[Federal Register Volume 77, Number 110 (Thursday, June 7, 2012)]
[Rules and Regulations]
[Pages 33635-33637]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-13783]


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

DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 1010

RIN 1506-AB17


Amendment to the Bank Secrecy Act Regulations--Requirement That 
Clerks of Court Report Certain Currency Transactions

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

ACTION: Final rule.

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

SUMMARY: FinCEN is amending the rules relating to the reporting of 
certain currency transactions consistent with a recent statutory 
amendment authorizing FinCEN to require clerks of court to file such 
reports with the U.S. Department of the Treasury. Such information 
already is required to be reported by clerks of court pursuant to 
regulations issued by the Internal Revenue Service (``IRS''), but 
FinCEN heretofore has been limited in its ability to access and share 
further that information because of minor differences between the 
relevant statutory authorities applicable to FinCEN and the IRS.

DATES: Effective Date: July 9, 2012.

FOR FURTHER INFORMATION CONTACT: The FinCEN regulatory helpline at 
(800) 949-2732 and select Option 6.

[[Page 33636]]


SUPPLEMENTARY INFORMATION: 

I. Statutory Provisions

    FinCEN exercises regulatory functions primarily under the Currency 
and Financial Transactions Reporting Act of 1970, as amended by the USA 
PATRIOT Act of 2001 and other legislation, which legislative framework 
is commonly referred to as the ``Bank Secrecy Act'' (``BSA''),\1\ which 
authorizes the Secretary of the Treasury (``Secretary'') to require 
financial institutions to keep records and file reports that ``have a 
high degree of usefulness in criminal, tax, or regulatory proceedings, 
or in the conduct of intelligence or counterintelligence activities, 
including analysis, to protect against international terrorism.\2\ The 
Secretary has delegated to the Director of FinCEN the authority to 
implement, administer, and enforce compliance with the BSA and 
associated regulations.\3\ FinCEN is authorized to impose anti-money 
laundering (``AML'') program requirements on financial institutions.\4\
---------------------------------------------------------------------------

    \1\ The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, 
18 U.S.C. 1956, 18 U.S.C. 1957, 18 U.S.C. 1960, and 31 U.S.C. 5311-
5314 and 5316-5332 and notes thereto, with implementing regulations 
at 31 CFR Chapter X. See 31 CFR 1010.100(e).
    \2\ 31 U.S.C. 5311.
    \3\ Treasury Order 180-01 (Sept. 26, 2002).
    \4\ 31 U.S.C. 5318(h)(2).
---------------------------------------------------------------------------

    Under 31 U.S.C. 5331, any person who is engaged in a trade or 
business and who, in the course of such trade or business, receives 
more than $10,000 in coins or currency in one transaction (or two or 
more related transactions) is required to file a report with respect to 
such transaction (or related transactions) with FinCEN. Reporting under 
section 5331 does not apply to amounts received in a transaction 
reported under 31 U.S.C. 5313 and its implementing regulations.\5\
---------------------------------------------------------------------------

    \5\ See, e.g., 31 CFR 1010.310.
---------------------------------------------------------------------------

    For purposes of section 5331, currency includes foreign currency, 
and to the extent provided in regulations, any monetary instrument, 
whether or not in bearer form, with a face amount of not more than 
$10,000. Such monetary instruments shall not include any check drawn on 
the account of the writer in a financial institution referred to in 
subparagraph (A), (B), (C), (D), (E), (F), (G), (J), (K), (R), or (S) 
of 31 U.S.C. 5312(a)(2).
    Reports required under section 5331 must be in such form as FinCEN 
may prescribe. The reports must contain: (1) The name, address, and 
such other identification information as FinCEN may require, of the 
person from whom the coins or currency was received; (2) the amount of 
coins or currency received; (3) the date and nature of the transaction; 
and (4) such other information, including the identification of the 
person filing the report, as FinCEN may prescribe.
    On December 23, 2011, the President signed the Consolidated 
Appropriations Act, 2012 (the ``Act'') into law. Section 120 of Title 
I, Division C of the Act amends 31 U.S.C. 5331 by further requiring 
that any persons ``required to file a report under section 6050I(g) of 
the Internal Revenue Code of 1986'' file reports with FinCEN in the 
time and manner prescribed by regulation. Section 6050I(g) of title 26 
requires every clerk of a Federal or State criminal court who receives 
more than $10,000 in cash as bail for any individual to make a return 
of that information. The amendment to 31 U.S.C. 5331 therefore 
authorizes FinCEN to require clerks of court to report certain currency 
transactions.

II. Final Rule

    The final rule contained in this document is intended to enable 
FinCEN to receive reports on certain currency transactions filed by 
clerks of court. Since 2002, FinCEN has required persons engaged in a 
trade or business to report certain currency transactions.\6\ That 
requirement is deemed satisfied by the filing of a single Form 8300 for 
transactions subject to both the IRS's rule \7\ and FinCEN's rule. The 
underlying statutory authority for FinCEN's 2001 rule did not authorize 
reporting by clerks of court. Consequently, any Form 8300 filed since 
2002 by a clerk of court was reported pursuant to the IRS's rule and 
FinCEN's ability to access and share further such information has been 
limited because of the applicable restrictions on disclosure in the 
U.S. tax code. During calendar year 2010, approximately 7,600 Form 
8300s were filed by clerks of court, representing roughly 2 percent of 
the total number of Form 8300s filed for that year. FinCEN has 
determined that the information contained in such reports can be highly 
useful in criminal, tax, and regulatory investigations or proceedings, 
and in the conduct of intelligence or counter-intelligence activities, 
to protect against international terrorism.
---------------------------------------------------------------------------

    \6\ 66 FR 67680 (December 31, 2001), codified at 31 CFR 
1010.330.
    \7\ 26 CFR 1.6050I-1.
---------------------------------------------------------------------------

    As amended, section 5331(a)(2) now requires reporting to FinCEN of 
the same transaction that must be reported to the IRS under 26 U.S.C. 
6050I(g) and 26 CFR 1.6050I-2. Because section 5331(a)(2) and section 
6050I(g) of Title 26 are identical in terms of reporting to 
Treasury,\8\ the final rule contained in this document provides that 
clerks of court required to report a transaction under section 
5331(a)(2) must make that report by filing a joint FinCEN/IRS Form 8300 
with Treasury. Under this dual reporting regime, only one form is 
required to be filed for a transaction subject to both section 
5331(a)(2) and section 6050I(g) of title 26. Use of the Form 8300 
currently used by clerks of court to satisfy 26 U.S.C. 6050I(g) and 26 
CFR 1.6050I-2 will satisfy the requirement under the final rule. Thus, 
the final rule imposes no new reporting or recordkeeping burden on 
clerks of court.
---------------------------------------------------------------------------

    \8\ Section 5331 does not require the person making a report 
(either as a trade or business or a clerk of court) to furnish a 
statement concerning the report to: (i) the person whose name is 
required to be set forth on the report; or (ii) Federal prosecutors 
for the jurisdiction in which such person resides and the 
jurisdiction in which the specified criminal offense occurred. Cf. 
26 U.S.C. 6050I(e) and (g). The final rule therefore does not place 
any of these notification requirements upon clerks of court.
---------------------------------------------------------------------------

    Because the IRS authority and the FinCEN authority governing the 
reporting to Treasury of certain currency transactions by clerks of 
court are identical, FinCEN believes it is appropriate for the final 
rule to adopt the same definitions and rules relating to the time and 
manner of reporting, including verifying the identity of each payor of 
bail listed in the report. Thus, for example, the final rule defines a 
clerk of court to mean, with respect to a Federal or a State court, the 
clerks' office or the office, department, division, branch, or unit of 
the court that is authorized to receive bail.
    The final rule makes two other non-substantive conforming changes 
to FinCEN's rule requiring a trade or business to report certain 
currency transactions. The first change amends the trade or business 
rule to acknowledge that the same information is now required to be 
reported to Treasury under both 26 U.S.C. 6050I and 31 U.S.C. 5331. The 
second change to the trade or business rule reflects that the 
definition of currency used therein is slightly different from the 
definition used in the clerks of court rule, and therefore is not 
applicable for purposes of 31 U.S.C. 5331 in all cases.

III. Notice and Comment Under the Administrative Procedure Act

    The Administrative Procedure Act (5 U.S.C. 553) (``APA'') allows an 
agency to dispense with notice and comment when it would be 
impractical, unnecessary, or contrary to the public interest. Because 
the final rule affects

[[Page 33637]]

only clerks of court and imposes no new or additional burden on them, 
notice and public comment are unnecessary.

IV. Regulatory Flexibility Act

    The provisions of the Regulatory Flexibility Act relating to 
initial and final regulatory analysis (5 U.S.C. 604) are not applicable 
to the final rule contained in this document because FinCEN was not 
required to publish a notice of proposed rulemaking under 5 U.S.C. 553 
or any other law.

V. Paperwork Reduction Act

    This regulation is being issued without prior notice and public 
comment pursuant to the APA. For this reason, the collection of 
information contained in this regulation has been reviewed under the 
requirements of the Paperwork Reduction Act (44 U.S.C. 3507(j)) and 
approved by the Office of Management and Budget (OMB) under control 
number 1506-0018. 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.

VI. Executive Orders 13563 and 12866

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. It has been determined that the final rule is neither an 
economically significant regulatory action nor a significant regulatory 
action for purposes of Executive Orders 13563 and 12866.

VII. Unfunded Mandates Reform 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 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 205 
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.

List of Subjects in 31 CFR Part 1010

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

Authority and Issuance

    For the reasons set forth above, Chapter X of title 31 of the Code 
of Federal Regulations is amended as follows:

PART 1010--GENERAL PROVISIONS

0
1. The authority citation for part 1010 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, Pub. L. 107-56, 115 Stat. 307.


0
2. Amend Sec.  1010.330 by revising paragraph (a)(1)(ii) and the 
introductory text to paragraph (c)(1) to read as follows:


Sec.  1010.330  Reports relating to currency in excess of $10,000 
received in a trade or business.

    (a) * * *
    (1) * * *
    (ii) Certain financial transactions. Section 6050I of title 26 of 
the United States Code requires persons to report information about 
financial transactions to the IRS, and 31 U.S.C. 5331 requires persons 
to report the same information to the Financial Crimes Enforcement 
Network. This information shall be reported on the same form as 
prescribed by the Secretary.
* * * * *
    (c) * * *
    (1) Currency. The term currency means--
* * * * *

0
3. Add new Sec.  1010.331 to read as follows:


Sec.  1010.331  Reports relating to currency in excess of $10,000 
received as bail by court clerks.

    (a) Reporting requirement.--(1) In general. Any clerk of a Federal 
or State court who receives more than $10,000 in currency as bail for 
any individual charged with a specified criminal offense must make a 
report of information with respect to that receipt of currency. For 
purposes of this section, a clerk is the clerk's office or the office, 
department, division, branch, or unit of the court that is authorized 
to receive bail. If someone other than a clerk receives bail on behalf 
of a clerk, the clerk is treated as receiving the bail for purposes of 
this paragraph (a).
    (2) Certain financial transactions. Section 6050I of title 26 of 
the United States Code requires clerks to report information about 
financial transactions to the IRS, and 31 U.S.C. 5331 require clerks to 
report the same information to the Financial Crimes Enforcement 
Network. This information shall be reported on the same form as 
prescribed by the Secretary.
    (b) Meaning of terms. The following definitions apply for purposes 
of this section--
    (1) The term currency means--
    (i) The coin and currency of the United States, or of any other 
country, that circulate in and are customarily used and accepted as 
money in the country in which issued; and
    (ii) A cashier's check (by whatever name called, including 
treasurer's check and bank check), bank draft, traveler's check, or 
money order having a face amount of not more than $ 10,000.
    (2) The term specified criminal offense means--
    (i) A Federal criminal offense involving a controlled substance (as 
defined in section 802 of title 21 of the United States Code), provided 
the offense is described in Part D of Subchapter I or Subchapter II of 
title 21 of the United States Code;
    (ii) Racketeering (as defined in section 1951, 1952, or 1955 of 
title 18 of the United States Code);
    (iii) Money laundering (as defined in section 1956 or 1957 of title 
18 of the United States Code); and
    (iv) Any State criminal offense substantially similar to an offense 
described in this paragraph (b)(2) of this section.
    (c) Time, form, and manner of reporting.--(1) In general. The 
reports required by paragraph (a) of this section must be made by 
filing a Form 8300, as specified in 26 CFR 1.6050I-2(c)(2). The report 
must be filed at the time and in the manner specified in 26 CFR 
1.6050I-2(c)(1) and (3), respectively.
    (2) Verification of identity. A clerk required to make a report 
under this section must, in accordance with 26 CFR 1.6050I-2(c)(3)(ii), 
verify the identity of each payor of bail listed in the report.

    Dated: June 1, 2012.
James H. Freis, Jr.,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2012-13783 Filed 6-6-12; 8:45 am]
BILLING CODE 4810-02-P