[Federal Register Volume 80, Number 49 (Friday, March 13, 2015)]
[Proposed Rules]
[Pages 13304-13309]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-05724]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 1010

RIN 1506-AB30


Imposition of Special Measure against Banca Privada d'Andorra as 
a Financial Institution of Primary Money Laundering Concern

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: In a finding, notice of which is published elsewhere in this 
issue of the Federal Register (``Notice of Finding''), the Director of 
FinCEN found that Banca Privada d'Andorra (``BPA'') is a financial 
institution operating outside of the United States that is of primary 
money laundering concern. FinCEN is issuing this notice of proposed 
rulemaking (``NPRM'') to propose the imposition of a special measure 
against BPA.

DATES: Written comments on this NPRM must be submitted on or before May 
12, 2015.

ADDRESSES: You may submit comments, identified by 1506-AB30, by any of 
the following methods:
     Federal E-rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. Include 1506-AB30 in 
the submission.
     Mail: The Financial Crimes Enforcement Network, P.O. Box 
39, Vienna, VA 22183. Include 1506-AB30 in the body of the text. Please 
submit comments by one method only.
     Comments submitted in response to this NPRM will become a 
matter of public record. Therefore, you should submit only information 
that you wish to make publicly available.
    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 on http://www.regulations.gov. Comments received may be physically inspected in 
the FinCEN reading room located in Vienna, Virginia. 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 Resource Center at (800) 
767-2825.

SUPPLEMENTARY INFORMATION: 

I. 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 Act of 2001 (the ``USA PATRIOT Act''), 
Public Law 107-56. Title III of the USA PATRIOT Act amends the anti-
money laundering provisions of the Bank Secrecy Act (``BSA''), codified 
at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-5314, 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 Chapter X. The 
authority of the Secretary of the Treasury (the ``Secretary'') to 
administer the BSA and its implementing regulations has been delegated 
to the Director of FinCEN.
    Section 311 of the USA PATRIOT Act (``Section 311''), codified at 
31 U.S.C. 5318A, grants the Director of FinCEN the authority, upon 
finding that reasonable grounds exist for concluding that a foreign 
jurisdiction, institution, class of transaction, or type of account is 
of ``primary money laundering concern,'' to require domestic financial 
institutions and financial agencies to take certain ``special 
measures'' to address the primary money laundering concern.

II. Imposition of a Special Measure Against BPA as a Financial 
Institution of Primary Money Laundering Concern

A. Special Measure

    As noticed elsewhere in this issue of the Federal Register, on 
March 6, 2015, the Director of FinCEN found that BPA is a financial 
institution operating outside the United States that is of primary 
money laundering concern (``Finding''). Based upon that Finding, the 
Director of FinCEN is authorized to impose one or more special 
measures. Following the consideration of all factors relevant to the 
Finding and to selecting the special measure proposed in this NPRM, the 
Director of FinCEN proposes to impose the special measure authorized by 
section 5318A(b)(5) (the ``fifth special measure''). In connection with 
this action, FinCEN consulted with representatives of the Federal 
functional regulators, the Department of Justice, and the Department of 
State, among others.

B. Discussion of Section 311 Factors

    In determining which special measures to implement to address the 
primary money laundering concern, FinCEN considered the following 
factors.

[[Page 13305]]

1. Whether Similar Action Has Been or Will Be Taken by Other Nations or 
Multilateral Groups Against BPA
    Other countries or multilateral groups have not yet taken action 
similar to the action proposed in this rulemaking that would: (1) 
Prohibit domestic financial institutions and agencies from opening or 
maintaining a correspondent account for or on behalf of BPA; and (2) 
require certain covered financial institutions to screen their 
correspondent accounts in a manner that is reasonably designed to guard 
against processing transactions involving BPA. FinCEN encourages other 
countries to take similar action based on the information contained in 
this NPRM and the Notice of Finding.
2. Whether the Imposition of the Fifth Special Measure Would Create a 
Significant Competitive Disadvantage, Including Any Undue Cost or 
Burden Associated With Compliance, for Financial Institutions Organized 
or Licensed in the United States
    The fifth special measure proposed by this rulemaking would 
prohibit covered financial institutions from opening or maintaining 
correspondent accounts for or on behalf of BPA after the effective date 
of the final rule implementing the fifth special measure. Currently, 
only four U.S. covered financial institutions maintain an account for 
BPA; therefore, FinCEN believes this action will not present an undue 
regulatory burden. As a corollary to this measure, covered financial 
institutions also would be required to take reasonable steps to apply 
special due diligence, as set forth below, to all of their 
correspondent accounts to help ensure that no such account is being 
used to provide services to BPA. For direct correspondent 
relationships, this would involve a minimal burden in transmitting a 
one-time notice to certain foreign correspondent account holders 
concerning the prohibition on processing transactions involving BPA 
through the U.S. correspondent account. U.S. financial institutions 
generally apply some level of screening and, when required, conduct 
some level of reporting of their transactions and accounts, often 
through the use of commercially-available software such as that used 
for compliance with the economic sanctions programs administered by the 
Office of Foreign Assets Control (``OFAC'') of the Department of the 
Treasury and to detect potential suspicious activity. To ensure that 
U.S. financial institutions are not being used unwittingly to process 
payments for or on behalf of BPA, directly or indirectly, some 
additional burden will be incurred by U.S. financial institutions to be 
vigilant in their suspicious activity monitoring procedures. As 
explained in more detail in the section-by-section analysis below, 
financial institutions should be able to leverage these current 
screening and reporting procedures to detect transactions involving 
BPA.
3. The Extent to Which the Proposed Action or Timing of the Action 
Would Have a Significant Adverse Systemic Impact on the International 
Payment, Clearance, and Settlement System, or on Legitimate Business 
Activities of BPA
    The requirements proposed in this NPRM would target BPA 
specifically; they would not target a class of financial transactions 
(such as wire transfers) or a particular jurisdiction. BPA is not a 
major participant in the international payment system and is not relied 
upon by the international banking community for clearance or settlement 
services. Additionally, it is difficult to assess on the information 
available the extent to which BPA is used for legitimate business 
purposes. BPA provides services in private banking, personal banking, 
and corporate banking. These services include typical bank products 
such as savings accounts, corporate accounts, credit cards, and 
financing. BPA provides services to high-risk customers including 
international foreign operated shell companies, businesses likely 
engaged in unlicensed money transmission, and senior foreign political 
officials. Because of the demonstrated cooperation of high level 
management at BPA with TPMLs, BPA's legitimate business activity is at 
high risk of being abused by money launderers. Given this risk, FinCEN 
believes that any impact on the legitimate business activities of BPA 
is outweighed by the need to protect the US financial system. Moreover, 
the imposition of the fifth special measure against BPA would not have 
a significant adverse systemic impact on the international payment, 
clearance, and settlement system.
4. The Effect of the Proposed Action on United States National Security 
and Foreign Policy
    The exclusion of BPA from the U.S. financial system as proposed in 
this NPRM would enhance national security by making it more difficult 
for money launderers, transnational criminal organizations, human 
traffickers, and other criminals to access the U.S. financial system. 
More generally, the imposition of the fifth special measure would 
complement the U.S. Government's worldwide efforts to expose and 
disrupt international money laundering.
    Therefore, pursuant to the Finding that BPA is a financial 
institution operating outside of the United States of primary money 
laundering concern, and after conducting the required consultations and 
weighing the relevant factors, the Director of FinCEN proposes to 
impose the fifth special measure.

III. Section-by-Section Analysis for Imposition of the Fifth Special 
Measure

A. 1010.662(a)--Definitions

1. Banca Privada d'Andorra
    Section 1010.662(a)(1) of the proposed rule would define BPA to 
include all domestic and international branches, offices, and 
subsidiaries of BPA wherever located.
    Covered financial institutions should take commercially reasonable 
measures to determine whether a customer is a branch, office, or 
subsidiary of BPA.
2. Correspondent Account
    Section 1010.662(a)(2) of the proposed rule would define the term 
``correspondent account'' by reference to the definition contained in 
31 CFR 1010.605(c)(1)(ii). Section 1010.605(c)(1)(ii) defines a 
correspondent account to mean an account established to receive 
deposits from, or make payments or other disbursements on behalf of, a 
foreign bank, or to handle other financial transactions related to the 
foreign bank. Under this definition, ``payable through accounts'' are a 
type of correspondent account.
    In the case of a U.S. depository institution, this broad definition 
includes most types of banking relationships between a U.S. depository 
institution and a foreign bank that are established to provide regular 
services, dealings, and other financial transactions, including a 
demand deposit, savings deposit, or other transaction or asset account, 
and a credit account or other extension of credit. FinCEN is using the 
same definition of ``account'' for purposes of this rule as was 
established for depository institutions in the final rule implementing 
the provisions of section 312 of the USA PATRIOT Act requiring enhanced 
due diligence for correspondent accounts maintained for certain foreign 
banks.\1\
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    \1\ See 31 CFR 1010.605(c)(2)(i).
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    In the case of securities broker-dealers, futures commission 
merchants, introducing brokers-commodities, and investment companies 
that are open-end companies (``mutual funds''), FinCEN is

[[Page 13306]]

also using the same definition of ``account'' for purposes of this rule 
as was established for these entities in the final rule implementing 
the provisions of section 312 of the USA PATRIOT Act requiring enhanced 
due diligence for correspondent accounts maintained for certain foreign 
banks.\2\
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    \2\ See 31 CFR 1010.605(c)(2)(ii)-(iv).
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3. Covered Financial Institution
    Section 1010.662(a)(3) of the proposed rule would define ``covered 
financial institution'' with the same definition used in the final rule 
implementing the provisions of section 312 of the USA PATRIOT Act,\3\ 
which in general includes the following:
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    \3\ See 31 CFR 1010.605(e)(1).
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     An insured bank (as defined in section 3(h) of the Federal 
Deposit Insurance Act (12 U.S.C. 1813(h));
     a commercial bank;
     an agency or branch of a foreign bank in the United 
States;
     a Federally insured credit union;
     a savings association;
     a corporation acting under section 25A of the Federal 
Reserve Act (12 U.S.C. 611);
     a trust bank or trust company;
     a broker or dealer in securities;
     a futures commission merchant or an introducing broker-
commodities; and
     a mutual fund.
4. Subsidiary
    Section 1010.662(a)(4) of the proposed rule would define 
``subsidiary'' as a company of which more than 50 percent of the voting 
stock or analogous equity interest is owned by BPA.

B. 1010.662(b)--Prohibition on Accounts and Due Diligence Requirements 
for Covered Financial Institutions

1. Prohibition on Opening or Maintaining Correspondent Accounts
    Section 1010.662(b)(1) of the proposed rule imposing the fifth 
special measure would prohibit covered financial institutions from 
establishing, maintaining, administering, or managing in the United 
States any correspondent account for or on behalf of BPA.
2. Special Due Diligence for Correspondent Accounts To Prohibit Use
    As a corollary to the prohibition on maintaining correspondent 
accounts for or on behalf of BPA, section 1010.662(b)(2) of the 
proposed rule would require a covered financial institution to apply 
special due diligence to all of its foreign correspondent accounts that 
is reasonably designed to guard against processing transactions 
involving BPA. As part of that special due diligence, covered financial 
institutions must notify those foreign correspondent account holders 
that the covered financial institutions know or have reason to know 
provide services to BPA that such correspondents may not provide BPA 
with access to the correspondent account maintained at the covered 
financial institution. Covered financial institutions should implement 
appropriate risk-based procedures to identify transactions involving 
BPA.
    A covered financial institution may satisfy the notification 
requirement by transmitting the following notice to its foreign 
correspondent account holders that it knows or has reason to know 
provide services to BPA:

    Notice: Pursuant to U.S. regulations issued under Section 311 of 
the USA PATRIOT Act, see 31 CFR 1010.662, we are prohibited from 
establishing, maintaining, administering, or managing a 
correspondent account for or on behalf of Banca Privada d'Andorra. 
The regulations also require us to notify you that you may not 
provide Banca Privada d'Andorra or any of its subsidiaries with 
access to the correspondent account you hold at our financial 
institution. If we become aware that the correspondent account you 
hold at our financial institution has processed any transactions 
involving Banca Privada d'Andorra or any of its subsidiaries, we 
will be required to take appropriate steps to prevent such access, 
including terminating your account.

    A covered financial institution may, for example, have knowledge 
through transaction screening software that a correspondent processes 
transactions for BPA. The purpose of the notice requirement is to aid 
cooperation with correspondent account holders in preventing 
transactions involving BPA from accessing the U.S. financial system. 
However, FinCEN would not require or expect a covered financial 
institution to obtain a certification from any of its correspondent 
account holders that access will not be provided to comply with this 
notice requirement. Methods of compliance with the notice requirement 
could include, for example, transmitting a one-time notice by mail, 
fax, or email. FinCEN specifically solicits comments on the form and 
scope of the notice that would be required under the rule.
    The special due diligence would also include implementing risk-
based procedures designed to identify any use of correspondent accounts 
to process transactions involving BPA. A covered financial institution 
would be expected to apply an appropriate screening mechanism to 
identify a funds transfer order that on its face listed BPA as the 
financial institution of the originator or beneficiary, or otherwise 
referenced BPA in a manner detectable under the financial institution's 
normal screening mechanisms. An appropriate screening mechanism could 
be the mechanism used by a covered financial institution to comply with 
various legal requirements, such as the commercially available software 
programs used to comply with the economic sanctions programs 
administered by OFAC.
    A covered financial institution would also be required to implement 
risk-based procedures to identify indirect use of its correspondent 
accounts, including through methods used to disguise the originator or 
originating institution of a transaction. Specifically, FinCEN is 
concerned that BPA may attempt to disguise its transactions by relying 
on types of payments and accounts that would not explicitly identify 
BPA as an involved party. A financial institution may develop a 
suspicion of such misuse based on other information in its possession, 
patterns of transactions, or any other method available to it based on 
its existing systems. Under the proposed rule, a covered financial 
institution that suspects or has reason to suspect use of a 
correspondent account to process transactions involving BPA must take 
all appropriate steps to attempt to verify and prevent such use, 
including a notification to its correspondent account holder requesting 
further information regarding a transaction, requesting corrective 
action to address the perceived risk and, where necessary, terminating 
the correspondent account. A covered financial institution may re-
establish an account closed under the rule if it determines that the 
account will not be used to process transactions involving BPA. FinCEN 
specifically solicits comments on the requirement under the proposed 
rule that covered financial institutions take reasonable steps to 
prevent any processing of transactions involving BPA.
3. Recordkeeping and Reporting
    Section 1010.662(b)(3) of the proposed rule would clarify that 
paragraph (b) of the rule does not impose any reporting requirement 
upon any covered financial institution that is not otherwise required 
by applicable law or regulation. A covered financial institution must, 
however, document its compliance with the requirement that it notify 
those correspondent account holders that the covered financial 
institution knows, or has reason to

[[Page 13307]]

know, provide services to BPA, that such correspondents may not process 
any transaction involving BPA through the correspondent account 
maintained at the covered financial institution.

IV. Request for Comments

    FinCEN invites comments on all aspects of the proposal to impose 
the fifth special measure against BPA and specifically invites comments 
on the following matters:
    1. The impact of the proposed special measure upon legitimate 
transactions using BPA involving, in particular, U.S. persons and 
entities; foreign persons, entities, and governments; and multilateral 
organizations doing legitimate business.
    2. The form and scope of the notice to certain correspondent 
account holders that would be required under the rule;
    3. The appropriate scope of the proposed requirement for a covered 
financial institution to take reasonable steps to identify any use of 
its correspondent accounts to process transactions involving BPA; and
    4. The appropriate steps a covered financial institution should 
take once it identifies use of one of its correspondent accounts to 
process transactions involving BPA.

V. Regulatory Flexibility Act

    When an agency issues a rulemaking proposal, the Regulatory 
Flexibility Act (``RFA'') requires the agency to ``prepare and make 
available for public comment an initial regulatory flexibility 
analysis'' that will ``describe the impact of the proposed rule on 
small entities.'' (5 U.S.C. 603(a)). Section 605 of the RFA allows an 
agency to certify a rule, in lieu of preparing an analysis, if the 
proposed rulemaking is not expected to have a significant economic 
impact on a substantial number of small entities.

A. Proposal To Prohibit Covered Financial Institutions From Opening or 
Maintaining Correspondent Accounts With Certain Foreign Banks Under the 
Fifth Special Measure

1. Estimate of the Number of Small Entities to Whom the Proposed Fifth 
Special Measure Will Apply
    For purposes of the RFA, both banks and credit unions are 
considered small entities if they have less than $500,000,000 in 
assets.\4\ Of the estimated 7,000 banks, 80 percent have less than 
$500,000,000 in assets and are considered small entities.\5\ Of the 
estimated 7,000 credit unions, 94 percent have less than $500,000,000 
in assets.\6\
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    \4\ Table of Small Business Size Standards Matched to North 
American Industry Classification System Codes, Small Business 
Administration Size Standards (SBA Jan. 22, 2014) [hereinafter SBA 
Size Standards].
    \5\ Federal Deposit Insurance Corporation, Find an Institution, 
http://www2.fdic.gov/idasp/main.asp; select Size or Performance: 
Total Assets, type Equal or less than $: ``500000'' and select Find.
    \6\ National Credit Union Administration, Credit Union Data, 
http://webapps.ncua.gov/customquery/; select Search Fields: Total 
Assets, select Operator: Less than or equal to, type Field Values: 
``500000000'' and select Go.
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    Broker-dealers are defined in 31 CFR 1010.100(h) as those broker-
dealers required to register with the Securities and Exchange 
Commission (``SEC''). Because FinCEN and the SEC regulate substantially 
the same population, for the purposes of the RFA, FinCEN relies on the 
SEC's definition of small business as previously submitted to the Small 
Business Administration (``SBA''). The SEC has defined the term ``small 
entity'' to mean a broker or dealer that: ``(1) had total capital (net 
worth plus subordinated liabilities) of less than $500,000 on the date 
in the prior fiscal year as of which its audited financial statements, 
were prepared pursuant to Rule 17a-5(d) or, if not required to file 
such statements, a broker or dealer that had total capital (net worth 
plus subordinated debt) of less than $500,000 on the last business day 
of the preceding fiscal year (or in the time that it has been in 
business if shorter); and (2) is not affiliated with any person (other 
than a natural person) that is not a small business or small 
organization as defined in this release.'' \7\ Based on SEC estimates, 
17 percent of broker-dealers are classified as ``small'' entities for 
purposes of the RFA.\8\
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    \7\ 17 CFR 240.0-10(c).
    \8\ 76 FR 37572, 37602 (June 27, 2011) (the SEC estimates 871 
small broker-dealers of the 5,063 total registered broker-dealers).
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    Futures commission merchants (``FCMs'') are defined in 31 CFR 
1010.100(x) as those FCMs that are registered or required to be 
registered as a FCM with the Commodity Futures Trading Commission 
(``CFTC'') under the Commodity Exchange Act (``CEA''), except persons 
who register pursuant to section 4f(a)(2) of the CEA, 7 U.S.C. 
6f(a)(2). Because FinCEN and the CFTC regulate substantially the same 
population, for the purposes of the RFA, FinCEN relies on the CFTC's 
definition of small business as previously submitted to the SBA. In the 
CFTC's ``Policy Statement and Establishment of Definitions of `Small 
Entities' for Purposes of the Regulatory Flexibility Act,'' the CFTC 
concluded that registered FCMs should not be considered to be small 
entities for purposes of the RFA.\9\ The CFTC's determination in this 
regard was based, in part, upon the obligation of registered FCMs to 
meet the capital requirements established by the CFTC.
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    \9\ 47 FR 18618, 18619 (Apr. 30, 1982).
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    For purposes of the RFA, an introducing broker-commodities dealer 
is considered small if it has less than $35,500,000 in gross receipts 
annually.\10\ Based on information provided by the National Futures 
Association (``NFA''), 95 percent of introducing brokers-commodities 
dealers have less than $35.5 million in Adjusted Net Capital and are 
considered to be small entities.
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    \10\ SBA Size Standards at 28.
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    Mutual funds are defined in 31 CFR 1010.100(gg) as those investment 
companies that are open-end investment companies that are registered or 
are required to register with the SEC. Because FinCEN and the SEC 
regulate substantially the same population, for the purposes of the 
RFA, FinCEN relies on the SEC's definition of small business as 
previously submitted to the SBA. The SEC has defined the term ``small 
entity'' under the Investment Company Act to mean ``an investment 
company that, together with other investment companies in the same 
group of related investment companies, has net assets of $50 million or 
less as of the end of its most recent fiscal year.'' \11\ Based on SEC 
estimates, 7 percent of mutual funds are classified as ``small 
entities'' for purposes of the RFA under this definition.\12\
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    \11\ 17 CFR 270.0-10.
    \12\ 78 FR 23637, 23658 (April 19, 2013).
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    As noted above, 80 percent of banks, 94 percent of credit unions, 
17 percent of broker-dealers, 95 percent of introducing brokers-
commodities, zero FCMs, and 7 percent of mutual funds are small 
entities. The limited number of foreign banking institutions with which 
BPA maintains or will maintain accounts will likely limit the number of 
affected covered financial institutions to the largest U.S. banks, 
which actively engage in international transactions. Thus, the 
prohibition on maintaining correspondent accounts for foreign banking 
institutions that engage in transactions involving BPA under the fifth 
special measure would not impact a substantial number of small 
entities.
2. Description of the Projected Reporting and Recordkeeping 
Requirements of the Fifth Special Measure
    The proposed fifth special measure would require covered financial 
institutions to provide a notification

[[Page 13308]]

intended to aid cooperation from foreign correspondent account holders 
in preventing transactions involving BPA from accessing the U.S. 
financial system. FinCEN estimates that the burden on institutions 
providing this notice is one hour. Covered financial institutions would 
also be required to take reasonable measures to detect use of their 
correspondent accounts to process transactions involving BPA. All U.S. 
persons, including U.S. financial institutions, currently must exercise 
some degree of due diligence to comply with OFAC sanctions and 
suspicious activity reporting requirements. The tools used for such 
purposes, including commercially available software used to comply with 
the economic sanctions programs administered by OFAC, can easily be 
modified to identify correspondent accounts with foreign banks that 
involve BPA. Thus, the special due diligence that would be required by 
the imposition of the fifth special measure--i.e., the one-time 
transmittal of notice to certain correspondent account holders, the 
screening of transactions to identify any use of correspondent 
accounts, and the implementation of risk-based measures to detect use 
of correspondent accounts--would not impose a significant additional 
economic burden upon small U.S. financial institutions.

B. Certification

    For these reasons, FinCEN certifies that the proposals contained in 
this rulemaking would not have a significant impact on a substantial 
number of small businesses.
    FinCEN invites comments from members of the public who believe 
there would be a significant economic impact on small entities from the 
imposition of the fifth special measure regarding BPA.

VI. 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 
the Desk Officer for the Department of Treasury, Office of Information 
and Regulatory Affairs, Office of Management and Budget, Paperwork 
Reduction Project (1506), Washington, DC 20503 (or by email to oira 
[email protected]) with a copy to FinCEN by mail or email at the 
addresses previously specified. Comments should be submitted by one 
method only. Comments on the collection of information should be 
received by May 12, 2015. In accordance with the requirements of the 
Paperwork Reduction Act and its implementing regulations, 5 CFR 1320, 
the following information concerning the collection of information as 
required by 31 CFR 1010.662 is presented to assist those persons 
wishing to comment on the information collection.

A. Proposed Information Collection Under the Fifth Special Measure

    The notification requirement in section 1010.662(b)(2)(i) is 
intended to aid cooperation from correspondent account holders in 
denying BPA access to the U.S. financial system. The information 
required to be maintained by section 1010.662(b)(3)(i) would be used by 
federal agencies and certain self-regulatory organizations to verify 
compliance by covered financial institutions with the provisions of 31 
CFR 1010.662. The collection of information would be mandatory.
    Description of Affected Financial Institutions: Banks, broker-
dealers in securities, futures commission merchants and introducing 
brokers-commodities, and mutual funds.
    Estimated Number of Affected Financial Institutions: 5,000.
    Estimated Average Annual Burden in Hours Per Affected Financial 
Institution: The estimated average burden associated with the 
collection of information in this proposed rule is one hour per 
affected financial institution.
    Estimated Total Annual Burden: 5,000 hours.
    FinCEN specifically invites comments on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the mission of FinCEN, including whether the information would have 
practical utility; (b) the accuracy of FinCEN's estimate of the burden 
of the proposed collection of information; (c) ways to enhance the 
quality, utility, and clarity of the information required to be 
maintained; (d) ways to minimize the burden of the required collection 
of information, 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 report the information.
    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 
OMB control number.

VII. Executive Order 12866

    Executive Orders 12866 and 13563 direct agencies to assess 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 proposed rule is not a ``significant 
regulatory action'' for purposes of Executive Order 12866.

List of Subjects in 31 CFR Part 1010

    Administrative practice and procedure, banks and banking, brokers, 
counter-money laundering, counter-terrorism, foreign banking.

Authority and Issuance

    For the reasons set forth in the preamble, part 1010, chapter X of 
title 31 of the Code of Federal Regulations, is proposed to be amended 
as follows:

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

0
2. Add Sec.  1010.662 to read as follows:


Sec.  1010.662  Special measures against Banca Privada d'Andorra.

    (a) Definitions. For purposes of this section:
    (1) Banca Privada d'Andorra means all branches, offices, and 
subsidiaries of Banca Privada d'Andorra wherever located.
    (2) Correspondent account has the same meaning as provided in Sec.  
1010.605(c)(1)(ii).
    (3) Covered financial institution has the same meaning as provided 
in Sec.  1010.605(e)(1).
    (4) Subsidiary means a company of which more than 50 percent of the 
voting stock or analogous equity interest is owned by another company.
    (b) Prohibition on accounts and due diligence requirements for 
covered financial institutions--(1) Prohibition on use of correspondent 
accounts. A covered financial institution shall terminate any 
correspondent account that is established, maintained, administered, or 
managed in the United States for, or on behalf of, Banca Privada 
d'Andorra.
    (2) Special due diligence of correspondent accounts to prohibit 
use. (i) A covered financial institution shall apply special due 
diligence to its foreign correspondent accounts that is reasonably 
designed to guard against

[[Page 13309]]

their use to process transactions involving Banca Privada d'Andorra. At 
a minimum, that special due diligence must include:
    (A) Notifying those foreign correspondent account holders that the 
covered financial institution knows or has reason to know provide 
services to Banca Privada d'Andorra that such correspondents may not 
provide Banca Privada d'Andorra with access to the correspondent 
account maintained at the covered financial institution; and
    (B) Taking reasonable steps to identify any use of its foreign 
correspondent accounts by Banca Privada d'Andorra, to the extent that 
such use can be determined from transactional records maintained in the 
covered financial institution's normal course of business.
    (ii) A covered financial institution shall take a risk-based 
approach when deciding what, if any, other due diligence measures it 
reasonably must adopt to guard against the use of its foreign 
correspondent accounts to process transactions involving Banca Privada 
d'Andorra.
    (iii) A covered financial institution that obtains knowledge that a 
foreign correspondent account may be being used to process transactions 
involving Banca Privada d'Andorra shall take all appropriate steps to 
further investigate and prevent such access, including the notification 
of its correspondent account holder under paragraph (b)(2)(i)(A) and, 
where necessary, termination of the correspondent account.
    (3) Recordkeeping and reporting. (i) A covered financial 
institution is required to document its compliance with the notice 
requirement set forth in paragraph (b)(2)(i)(A) of this section.
    (ii) Nothing in this paragraph (b) shall require a covered 
financial institution to report any information not otherwise required 
to be reported by law or regulation.

    Dated: March 6, 2015.
Jennifer Shasky Calvery,
Financial Crimes Enforcement Network.
[FR Doc. 2015-05724 Filed 3-12-15; 8:45 am]
 BILLING CODE 4810-2-P