director of FinCEN.
    Of the Act's many goals, the facilitation of information sharing 
among governmental entities and financial institutions for the purpose 
of combating terrorism and money laundering is of paramount importance. 
Section 314 of the Act furthers this goal by providing for the sharing 
of information between the government and financial institutions, and 
among financial institutions themselves. As with many other provisions 
of the Act, Congress has charged the U.S. Department of the Treasury 
with developing regulations to implement these information-sharing 
provisions.

[[Page 58927]]

    Subsection 314(a) of the Act states in part that:

    [t]he Secretary shall * * * adopt regulations to encourage 
further cooperation among financial institutions, their regulatory 
authorities, and law enforcement authorities, with the specific 
purpose of encouraging regulatory authorities and law enforcement 
authorities to share with financial institutions information 
regarding individuals, entities, and organizations engaged in or 
reasonably suspected based on credible evidence of engaging in 
terrorist acts or money laundering activities.

B. Overview of the Current Regulatory Provisions Regarding the 314(a) 
Program

    On September 26, 2002, FinCEN published a final rule implementing 
the authority contained in section 314(a) of the Act.\1\ That rule 
(``the 314(a) rule'') allows FinCEN to require U.S. financial 
institutions to search their records to determine whether they have 
maintained an account or conducted a transaction with a person that a 
Federal law enforcement agency has certified is suspected based on 
credible evidence of engaging in terrorist activity or money 
laundering.\2\ Before processing a request from a Federal law 
enforcement agency, FinCEN also requires the requesting agency to 
certify that, in the case of money laundering, the matter is 
significant, and that the requesting agency has been unable to locate 
the information sought through traditional methods of investigation and 
analysis before attempting to use this authority (``the 314(a) 
program'').
---------------------------------------------------------------------------

    \1\ Special Information Sharing Procedures to Deter Money 
Laundering and Terrorist Activity, 67 FR 60579 (Sept. 26, 2002).
    \2\ 31 CFR 103.100.
---------------------------------------------------------------------------

    Since its inception, the 314(a) program has yielded significant 
investigative benefits to Federal law enforcement users in terrorist 
financing and major money laundering cases. Feedback from the 
requesters and illustrations from sample case studies consistently 
demonstrate how useful the program is in enhancing the scope and 
expanding the universe of investigations. In view of the proven success 
of the 314(a) program, FinCEN seeks to broaden access to the program as 
outlined in the following paragraphs.

C. Objectives of Proposed Changes

a. Allowing Certain Foreign Law Enforcement Agencies To Initiate 314(a) 
Queries
    In order to satisfy the United States' treaty obligation with 
certain foreign governments, FinCEN is proposing to extend the use of 
the 314(a) program to include foreign law enforcement agencies. On June 
25, 2003, the Agreement on Mutual Legal Assistance between the United 
States and the European Union (EU) (hereinafter, the ``U.S.-EU MLAT'') 
was signed. Between 2004 and 2006, twenty-five bilateral implementing 
agreements also were signed by the United States and EU Member States. 
In 2006, the U.S.-EU MLAT, along with twenty-five bilateral 
instruments, was submitted to the U.S. Senate for its advice and 
consent to ratification. An additional two bilateral instruments, with 
Romania and Bulgaria, were concluded and submitted to the Senate in 
2007, following those countries' accession to the EU. The U.S.-EU MLAT 
and all twenty-seven bilateral instruments were ratified by the 
President on September 23, 2008, upon the advice and consent of the 
U.S. Senate.
    Article 4 of the U.S.-EU MLAT (entitled ``Identification of Bank 
Information'') obligates a requested Signatory State to search on a 
centralized basis for bank accounts within its territory that may be 
important to a criminal investigation in the requesting Signatory 
State. Article 4 also contemplates that Signatory States may search for 
information in the possession of a non-bank financial institution. 
Under Article 4, a Signatory State receiving a request may limit the 
scope of its obligation to provide assistance to terrorist activity and 
money laundering offenses, and many did so in their respective 
bilateral instruments with the United States. In addition, Article 4 
makes clear that the United States and the EU are under an obligation 
to ensure that the application of Article 4 does not impose 
extraordinary burdens on States that receive search requests. Certain 
EU States are expected to accommodate search requests from the United 
States by querying a single centralized database which identifies all 
bank accounts within that State. In negotiating the terms of Article 4, 
the United States expressly envisioned that EU member States would be 
able to access the information sharing process created by the 
implementation of section 314(a) of the Act. Expanding that process to 
include certain foreign law enforcement requesters would greatly 
benefit the United States by granting law enforcement agencies in the 
United States with reciprocal rights to obtain information about 
matching accounts in EU member States.
    Foreign law enforcement agencies would be able to use the 314(a) 
program in a way analogous to how Federal criminal law enforcement 
agencies currently access the program. Thus, a foreign law enforcement 
agency, prior to initiating a 314(a) query, would have to certify that, 
in the case of a money laundering investigation, the matter is 
significant, and that it has been unable to locate the information 
sought through traditional methods of investigation and analysis before 
attempting to use the 314(a) program. FinCEN also anticipates that the 
foreign request will be screened initially by a Federal law enforcement 
official serving as an attach[eacute] to the requesting jurisdiction. 
The application of these internal procedures will help ensure that the 
314(a) program is utilized only in significant situations, thereby 
minimizing the cost on reporting financial institutions.
b. Allowing State and Local Law Enforcement Agencies To Initiate 314(a) 
Queries
    By regulation, access to the 314(a) program currently is only 
available to Federal law enforcement agencies. When the section 314(a) 
rule was drafted, FinCEN considered expanding the process to include 
requesters from other types of law enforcement agencies. However, 
because of uncertainty about how the new information-sharing rules 
would impact financial institutions, FinCEN ultimately decided to defer 
expansion beyond Federal law enforcement agencies. FinCEN now has the 
benefit of drawing upon six years of experience in administering the 
section 314(a) rule. In that time, financial institutions have made 
necessary adjustments to comply with these rules and have developed 
more efficient ways to respond to section 314(a) requests.
    Money laundering and terror-related financial crimes are not 
limited by jurisdiction or geography. Detection and deterrence of these 
crimes require information sharing across all levels of investigative 
authorities, to include State and local law enforcement, to ensure the 
broadest United States Government defense.
    State and local law enforcement investigations run the gamut of 
criminal violations, to include money laundering and to a lesser 
extent, terrorist financing, and some of these investigations could 
benefit from the use of the 314(a) program. Access to the 314(a) 
program by State and local law enforcement would provide them a 
platform from which they could more effectively and efficiently fill 
information gaps, including those connected with multi-jurisdictional 
financial transactions, in the same manner as Federal law enforcement 
agencies. This expansion of the 314(a) program, in certain limited

[[Page 58928]]

circumstances, to include State and local law enforcement authorities, 
would benefit overall efforts to ensure that all law enforcement 
resources are made available to combat money laundering and terrorist 
financing.
    Therefore, the proposal would broaden 314(a) access to allow State 
and local law enforcement agencies to submit 314(a) queries. As is the 
case currently with requesting Federal criminal law agencies, State and 
local law enforcement, prior to initiating a 314(a) query, would have 
to certify that, in the case of a money laundering investigation, the 
matter is significant, and that it has been unable to locate the 
information sought through traditional methods of investigation and 
analysis before attempting to use the 314(a) program. The application 
of these internal procedures will help ensure that the 314(a) program 
will be utilized only in the most compelling situations, thereby 
minimizing the cost incurred by reporting financial institutions.
c. Clarifying That FinCEN, on Its Own Behalf and on Behalf of 
Appropriate Components of the Department of the Treasury, May Initiate 
314(a) Queries
    FinCEN's statutory mandate includes working to identify possible 
criminal activity to appropriate Federal, State, local, and foreign law 
enforcement agencies, and to support ongoing criminal financial 
investigations and prosecutions.\3\ FinCEN also routinely assists the 
law enforcement community through proactive analyses to discover 
trends, patterns, and common activity in the financial information 
contained in BSA reports. FinCEN's use of the 314(a) program will 
greatly enhance the scope and utility of its case support efforts 
beyond the insights provided from the BSA data, thereby delivering 
critical information about significant criminal activity on a timelier 
basis. Accordingly, FinCEN would use the 314(a) program to submit self-
initiated 314(a) queries.
---------------------------------------------------------------------------

    \3\ See 31 U.S.C. 310.
---------------------------------------------------------------------------

    FinCEN assists law enforcement by providing advanced or specialized 
analysis of BSA data on significant investigations involving offenses 
of money laundering or terrorist financing. These investigations often 
involve multiple locations or are otherwise linked to other 
investigations. A single 314(a) request issued by FinCEN could more 
efficiently coordinate and simultaneously support several 
investigations, thereby eliminating the need for separate requests from 
each investigating agency or jurisdiction.
    There also are instances in which FinCEN's analytical products will 
benefit from access to the 314(a) program by providing a more complete 
picture of financial transactions and mechanisms, as well as 
interrelationships among investigative subjects and financial 
transactions or entities. In addition, other appropriate components of 
the Department of the Treasury that provide analytical support, such as 
the Department's counter-terrorist financing and money laundering 
efforts, will be better equipped to fulfill their missions when given 
access to the 314(a) program. It is anticipated that the findings from 
the use of the 314(a) program will reveal additional insights and 
overall patterns of suspicious financial activities.

II. Section-by-Section Analysis

A. Section 103.90(a)

    FinCEN proposes to amend 31 CFR 103.90(a) by changing the 
definition of the term ``money laundering'' to include activity that 
would be criminalized by 18 U.S.C. 1956 or 1957 if such activity 
occurred in the United States. The change would allow the term to be 
applied to information requests by foreign law enforcement agencies. 
State and local law enforcement requesters would be subject to the same 
definition of money laundering that currently applies to Federal law 
enforcement agencies--i.e., activity that is criminalized by 18 U.S.C. 
1956 or 1957. Thus, in the case of a significant money laundering 
matter, a State or local law enforcement agency seeking information 
under the section 314(a) program would have to certify that it is 
investigating activity that would be criminalized under 18 U.S.C. 1956 
or 1957. Such activity could include, for example, conducting a 
financial transaction with proceeds of murder, kidnapping, or dealing 
in a controlled substance (as defined in section 102 of the Controlled 
Substances Act), which is punishable as a felony under State law.\4\
---------------------------------------------------------------------------

    \4\ See 18 U.S.C. 1956(c)(7) (defining the term ``specified 
unlawful activity'' to include, inter alia, an offense listed in 18 
U.S.C. 1961(1)).
---------------------------------------------------------------------------

B. Section 103.100(a)(4)

    FinCEN proposes to add 31 CFR 103.100(a)(4), which would define a 
``law enforcement agency'' to include a Federal, State, local, or 
foreign law enforcement agency with criminal investigative authority, 
provided that the foreign law enforcement agency is from a jurisdiction 
that is a party to a treaty that provides for, or in the determination 
of FinCEN is from a jurisdiction that otherwise allows, law enforcement 
agencies in the United States with reciprocal access to information 
comparable to that obtainable under section 103.100. The addition of 
foreign law enforcement agencies would enable the United States to be 
compliant with its obligations under the U.S.-EU MLAT, thereby 
providing law enforcement agencies in the United States with the 
benefit of reciprocal access to information in EU member States. The 
U.S.-EU MLAT, and 27 bilateral instruments with EU Member States 
implementing its terms, require each EU member State to be able to 
search for the kind of information covered by 31 CFR 103.100 and to 
promptly report to the requesting State the results of such a search.
    The addition of State and local law enforcement agencies would 
provide a platform for such agencies to deal more effectively with 
multi-jurisdictional financial transactions in the same manner as 
Federal law enforcement agencies. Access to the 314(a) program would 
provide State and local law enforcement agencies with another resource 
to aide in discovering the whereabouts of stolen proceeds.

C. Section 103.100(b)(1)

    FinCEN proposes to amend section 103.100(b)(1) to make conforming 
changes to reflect the addition of State and local law enforcement 
agencies, and foreign law enforcement agencies, as potential requesters 
of information. These other categories of law enforcement agencies 
would be subject to the same standard now applicable to Federal law 
enforcement agencies--in particular, the requirement to certify that 
each individual, entity, or organization about which the law 
enforcement agency is seeking information is engaged in, or is 
reasonably suspected based on credible evidence of engaging in, 
terrorist activity or money laundering. To further ensure that 
financial institutions are not overwhelmed by information requests, 
FinCEN has, since 2003, adopted an additional operating procedure that 
requires Federal law enforcement agencies to further certify that, in 
the case of a money laundering investigation, the matter is 
significant. FinCEN intends to apply that same standard to State, local 
and certain foreign law enforcement agencies.

D. Section 103.100(b)(2)

    FinCEN proposes to add new 31 CFR 103.100(b)(2) which would clarify 
that FinCEN may request directly, on its own behalf and on behalf of 
appropriate components of the Department of the Treasury, whether a 
financial institution or a group of financial institutions maintains or 
has maintained accounts

[[Page 58929]]

for, or has engaged in transactions with, specified individuals, 
entities, or organizations. Such information requests shall be for the 
purpose of conducting analyses to deter and detect terrorist financing 
activity or money laundering. Adding FinCEN, itself and acting on 
behalf of other appropriate Treasury components, as a requester of 
information will increase the value of analytical support to law 
enforcement.

III. Administrative Matters

A. Executive Order 12866

    It has been determined that this proposed rule is a significant 
regulatory action for purposes of Executive Order 12866 because it 
raises a novel policy issue. However, a regulatory impact analysis is 
not required.

B. Unfunded Mandates Act of 1995 Statement

    Section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded 
Mandates Act''), Public Law 104-4 (March 22, 1995), requires that an 
agency prepare a budgetary impact statement before promulgating a rule 
that may result in expenditure by that State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. If a budgetary impact statement is 
required, section 202 of the Unfunded Mandates Act also requires an 
agency to identify and consider a reasonable number of regulatory 
alternatives before promulgating a rule. FinCEN has determined that it 
is not required to prepare a written statement under section 202.

C. Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et 
seq.), FinCEN certifies that these proposed regulation revisions will 
not have a significant economic impact on a substantial number of small 
entities. The proposed revisions would allow certain other agencies to 
submit 314(a) requests, but would not change the substance of the 
search and reporting requirements. Thus, FinCEN estimates that any 
impact resulting from the proposal will not be significant.

D. Paperwork Reduction Act

    The collection of information contained in this proposed rule is 
being submitted to the Office of Management and Budget for review in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)). Comments on the collection of information should be sent to: 
Desk Officer for the Department of the Treasury, Office of Information 
and Regulatory Affairs, Office of Management and Budget, Paperwork 
Reduction Project (1506), Washington, DC 20503 at the following e-mail 
address: [email protected], with a copy to the Financial 
Crimes Enforcement Network by mail or the Internet at the addresses 
previously specified. As an alternative, comments may be submitted to 
OMB by fax to (202) 395-6974. Comments on the collection of information 
should be received by January 15, 2010. In accordance with the 
requirements of the Paperwork Reduction Act of 1995, 44 U.S.C. 
3506(c)(2)(A), and its implementing regulations, 5 CFR part 1320, the 
following information concerning the collection of information is 
presented to assist those persons wishing to comment on the information 
collection.
    The collection of information in this proposal is in 31 CFR 
103.100. The information will be used by Federal,\5\ State, and local 
law enforcement agencies, as well as certain foreign law enforcement 
agencies, and FinCEN and other appropriate components of the Department 
of Treasury, in the conduct of investigating money laundering and 
terrorist financing activity. The collection of information is 
mandatory.
---------------------------------------------------------------------------

    \5\ The requirement in section 103.100(b)(2), concerning reports 
by financial institutions in response to a request from FinCEN on 
behalf of a Federal law enforcement agency, is not a collection of 
information for purposes of the Paperwork Reduction Act. See 5 CFR 
1320.4(a)(2).
---------------------------------------------------------------------------

    International Requests: FinCEN estimates that there would be no 
more than 60 requests for research submitted to the 314(a) program by 
foreign law enforcement agencies annually.\6\
---------------------------------------------------------------------------

    \6\ These calculations were based on previous requests for 
information. A review of incoming requests from European Union 
countries revealed an average of about 350 cases per year from 2006-
2008. Of these, approximately 75% (an average of 269) were money 
laundering and/or terrorism related, however, the majority were not 
identified as complex cases. Conversations with FinCEN personnel 
responsible for European Union indicated not more than 10% of the 
money laundering and/or terrorism related cases would be significant 
enough to meet 314(a) use criteria, however, it is anticipated that 
there may be additional requests that would be submitted outside of 
the normal Financial Intelligence Unit channels.
---------------------------------------------------------------------------

    State and Local Requests: While there are more than 18,000 State 
and local law enforcement agencies, FinCEN estimates that the number of 
cases that would meet the stringent 314(a) submission criteria would be 
relatively low. The majority of significant money laundering and 
terrorist financing related cases are worked jointly with Federal 
investigators and are thus already eligible for 314(a) request 
submission. FinCEN estimates that there would be no more than 50 State 
and local cases per annum of 314(a) requests that meet submission 
criteria.
    FinCEN and appropriate components of the Department of the Treasury 
Requests: FinCEN estimates that the 314(a) program would be used by 
FinCEN and other appropriate Department components in fewer than 10 
cases per annum. Taking into consideration the estimated number of 
potential use cases that would fit recommended internal 314(a) 
criteria, FinCEN does not believe that this expansion would be a 
significant strain on existing program resources.
    Description of Recordkeepers: Covered financial institutions as 
defined in 31 CFR 103.100.
    Estimated Number of Recordkeepers: On an annual basis, there are 
approximately 20,134 covered financial institutions, consisting of 
15,106 commercial banks, savings associations, and credit unions, 4,793 
securities broker-dealers, 139 future commission merchants, 79 trust 
companies, and 17 life insurance companies.
    Estimated Average Annual Burden Hours per Recordkeeper: FinCEN 
estimates 120 search requests \7\ per year associated with the 
recordkeeping requirement in this proposed rule and 9 subjects 
(including aliases) per request, resulting in an estimated 1,080 
subjects per year. The estimated average burden associated with 
searching each subject is 4 minutes per subject. FinCEN therefore 
estimates that each recordkeeper will, on average, spend approximately 
4,320 minutes, or roughly 72 hours per year to comply with the 
recordkeeping requirement in this proposed rule.
---------------------------------------------------------------------------

    \7\ Estimated requests per annum subject to the Paperwork 
Reduction Act include 10 from FinCEN, 50 from State/local 
enforcement, and 60 from foreign law enforcement agencies, for a 
total of 120 requests.
---------------------------------------------------------------------------

    Estimated Total Annual Recordkeeping Burden: 1,449,648 annual 
burden hours (20,134 recordkeepers x 72 average annual burden hours per 
recordkeeper).
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collection of 
information displays a valid OMB control number. Records required to be 
retained under the Bank Secrecy Act must be retained for five years.
    Request for Comments: We specifically invite comments on: (a) 
Whether the proposed recordkeeping requirement is necessary for the 
proper performance of the mission of the Financial Crimes Enforcement 
Network, and whether the information shall have practical utility; (b) 
the accuracy of our

[[Page 58930]]

estimate of the burden of the proposed recordkeeping requirement; (c) 
ways to enhance the quality, utility, and clarity of the information 
required to be maintained; (d) ways to minimize the burden of the 
recordkeeping requirement, including through the use of automated 
collection techniques or other forms of information technology; and (e) 
estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to maintain the information.

List of Subjects in 31 CFR Part 103

    Administrative practice and procedure, Authority delegations 
(Government agencies), Banks and banking, Currency, Foreign banking, 
Foreign currencies, Gambling, Investigations, Law enforcement, 
Penalties, Reporting and recordkeeping requirements, Securities, Taxes.

Proposed Amendments to the Regulations

    For the reasons set forth above in the preamble, FinCEN proposes to 
amend 31 CFR part 103 as follows:

PART 103--FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND 
FINANCIAL 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. 5311-5314 
and 5316-5332; title III, sec. 314, Public Law 107-56, 115 Stat. 
307.

    2. Section 103.90(a) is revised to read as follows:


Sec.  103.90  Definitions.

* * * * *
    (a) Money laundering means an activity criminalized by 18 U.S.C. 
1956 or 1957, or an activity that would be criminalized by 18 U.S.C. 
1956 or 1957 if it occurred in the United States.
* * * * *
    3. Section 103.100 is amended by--
    a. Adding new paragraph (a)(4);
    b. Revising paragraph (b)(1);
    c. Redesignating paragraphs (b)(2) through (4) as paragraphs (b)(3) 
through (5);
    d. Adding new paragraph (b)(2);
    e. Revising newly redesignated paragraph (b)(3)(i);
    f. Revising newly redesignated paragraph (b)(3)(iv)(B)(1);
    g. Revising newly redesignated paragraph (b)(3)(iv)(B)(2);
    h. Revising newly redesignated paragraph (b)(3)(iv)(C);
    i. Revising newly redesignated paragraph (b)(4); and
    j. Revising newly redesignated paragraph (b)(5).
    The revisions read as follows:


Sec.  103.100  Information sharing between government agencies and 
financial institutions.

    (a) * * *
    (4) Law enforcement agency means a Federal, State, local, or 
foreign law enforcement agency with criminal investigative authority, 
provided that in the case of a foreign law enforcement agency, such 
agency is from a jurisdiction that is a party to a treaty that provides 
for, or in the determination of FinCEN is from a jurisdiction that 
otherwise allows, law enforcement agencies in the United States 
reciprocal access to information comparable to that obtainable under 
this section.
    (b) Information requests based on credible evidence concerning 
terrorist activity or money laundering--(1) In general. A law 
enforcement agency investigating terrorist activity or money laundering 
may request that FinCEN solicit, on the investigating agency's behalf, 
certain information from a financial institution or a group of 
financial institutions. When submitting such a request to FinCEN, the 
law enforcement agency shall provide FinCEN with a written 
certification, in such form and manner as FinCEN may prescribe. At a 
minimum, such certification must: State that each individual, entity, 
or organization about which the law enforcement agency is seeking 
information is engaged in, or is reasonably suspected based on credible 
evidence of engaging in, terrorist activity or money laundering; 
include enough specific identifiers, such as date of birth, address, 
and Social Security number, that would permit a financial institution 
to differentiate between common or similar names; and identify one 
person at the agency who can be contacted with any questions relating 
to its request. Upon receiving the requisite certification from the 
requesting law enforcement agency, FinCEN may require any financial 
institution to search its records to determine whether the financial 
institution maintains or has maintained accounts for, or has engaged in 
transactions with, any specified individual, entity, or organization.
    (2) Requests from FinCEN. FinCEN may solicit, on its own behalf and 
on behalf of appropriate components of the Department of the Treasury, 
whether a financial institution or a group of financial institutions 
maintains or has maintained accounts for, or has engaged in 
transactions with, any specified individual, entity, or organization. 
Before an information request under this section is made to a financial 
institution, FinCEN or the appropriate Treasury component shall certify 
in writing in the same manner as a requesting law enforcement agency 
that each individual, entity or organization about which FinCEN or the 
appropriate Treasury component is seeking information is engaged in, or 
is reasonably suspected based on credible evidence of engaging in, 
terrorist activity or money laundering. The certification also must 
include enough specific identifiers, such as date of birth, address, 
and Social Security number that would permit a financial institution to 
differentiate between common or similar names, and identify one person 
at FinCEN or the appropriate Treasury component who can be contacted 
with any questions relating to its request.
    (3) Obligations of a financial institution receiving an information 
request--(i) Record search. Upon receiving an information request from 
FinCEN under this section, a financial institution shall expeditiously 
search its records to determine whether it maintains or has maintained 
any account for, or has engaged in any transaction with, each 
individual, entity, or organization named in FinCEN's request. A 
financial institution may contact the law enforcement agency, FinCEN or 
requesting Treasury component representative, or U.S. law enforcement 
attach[eacute] in the case of a request by a foreign law enforcement 
agency, which has been named in the information request provided to the 
institution by FinCEN with any questions relating to the scope or terms 
of the request. Except as otherwise provided in the information 
request, a financial institution shall only be required to search its 
records for:
* * * * *
    (iv) * * *
    (B)(1) A financial institution shall not disclose to any person, 
other than FinCEN or the requesting Treasury component, the law 
enforcement agency on whose behalf FinCEN is requesting information, or 
U.S. law enforcement attach[eacute] in the case of a request by a 
foreign law enforcement agency, which has been named in the information 
request, the fact that FinCEN has requested or has obtained information 
under this section, except to the extent necessary to comply with such 
an information request.
    (2) Notwithstanding paragraph (b)(3)(iv)(B)(1) of this section, a 
financial institution authorized to share information under Sec.  
103.110 may share information concerning an individual,

[[Page 58931]]

entity, or organization named in a request from FinCEN in accordance 
with the requirements of such section. However, such sharing shall not 
disclose the fact that FinCEN has requested information concerning such 
individual, entity, or organization.
    (C) Each financial institution shall maintain adequate procedures 
to protect the security and confidentiality of requests from FinCEN for 
information under this section. The requirements of this paragraph 
(b)(3)(iv)(C) shall be deemed satisfied to the extent that a financial 
institution applies to such information procedures that the institution 
has established to satisfy the requirements of section 501 of the 
Gramm-Leach-Bliley Act (15 U.S.C. 6801), and applicable regulations 
issued thereunder, with regard to the protection of its customers' 
nonpublic personal information.
* * * * *
    (4) Relation to the Right to Financial Privacy Act and the Gramm-
Leach-Bliley Act. The information that a financial institution is 
required to report pursuant to paragraph (b)(3)(ii) of this section is 
information required to be reported in accordance with a federal 
statute or rule promulgated thereunder, for purposes of subsection 
3413(d) of the Right to Financial Privacy Act (12 U.S.C. 3413(d)) and 
subsection 502(e)(8) of the Gramm-Leach-Bliley Act (15 U.S.C. 
6802(e)(8)).
    (5) No effect on law enforcement or regulatory investigations. 
Nothing in this subpart affects the authority of a Federal, State or 
local law enforcement agency or officer, or FinCEN or another component 
of the Department of the Treasury, to obtain information directly from 
a financial institution.

    Dated: November 9, 2009.
James H. Freis, Jr.,
Director, Financial Crimes Enforcement Network.
[FR Doc. E9-27447 Filed 11-13-09; 8:45 am]
BILLING CODE 4810-02-P