[Federal Register Volume 85, Number 189 (Tuesday, September 29, 2020)]
[Notices]
[Pages 61104-61110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21441]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network


Agency Information Collection Activities; Proposed Renewal; 
Comment Request; Renewal Without Change of Anti-Money Laundering 
Programs; Due Diligence Programs for Correspondent Accounts for Foreign 
Financial Institutions and for Private Banking Accounts

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

ACTION: Notice and request for comments.

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SUMMARY: As part of its continuing effort to reduce paperwork and 
respondent burden, FinCEN invites comments on the proposed renewal, 
without change, of a currently approved information collection found in 
existing Bank Secrecy Act regulations. Specifically, the regulations 
require banks, brokers or dealers in securities, futures commission 
merchants, introducing brokers in commodities, and mutual funds to 
establish due diligence programs that include risk-based, and, where 
necessary, enhanced, policies, procedures, and controls reasonably 
designed to detect and report money laundering conducted through or 
involving, any correspondent accounts established or maintained for 
foreign financial institutions. The regulations also require that these 
same financial institutions establish due diligence programs that 
include policies, procedures, and controls reasonably designed to 
detect and report money laundering conducted through or involving any 
private banking accounts established by the financial institutions. The 
due diligence programs are required to be part of the financial 
institutions' anti-money laundering programs. Although no changes are 
proposed to the information collection itself, this request for 
comments covers a future expansion of the scope of the annual hourly 
burden and cost estimate associated with these regulations. This 
request for comments is made pursuant to the Paperwork Reduction Act of 
1995.

DATES: Written comments are welcome, and must be received on or before 
November 30, 2020.

ADDRESSES: Comments may be submitted by any of the following methods:
     Federal E-rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. Refer to Docket Number 
FINCEN-2020-0012 and the specific Office of Management and Budget (OMB) 
control number 1506-0046.
     Mail: Policy Division, Financial Crimes Enforcement 
Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-
2020-0012 and OMB control number 1506-0046.
    Please submit comments by one method only. Comments will also be 
incorporated into FinCEN's review of existing regulations, as provided 
by Treasury's 2011 Plan for Retrospective Analysis of Existing Rules. 
All comments submitted in response to this notice will become a matter 
of public record. Therefore, you should submit only information that 
you wish to make publicly available.

FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section 
at 1-800-767-2825 or electronically at [email protected].

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Provisions

    The legislative framework generally referred to as the Bank Secrecy 
Act (BSA) consists of the Currency and Financial Transactions Reporting 
Act of 1970, as amended by the Uniting and Strengthening America by 
Providing Appropriate Tools Required to Intercept and Obstruct 
Terrorism Act of 2001 (USA PATRIOT Act) (Pub. L. 107-56) and other 
legislation. The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-
1959, 31 U.S.C. 5311-5314 and 5316-5332, and notes thereto, with 
implementing regulations at 31 CFR chapter X.
    The BSA authorizes the Secretary of the Treasury, inter alia, to 
require financial institutions to keep records and file reports that 
are determined to have a high degree of usefulness in criminal, tax, 
and regulatory matters, or in the conduct of intelligence or counter-
intelligence activities to protect against international terrorism, and 
to implement anti-money laundering (AML) programs and compliance 
procedures.\1\ Regulations implementing the BSA appear at 31 CFR 
chapter X. The authority of the Secretary to administer the BSA has 
been delegated to the Director of FinCEN.\2\
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    \1\ Section 358 of the USA PATRIOT Act added language expanding 
the scope of the BSA to intelligence or counter-intelligence 
activities to protect against international terrorism.
    \2\ Treasury Order 180-01 (re-affirmed Jan. 14, 2020).
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    Section 312 of the USA PATRIOT Act added subsection (i) to 31 
U.S.C. 5318 of the BSA. Section 312 mandates that each financial 
institution that establishes, maintains, administers, or manages a 
correspondent account or a private banking account in the United States 
for non-U.S. persons subject such accounts to certain anti-money 
laundering compliance measures. In particular, a financial institution 
must establish appropriate, specific, and, where necessary, enhanced, 
due diligence (EDD) or enhanced scrutiny policies, procedures, and 
controls that are reasonably designed to detect and report instances of 
money laundering through those accounts. The regulations implementing 
the due diligence requirements for maintaining foreign correspondent 
accounts and private banking accounts are found at 31 CFR 1010.610 and 
31 CFR 1010.620, respectively, and apply to covered financial 
institutions defined as banks, brokers or dealers in securities, 
futures commission merchants, introducing brokers in commodities, and 
mutual funds.\3\
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    \3\ 31 CFR 1010.605(e).
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    (a) 31 CFR 1010.610--Due diligence programs for correspondent 
accounts for foreign financial institutions.
    Under 31 CFR 1010.610(a), covered financial institutions are 
required to establish due diligence policies, procedures, and controls 
that include each of the following for any correspondent account 
established, maintained, administered, or managed: (i) Determining 
whether any such foreign correspondent account is subject to EDD; (ii) 
assessing the money laundering risks presented by each such foreign 
correspondent account; and (iii) applying risk-based procedures and 
controls to each such foreign

[[Page 61105]]

correspondent account reasonably designed to detect and report known or 
suspected money laundering activity, including a periodic review of the 
correspondent account activity sufficient to determine consistency with 
information obtained about the type, purpose, and anticipated activity 
of the account.
    Under 31 CFR 1010.610(b), covered financial institutions are 
required to establish EDD policies, procedures, and controls when 
establishing, maintaining, administering, or managing a correspondent 
account for certain foreign banks, as defined in 31 CFR 1010.610(c).\4\ 
The EDD must reflect the risk assessment of the account and must 
include, as appropriate: (i) Obtaining information relating to the 
foreign bank's AML program; (ii) monitoring transactions to, from, or 
through the correspondent account in a manner reasonably designed to 
detect money laundering and suspicious activity; (iii) obtaining 
information from the foreign bank about the identity of persons with 
authority to direct transactions through the correspondent account if 
it is a payable-through account, as well as information about the 
sources and beneficial owners of funds or other assets in the payable-
through account; (iv) determining whether the foreign bank maintains 
correspondent accounts for other foreign banks that use the foreign 
correspondent account established or maintained by the covered 
financial institution and, if so, taking reasonable steps to obtain 
information relevant to assess and mitigate money laundering risks, 
including, as appropriate, by obtaining the identity of the other 
foreign banks; and (v) obtaining the identity of certain owners of any 
such foreign bank that is not publicly traded and the nature and extent 
of the ownership interest.
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    \4\ The EDD procedures are required for any correspondent 
account maintained for a foreign bank that operates pursuant to: (i) 
An offshore banking license; (ii) a banking license issued by a 
foreign country that has been designated as non-cooperative with 
international anti-money laundering principles or procedures by an 
intergovernmental group or organization of which the United States 
is a member and with which designation the U.S. representative to 
the group or organization concurs; or (iii) a banking license issued 
by a foreign country that has been designated by the Secretary as 
warranting special measures due to money laundering concerns.
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    Under 31 CFR 1010.610(d), covered financial institutions are 
required to establish special procedures when due diligence or EDD 
cannot be performed, including when the covered financial should refuse 
to open the account, suspend transaction activity, file a suspicious 
activity report, or close the account.
    (b) 31 CFR 1010.620--Due diligence programs for private banking 
accounts.
    Under 31 CFR 1010.620, covered financial institutions are required 
to establish due diligence policies, procedures, and controls that, at 
a minimum, are designed to ensure that the financial institutions take 
reasonable steps to: (i) Ascertain the identify of all nominal and 
beneficial owners of a private banking account; \5\ (ii) ascertain 
whether any nominal or beneficial owner is a senior foreign political 
figure; (iii) ascertain the source(s) of funds deposited into a private 
banking account and the purpose and expected use of the account; and 
(iv) review the activity of the account to ensure that it is consistent 
with the information obtained about the client's source of funds and 
with the stated purpose and expected use of the account, as needed to 
guard against money laundering, and to report any known or suspected 
money laundering or suspicious activity conducted to, from, or through 
a private banking account.
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    \5\ Private banking account means an account (or any combination 
of accounts) maintained at a covered financial institution that: (i) 
Requires a minimum aggregate deposit of funds or other assets of not 
less than $1,000,000; (ii) is established on behalf of or for the 
benefit of one or more non-U.S. persons who are direct or beneficial 
owners of the account; and (iii) is assigned to, or is administered 
or managed by, in whole or in part, an officer, employee, or agent 
of a covered financial institution acting as a liaison between the 
covered financial institution and the direct or beneficial owner of 
the account. 31 CFR 1010.605(m).
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    Under 31 CFR 1010.620(c), in the case of a private banking account 
for which a senior foreign political figure is a nominal or beneficial 
owner, covered financial institutions are required to conduct enhanced 
scrutiny of the account that is reasonably designed to detect and 
report transactions that may involve the proceeds of foreign 
corruption.\6\
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    \6\ See 31 CFR 1010.620(c)(2) for the definition of the term 
``proceeds of foreign corruption.''
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    Under 31 CFR 1010.620(d), covered financial institutions are 
required to establish special procedures when appropriate due diligence 
cannot be performed, including when the covered financial institution 
should refuse to open the account, suspend transaction activity, file a 
suspicious activity report, or close the account.

II. Paperwork Reduction Act of 1995 (PRA) \7\
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    \7\ Public Law 104-13, 44 U.S.C. 3506(c)(2)(A).
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    Title: Due diligence programs for correspondent accounts for 
foreign financial institutions and private banking accounts (31 CFR 
1010.610 and 31 CFR 1010.620).
    OMB Control Number: 1506-0046.
    Report Number: Not applicable.
    Abstract: FinCEN is issuing this notice to renew the OMB control 
number for the due diligence programs for correspondent accounts for 
foreign financial institutions and for private banking accounts.
    Affected Public: Businesses or other for-profit institutions, and 
non-profit institutions.
    Type of Review:
     Renewal without change of a currently approved information 
collection.
     Propose for review and comment a renewal of the portion of 
the PRA burden that has been subject to notice and comment in the past 
(the ``traditional annual PRA burden'').
     Propose for review and comment a future expansion of the 
scope of the PRA burden (the ``supplemental annual PRA burden'').
    Frequency: As required.
    Estimated Number of Respondents: 16,938 financial institutions.\8\
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    \8\ Table 1 below sets forth a breakdown of the types of 
financial institutions covered by this notice.
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    Estimated Recordkeeping Burden:
    In Part 1 of this notice, FinCEN describes the breakdown of the 
estimated number of financial institutions, by type. In Part 2, FinCEN 
proposes for review and comment a renewal of the estimate of the 
traditional annual PRA hourly burden, which includes a scope and 
methodology similar to that used in the past, with the incorporation of 
a more robust cost estimate. The scope and methodology used in the past 
was limited to maintaining and updating the due diligence programs as 
part of the AML programs. In Part 3, FinCEN proposes for review and 
comment a methodology to estimate the hourly burden and the cost of a 
future estimate of a supplemental annual PRA burden that includes the 
burden and cost of maintaining records related to the regulatory 
requirements to conduct due diligence and EDD for foreign correspondent 
accounts, and to conduct due diligence and enhanced scrutiny for 
private banking accounts. Finally, in Part 4, FinCEN solicits input 
from the public about: (a) The accuracy of the estimate of the 
traditional annual PRA burden; (b) the method proposed for the 
calculation of the future supplemental annual PRA burden; (c) the 
criteria, metrics, and most appropriate questions FinCEN should 
consider when researching the information to estimate

[[Page 61106]]

the future traditional and supplemental annual PRA burden, according to 
the methodology proposed; and (d) any other comments about the 
regulations and the current and proposed future hourly burden and cost 
estimates of these requirements.

Part 1. Breakdown of the Financial Institutions Covered By This Notice

    The breakdown of financial institutions, by type, covered By this 
notice is reflected in Table 1 below:

 Table 1--Breakdown of Financial Institutions Covered By This Notice, by
                      Type of Financial Institution
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                                                             Number of
              Type of financial institution                  financial
                                                           institutions
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Banks...................................................      \9\ 10,542
Brokers or dealers in securities........................      \10\ 3,640
Futures commission merchants............................         \11\ 61
Introducing brokers in commodities......................      \12\ 1,104
Mutual funds............................................      \13\ 1,591
                                                         ---------------
    Total number of financial institutions..............          16,938
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Part 2. Traditional Annual PRA Burden and Cost

    Due to the practical challenges of obtaining the total number of 
correspondent accounts maintained by covered financial institutions for 
foreign financial institutions subject to regular due diligence 
requirements, the number of correspondent accounts maintained for 
foreign banks subject to EDD requirements, and the number of private 
banking accounts, the scope of the traditional annual PRA burden was 
limited to the annual burden of (a) maintaining and updating a due 
diligence programs as part of the AML program, and (b) securing 
approval of the program by an appropriate level of senior management.
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    \9\ According to the Federal Deposit Insurance Corporation 
(FDIC) there were 5,103 FDIC-insured banks as of March 31, 2020. 
According to the Federal Reserve Board (FRB), there were 203 other 
entities supervised by the FRB, as of June 16, 2020, that fall 
within the definition of bank (20 Edge Act institutions, 15 
agreement corporations, and 168 foreign banking organizations). 
According to the National Credit Union Administration there were 
5,236 federally regulated credit unions as of December 31, 2019.
    \10\ According to the Securities and Exchange Commission (SEC), 
there were 3,640 brokers or dealers in securities registered with 
the SEC, as of March 31, 2020.
    \11\ According to the Commodities and Futures Trading Commission 
(CFTC), there were 61 futures commission merchants registered with 
the CFTC, as of March 31, 2020.
    \12\ According to the CFTC, there were 1,104 introducing brokers 
in commodities registered with the CFTC as of March 31, 2020.
    \13\ According to the SEC, there were approximately 1,591 mutual 
funds in 2017, based on forms filed with the SEC. The SEC provided 
the estimate to FinCEN for the last renewal of OMB control number 
1506-0033, 83 FR 46012 (Sept. 11, 2018). FinCEN was unable to obtain 
a more recent estimate.
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    FinCEN continues estimating the annual hourly burden of maintaining 
and updating the due diligence program for foreign correspondent 
accounts and private banking accounts at two hours per covered 
financial institution. This estimate covers the burden of (i) 
maintaining and updating the due diligence program to take into 
consideration any regulatory changes and any potential modifications 
required by changes in the types of foreign correspondent accounts or 
private banking accounts maintained, or by changes in the operations or 
organizational structure of the foreign financial institutions for 
which a covered financial institution maintains accounts, as well as 
changes to the organizational structure of private banking accounts 
(one hour), and (ii) presenting the updated due diligence program to 
the appropriate level of senior management of the financial institution 
for approval (one hour).
    FinCEN's estimate of the traditional annual PRA burden, therefore, 
is 33,876 hours, as detailed in Table 2 below:

       Table 2--Burden Associated With Updating and Maintaining the Due Diligence Program and Obtaining Senior Management Approval of the Program
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                                          Number of              Time per financial institution             Total burden hours per step
                                          financial   -----------------------------------------------------------------------------------   Grand total
    Type of financial institution       institutions                                                                                       burden hours
                                        (see Table 1)         Maintenance                Approval           Maintenance      Approval
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Banks................................          10,542  1 hour..................  1 hour.................          10,542          10,542          21,084
Brokers or dealers in securities.....           3,640  1 hour..................  1 hour.................           3,640           3,640           7,280
Futures commission merchants.........              61  1 hour..................  1 hour.................              61              61             122
Introducing brokers in commodities...           1,104  1 hour..................  1 hour.................           1,104           1,104           2,208
Mutual funds.........................           1,591  1 hour..................  1 hour.................           1,591           1,591           3,182
                                                                                                         -----------------------------------------------
    Total burden hours...............                                                                             16,938          16,938          33,876
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    To calculate the hourly costs of the burden estimate, FinCEN 
identified four roles and corresponding staff positions involved in 
maintaining, updating, and obtaining senior management approval of the 
due diligence program: (i) Board of directors or senior management of 
the financial institution; (ii) general supervision (providing process 
oversight); (iii) direct supervision (reviewing operational-level work 
and cross-checking all or a sample of the work product against 
supporting documentation); and (iv) clerical work (engaging in research 
and administrative review, and recordkeeping).
    FinCEN calculated the fully-loaded hourly wage for each of these 
four roles by using the median wage estimated by the U.S. Bureau of 
Labor Statistics (BLS),\14\ and computing an additional benefits cost 
as follows:
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    \14\ The U.S. Bureau of Labor Statistics, Occupational 
Employment Statistics-National, May 2019, available at https://www.bls.gov/oes/tables.htm. The most recent data from the BLS 
corresponds to May 2019. For the benefits component of total 
compensation, see U.S. Bureau of Labor Statistics, Employer's Cost 
per Employee Compensation as of December 2019, available at https://www.bls.gov/news.release/ecec.nr0.htm. The ratio between benefits 
and wages for financial activities is $15.95 (hourly benefits)/
$32.05 (hourly wages) = 0.50. The benefit factor is 1 plus the 
benefit/wages ratio, or 1.50. Multiplying each hourly wage by the 
benefit factor produces the fully-loaded hourly wage per position.

[[Page 61107]]



  Table 3--Fully-Loaded Hourly Wage by Role and BLS Job Position for All Financial Institutions Covered By This
                                                     Notice
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                                                                                                        Fully-
                Role                   BLS-code           BLS-name            Median      Benefit       loaded
                                                                           hourly wage     factor    hourly wage
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Board of directors/senior management     11-1010  Chief Executive........       $88.68         1.50    * $133.00
General supervision.................     11-3031  Financial Manager......        62.45         1.50        93.68
Direct supervision..................     13-1041  Compliance Officer.....        33.20         1.50        49.80
Clerical work (research, review, and     43-3099  Financial Clerk........        20.40         1.50        30.60
 recordkeeping).
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(*) $133.02 rounded to $133.00.

    FinCEN estimates that, in general and on average,\15\ each role 
would spend different amounts of time on each portion of the 
traditional annual PRA burden, as follows:
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    \15\ By ``in general,'' FinCEN means without regard to outliers 
(e.g., financial institutions with foreign correspondent account 
relationships with complexities that are uncommonly higher or lower 
than those of the population at large). By ``on average,'' FinCEN 
means the mean of the distribution of each subset of the population.
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    For annually maintaining and updating the due diligence program, 
the cost of each hour of burden would be (i) one burden hour at $133.00 
(representing the cost of board of directors or senior management 
review and approval), and (ii) one hour at $48.00 representing the 
actual update of the content of the program broken down by each role as 
shown in Table 4 below:

                               Table 4--Weighted Average Hourly Cost of Maintaining and Updating the Due Diligence Program
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                        General supervision                                 Direct supervision                   Clerical work               Weighted
---------------------------------------------------------------------------------------------------------------------------------------- average  hourly
                      % Time                          Hourly cost         % Time        Hourly cost         % Time        Hourly cost          cost
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10%...............................................           $9.37              60%           $29.88              30%            $9.18           $48.00
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$48.43 rounded to $48.00

    The total estimated cost of the traditional annual PRA burden is 
$3,065,778, as reflected in Table 5 below:
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    \16\ See Table 2.
    \17\ See Table 4.
    \18\ See Table 2.
    \19\ See Table 3.

                              Table 5--Total Cost of Traditional Annual PRA Burden
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                              Steps                                Hourly burden    Hourly cost     Total cost
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Maintaining and updating the program (divided between the roles      \16\ 16,938     \17\ $48.00        $813,024
 listed in Table 4).............................................
Board of directors/senior management approval of the program....     \18\ 16,938     \19\ 133.00       2,252,754
                                                                 -----------------------------------------------
    Total cost..................................................                                       3,065,778
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Part 3. Supplemental Annual PRA Burden

    In the future, FinCEN intends to add a supplemental annual PRA 
burden calculation that will include the estimated hourly burden and 
cost to maintain records to document compliance with the due diligence 
and EDD procedures for foreign correspondent accounts, and due 
diligence procedures and enhanced scrutiny requirements for private 
banking accounts.
    (a) Due diligence procedures for foreign correspondent accounts.
    As noted in Section I above, for all correspondent accounts 
established or maintained for foreign financial institutions, covered 
financial institutions are required to establish due diligence 
policies, procedures, and controls that include: (i) Determining 
whether each account is subject to EDD; (ii) assessing the money 
laundering risks presented by each account; and (iii) applying risk-
based procedures and controls to each account that are reasonably 
designed to detect and report known or suspected money laundering 
activity, including a periodic review of the account activity 
sufficient to determine consistency with information obtained about the 
type, purpose, and anticipated activity of the account.
    (b) EDD procedures for certain foreign bank accounts.
    As noted in Section I above, covered financial institutions are 
required to establish EDD policies, procedures, and controls when 
establishing, maintaining, administering, or managing a correspondent 
account for certain foreign banks, as defined in 31 CFR 1010.610(c). 
The enhanced scrutiny must reflect the risk assessment of the account 
and must include, as appropriate: (i) Obtaining information relating to 
the AML program of the foreign bank; (ii) monitoring transactions to, 
from, or through the correspondent account in a manner reasonably 
designed to detect money laundering and suspicious activity; (iii) 
obtaining information from the foreign bank about the identity of 
persons with authority to direct transactions through the correspondent 
accounts if they are payable-through accounts, as well as information 
about the sources and beneficial owners of funds or other assets in the 
payable-through accounts; (iv) determining whether the foreign bank 
maintains correspondent accounts for other foreign banks that use the 
foreign correspondent account established or maintained by the covered 
financial institution and, if so,

[[Page 61108]]

taking reasonable steps to obtain information relevant to assess and 
mitigate money laundering risks, including, as appropriate, by 
obtaining the identity of the other foreign banks; and (v) obtaining 
the identity of certain owners of any such foreign bank that is not 
publicly traded and the nature and extent of the ownership interest.
    (c) Due diligence procedures for private banking accounts.
    As noted in Section I above, covered financial institutions are 
required to establish due diligence policies, procedures, and controls 
that, at a minimum, are designed to ensure that the financial 
institutions take reasonable steps to: (i) Ascertain the identity of 
all nominal and beneficial owners of a private banking account; (ii) 
ascertain whether any nominal or beneficial owner is a senior foreign 
political figure; (iii) ascertain the source(s) of funds deposited into 
a private banking account and the purpose and expected use of the 
account; and (iv) review the activity of the account to ensure that it 
is consistent with the information obtained about the client's source 
of funds and with the stated purpose and expected use of the account, 
as needed to guard against money laundering, and to report any known or 
suspected money laundering or suspicious activity conducted to, from, 
or through a private banking account.
    (d) Enhanced scrutiny for private banking accounts.
    As noted in Section I above, in the case of a private banking 
account for which a senior foreign political figure is a nominal or 
beneficial owner, covered financial institutions are required to 
conduct enhanced scrutiny that is reasonably designed to detect and 
report transactions involving the account that may involve the proceeds 
of foreign corruption.
    FinCEN does not have the necessary information to provide a 
tentative estimate for these supplemental PRA hourly burdens and costs 
within the current notice. In addition, FinCEN does not have all the 
necessary information to precisely estimate the traditional annual PRA 
burden. For that reason, FinCEN is relying on estimates used in prior 
renewals of this OMB control number and the applicable regulations. 
FinCEN further recognizes that after receiving public comments as a 
result of this notice, future traditional annual PRA hourly burden and 
cost estimates may vary significantly. FinCEN intends to conduct more 
granular studies of the actions included in the proposed scope of the 
supplemental annual PRA burden in the near future, to arrive at more 
precise estimates of net BSA hourly burden and cost.\20\ The data 
obtained in these studies also may result in a significant variation of 
the estimated traditional annual PRA burden.
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    \20\ Net hourly burden and cost are the burden and cost a 
financial institution incurs to comply with requirements that are 
unique to the BSA, and that do not support any other business 
purpose or regulatory obligation of the financial institution. 
Burden for purposes of the PRA does not include the time and 
financial resources needed to comply with an information collection, 
if the time and resources are for things a business (or other 
person) does in the ordinary course of its activities if the agency 
demonstrates that the reporting activities needed to comply are 
usual and customary. 5 CFR 1320.3(b)(2). For example, depending on 
the nature of the correspondent account or private banking account, 
a financial institution may be collecting and maintaining some of 
the same information on the foreign financial institution 
correspondent account holder or the private banking account holder 
that is required by the regulatory requirements under 31 CFR 
1010.610 and 31 CFR 1010.620, respectively, in order to satisfy 
other obligations including (i) protecting the financial institution 
from fraud against itself or its customers, (ii) complying with 
other non-BSA regulatory requirements such as those imposed by the 
specific Federal functional regulator, or (iii) improving the 
financial institution's marketing efforts, or the credit analysis of 
any lending facilities granted to the foreign financial institution.
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    Estimated Recordkeeping Burden: The average estimated annual PRA 
burden, measured in hours per respondent, is two hours (one burden hour 
to annually maintain and update the due diligence program, and one hour 
to annually obtain senior management approval of the due diligence 
program).
    Estimated Number of Respondents: 16,938, as set out in Table 1.
    Estimated Total Annual Responses: 16,938 revised due diligence 
programs for foreign correspondent accounts and private banking 
accounts annually; and 16,938 due diligences programs for foreign 
correspondent accounts and private banking accounts approved by senior 
management annually, as set out in Table 2.
    Estimated Total Annual Recordkeeping Burden: The estimated total 
annual PRA burden is 33,876 hours, as set out in Table 2.
    Estimated Total Annual Recordkeeping Cost: The estimated total 
annual PRA cost is $3,065,778, as set out in Table 5.
    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 BSA must be retained for five years.

Part 4. Request for Comments

    (a) Specific request for comments on the traditional annual PRA 
hourly burden and cost.
    FinCEN invites comments on any aspect of the traditional annual PRA 
burden, as set out in Part 2 of this notice. In particular, FinCEN 
seeks comments on the adequacy of: (i) FinCEN's assumptions underlying 
its estimate of the burden; (ii) the estimated number of hours required 
by each portion of the burden; and (iii) the organizational levels of 
the financial institution engaged in each portion of the burden, their 
estimated hourly remuneration, and the estimated proportion of 
participation by each role. FinCEN encourages commenters to include any 
publicly available sources for alternative estimates or methodologies.
    (b) Specific request for comments on the proposed criteria for 
determining the scope of a supplemental annual PRA hourly burden and 
cost estimate.
    FinCEN invites comments on any aspect of the criteria for a future 
estimate of the supplemental annual PRA burden, as set out in Part 3 of 
this notice.
    (c) Specific request for comments on the appropriate criteria, 
methodology, and questionnaire required to obtain information to more 
precisely estimate the supplemental annual PRA hourly burden and cost.
    FinCEN invites comments on the most appropriate and comprehensive 
means to question financial institutions about the annual hourly burden 
and cost attributable solely to the recordkeeping necessary to comply 
with the due diligence and EDD requirements for foreign correspondent 
accounts, and due diligence procedures and enhanced scrutiny 
requirements for private banking accounts (i.e., the hourly burden and 
cost of complying with the recordkeeping requirements imposed 
exclusively by the BSA, which are not used to satisfy contractual 
obligations, other regulatory requirements, or business purposes of the 
financial institution).
    The supplemental annual PRA hourly burden and cost estimate of the 
recordkeeping necessary to comply with the due diligence and EDD 
requirements for foreign correspondent accounts, and due diligence and 
enhanced scrutiny for private banking accounts must take into 
consideration only the effort involved in obtaining those data elements 
that are used exclusively for complying with requirements under 31 CFR 
1010.610 and 31 CFR 1010.620, respectively. Given the complexity in 
determining what portion of the effort to include in the estimate, 
FinCEN seeks comments from the public regarding any questions we should 
consider posing in future notices, in addition to the specific 
questions for comment outlined directly below. Also, due to the evident

[[Page 61109]]

difficulty involved in estimating the number of correspondent accounts 
maintained for foreign financial institutions, the number of 
correspondent accounts maintained for foreign banks for which EDD is 
required, the number of private banking accounts, and the number of 
private banking accounts for which a senior foreign political figure is 
a nominal or beneficial owner and therefore subject to enhanced 
scrutiny, FinCEN welcomes any suggestions as to how to derive these 
estimates by using publicly available financial information.
    (d) Specific questions for comment associated with the due 
diligence and EDD procedures for foreign correspondent accounts:
    (1) Due diligence procedures.
     On average, how many correspondent accounts does your 
financial institution maintain for foreign financial institutions that 
require due diligence?
     Does your financial institution maintain foreign 
correspondent accounts for banks that require EDD?
     On average, how many correspondent accounts does your 
financial institution maintain for foreign banks that require EDD?
     Does your financial institution have a process to track 
foreign correspondent accounts for reasons other than to comply with 
the BSA requirements?
     On average, during the on-boarding process, how long does 
it take your financial institution to conduct the research necessary to 
determine if a correspondent account requires due diligence or EDD?
     Does your financial institution have a review and approval 
process involving senior management regarding the determination to 
conduct due diligence versus EDD? On average, how long does the review 
process take and how many approvals are necessary?
     On average, how long does it take your financial 
institution to conduct the research and document an initial risk 
assessment of a correspondent account?
     Does your financial institution have a review and approval 
process involving senior management to evaluate the conclusions reached 
in the original risk assessment? On average, how long does the review 
process take and how many approvals are necessary?
     On average, how frequently does your financial institution 
conduct periodic reviews of each correspondent account?
     On average, how long does it take your financial 
institution to conduct and document the periodic review of a 
correspondent account?
     Does your financial institution have a review and approval 
process involving senior management to evaluate the conclusions reached 
in the periodic review of a correspondent account? On average, how long 
does the review process take and how many approvals are necessary?
    (2) EDD procedures.
     On average, how long does it take your financial 
institution to conduct research and document an initial risk assessment 
of a correspondent account that requires EDD?
     Does your financial institution have a review and approval 
process involving senior management to evaluate the conclusions reached 
in the original risk assessment? On average, how long does the review 
process take and how many approvals are necessary?
     On average, how long does it take your financial 
institution to obtain a foreign bank's AML program when a correspondent 
account requires EDD? Does your financial institution conduct a review 
of each applicable AML program?
     On average, how often does your financial institution 
conduct and document review of transaction activity through a 
correspondent account?
     On average, how long does it take your financial 
institution to conduct and document review of transaction activity 
through a correspondent account?
     Does your financial institution have a review and approval 
process involving senior management to evaluate the conclusions reached 
as a result of a transaction activity review on a particular 
correspondent account? On average, how long does the review process 
take and how many layers of management review are there?
     On average, how long does it take your financial 
institution to obtain information from a foreign bank about the 
identity of persons with authority to direct transactions through the 
correspondent account if it is a payable-through account, as well as 
information about the sources and beneficial owners of funds or other 
assets in the payable-through account?
     On average, how many individuals have the authority to 
direct transactions through a correspondent account?
     Does your financial institution have a way of identifying 
if a new person is permitted to conduct transaction activity through a 
correspondent account, so that your financial institution can obtain 
the proper information?
     Does your financial institution have a review and approval 
process involving senior management to evaluate information obtained on 
persons with authority to direct transactions through a correspondent 
account?
     Does your financial institution maintain correspondent 
accounts for foreign banks that permit other foreign banks to use the 
correspondent account maintained with your financial institution?
     On average, how many correspondent accounts does your 
financial institution maintain for foreign banks that permit other 
foreign banks to access the correspondent account?
     Does your financial institution have a way of determining 
if a foreign bank permits another foreign bank to access the 
correspondent account maintained with your financial institution?
     On average, how long does it take your financial 
institution to obtain information from a foreign bank about other 
foreign banks with access to the correspondent account maintained with 
your financial institution?
     What additional information does your financial 
institution obtain to assess and mitigate risk as it relates to other 
foreign banks permitted to access the correspondent account you 
maintain with a foreign bank?
     Does your financial institution have a review and approval 
process involving senior management to evaluate applicable information 
on other foreign banks with access a correspondent account you maintain 
with a foreign bank? On average, how long does the review process take 
and how many approvals are necessary?
     On average, how many non-publicly traded foreign banks 
does your financial institution maintain correspondent accounts for?
     On average, how long does it take your financial 
institution to obtain the identity of owners of a non-publicly traded 
foreign bank and obtain applicable information on the nature and extent 
of the ownership interest?
     Does your financial institution have a review and approval 
process involving senior management to evaluate applicable information 
on a non-publicly traded foreign bank? On average, how long does the 
review process take and how many approvals are necessary?
    (e) Specific questions for comment associated with the due 
diligence and enhanced scrutiny for private banking accounts:
    (1) Due diligence procedures.
     On average, how many private banking accounts does your 
financial institution maintain that requires due diligence?
     Does your financial institution maintain private banking 
accounts for

[[Page 61110]]

which a senior foreign political figure is a nominal or beneficial 
owner?
     On average, how many private banking accounts does your 
financial institution maintain for which a senior foreign political 
figure is a nominal or beneficial owner?
     Does your financial institution have a process to track 
private banking accounts for reasons other than to comply with the BSA 
requirements?
     On average, during the on-boarding process, how long does 
it take your financial institution to conduct the research necessary to 
determine if a private banking account requires enhanced scrutiny 
because a senior foreign political figure is a nominal or beneficial 
owner?
     On average, how long does it take your financial 
institution to conduct the research and/or obtain documents to 
ascertain the identity of all nominal and beneficial owners of a 
private banking account?
     On average, how long does it take your financial 
institution to research, obtain, and document the source of funds 
deposited into a private banking account and the purpose and expected 
use of the account?
     On average, how frequently does your financial institution 
conduct periodic reviews of each private banking account?
     On average, how long does it take your financial 
institution to conduct and document the periodic review of a private 
banking account?
     Does your financial institution have a review and approval 
process involving senior management to evaluate the conclusions reached 
in the periodic review of a private banking account? On average, how 
long does the review process take and how many approvals are necessary?
    (2) Enhanced scrutiny for senior foreign political figures.
     On average, how long does it take your financial 
institution to conduct enhanced scrutiny of a private banking account 
for which a senior foreign political figure is a nominal or beneficial 
owner?
     On average, how often does your financial institution 
conduct enhanced scrutiny of such private banking account?
     Does your financial institution have a review and approval 
process involving senior management to evaluate the conclusions reached 
as a result of conducting enhanced scrutiny on such a private banking 
account? On average, how long does the review process take and how many 
approvals are necessary?
    (f) General request for comments.
    Comments submitted in response to this notice will be summarized 
and/or included in the request for OMB approval. All comments will 
become a matter of public record. Comments are invited on: (i) Whether 
the collection of information is necessary for the proper performance 
of the functions of the agency, including whether the information shall 
have practical utility; (ii) the accuracy of the agency's estimate of 
the burden of the collection of information; (iii) ways to enhance the 
quality, utility, and clarity of the information to be collected; (iv) 
ways to minimize the burden of the collection of information on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and (v) estimates 
of capital or start-up costs and costs of operation, maintenance, and 
purchase of services to provide information.

Michael Mosier,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2020-21441 Filed 9-28-20; 8:45 am]
BILLING CODE 4810-02-P