[Federal Register Volume 74, Number 220 (Tuesday, November 17, 2009)]
[Rules and Regulations]
[Pages 59096-59098]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-27449]


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

DEPARTMENT OF THE TREASURY

31 CFR Part 103

RIN 1506-AB03


Financial Crimes Enforcement Network; Amendment to the Bank 
Secrecy Act Regulations--Administrative Ruling System

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

ACTION: Final rule.

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

SUMMARY: FinCEN is issuing this final rule to amend the procedures for 
publicly issuing an administrative ruling\1\ relating to the Bank 
Secrecy Act (``BSA''). Reliance on these administrative rulings is 
limited to persons who are similarly situated to the original recipient 
of an applicable administrative ruling. To disseminate its 
interpretations in a more timely and efficient manner, FinCEN will use 
its website to make these administrative rulings available to the 
public.\2\
---------------------------------------------------------------------------

    \1\ ``Administrative ruling'' is the title FinCEN uses to 
represent documents commonly referred to as interpretative rules.
    \2\ FinCEN's criteria for determining whether a particular 
ruling will be published is located under the heading ``Rulings'' on 
the FinCEN Web site at http://www.fincen.gov.

---------------------------------------------------------------------------
DATES: Effective Date: December 17, 2009.

FOR FURTHER INFORMATION CONTACT: Regulatory Policy and Programs 
Division, FinCEN (800) 949-2732 and select option 6.

SUPPLEMENTARY INFORMATION: 

I. Background

A. Statutory and Regulatory Background

    The BSA, Titles I and II of Public Law 91-508, as amended, codified 
at 12 U.S.C. 1829b, 1951-1959, and 31 U.S.C. 5311-5314 and 5316-5332, 
authorizes the Secretary of the Treasury (the ``Secretary''), among 
other things, to issue regulations requiring financial institutions to 
keep records and file reports that the Secretary determines ``have a 
high degree of usefulness in criminal, tax, or regulatory 
investigations or proceedings, or in the conduct of intelligence or 
counterintelligence matters, including analysis, to protect against 
international terrorism.'' \3\ The Secretary's authority to administer 
the BSA and its implementing regulations has been delegated to the 
Director of FinCEN.\4\ FinCEN has interpreted the BSA through 
implementing regulations that appear at 31 CFR Part 103.
---------------------------------------------------------------------------

    \3\ 31 U.S.C. 5311.
    \4\ See Treasury Order 180-01 (Sept. 26, 2002).
---------------------------------------------------------------------------

    In 1987, the Department of the Treasury's Office of Financial 
Enforcement \5\ established an administrative ruling system to ensure 
uniform guidance and effective and efficient dissemination of official 
Treasury interpretations of the BSA.\6\ The administrative ruling 
system was designed to: provide financial institutions with binding 
ruling interpretations of Part 103; and to provide interpretations of 
hypothetical situations.\7\ 31 CFR 103.85 requires that the 
interpretations intended to have precedential value be published 
periodically in the Federal Register and yearly in the Appendix to Part 
103.
---------------------------------------------------------------------------

    \5\ The Office of Financial Enforcement originally had authority 
to issue regulations implementing the BSA. In 1994, the Treasury 
Department merged the Office of Financial Enforcement with FinCEN 
and granted FinCEN the authority to implement the BSA.
    \6\ See 52 FR 35545 (Sep. 22, 1987) (final rule instituting an 
administrative ruling system).
    \7\ If the subject situation is hypothetical, it must include 
``a statement justifying why the particular situation described 
warrants the issuance of a ruling.'' 31 CFR 103.81(6).

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

[[Page 59097]]

B. Section-by-Section Analysis

    FinCEN is amending section 103.85 by removing the requirement that 
rulings be published in the Federal Register before similarly situated 
persons other than the recipients of the rulings can rely upon them. In 
addition, FinCEN is no longer publishing these administrative rulings 
in an Appendix to Part 103. Instead, these rulings will be available on 
the FinCEN Web site or by mail per written request.\8\
---------------------------------------------------------------------------

    \8\ Administrative Rulings 88-5, 89-5, 92-1 and 92-2 will be 
posted on FinCEN's public Web site. Administrative Rulings 88-1, 88-
3, 88-4, 89-1, and 89-2 have been superseded by changes to 31 CFR 
103.22 and 31 U.S.C. 5318 and are hereby formally rescinded under 31 
CFR 103.86(a)(1) and (3). These administrative rulings will not be 
available on the website.
---------------------------------------------------------------------------

    Using alternatives to the Federal Register to provide notice to the 
public of administrative rulings is not uncommon. Many agencies publish 
bulletins containing their administrative rulings including the Office 
of the Comptroller of Currency, Internal Revenue Service (``IRS''), and 
U.S. Customs Service and Border Protection. Specifically, in July of 
1955, the IRS implemented the Internal Revenue Bulletin (``IRB'') under 
Revenue Procedure 55-1 to ``* * * promote uniform application of the 
tax laws by Service employees and to assist taxpayers in attaining 
maximum voluntary compliance.'' \9\ At the time, the IRS determined 
that the IRB was the most appropriate forum to provide notice to the 
public of its administrative rulings.
---------------------------------------------------------------------------

    \9\ See Rev. Proc. 68-44 (July 1968) (Discussion of the 
objectives of the IRB).
---------------------------------------------------------------------------

    In 1987, when implementing the BSA administrative ruling system, 
the Department of the Treasury did not have a bulletin for publishing 
its determinations concerning the BSA. Therefore, the Department of the 
Treasury determined that publishing the administrative rulings in the 
Federal Register ensured proper distribution to the public. However, 
since implementation of the BSA administrative ruling system, various 
electronic and other means of disseminating information to the public 
have become available. In particular, FinCEN, like many other 
administrative agencies, has developed a Web site to provide notice of 
agency actions to the public. The current address for the Web site is: 
www.fincen.gov/statutes_regs/rulings/. Similar to the IRS's 
determination in creating the IRB in 1955, FinCEN, in promoting uniform 
application and compliance with the BSA, has determined that publishing 
administrative rulings on the FinCEN website distributes information to 
the public more broadly and more expediently than publication in the 
Federal Register. There are a variety of persons who are affected by 
the BSA. The majority of such affected persons are probably more 
familiar with the Internet than with the Federal Register. 
Communications with these affected persons through FinCEN's regulatory 
Helpline has shown that the majority of callers referred to the FinCEN 
website as a source for information. Also, when responding to questions 
from affected persons, FinCEN staff members regularly refer individuals 
to the FinCEN website for information. Because FinCEN's website is 
specifically tailored to the BSA, affected persons are not required to 
sift through the volumes of information available in the Federal 
Register before finding a relevant interpretive rule addressing the 
affected person's issue. Considering the time and resources FinCEN 
allocates to updating the website and increasing the website's 
usability, FinCEN believes that it would be inefficient and unnecessary 
to also publish administrative rulings in the Federal Register.

II. Proposed Location in Chapter X

    As discussed in a previous Federal Register Notice, 73 FR 66414, 
Nov. 7, 2008, FinCEN is separately proposing to remove Part 103 of 
Chapter I of Title 31, Code of Federal Regulations, and add Chapter 
1000 to 1099 (``Chapter X''). If the notice of proposed rulemaking for 
Chapter X is finalized, the changes in the present final rule would be 
reorganized according to the proposed Chapter X. The planned 
reorganization will have no substantive effect on the regulatory 
changes herein, except that the words ``part 103'' in the first 
sentence of 31 CFR 103.85 would be replaced by ``this chapter.'' The 
regulatory changes of this specific rulemaking would be renumbered 
according to the proposed Chapter X as follows:
    (a) 103.85 would be moved to 1010.715.
    (b) 103.81 would be moved to 1010.711
    (c) Appendix A to Part 103--Administrative Rulings would be removed 
in its entirety and Appendix E to Chapter X--Administrative Rulings 
would not appear.

III. Notice and Comment Under the Administrative Procedure Act

    The administrative ruling procedural changes at 31 CFR 103.85 will 
take effect 30 days after publication in the Federal Register.
    The Administrative Procedure Act (``APA'') allows an agency to 
dispense with notice and comment for ``rules of agency organization, 
procedure, or practice.'' \10\ This amendment promulgates general 
statements of policy, procedures and practices governing the scope and 
operation of an administrative ruling system. Hence, pursuant to 5 
U.S.C. 553(b)(A), notice and public procedure are unnecessary.
---------------------------------------------------------------------------

    \10\ 5 U.S.C. Sec.  553(b).
---------------------------------------------------------------------------

IV. Regulatory Flexibility Act

    Since no notice of proposed rulemaking is required by the APA (5 
U.S.C. 551 et seq.), or by any other statute, this document is not 
subject to the provisions of the Regulatory Flexibility Act (RFA) (5 
U.S.C. 601 et seq.).

V. Paperwork Reduction Act

    The collection of information requirements have been reviewed and 
approved by the Office of Management and Budget under section 3507 of 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d). (OMB Control 
No. 1506-0009). Under the Paperwork Reduction Act, an agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number.

VI. Executive Order 12866

    As this rulemaking primarily deals with agency management, it has 
been determined not to be a significant regulatory action for purposes 
of Executive Order 12866. Accordingly, a regulatory impact analysis is 
not required.

VII. Unfunded Mandates Act of 1995

    Since no notice of proposed rulemaking is required by the APA (5 
U.S.C. 551 et seq.), or by any other statute, FinCEN has determined 
that it is not required to prepare a written statement under section 
202 of the Unfunded Mandates Reform Act of 1995, Public Law 104-4 
(March 22, 1995).

List of Subjects in 31 CFR Part 103

    Administrative practice and procedure, Banks, banking, Brokers, 
Currency, Foreign banking, Foreign currencies, Gambling, 
Investigations, Penalties, Reporting and recordkeeping requirements, 
Securities, Terrorism.

Authority and Issuance

0
For the reasons set forth in the preamble, part 103 of title 31 of the

[[Page 59098]]

Code of Federal Regulations is amended as follows:

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

0
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, 
5316-5332; title III, secs. 311, 312, 313, 314, 319, 326, 352, 
Public Law 107-56, 115 Stat. 307.


0
2. Section 103.85 is revised to read as follows:


Sec.  103.85  Issuing rulings.

    The Director, FinCEN, or his designee may issue a written ruling 
interpreting the relationship between part 103 and each situation for 
which the ruling has been requested in conformity with Sec.  103.81. A 
ruling issued under this section shall bind FinCEN only in the event 
that the request describes a specifically identified actual situation. 
A ruling issued under this section shall have precedential value, and 
hence may be relied upon by others similarly situated, only if FinCEN 
makes it available to the public through publication on the FinCEN 
website under the heading ``Administrative rulings'' or other 
appropriate forum. All rulings with precedential value will be 
available by mail to any person upon written request specifically 
identifying the ruling sought. FinCEN will make every effort to respond 
to each requestor within 90 days of receiving a request.

Appendix A--Administrative Rulings [Removed]

0
3. Appendix A to part 103 is removed.

    Dated: November 9, 2009.
James H. Freis, Jr.,
Director, Financial Crimes Enforcement Network.
[FR Doc. E9-27449 Filed 11-16-09; 8:45 am]
BILLING CODE 4810-02-P