[Federal Register Volume 89, Number 153 (Thursday, August 8, 2024)]
[Notices]
[Pages 65012-65015]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17605]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network


Agency Information Collection Activities; Proposed Renewal; 
Comment Request; Renewal Without Change of Transactions of Exempt 
Persons Regulations, and FinCEN Form 110, Designation of Exempt Person 
Report

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 existing information collection requirements found 
in Bank Secrecy Act regulations that require a bank to file a FinCEN 
Form 110, Designation of Exempt Person, to designate eligible customers 
as exempt persons, such that a bank is not required to file a report

[[Page 65013]]

with respect to any transaction in currency over $10,000 with such 
customers. In addition to filing this report, the regulations require 
the bank to take steps to ensure that a person meets the requirements 
for an exemption, document the basis for the bank's initial conclusion 
that a person is exempt, annually review the eligibility of certain 
exempt persons, document compliance with the requirements of FinCEN 
Form 110, Designation of Exempt Person, and maintain a monitoring 
system that is reasonably designed to detect, for each account of a 
non-listed business or payroll customer, transactions in currency 
requiring a bank to file a suspicious transaction report. 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 
October 7, 2024.

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-2024-0015 and Office of Management and Budget (OMB) control 
number 1506-0012.
     Mail: Policy Division, Financial Crimes Enforcement 
Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-
2024-0015 and OMB control number 1506-0012.
    Please submit comments by one method only. Comments will be 
reviewed consistent with the Paperwork Reduction Act of 1995 (PRA) and 
applicable OMB regulations and guidance. 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: FinCEN's 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 Foreign 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) \1\ and other legislation, 
including the Anti-Money Laundering Act of 2020 (AML Act).\2\ The BSA 
is codified at 12 U.S.C. 1829b and 1951-1960 and 31 U.S.C. 5311-5314 
and 5316-5336, and notes thereto, with implementing regulations at 31 
CFR chapter X.
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    \1\ USA PATRIOT Act, Public Law 107-56.
    \2\ The AML Act was enacted as Division F, sections 6001-6511, 
of the William M. (Mac) Thornberry National Defense Authorization 
Act for Fiscal Year 2021, Public Law 116-283, 134 Stat. 3388 (NDAA).
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    The BSA authorizes the Secretary of the Treasury (Secretary) to, 
inter alia, require financial institutions to keep records and file 
reports that are determined to have a high degree of usefulness in 
criminal, tax, or regulatory matters, risk assessments or proceedings, 
or in the conduct of intelligence or counter-intelligence activities to 
protect against terrorism, and to implement anti-money laundering/
countering the financing of terrorism (AML/CFT) programs and compliance 
procedures.\3\ The authority of the Secretary to administer the BSA has 
been delegated to the Director of FinCEN.\4\
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    \3\ See 31 U.S.C. 5311; see also 12 U.S.C. 1829b(a).
    \4\ Treasury Order 180-01 (Jan. 14, 2020).
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    Under 31 U.S.C. 5313, the Secretary is authorized to require 
financial institutions to report currency transactions exceeding 
$10,000. Regulations implementing 31 U.S.C. 5313 are found at 31 CFR 
1010.310 through 1010.314, 31 CFR 1021.311, and 31 CFR 1021.313. The 
Money Laundering Suppression Act of 1994 amended the BSA to create 
certain mandatory exemptions applicable to banks from the requirement 
for financial institutions to file currency transaction reports (CTRs), 
and to give the Secretary authority to create additional such 
exemptions.\5\ Regulations implementing this exemption authority, 
including by requiring the collection of information on FinCEN Form 
110, Designation of Exempt Person (``DOEP Report''), are found at 31 
CFR 1020.315.
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    \5\ Public Law 103-325, Title IV, Section 402 (Sep. 23, 1994), 
108 Stat. 2243. These authorities are codified at 31 U.S.C. 5313(d) 
(mandatory exemptions) and (e) (discretionary exemptions).
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    Under 31 CFR 1020.315(a), a bank is not required to file a CTR with 
respect to any transaction in currency between exempt persons and the 
bank, or between an exempt person and other banks that are affiliated 
with the bank.\6\
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    \6\ 31 CFR 1010.315(a). The exemption does not apply when the 
exempt person is acting as agent for another person who is the 
beneficial owner of the funds that are the subject of the 
transaction. 31 CFR 1010.315(f).
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    31 CFR 1020.315(b) sets out that an exempt person is: (1) a bank, 
to the extent of such bank's domestic operations; (2) a department or 
agency of the United States, of any State, or of any political 
subdivision of any State; (3) any entity established under the laws of 
the United States, any State, or any political subdivision of any 
State, or under an interstate compact, that exercises governmental 
authority on behalf of the United States, any such State, or any such 
political subdivision; (4) any entity, other than a bank, whose common 
stock or analogous equity interests are listed on the New York Stock 
Exchange, the American Exchange, or the NASDAQ Stock Market (a ``listed 
entity''), provided that, if the listed entity is a financial 
institution other than a bank, it is an exempt person only to the 
extent of its domestic operations; (5) any subsidiary, other than a 
bank, of a listed entity mentioned in the previous item (4) that is 
organized under the laws of the United States or of any State, provided 
that the listed entity owns at least 51 percent of the equity interest 
of the subsidiary, and subject to the qualification that if the 
subsidiary is a financial institution other than a bank, it is an 
exempt person only to the extent of its domestic operations; (6) any 
other commercial enterprise, with certain exceptions, that maintains a 
transaction account at the bank for at least two months, frequently 
engages in transactions with the bank in currency in excess of $10,000, 
and is incorporated or organized under the laws of, or is registered as 
and eligible to do business within, the United States or a State (a 
``non-listed business''), but only to the extent of the non-listed 
business customer's domestic operations and only with respect to 
transactions conducted through the non-listed business customer's 
exemptible accounts; or (7) any other person, with certain exceptions, 
that maintains a transaction account at the bank for at least two 
months, operates a firm that frequently withdraws more than $10,000 in 
order to pay its U.S. employees in currency, and is incorporated or 
organized under the laws of, or is registered as and eligible to do 
business within, the United States or a State (a ``payroll customer''), 
but solely with respect to withdrawals for payroll purposes from 
existing exemptible accounts.\7\
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    \7\ In certain circumstances, a limited exemption from the two-
month transaction account holding requirement may apply to non-
listed business and payroll customers pursuant to the special rule 
at 31 CFR 1010.315(c)(2)(ii).
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    31 CFR 1020.315(c)(1) requires a bank to designate an exempt person 
by filing

[[Page 65014]]

the DOEP Report \8\ within 30 calendar days after the day of the first 
reportable transaction in currency with the person that the bank seeks 
to exempt from reporting. A bank holding company or one of its bank 
subsidiaries may make such a designation on behalf of any or all of the 
bank holding company's bank subsidiaries by listing those bank 
subsidiaries in the DOEP Report that it files.\9\ However, a bank is 
not required to file a DOEP Report for transfer of currency to or from: 
(1) any of the 12 Federal Reserve Banks; (2) a bank, to the extent of 
such bank's domestic operations; (3) a department or agency of the 
United States, of any State, or of any political subdivision of any 
State; or (4) any entity established under the laws of the United 
States, any State, or any political subdivision of any State, or under 
an interstate compact between two or more States, that exercises 
governmental authority on behalf of the United States or any such State 
or political subdivision.\10\
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    \8\ This is referred to in the regulations as ``FinCEN Form 
110.'' FinCEN has referred to its forms as ``reports'' since moving 
to electronic filing.
    \9\ 31 CFR 1020.315(c)(1) and (e)(6).
    \10\ 31 CFR 1020.315(c)(2)(i)(A) and (B).
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    31 CFR 1020.315(d) requires a bank to review at least once annually 
the continued eligibility of an exempt person that is a (1) listed 
entity, (2) subsidiary of a listed entity, (3) non-listed business 
customer, or (4) payroll customer. As part of the annual review, a bank 
must also review the application to each existing account of a non-
listed business or payroll customer of the monitoring system that 31 
CFR 1020.315(h)(2) requires the bank to maintain (related to suspicious 
activity monitoring).
    Under 31 CFR 1020.315(e), a bank must take steps to assure itself 
that an exempt person meets the definition of that term (see 31 CFR 
1020.315(b), summarized above), document the basis for its conclusion, 
and document its compliance with the terms of the exemption, including 
the operating rules in 31 CFR 1020.315(e)(2)-(9). A bank must also take 
steps to document compliance with its suspicious activity monitoring 
obligations under 31 CFR 1020.315(h)(2). The steps that the bank takes 
under 31 CFR 1020.315(e) must be those that a reasonable and prudent 
bank would take and document to protect itself from fraud or loss based 
on misidentification of a person's status and, in the case of the 
suspicious activity monitoring obligations, to identify suspicious 
transactions.
    31 CFR 1020.315(h)(1) states that the CTR exemption rules do not 
relieve a bank of its obligation to report any suspicious transactions 
pursuant to 31 CFR 1020.320, including any suspicious transactions or 
attempted transactions in currency associated with the accounts of an 
exempt person, or relieve a bank of any other reporting or 
recordkeeping obligation imposed under the authority of the BSA.
    Under 31 CFR 1020.315(h)(2), a bank must establish and maintain a 
monitoring system that is reasonably designed to detect, for each 
account of a non-listed business or payroll customer, transactions in 
currency that would require a bank to file a suspicious activity 
report.

II. Paperwork Reduction Act of 1995 (PRA) \11\
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    \11\ Public Law 104-13, 44 U.S.C. 3506(c)(2)(A).
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    Title: Transactions of exempt person (31 CFR 1020.315), and FinCEN 
Form 110--DOEP Report.
    OMB Control Number: 1506-0012.
    Report Number: FinCEN Form 110--DOEP Report.
    Abstract: FinCEN is issuing this notice to renew the OMB control 
number for the transactions of exempt person regulations and the DOEP 
Report.
    Affected Public: Businesses or other for-profit institutions, and 
non-profit institutions.
    Type of Review: Renewal without change of a currently approved 
information collection.
    Frequency: As required.
    Estimated Number of Respondents: 10,062 banks.\12\
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    \12\ Table 1 below describes the distribution of the types of 
financial institutions covered by this notice.
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    Estimated Number of Responses: 15,105 DOEP Reports.\13\
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    \13\ Based on 2023 filings, FinCEN received 15,105 DOEP Reports.
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    Estimated Recordkeeping Burden:
    In Part 1 of this notice, FinCEN describes the distribution of the 
estimated number of financial institutions, by type, affected by the 
regulatory requirements. In Part 2, FinCEN proposes for review and 
comment a renewal of the calculation of the annual PRA burden that 
includes a scope and methodology similar to that used in the 2021 
notice to renew the OMB control number associated with this information 
collection requirement.\14\
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    \14\ See FinCEN, Agency Information Collections Activities; 
Proposed Renewal; Comment Request: Renewal Without Change of 
Transactions of Exempt Persons Regulations, and FinCEN Report 110, 
Designation of Exempt Persons Reports, 86 FR 6964 (Jan. 25, 2021).
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Part 1. Distribution of the Financial Institutions Covered by This 
Notice

    The distribution of financial institutions, by type, covered by 
this notice is reflected in table 1 below.

 Table 1--Distribution 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 with a Federal functional regulator (FFR) \a\.....           9,462
Banks lacking an FFR \b\................................             600
                                                         ---------------
    Total...............................................          10,062
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\a\ This estimate of the total number of banks with a federal functional
  regulator, including credit unions, is based on end of year 2023 data
  as provided by the FFR: the Board of Governors of the Federal Reserve
  System, the Federal Deposit Insurance Corporation, the Office of the
  Comptroller of the Currency, and the National Credit Union
  Administration.
\b\ This estimate of active entries as of year-end 2023 incorporates
  data from both public and non-public sources, including: Call Reports;
  various State banking/financial institution regulators' websites and
  directories; the Federal Reserve Board of Governors' Master Account
  and Services database (https://federalreserve.gov/paymentsystems/master-account-and services-database-exisiting-access.htm); and data
  from the OCIF (Oficina del Comisionado de Instituciones Financieras);
  and was derived in consultation with staff from the Internal Revenue
  Service's Small Business/Self-Employed Division.

    In connection with a variety of initiatives FinCEN is undertaking 
to implement the AML Act, FinCEN intends to conduct, in the future, 
additional assessments of the PRA burden associated with BSA 
requirements.

Part 2. Annual PRA Burden and Cost

    FinCEN continues to estimate the annual hourly burden of the 
designation of exempt persons as one hour per report. This estimate 
covers the burden of: (1) reporting, which is estimated to require an 
average of 45 minutes to fill out and file the report; and (2) 
recordkeeping and maintenance, which is estimated to require an average 
of 15 minutes per report. FinCEN believes that the information required 
to be included on the DOEP Report is basic information that banks need 
to maintain to conduct business. The BSA E-filing

[[Page 65015]]

system prompts banks to save the report after submission.
    FinCEN's estimate of the annual PRA burden, which is based on 
reporting activity in the previous calendar year, therefore, is 15,105 
hours, as detailed in table 2 below:

                       Table 2--Estimated Total Annual Burden Hours Associated With Completion and Maintenance of the Doep Reports
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                                           Number of                 Time per report in minutes                Total burden hours per step
                                         DOEP reports ------------------------------------------------------------------------------------- Total burden
     Type of financial institution         filed in                                                                                             hours
                                             2023               Reporting                 Recordkeeping          Reporting   Recordkeeping
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Banks..................................       15,105   45 minutes................  15 minutes................       11,329          3,776    15,105 \a\
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\a\ FinCEN estimates that the burden to complete and file the DOEP Report for banks was one hour (45 minutes for completion of the report and 15 minutes
  for recordkeeping). 15,105 DOEP Reports multiplied by 45 minutes and converted to hours equals 11,329 hours. 15,105 DOEP Reports multiplied by 15
  minutes and converted to hours equals 3,776 hours. The summation of 11,329 hours and 3,776 hours is 15,105 hours.

    FinCEN is utilizing the same fully loaded composite hourly wage 
rate of $106.30 utilized in the 2024 notices of proposed rulemaking 
(NPRMs) entitled Customer Identification Programs for Registered 
Investment Advisers and Exempt Reporting Companies and Anti-Money 
Laundering and Countering the Financing of Terrorism Programs, as well 
as in recent 60-Day Notices to renew OMB control numbers corresponding 
to specific BSA regulations.\15\
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    \15\ See, e.g., FinCEN and SEC, NPRM Customer Identification 
Programs for Registered Investment Advisers and Exempt Reporting 
Advisers, 89 FR 44571 (May 21, 2024); FinCEN, NPRM Anti-Money 
Laundering and Countering the Financing of Terrorism Programs NPRM, 
89 FR 55428 (Jul. 3, 2024); FinCEN, Agency Information Collection 
Activities; Proposed Renewal; Comment Request; Renewal Without 
Change of the Customer Identification Program Regulatory 
Requirements for Certain Financial Institutions, 89 FR 51940 (Jun. 
20, 2024); and FinCEN, Agency Information Collection Activities; 
Proposed Renewal; Comment Request; Renewal Without Change of Due 
Diligence Programs for Correspondent Accounts for Foreign Financial 
Institutions and for Private Banking Accounts, 89 FR 49273, (Jun. 
11, 2024).
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    The total estimated cost of the annual PRA burden is $2,421,331.50, 
as reflected in table 3 below:

                               Table 3--Estimated Total Cost of Annual PRA Burden
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                                                                     Burden hours
                               Steps                                   per step      Wage rate      Total cost
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Report completion.................................................          11,329      $106.30    $1,816,038.70
Maintenance/recordkeeping.........................................           3,776       106.30       605,292.80
                                                                   ---------------------------------------------
    Total cost....................................................  ..............  ...........     2,421,331.50
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    Estimated Number of Respondents: 10,062 banks, as set out in table 
1.
    Estimated Total Annual Responses: 15,105 DOEP Reports.\16\
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    \16\ See supra note 15.
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    Estimated Total Annual Reporting and Recordkeeping Burden: The 
estimated total annual reporting and recordkeeping burden is 
approximately 15,105 hours, which is comprised of the total annual 
reporting and total annual recordkeeping burdens described below.
    Estimated Total Annual Reporting Burden: The estimated total annual 
reporting burden is approximately 11,329 hours, as set out in table 2.
    Estimated Total Annual Recordkeeping Burden: The estimated total 
annual recordkeeping burden is approximately 3,776 hours, as set out in 
table 2.
    Estimated Total Annual Reporting and Recordkeeping Cost: The 
estimated total annual PRA cost is approximately $2,421,331.50, as set 
out in table 3.
    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.
    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: (1) 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; (2) the accuracy of the 
agency's estimate of the burden of the collection of information; (3) 
ways to enhance the quality, utility, and clarity of the information to 
be collected; (4) 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 (5) 
estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.

Andrea M. Gacki,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2024-17605 Filed 8-7-24; 8:45 am]
BILLING CODE 4810-02-P