7 November 2008
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[Federal Register: November 7, 2008 (Volume 73, Number 217)][Proposed Rules] [Page 66413-66486] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr07no08-22] [[Page 66413]] ----------------------------------------------------------------------- Part III Department of the Treasury 31 CFR Part 103 Financial Crimes Enforcement Network 31 CFR Chapter X ----------------------------------------------------------------------- Transfer and Reorganization of Bank Secrecy Act Regulations; Proposed Rule [[Page 66414]] ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY 31 CFR Part 103 Financial Crimes Enforcement Network 31 CFR Chapter X RIN 1506-0092 Transfer and Reorganization of Bank Secrecy Act Regulations AGENCY: Financial Crimes Enforcement Network (FinCEN), Department of the Treasury. ACTION: Notice of proposed rulemaking and request for comments. ----------------------------------------------------------------------- SUMMARY: FinCEN proposes to move Bank Secrecy Act (BSA) regulations to a new chapter in the Code of Federal Regulations (CFR). The new chapter would contain the BSA regulations, which would generally be reorganized by financial industry. Moving the BSA regulations to a new chapter and organizing the chapter by financial industry would create a user- friendly way to find regulations applicable to a particular financial industry. This new organization within the new chapter also allows for the renumbering of the BSA regulations in a manner that would make it easier to find regulatory requirements than under the numbering system currently used in the existing regulations. FinCEN also proposes to make minor technical changes to the BSA regulations such as updating mailing addresses and points of contact. DATES: Written comments must be submitted on or before March 9, 2009. ADDRESSES: Those submitting comments are encouraged to do so via the Internet. Comments submitted via the Internet may be submitted at http://www.regulations.gov/search/index.jsp with the caption in the body of the text, ``Attention: Chapter X.'' Comments may also be submitted by written mail to: Financial Crimes Enforcement Network, Department of the Treasury, P.O. Box 39, Vienna, VA 22183, Attention: Chapter X. Please submit comments by one method only. All comments submitted in response to this notice of proposed rulemaking will become a matter of public record; therefore, you should submit only information that you wish to make publicly available. Inspection of comments: Comments may be inspected between 10 a.m. and 4 p.m. in the FinCEN reading room in Vienna, VA. Persons wishing to inspect the comments submitted must request an appointment with the Disclosure Officer by telephoning (703) 905-5034 (not a toll free call). In general, FinCEN will make all comments publicly available by posting them on http://www.regulations.gov. FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Helpline at (800) 949-2732 (toll-free number). SUPPLEMENTARY INFORMATION: I. Introduction As part of its effort to increase the efficiency and effectiveness of BSA obligations, FinCEN proposes to move, without substantive change, the regulations promulgated under the BSA and the USA PATRIOT Act to a new chapter within the Code of Federal Regulations. Moving the regulations to a new chapter within Title 31 provides FinCEN with the opportunity to restructure its regulations to make them more easily identifiable by a particular regulated industry. Making the regulatory obligations more clear in their structure and more readily accessible to regulatory institutions will facilitate compliance and thereby advance the purposes of the BSA. II. Background In September 2005, the eRulemaking program launched the Federal Docket Management System (FDMS), greatly expanding public access to information and improving agency management of the rulemaking process. FDMS, publicly accessible at http://www.regulations.gov, serves as an electronic document repository, enabling departments and agencies to post all rulemaking and non-rulemaking documents for public access and comment. This access is revolutionizing the way the government involves the public in its decision-making by moving from paper-based processes to new e-government innovations, which will lead to more efficient interactions between government and the public. Currently, FinCEN is included in FDMS as a departmental office of Treasury and FinCEN's rulemaking is included with all other departmental offices, not separately. By having its own chapter, FinCEN will be listed separately in FDMS. This separate FDMS listing will make it easier for the public to locate and comment on future FinCEN rulemaking documents. Moving the regulations to a new chapter also provides the opportunity for FinCEN to organize the existing rules in a way that will add value to financial institutions, regulators, and law enforcement entities that deal with these rules by making them easier to find. FinCEN has not proposed any substantive amendments or revisions to the Part 103 regulations. The information collection, reporting, and recordkeeping requirements will remain the same for all regulated entities.\1\ However, in addition to adding a new chapter and restructuring the organization of its regulations, FinCEN proposes to make necessary technical corrections, such as updating references, mailing addresses, and points of contact. --------------------------------------------------------------------------- \1\ To the extent that the renumbering of regulations will require making changes to regulations referenced on various FinCEN information collection forms, it will not change the information fields in such forms and the manner in which the forms are completed will not be altered. --------------------------------------------------------------------------- FinCEN has not published any of the Appendices in 31 CFR part 103 with this proposal. As explained in greater detail below, FinCEN proposes to publish the Appendices that will be part of Chapter X in a subsequent notice of proposed rulemaking. III. Proposed Changes A. Structure of Chapter X FinCEN proposes to organize Chapter X by financial industry so as to create a user-friendly way to find regulations which apply to a particular industry. This methodology and format is currently used by several state jurisdictions. In this new structure, definitions and regulatory obligations applicable to all or a number of regulated persons and financial institutions will be located in a Part titled ``General Provisions.'' Regulatory obligations applicable to a particular industry will be located in an industry-specific Part. If a regulatory obligation in the General Provisions Part is applicable to a particular industry, there will be a statement in the industry-specific Part referring the industry to the obligation contained in the General Provisions Part. FinCEN is proposing this structure so that individuals interested in finding the rules applicable to a particular category of financial institution need only to look in two places. The proposed Parts are as follows: 1010 General Provisions 1020 Rules for Banks 1021 Rules for Casinos and Card Clubs 1022 Rules for Money Services Businesses 1023 Rules for Brokers or Dealers in Securities 1024 Rules for Mutual Funds 1025 Rules for Insurance Companies 1026 Rules for Futures Commission Merchants and Introducing Brokers in Commodities 1027 Rules for Dealers in Precious Metals, Precious Stones, or Jewels 1028 Rules for Operators of Credit Card Systems 1029-1099 [RESERVED] [[Page 66415]] Additionally, FinCEN will use Chapter X to reorganize provisions currently divided into several layers of subparagraphs throughout a particular Part 103 subpart in a manner that will be simpler to follow. For example, FinCEN is proposing to divide the regulations relating to currency transaction reporting (CTR) regulations into separately numbered sections. Interested parties will be able to identify specific CTR requirements, including those relating to filing reports, identification, aggregation, and structured transactions, more readily as they have been grouped together, rather than throughout the subpart or in several subparagraphs within a section. Current CTR requirements for financial institutions other than casinos and card clubs will be located in the General Provisions Part because those regulations apply to several industries. CTR requirements for casinos and card clubs that use different language due to the unique nature of the industry will be located within Part 1021 only. FinCEN is taking a tiered approach to removing the BSA regulations from 31 CFR part 103 and adding them in 31 CFR Chapter X. As part of this tiered approach, FinCEN intends to publish a subsequent notice of proposed rulemaking with any revisions or deletions necessary to move the Appendices contained in 31 CFR part 103 to 31 CFR Chapter X. Because the current notice is focusing on the restructuring effort, within this notice, FinCEN has proposed the new location of each 31 CFR part 103 Appendix in the Distribution Table below as well as in the table of contents contained in the proposed rulemaking. In the subsequent notice of proposed rulemaking, FinCEN will publish those Appendices that should be moved to 31 CFR Chapter X. B. Renumbering Logic FinCEN's proposed renumbering logic is designed to provide consistency and ease of access. By maintaining a consistent numbering and division of sections within subparts, regulatory requirements will be easier to find. For example, each regulatory section in each subpart A refers to definitions; each regulatory section in each Subpart B is numbered 10xx.2xx and refers to a program requirement; each regulatory section in each Subpart C is numbered 10xx.3xx and refers to a reporting requirement; and each regulatory section in each Subpart D is numbered 10xx.4xx and refers to a recordkeeping requirement. Therefore, if a regulation is numbered 10xx.3xx, such as 1010.310, it will be immediately recognizable as a reporting requirement. If the regulation is numbered 10xx.4xx, such as 1010.410, it will likewise be recognizable as a recordkeeping requirement. This renumbering, in conjunction with the restructuring, will eliminate confusion existing in the current structure. For instance, currently, Sec. 103.29, pertaining to ``purchases of bank checks and drafts, cashier's checks, money orders and traveler's checks,'' is in Subpart B--Reports Required To Be Made; this specific regulation, however, is a recordkeeping requirement. In the proposed Chapter X, that regulatory obligation will be included in the subpart for recordkeeping requirements. FinCEN is reordering and renumbering the requirement to make this provision, and others, clearly identifiable and retrievable based on a logical format that will require less memorization. This renumbering logic will also allow financial institutions to search for a section in their relevant Part to determine quickly if there is in fact a current regulatory requirement. For example, each section that ends with .320 will always pertain to suspicious activity reporting (SAR) requirements. As specific examples, 1021.320 will be the SAR requirement for casinos and card clubs and 1023.320 will be the SAR requirement for broker or dealers in securities. If a financial institution, such as a dealer in precious metals, precious stones, or jewels views Part 1027, the institution will see that 1027.320 is ``Reserved.'' While dealers in precious metals, precious stones, or jewels are encouraged to file SARs, they are currently not required to do so. C. Definitions General BSA definitions will be found in Sec. 1010.100, with further definitions in Sec. Sec. 1010.505 and 1010.605, which are applicable to subparts E and F, respectively, of Part 1010. As indicated above, definitions specific to a particular financial industry will always be found in subpart A of that financial industry Part in a section ending with .100 (e.g., Sec. 1024.100 of Part 1024 and Sec. 1026.100 of Part 1026). Certain definitions that are not currently located in Sec. 103.11, but which FinCEN intends to apply to the entire Chapter, unless otherwise indicated, have been moved into the General Definition Sec. 1010.100. Additionally, definitions have been reordered in Sec. 1010.100 to be consistent with the alphabetical system. These include the definitions for ``Attorney General,'' ``business day,'' ``commodity,'' ``contract of sale,'' ``Federal Functional Regulator,'' ``FinCEN,'' ``futures commission merchant,'' ``Indian Gaming Regulatory Act,'' ``intermediary bank,'' ``introducing broker-commodities,'' ``mutual fund,'' ``security,'' ``self-regulatory organization,'' ``state,'' ``stored value,'' ``taxpayer identification number,'' ``territories and insular provinces,'' ``transaction account,'' ``United States Postal Service,'' and ``U.S. person.'' General Definitions will apply to all FinCEN regulations, unless otherwise noted. FinCEN proposes a definition for Bank Secrecy Act (BSA). Currently, the acronym ``BSA'' and the term ``Bank Secrecy Act'' is used throughout Part 103, but has not been defined. FinCEN has proposed a definition of Bank Secrecy Act so that it can be used consistently throughout the Chapter. The definition of ``mutual fund'' has been moved from the substantive text of the regulations to the General Definitions section, as well as sections where the term is specified according to regulatory requirements. Where applicable, such as Special Measures requirements or Customer Identification Program requirements for mutual funds, the definitions of mutual fund have been reprinted as it was in those sections in current 31 CFR 103 and relocated as per the proposed Chapter X renumbering logic. D. Technical Corrections The following technical corrections to FinCEN regulations are being proposed: 1. FinCEN has updated references to its Web site by including ``http://www.fincen.gov'' where current references cite to ``http:// www.treas.gov/fincen.'' 2. The FinCEN mailing address has been changed to: P.O. Box 39, Vienna, Virginia, 22183. 3. When used to refer to Part 103, the word ``part'' or the phrase ``Part 103'' has been changed to ``chapter.'' 4. The ``Office of Enforcement'' has been changed to ``FinCEN.'' 5. ``Assistant Secretary (Enforcement)'' and ``Director, Office of Financial Enforcement'' have been updated to ``Director, FinCEN.'' 6. ``The Office of the Assistant Secretary (Enforcement)'' has been changed to ``Director of FinCEN or his designee.'' 7. ``Customs'' has been changed to ``Customs and Border Protection.'' 8. FinCEN has replaced ``Commission'' with ``Commodity Futures Trading Commission'' when the term is used to refer to the Commodity Futures Trading Commission. The term ``Commission'' is now only used to refer to the Securities and Exchange Commission. [[Page 66416]] 9. The definition of FinCEN has been updated to reflect that FinCEN is now a bureau rather than an office within the Treasury Department (i.e. proposed Sec. 1010.100(s) versus the prior version Sec. 103.11(qq)). 10. The name of the SAR form that brokers or dealers in securities and futures commission merchants and introducing brokers in commodities use to report suspicious transactions has been updated to reflect the correct name of the form. 11. The references to Treasury Form TD F 90-22.53 have been changed to FinCEN Form 110. 12. The reference to the New York Stock Exchange and the National Association of Securities Dealers has been changed to the Financial Industry Regulatory Authority. 13. Cross references to Sec. 103.21 contained in Sec. 103.22(d)(9) were not updated when the bank SAR rules were moved from Sec. 103.21 to Sec. 103.18. In Chapter X, the references have been fixed so that they refer to the bank SAR rules (proposed Sec. 1020.320) rather than to the casino SAR rules (proposed Sec. 1021.320). 14. Sections 103.27(a)(1) and 103.55(c)(1) incorrectly indicate that the transactions in currency reporting requirements are contained in Sec. 103.22(a). Prior to 1998, the reporting obligations were contained in Sec. 103.22(a), but per the Amendments to the Bank Secrecy Act Regulations--Exemptions from the Requirement to Report Transactions in Currency--Phase II, 63 FR 50147 (1998), the filing obligations were moved to Sec. 103.22(b)(1) for financial institutions other than casinos and Sec. 103.22(b)(2) for casinos. The cross references to Sec. 103.22(a) in Sec. 103.27(a)(1) (proposed Sec. 1010.306(a)(1)) and Sec. 103.55(c)(1) (proposed Sec. 1010.970(c)(1)) have been corrected to include those Chapter X sections that contain transactions in currency transaction reporting obligations. 15. All references to ``subpart'' in Sec. 103.38(a)-(d) were changed to ``chapter'' in proposed Sec. 1010.430(a)-(d). 16. The reference to ``subpart'' in Sec. 103.39 was changed to ``chapter'' in proposed Sec. 1010.440. 17. The word ``Act'' from Sec. 103.62 was changed to the ``Bank Secrecy Act'' in proposed Sec. 1010.930. 18. The words ``Treasury Department'' in Sec. 103.85 (proposed Sec. 1010.715) have been changed to ``FinCEN,'' so that now the provision states that FinCEN will only be bound by a ruling if the request describes a specifically identified actual situation. 19. The cross reference contained in Sec. 103.140(a)(4)(ii) to ``paragraph (a)(3)(i) of this section'' is incorrect because there is no (a)(3)(i) in that section. Because this should have been a reference to (a)(4)(i), the cross-reference should be to proposed Sec. 1027.100(d)(1) in Chapter X. 20. Former Sec. 103.170(c), currently proposed as Sec. 1010.205(c), has been corrected by revising the beginning of the first sentence to read as follows: ``The exemptions described in paragraph (b) of this section * * *''. In Part 103, there was a reference to the exemptions contained in ``paragraphs (a)(2) and (b)'' of Sec. 103.170. Paragraph (a)(2) was removed and reserved through Corrections published in the Federal Register (see 67 FR 68935 (Nov. 14, 2002)). Paragraph (b) is the only paragraph within this section that contains exemptions (see 67 FR at 67549 (Nov. 6, 2002)). 21. Paragraph (a)(2) of 31 CFR 103.27, which provided that ``A report required by Sec. 103.22(g) shall be filed by the bank within 15 days after receiving a request for the report,'' is superfluous and has been deleted. Paragraph (g) of 31 CFR 103.22 was previously removed in 63 FR 50147. IV. Part-by-Part Analysis Part 1010 of Chapter X contains the general regulatory provisions of the Bank Secrecy Act and USA PATRIOT Act. General definitions are in Subpart A (Sec. 1010.100); programs are in Subpart B (Sec. Sec. 1010.205-1010.220); reports required to be made by financial institutions are in Subpart C (Sec. Sec. 1010.301-1010.370); records required to be maintained by financial institutions are in Subpart D (Sec. Sec. 1010.401-1010.440); special information sharing procedures to deter money laundering and terrorist activity are in Subpart E (Sec. Sec. 1010.505-1010.540); special standards of diligence; prohibitions; and special measures are in Subpart F (Sec. Sec. 1010.605-1010.670); administrative rulings are in Subpart G (Sec. Sec. 1010.710-1010.717); enforcement; penalties; and forfeiture provisions are in Subpart H (Sec. Sec. 1010.810-1010.850); summons provisions are in Subpart I (Sec. Sec. 1010.911-1010.917); miscellaneous provisions are in Subpart J (Sec. Sec. 1010.920-1010.980). Part 1020 of Chapter X contains regulatory provisions for banks. Definitions applicable to banks are in Subpart A (Sec. 1020.100); programs are in Subpart B (Sec. Sec. 1020.210-1020.220); reports required to be made by banks are in Subpart C (Sec. Sec. 1020.310- 1020.320); records required to be maintained by banks are in Subpart D (Sec. 1020.410); special information sharing procedures to deter money laundering and terrorist activity for banks are in Subpart E, and special standards of diligence; prohibitions; and special measures for banks are in Subpart F. Part 1021 of Chapter X contains regulatory provisions for casinos and card clubs. Definitions for casinos and card clubs are in Subpart A (Sec. 1021.100); programs are in Subpart B (Sec. 1021.210); reports required to be made by casinos are in Subpart C (Sec. Sec. 1021.310- 1021.320); records required to be maintained by casinos are in Subpart D (Sec. 1021.410); special information sharing procedures to deter money laundering and terrorist activity for casinos are in Subpart E; and special standards of diligence; prohibitions; and special measures for casinos are in Subpart F. Part 1022 of Chapter X contains regulatory provisions for money services businesses. Definitions for money services business are in Subpart A (Sec. 1022.100); programs are in Subpart B (Sec. 1022.210); reports required to be made by money services businesses are in Subpart C (Sec. Sec. 1022.310-1022.320); records required to be maintained by money services businesses are in Subpart D (Sec. 1022.410); special information sharing procedures to deter money laundering and terrorist activity for money services businesses are in Subpart E; and special standards of diligence; prohibitions; and special measures for money services businesses are in Subpart F. Part 1023 of Chapter X contains regulatory provisions for brokers or dealers in securities. Definitions for brokers or dealers in securities are in Subpart A (Sec. 1023.100); programs are in Subpart B (Sec. Sec. 1023.210-1023.220); reports required to be made by brokers or dealers in securities are in Subpart C (Sec. Sec. 1023.310- 1023.320); records required to be maintained by brokers or dealers in securities are in Subpart D (Sec. 1023.410); special information sharing procedures to deter money laundering and terrorist activity for brokers or dealers in securities are in Subpart E; and special standards of diligence; prohibitions; and special measures for money services businesses are in Subpart F. Part 1024 of Chapter X contains regulatory provisions for mutual funds. Definitions for mutual funds are in Subpart A (Sec. 1024.100); programs are in Subpart B (Sec. Sec. 1024.210-1024.220); reports required to be made by mutual funds are in Subpart C (Sec. Sec. 1024.310-1024.330); records required to be maintained by mutual funds are in [[Page 66417]] Subpart D (Sec. 1024.410); special information sharing procedures to deter money laundering and terrorist activity for mutual funds are in Subpart E; and special standards of diligence; prohibitions; and special measures for mutual funds are in Subpart F. Part 1025 of Chapter X contains regulatory provisions for insurance companies. Definitions for insurance companies are in Subpart A (Sec. 1025.100); programs are in Subpart B (Sec. 1025.210); reports required to be made by insurance companies are in Subpart C (Sec. Sec. 1025.310-1025.330); records required to be maintained by insurance companies are in Subpart D (Sec. 1025.410); special information sharing procedures to deter money laundering and terrorist activity for insurance companies are in Subpart E; and special standards of diligence; prohibitions; and special measures for insurance companies are in Subpart F. Part 1026 of Chapter X contains regulatory provisions for futures commission merchants and introducing brokers in commodities. Definitions for futures commission merchants and introducing brokers in commodities are in Subpart A (Sec. 1026.100); programs are in Subpart B (Sec. Sec. 1026.210-1026.220); reports required to be made by futures commission merchants and introducing brokers in commodities are in Subpart C (Sec. Sec. 1026.310-1026.330); records required to be maintained by futures commission merchants and introducing brokers in commodities are in Subpart D (Sec. 1026.410); special information sharing procedures to deter money laundering and terrorist activity for futures commission merchants and introducing brokers in commodities are in Subpart E; and special standards of diligence; prohibitions; and special measures for futures commission merchants and introducing brokers in commodities are in Subpart F. Part 1027 of Chapter X contains regulatory provisions for dealers in precious metals, precious stones, or jewels. Definitions for dealers in precious metals, precious stones, or jewels are in Subpart A (Sec. 1027.100); programs are in Subpart B (Sec. 1027.210); reports required to be made by dealers in precious metals, precious stones, or jewels are in Subpart C (Sec. Sec. 1027.310-1027.330); records required to be maintained by dealers in precious metals, precious stones, or jewels are in Subpart D (Sec. 1027.410); special information sharing procedures to deter money laundering and terrorist activity for dealers in precious metals, precious stones, or jewels are in Subpart E; and special standards of diligence; prohibitions; and special measures for dealers in precious metals, precious stones, or jewels are in Subpart F. Part 1028 of Chapter X contains regulatory provisions for operators of credit card systems. Definitions for operators of credit card systems are in Subpart A (Sec. 1028.100); programs are in Subpart B (Sec. 1028.210); reports required to be made by operators of credit card systems are in Subpart C (Sec. Sec. 1028.310-1028.330); records required to be maintained by operators of credit card systems are in Subpart D (Sec. 1028.410); special information sharing procedures to deter money laundering and terrorist activity for operators of credit card systems are in Subpart E; and special standards of diligence; prohibitions; and special measures for operators of credit card systems are in Subpart F. At this time, Parts 1029-1099 of Chapter X are reserved and the Appendices to Chapter X will remain the same as those currently contained in title 31 CFR Part 103 until further notice. For convenience, FinCEN is providing a table summarizing the redistribution of the 31 CFR Part 103 provisions to the proposed layout of Chapter X as follows: Distribution Table ------------------------------------------------------------------------ 31 CFR parts 1000-1099 31 CFR part 103 section (Chapter X) section ------------------------------------------------------------------------ 103.11.................................... 1010.100. 103.12.................................... 1010.301. 103.15(a)-(g)............................. 1024.320(a)-(g). 103.16(a)................................. Deleted. 103.16(b)-(i)............................. 1025.320(a)-(h). 103.17(a)-(h)............................. 1026.320(a)-(h). 103.18(a)-(f)............................. 1020.320(a)-(f). 103.19(a)-(h)............................. 1023.320(a)-(h). 103.20(a)-(f)............................. 1022.320(a)-(f). 103.21(a)-(g)............................. 1021.320(a)-(g). 103.22(a)................................. Deleted. 103.22(b)(1).............................. 1010.311. 103.22(b)(2)(i)-(iii)..................... 1021.311(a)-(c). 103.22(c)(1) & (2)........................ 1010.313(a) & (b). 103.22(c)(3).............................. 1021.313. 103.22(d)................................. 1020.315(a)-(k). 103.23(a)-(d)............................. 1010.340(a)-(d). 103.24.................................... 1010.350. 103.25(a)-(e)............................. 1010.360(a)-(e). 103.26(a)-(d)............................. 1010.370(a)-(d). 103.27(a)(1).............................. 1010.306(a)(1). 103.27(a)(2).............................. Deleted. 103.27(a)(3) & (4)........................ 1010.306(a)(2) & (3). 103.27(b)-(e)............................. 1010.306(b)-(e). 103.28.................................... 1010.312. 103.29(a)-(c)............................. 1010.415(a)-(c). 103.30(a)-(c)............................. 1010.330(a)-(c). 103.30(d)(1)(i)-(iv)...................... 1021.330(a)-(d). 103.30(d)(2).............................. 1010.330(d)(2). 103.30(d)(3).............................. 1010.330(d)(1). 103.30(e)................................. 1010.330(e). 103.31.................................... 1010.401. 103.32.................................... 1010.420. 103.33(a)-(d)............................. 1010.410(a)-(d). 103.33(e)................................. 1020.410(a). 103.33(f) & (g)........................... 1010.410(e) & (f). 103.34(a) & (b)........................... 1020.410(b) & (c). 103.35(a) & (b)........................... 1023.410(a) & (b). 103.36(a)-(c)............................. 1021.410(a)-(c). 103.37(a)-(c)............................. 1022.410(a)-(c). 103.38(a)-(d)............................. 1010.430(a)-(d). 103.39.................................... 1010.440. 103.41(a)-(f)............................. 1022.380(a)-(f). 103.51.................................... 1010.980. 103.52(a) & (b)........................... 1010.940(a) & (b). 103.53(a)-(f)............................. 1010.950(a)-(f). 103.54.................................... 1010.960. 103.55(a)-(c)............................. 1010.970(a)-(c). 103.56(a)-(g)............................. 1010.810(a)-(g). 103.57(a)-(h)............................. 1010.820(a)-(h). 103.58.................................... 1010.830. 103.59(a)-(d)............................. 1010.840(a)-(d). 103.60(a)-(c)............................. 1010.850(a)-(c). 103.61.................................... 1010.920. 103.62(a)-(c)............................. 1010.930(a)-(c). 103.63(a)-(c)............................. 1010.314(a)-(c). 103.64(a)................................. 1021.210(b). 103.64(b)(1).............................. 1021.100(a). 103.64(b)(2).............................. 1021.100(b). 103.64(b)(3).............................. 1021.100(c). 103.64(b)(4).............................. 1021.100(d). 103.64(b)(5).............................. 1021.100(e). 103.71.................................... 1010.911. 103.72(a)-(c)............................. 1010.912(a)-(c). 103.73(a) & (b)........................... 1010.913(a) & (b). 103.74(a)-(c)............................. 1010.914(a)-(c). 103.75(a)-(c)............................. 1010.915(a)-(c). 103.76.................................... 1010.916. 103.77.................................... 1010.917. 103.80.................................... 1010.710. 103.81(a)-(e)............................. 1010.711(a)-(e). 103.82.................................... 1010.712. 103.83(a) & (b)........................... 1010.713(a) & (b). 103.84.................................... 1010.714. 103.85.................................... 1010.715. 103.86(a)-(d)............................. 1010.716(a)-(d). 103.87(a) & (b)........................... 1010.717(a) & (b). 103.90(a)................................. 1010.505(b). 103.90(b)................................. 1010.505(c). 103.90(c)................................. 1010.505(a). 103.90(d)................................. 1010.505(d). 103.100(a)(1) & (a)(3).................... Deleted. 103.100(a)(2)............................. 1010.520(a)(1). 103.100(b)................................ 1010.520(b). 103.110(a)(1)............................. Deleted. 103.110(a)(2) & (3)....................... 1010.540(a)(1) & (2). 103.110(b)-(d)............................ 1010.540(b)-(d). 103.120(a)(1)............................. 1020.100(d)(1). 1023.100(e)(1). 103.120(a)(2)............................. 1010.100(r). 103.120(a)(3)............................. 1010.100(tt). 103.120(a)(4)............................. Deleted. 103.120(b)................................ 1020.210. 103.120(c)(1) & (2)....................... 1023.210(a) & (b). 1026.210(b)(1) & (2). 103.120(d)................................ 1021.210(a). 103.121(a)(1)............................. 1020.100(a). 103.121(a)(2)............................. 1020.100(b). 103.121(a)(3)............................. 1020.100(c). 103.121(a)(4)............................. Deleted. 103.121(a)(5)............................. 1020.100(d)(2). 103.121(a)(6)............................. 1010.100(yy). 103.121(a)(7)............................. 1010.100(iii). 103.121(a)(8)............................. 1010.100(iii). 103.121(b)-(d)............................ 1020.220(a)-(c). 103.122(a)(1)............................. 1023.100(a). [[Page 66418]] 103.122(a)(2)............................. 1023.100(b). 103.122(a)(3)............................. 1023.100(c). 103.122(a)(4)............................. 1023.100(d). 103.122(a)(5)............................. Deleted. 103.122(a)(6)............................. 1023.100(e). 103.122(a)(7)............................. Deleted. 103.122(a)(8)............................. Deleted. 103.122(a)(9)............................. Deleted. 103.122(b)-(d)............................ 1023.220(a)-(c). 103.123(a)(1)............................. 1026.100(a). 103.123(a)(2)............................. Deleted. 103.123(a)(3)............................. 1026.100(b). 103.123(a)(4)............................. 1026.100(c). 103.123(a)(5)............................. 1026.100(d). 103.123(a)(6)............................. Deleted. 103.123(a)(7)............................. 1026.100(e). 103.123(a)(8)............................. 1026.100(f). 103.123(a)(9)............................. 1026.100(g). 103.123(a)(10)............................ 1026.100(h). 103.123(a)(11)............................ Deleted. 103.123(a)(12)............................ Deleted. 103.123(a)(13)............................ Deleted. 103.123(b)-(d)............................ 1026.220(a)-(c). 103.125(a)-(e)............................ 1022.210(a)-(e). 103.130(a)................................ 1024.100(e)(1). 103.130(b) & (c).......................... 1024.210(a) & (b). 103.131(a)(1)............................. 1024.100(a). 103.131(a)(2)............................. 1024.100(c). 103.131(a)(3)............................. 1010.100(r). 103.131(a)(4)............................. 1024.100(d). 103.131(a)(5)............................. 1024.100(e)(2). 103.131(a)(6)............................. 1010.100(iii). 103.131(a)(7)............................. 1010.100(yy). 103.131(a)(8)............................. 1010.100(iii). 103.131(b)-(d)............................ 1024.220(a)-(c). 103.135(a)(1)............................. 1028.100(e). 103.135(a)(2)............................. 1028.100(d). 103.135(a)(3)............................. 1028.100(a). 103.135(a)(4)............................. 1028.100(f). 103.135(a)(5)............................. 1028.100(b). 103.135(a)(6)............................. 1028.100(c). 103.135(b) & (c).......................... 1028.210(a) & (b). 103.137(a)(1)............................. 1025.100(a). 103.137(a)(2)............................. Deleted. 103.137(a)(3)............................. Deleted. 103.137(a)(4)............................. 1025.100(b). 103.137(a)(5)............................. 1025.100(c). 103.137(a)(6)............................. 1025.100(d). 103.137(a)(7)............................. 1025.100(e). 103.137(a)(8)............................. 1025.100(f). 103.137(a)(9)............................. 1025.100(g). 103.137(a)(10)............................ 1025.100(h). 103.137(a)(11)............................ Deleted. 103.137(a)(12)............................ Deleted. 103.137(b)-(e)............................ 1025.210(a)-(d). 103.140(a)(1)............................. 1027.100(a). 103.140(a)(2)............................. 1027.100(b). 103.140(a)(3)............................. 1027.100(c). 103.140(a)(4)............................. 1027.100(d). 103.140(a)(5)............................. 1027.100(e). 103.140(a)(6)............................. Deleted. 103.140(a)(7)............................. 1027.100(f). 103.140(b)-(d)............................ 1027.210(a)-(c). 103.170(a)-(d)............................ 1010.205(a)-(d). 103.175(a)................................ 1010.100(c). 103.175(b)................................ 1010.605(a). 103.175(c)................................ 1010.605(b). 103.175(d)................................ 1010.605(c). 103.175(e)................................ 1010.605(d). 103.175(f)................................ 1010.605(e). 103.175(g)................................ Deleted. 103.175(h)................................ 1010.605(f). 103.175(i)................................ 1010.605(g). 103.175(j)................................ 1010.605(h). 103.175(k)................................ 1010.605(i). 103.175(l)................................ 1010.605(j). 103.175(m)................................ 1010.605(k). 103.175(n)................................ 1010.605(l). 103.175(o)................................ 1010.605(m). 103.175(p)................................ 1010.605(n). 103.175(q)................................ 1010.605(o). 103.175(r)................................ 1010.605(p). 103.175(s)................................ Deleted. 103.175(t)................................ Deleted. 103.176(a)-(g)............................ 1010.610(a)-(g). 103.177(a)-(f)............................ 1010.630(a)-(f). 103.178(a)-(e)............................ 1010.620(a)-(e). 103.185(a)-(f)............................ 1010.670(a)-(f). 103.186(a)(1)............................. 1010.651(a)(2). 103.186(a)(2)............................. 1010.651(a)(3). 103.186(a)(3)............................. 1010.651(a)(1). 103.186(b)................................ 1010.651(b). 103.187(a)(1)............................. 1010.652(a)(2). 103.187(a)(2)............................. 1010.652(a)(3). 103.187(a)(3)............................. 1010.652(a)(4). 103.187(a)(4)............................. 1010.652(a)(1). 103.187(b)................................ 1010.652(b). 103.188(a)(1)............................. 1010.653(a)(1). 103.188(a)(2)............................. 1010.653(a)(2). 103.188(a)(3)............................. 1010.653(a)(3). 103.188(a)(4)............................. 1010.653(a)(4). 103.188(b)................................ 1010.653(b). 103.192(a)(1)............................. 1010.654(a)(1). 103.192(a)(2)............................. 1010.654(a)(2). 103.192(a)(3)............................. 1010.654(a)(3). 103.192(a)(4)............................. 1010.654(a)(4). 103.192(b)................................ 1010.654(b). 103.193(a)(1)............................. 1010.655(a)(1). 103.193(a)(2)............................. 1010.655(a)(2). 103.193(a)(3)............................. 1010.655(a)(3). 103.193(a)(4)............................. 1010.655(a)(4). 103.193(b)................................ 1010.655(b). Appendix A to Subpart H................... Appendix A. Appendix A to Subpart I................... Appendix C. Appendix B to Subpart I................... Appendix D. Appendix A to Part 103.................... Appendix E. Appendix B to Part 103.................... Appendix B. Appendix C to Part 103.................... Appendix F. ------------------------------------------------------------------------ V. Request for Comments FinCEN invites comment on all aspects of the proposed restructuring of the regulations, and specifically seeks comment on the following issues: 1. Whether the structure and numbering logic of the sections and parts within Chapter X makes FinCEN regulations more easily accessible. 2. Whether alphabetical order and the maintenance of alphabetical order is clear, effective and of such value that FinCEN should renumber the definitions at this time and each time a new one is added. VI. Regulatory Matters A. Executive Order 12866 It has been determined that this proposed rule is not a significant regulatory action for purposes of Executive Order 12866. Accordingly, a regulatory impact analysis is not required. B. Unfunded Mandates Reform Act of 1995 Section 202 of the Unfunded Mandates Reform Act of 1995 (``Unfunded Mandates Act''), Public Law 104-4 (March 22, 1995), requires that an agency prepare a budgetary impact statement before promulgating a rule that may result in expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 202 of the Unfunded Mandates Act also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. FinCEN has determined that it is not required to prepare a written statement under Section 202 and has concluded that on balance the proposals in the Notice of Proposed Rulemaking provide the most cost-effective and least burdensome alternative to achieve the objectives of the rule. C. Regulatory Flexibility Act Pursuant to the Regulatory Flexibility Act (RFA) (5 U.S.C. 602 et seq.), FinCEN certifies that this proposed regulation would not have a significant economic impact on a substantial number of small entities. The proposed regulation merely restructures and re-codifies existing regulations. FinCEN believes the costs that may arise as a result of restructuring these regulations will be confined to training, publication and computer programming. The new regulatory structure will require financial institution compliance personnel to be retrained to assure familiarity with the new numbering format. FinCEN has attempted to mitigate any substantial costs of retraining by providing two aids: (1) III Proposed Changes--D. Technical Corrections, and (2) IV Part by Part Analysis. Publication costs incurred to reproduce informational materials supplied by financial institutions to customers and the public should be minimized by the time interval afforded between the proposed rule, analysis and publication of a final rule. [[Page 66419]] FinCEN's analysis of the small entities that are subject to this regulation indicates that the vast majority of such entities file paper reports with FinCEN. These entities should incur no additional filing costs because they will continue to obtain the most current copy of the form available on the FinCEN Web site to file a report. However, for small entities that utilize a computer system to generate reports, there may be some recoding or reprogramming of existing software or the purchase of new software to file under this regulation. A current survey of the size of the financial institutions that file electronically indicates that this would be a small number of the total filers. D. Paperwork Reduction Act This proposed rule contains no new information collection requirements subject to review and approval by the Office of Management and Budget under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d), et seq.). The information collection requirements for the Bank Secrecy Act, currently codified at 31 CFR part 103, were previously approved by the Office of Management and Budget under OMB Control numbers 1506-0001 through 1506-0046. List of Subjects in 31 CFR Part 103 and 31 CFR Parts 1010 and 1020 Through 1028 Administrative practice and procedure, Banks, banking, Brokers, Currency, Foreign banking, Foreign currencies, Gambling, Investigations, Penalties, Reporting and recordkeeping requirements, Securities, Terrorism. Department of the Treasury 31 CFR Chapter I Authority and Issuance For the reasons set forth above, under the authority of 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314, 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307, Chapter I of Title 31 of the Code of Federal Regulations is proposed to be amended by removing Part 103. Department of the Treasury Financial Crimes Enforcement Network 31 CFR Chapter X Authority and Issuance For the reasons set forth above, Chapter X, consisting of parts 1000 through 1099, is proposed to be added to Title 31 to read as follows: Chapter X--Financial Crimes Enforcement Network, Department of the Treasury PARTS 1000-1009 [RESERVED] PART 1010--GENERAL PROVISIONS Subpart A--General Definitions Sec. 1010.100 General definitions. Subpart B--Programs 1010.200 General. 1010.205 Exempted anti-money laundering programs for certain financial institutions. 1010.210 Anti-money laundering programs. 1010.220 Customer identification program requirements. Subpart C--Reports Required To Be Made 1010.300 General. 1010.301 Determination by the Secretary. 1010.305 [Reserved] 1010.306 Filing of reports. 1010.310 Reports of transactions in currency. 1010.311 Filing obligations for reports of transactions in currency. 1010.312 Identification required. 1010.313 Aggregation. 1010.314 Structured transactions. 1010.315 Exemptions for non-bank financial institutions. 1010.320 Reports of suspicious transactions. 1010.330 Reports relating to currency in excess of $10,000 received in a trade or business. 1010.340 Reports of transportation of currency or monetary instruments. 1010.350 Reports of foreign financial accounts. 1010.360 Reports of transactions with foreign financial agencies. 1010.370 Reports of certain domestic coin and currency transactions. Subpart D--Records Required To Be Maintained 1010.400 General. 1010.401 Determination by the Secretary. 1010.405 [Reserved] 1010.410 Records to be made and retained by financial institutions. 1010.415 Purchases of bank checks and drafts, cashier's checks, money orders and traveler's checks. 1010.420 Records to be made and retained by persons having financial interests in foreign financial accounts. 1010.430 Nature of records and retention period. 1010.440 Person outside the United States. Subpart E--Special Information Sharing Procedures To Deter Money Laundering and Terrorist Activity 1010.500 General. 1010.505 Definitions. 1010.520 Information sharing between Federal law enforcement agencies and financial institutions. 1010.530 [Reserved] 1010.540 Voluntary information sharing among financial institutions. Subpart F--Special Standards of Diligence; Prohibitions; and Special Measures 1010.600 General. Special Due Diligence for Correspondent Accounts and Private Banking Accounts 1010.605 Definitions. 1010.610 Due diligence programs for correspondent accounts for foreign financial institutions. 1010.620 Due diligence programs for private banking accounts. 1010.630 Prohibition on correspondent accounts for foreign shell banks; records concerning owners of foreign banks and agents for service of legal process. 1010.640 [Reserved] Special Measures Under Section 311 of the USA PATRIOT Act and Law Enforcement Access to Foreign Bank Records 1010.651 Special measures against Burma. 1010.652 Special measures against Myanmar Mayflower Bank and Asia Wealth Bank. 1010.653 Special measures against Commercial Bank of Syria. 1010.654 Special measures against VEF Bank. 1010.655 Special measures against Banco Delta Asia. 1010.670 Summons or subpoena of foreign bank records; termination of correspondent relationship. Subpart G--Administrative Rulings 1010.710 Scope. 1010.711 Submitting requests. 1010.712 Nonconforming requests. 1010.713 Oral communications. 1010.714 Withdrawing requests. 1010.715 Issuing rulings. 1010.716 Modifying or rescinding rulings. 1010.717 Disclosing information. Subpart H--Enforcement; Penalties; and Forfeiture 1010.810 Enforcement. 1010.820 Civil penalty. 1010.830 Forfeiture of currency or monetary instruments. 1010.840 Criminal penalty. 1010.850 Enforcement authority with respect to transportation of currency or monetary instruments. Subpart I--Summons 1010.911 General. 1010.912 Persons who may issue summons. 1010.913 Contents of summons. 1010.914 Service of summons. 1010.915 Examination of witnesses and records. 1010.916 Enforcement of summons. 1010.917 Payment of expenses. Subpart J--Miscellaneous 1010.920 Access to records. 1010.930 Rewards for informants. 1010.940 Photographic or other reproductions of Government obligations. 1010.950 Availability of information. 1010.960 Disclosure. 1010.970 Exceptions, exemptions, and reports. [[Page 66420]] 1010.980 Dollars as including foreign currency. Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314, 5316-5332; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307. Subpart A--General Definitions Sec. 1010.100 General definitions. When used in this chapter and in forms prescribed under this chapter, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meanings ascribed in this subpart. Terms applicable to a particular type of financial institution or specific part or subpart of this chapter are located in that part or subpart. Terms may have different meanings in different parts or subparts. (a) Accept. A receiving financial institution, other than the recipient's financial institution, accepts a transmittal order by executing the transmittal order. A recipient's financial institution accepts a transmittal order by paying the recipient, by notifying the recipient of the receipt of the order or by otherwise becoming obligated to carry out the order. (b) At one time. For purposes of Sec. 1010.340 of this part, a person who transports, mails, ships or receives; is about to or attempts to transport, mail or ship; or causes the transportation, mailing, shipment or receipt of monetary instruments, is deemed to do so ``at one time'' if: (1) That person either alone, in conjunction with or on behalf of others; (2) Transports, mails, ships or receives in any manner; is about to transport, mail or ship in any manner; or causes the transportation, mailing, shipment or receipt in any manner of; (3) Monetary instruments; (4) Into the United States or out of the United States; (5) Totaling more than $10,000; (6)(i) On one calendar day; or (ii) If for the purpose of evading the reporting requirements of Sec. 1010.340, on one or more days. (c) Attorney General. The Attorney General of the United States. (d) Bank. Each agent, agency, branch or office within the United States of any person doing business in one or more of the capacities listed below: (1) A commercial bank or trust company organized under the laws of any State or of the United States; (2) A private bank; (3) A savings and loan association or a building and loan association organized under the laws of any State or of the United States; (4) An insured institution as defined in section 401 of the National Housing Act; (5) A savings bank, industrial bank or other thrift institution; (6) A credit union organized under the law of any State or of the United States; (7) Any other organization (except a money services business) chartered under the banking laws of any state and subject to the supervision of the bank supervisory authorities of a State; (8) A bank organized under foreign law; (9) Any national banking association or corporation acting under the provisions of section 25(a) of the Act of Dec. 23, 1913, as added by the Act of Dec. 24, 1919, ch. 18, 41 Stat. 378, as amended (12 U.S.C. 611-32). (e) Bank Secrecy Act. The Currency and Foreign Transactions Reporting Act, its amendments, and the other statutes relating to the subject matter of that Act, have come to be referred to as the Bank Secrecy Act. These statutes are codified at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, 18 U.S.C. 1956, 18 U.S.C. 1957, 18 U.S.C. 1960, and 31 U.S.C. 5311-5314 and 5316-5332 and notes thereto. (f) Beneficiary. The person to be paid by the beneficiary's bank. (g) Beneficiary's bank. The bank or foreign bank identified in a payment order in which an account of the beneficiary is to be credited pursuant to the order or which otherwise is to make payment to the beneficiary if the order does not provide for payment to an account. (h) Broker or dealer in securities. A broker or dealer in securities, registered or required to be registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, except persons who register pursuant to section 15(b)(11) of the Securities Exchange Act of 1934. (i) Business day. As used in this chapter with respect to banks, business day means that day, as normally communicated to its depository customers, on which a bank routinely posts a particular transaction to its customer's account. (j) Commodity. Any good, article, service, right, or interest described in section 1a(4) of the Commodity Exchange Act (``CEA''), 7 U.S.C. 1a(4). (k) Common carrier. Any person engaged in the business of transporting individuals or goods for a fee who holds himself out as ready to engage in such transportation for hire and who undertakes to do so indiscriminately for all persons who are prepared to pay the fee for the particular service offered. (l) Contract of sale. Any sale, agreement of sale, or agreement to sell as described in section 1a(7) of the CEA, 7 U.S.C. 1a(7). (m) Currency. The coin and paper money of the United States or of any other country that is designated as legal tender and that circulates and is customarily used and accepted as a medium of exchange in the country of issuance. Currency includes U.S. silver certificates, U.S. notes and Federal Reserve notes. Currency also includes official foreign bank notes that are customarily used and accepted as a medium of exchange in a foreign country. (n) Deposit account. Deposit accounts include transaction accounts described in paragraph (ccc) of this section, savings accounts, and other time deposits. (o) Domestic. When used herein, refers to the doing of business within the United States, and limits the applicability of the provision where it appears to the performance by such institutions or agencies of functions within the United States. (p) Established customer. A person with an account with the financial institution, including a loan account or deposit or other asset account, or a person with respect to which the financial institution has obtained and maintains on file the person's name and address, as well as taxpayer identification number (e.g. , social security or employer identification number) or, if none, alien identification number or passport number and country of issuance, and to which the financial institution provides financial services relying on that information. (q) Execution date. The day on which the receiving financial institution may properly issue a transmittal order in execution of the sender's order. The execution date may be determined by instruction of the sender but cannot be earlier than the day the order is received, and, unless otherwise determined, is the day the order is received. If the sender's instruction states a payment date, the execution date is the payment date or an earlier date on which execution is reasonably necessary to allow payment to the recipient on the payment date. (r) Federal functional regulator. (1) The Board of Governors of the Federal Reserve System; (2) The Office of the Comptroller of the Currency; (3) The Board of Directors of the Federal Deposit Insurance Corporation; (4) The Office of Thrift Supervision; (5) The National Credit Union Administration; [[Page 66421]] (6) The Securities and Exchange Commission; or (7) The Commodity Futures Trading Commission. (s) FinCEN. FinCEN means the Financial Crimes Enforcement Network, a bureau of the Department of the Treasury. (t) Financial institution. Each agent, agency, branch, or office within the United States of any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the capacities listed below: (1) A bank (except bank credit card systems); (2) A broker or dealer in securities; (3) A money services business as defined in paragraph (ff) of this section; (4) A telegraph company; (5)(i) Casino. A casino or gambling casino that: Is duly licensed or authorized to do business as such in the United States, whether under the laws of a State or of a Territory or Insular Possession of the United States, or under the Indian Gaming Regulatory Act or other federal, state, or tribal law or arrangement affecting Indian lands (including, without limitation, a casino operating on the assumption or under the view that no such authorization is required for casino operation on Indian lands); and has gross annual gaming revenue in excess of $1 million. The term includes the principal headquarters and every domestic branch or place of business of the casino. (ii) For purposes of this paragraph (t)(5), ``gross annual gaming revenue'' means the gross gaming revenue received by a casino, during either the previous business year or the current business year of the casino. A casino or gambling casino which is a casino for purposes of this chapter solely because its gross annual gaming revenue exceeds $1,000,000 during its current business year, shall not be considered a casino for purposes of this chapter prior to the time in its current business year that its gross annual gaming revenue exceeds $1,000,000. (iii) Any reference in this chapter, other than in this paragraph (t)(5) and in paragraph (t)(6) of this section, to a casino shall also include a reference to a card club, unless the provision in question contains specific language varying its application to card clubs or excluding card clubs from its application; (6)(i) Card club. A card club, gaming club, card room, gaming room, or similar gaming establishment that is duly licensed or authorized to do business as such in the United States, whether under the laws of a State, of a Territory or Insular Possession of the United States, or of a political subdivision of any of the foregoing, or under the Indian Gaming Regulatory Act or other federal, state, or tribal law or arrangement affecting Indian lands (including, without limitation, an establishment operating on the assumption or under the view that no such authorization is required for operation on Indian lands for an establishment of such type), and that has gross annual gaming revenue in excess of $1,000,000. The term includes the principal headquarters and every domestic branch or place of business of the establishment. The term ``casino,'' as used in this chapter shall include a reference to ``card club'' to the extent provided in paragraph (t)(5)(iii) of this section. (ii) For purposes of this paragraph (t)(6), ``gross annual gaming revenue'' means the gross revenue derived from or generated by customer gaming activity (whether in the form of per-game or per-table fees, however computed, rentals, or otherwise) and received by an establishment, during either the establishment's previous business year or its current business year. A card club that is a financial institution for purposes of this chapter solely because its gross annual revenue exceeds $1,000,000 during its current business year, shall not be considered a financial institution for purposes of this chapter prior to the time in its current business year when its gross annual revenue exceeds $1,000,000; (7) A person subject to supervision by any state or federal bank supervisory authority; (8) A futures commission merchant; or (9) An introducing broker in commodities. (u) Foreign bank. A bank organized under foreign law, or an agency, branch or office located outside the United States of a bank. The term does not include an agent, agency, branch or office within the United States of a bank organized under foreign law. (v) Foreign financial agency. A person acting outside the United States for a person (except for a country, a monetary or financial authority acting as a monetary or financial authority, or an international financial institution of which the United States Government is a member) as a financial institution, bailee, depository trustee, or agent, or acting in a similar way related to money, credit, securities, gold, or a transaction in money, credit, securities, or gold. (w) Funds transfer. The series of transactions, beginning with the originator's payment order, made for the purpose of making payment to the beneficiary of the order. The term includes any payment order issued by the originator's bank or an intermediary bank intended to carry out the originator's payment order. A funds transfer is completed by acceptance by the beneficiary's bank of a payment order for the benefit of the beneficiary of the originator's payment order. Funds transfers governed by the Electronic Fund Transfer Act of 1978 (Title XX, Pub. L. 95-630, 92 Stat. 3728, 15 U.S.C. 1693, et seq.), as well as any other funds transfers that are made through an automated clearinghouse, an automated teller machine, or a point-of-sale system, are excluded from this definition. (x) Futures commission merchant. Any person registered or required to be registered as a futures commission merchant with the Commodity Futures Trading Commission [bs](``CFTC'') under the CEA, except persons who register pursuant to section 4f(a)(2) of the CEA, 7 U.S.C. 6f(a)(2). (y) Indian Gaming Regulatory Act. The Indian Gaming Regulatory Act of 1988, codified at 25 U.S.C. 2701-2721 and 18 U.S.C. 1166-68. (z) Intermediary bank. A receiving bank other than the originator's bank or the beneficiary's bank. (aa) Intermediary financial institution. A receiving financial institution, other than the transmittor's financial institution or the recipient's financial institution. The term intermediary financial institution includes an intermediary bank. (bb) Introducing broker-commodities. Any person registered or required to be registered as an introducing broker with the CFTC under the CEA, except persons who register pursuant to section 4f(a)(2) of the CEA, 7 U.S.C. 6f(a)(2). (cc) Investment security. An instrument which: (1) Is issued in bearer or registered form; (2) Is of a type commonly dealt in upon securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment; (3) Is either one of a class or series or by its terms is divisible into a class or series of instruments; and (4) Evidences a share, participation or other interest in property or in an enterprise or evidences an obligation of the issuer. (dd) Monetary instruments. (1) Monetary instruments include: (i) Currency; (ii) Traveler's checks in any form; (iii) All negotiable instruments (including personal checks, business [[Page 66422]] checks, official bank checks, cashier's checks, third-party checks, promissory notes (as that term is defined in the Uniform Commercial Code), and money orders) that are either in bearer form, endorsed without restriction, made out to a fictitious payee (for the purposes of Sec. 1010.340), or otherwise in such form that title thereto passes upon delivery; (iv) Incomplete instruments (including personal checks, business checks, official bank checks, cashier's checks, third-party checks, promissory notes (as that term is defined in the Uniform Commercial Code), and money orders) signed but with the payee's name omitted; and (v) Securities or stock in bearer form or otherwise in such form that title thereto passes upon delivery. (2) Monetary instruments do not include warehouse receipts or bills of lading. (ee) [Reserved] (ff) Money services business. Each agent, agency, branch, or office within the United States of any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the capacities listed in paragraphs (ff)(1) through (ff)(6) of this section. Notwithstanding the preceding sentence, the term ``money services business'' shall not include a bank, nor shall it include a person registered with, and regulated or examined by, the Securities and Exchange Commission or the Commodity Futures Trading Commission. (1) Currency dealer or exchanger. A currency dealer or exchanger (other than a person who does not exchange currency in an amount greater than $1,000 in currency or monetary or other instruments for any person on any day in one or more transactions). (2) Check casher. A person engaged in the business of a check casher (other than a person who does not cash checks in an amount greater than $1,000 in currency or monetary or other instruments for any person on any day in one or more transactions). (3) Issuer of traveler's checks, money orders, or stored value. An issuer of traveler's checks, money orders, or, stored value (other than a person who does not issue such checks or money orders or stored value in an amount greater than $1,000 in currency or monetary or other instruments to any person on any day in one or more transactions). (4) Seller or redeemer of traveler's checks, money orders, or stored value. A seller or redeemer of traveler's checks, money orders, or stored value (other than a person who does not sell such checks or money orders or stored value in an amount greater than $1,000 in currency or monetary or other instruments to or redeem such instruments for an amount greater than $1,000 in currency or monetary or other instruments from, any person on any day in one or more transactions). (5) Money transmitter--(i) In general. Money transmitter: (A) Any person, whether or not licensed or required to be licensed, who engages as a business in accepting currency, or funds denominated in currency, and transmits the currency or funds, or the value of the currency or funds, by any means through a financial agency or institution, a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both, or an electronic funds transfer network; or (B) Any other person engaged as a business in the transfer of funds. (ii) Facts and circumstances; Limitation. Whether a person ``engages as a business'' in the activities described in paragraph (ff)(5)(i) of this section is a matter of facts and circumstances. Generally, the acceptance and transmission of funds as an integral part of the execution and settlement of a transaction other than the funds transmission itself (for example, in connection with a bona fide sale of securities or other property), will not cause a person to be a money transmitter within the meaning of paragraph (ff)(5)(i) of this section. (6) U.S. Postal Service. The United States Postal Service, except with respect to the sale of postage or philatelic products. (gg) Mutual fund. An ``investment company'' (as the term is defined in section 3 of the Investment Company Act (15 U.S.C. 80a-3)) that is an ``open-end company'' (as that term is defined in section 5 of the Investment Company Act (15 U.S.C. 80a-5)) that is registered or is required to register with the Commission under section 8 of the Investment Company Act (15 U.S.C. 80a-8). (hh) Option on a commodity. Any agreement, contract, or transaction described in section 1a(26) of the CEA, 7 U.S.C. 1a(26). (ii) Originator. The sender of the first payment order in a funds transfer. (jj) Originator's bank. The receiving bank to which the payment order of the originator is issued if the originator is not a bank or foreign bank, or the originator if the originator is a bank or foreign bank. (kk) Payment date. The day on which the amount of the transmittal order is payable to the recipient by the recipient's financial institution. The payment date may be determined by instruction of the sender, but cannot be earlier than the day the order is received by the recipient's financial institution and, unless otherwise prescribed by instruction, is the date the order is received by the recipient's financial institution. (ll) Payment order. An instruction of a sender to a receiving bank, transmitted orally, electronically, or in writing, to pay, or to cause another bank or foreign bank to pay, a fixed or determinable amount of money to a beneficiary if: (1) The instruction does not state a condition to payment to the beneficiary other than time of payment; (2) The receiving bank is to be reimbursed by debiting an account of, or otherwise receiving payment from, the sender; and (3) The instruction is transmitted by the sender directly to the receiving bank or to an agent, funds transfer system, or communication system for transmittal to the receiving bank. (mm) Person. An individual, a corporation, a partnership, a trust or estate, a joint stock company, an association, a syndicate, joint venture, or other unincorporated organization or group, an Indian Tribe (as that term is defined in the Indian Gaming Regulatory Act), and all entities cognizable as legal personalities. (nn) Receiving bank. The bank or foreign bank to which the sender's instruction is addressed. (oo) Receiving financial institution. The financial institution or foreign financial agency to which the sender's instruction is addressed. The term receiving financial institution includes a receiving bank. (pp) Recipient. The person to be paid by the recipient's financial institution. The term recipient includes a beneficiary, except where the recipient's financial institution is a financial institution other than a bank. (qq) Recipient's financial institution. The financial institution or foreign financial agency identified in a transmittal order in which an account of the recipient is to be credited pursuant to the transmittal order or which otherwise is to make payment to the recipient if the order does not provide for payment to an account. The term recipient's financial institution includes a beneficiary's bank, except where the beneficiary is a recipient's financial institution. (rr) Secretary. The Secretary of the Treasury or any person duly authorized by the Secretary to perform the function mentioned. [[Page 66423]] (ss) Security. Security means any instrument or interest described in section 3(a)(10) of the Securities Exchange Act of 1934, 15 U.S.C. 78c(a)(10). (tt) Self-regulatory organization: (1) Shall have the same meaning as provided in section 3(a)(26) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(26)); and (2) Means a ``registered entity'' or a ``registered futures association'' as provided in section 1a(29) or 17, respectively, of the Commodity Exchange Act (7 U.S.C. 1a(29), 21). (uu) Sender. The person giving the instruction to the receiving financial institution. (vv) State. The States of the United States and, wherever necessary to carry out the provisions of this chapter, the District of Columbia. (ww) Stored value. Funds or monetary value represented in digital electronics format (whether or not specially encrypted) and stored or capable of storage on electronic media in such a way as to be retrievable and transferable electronically. (xx) Structure (structuring). For purposes of Sec. 1010.314, a person structures a transaction if that person, acting alone, or in conjunction with, or on behalf of, other persons, conducts or attempts to conduct one or more transactions in currency, in any amount, at one or more financial institutions, on one or more days, in any manner, for the purpose of evading the reporting requirements under Sec. Sec. 1010.311, 1010.313, 1020.315, 1021.311 and 1021.313 of this chapter. ``In any manner'' includes, but is not limited to, the breaking down of a single sum of currency exceeding $10,000 into smaller sums, including sums at or below $10,000, or the conduct of a transaction, or series of currency transactions at or below $10,000. The transaction or transactions need not exceed the $10,000 reporting threshold at any single financial institution on any single day in order to constitute structuring within the meaning of this definition. (yy) Taxpayer Identification Number. Taxpayer Identification Number (``TIN'') is defined by section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 6109) and the Internal Revenue Service regulations implementing that section (e.g., Social Security number or employer identification number). (zz) Territories and Insular Possessions. The Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and all other territories and possessions of the United States other than the Indian lands and the District of Columbia. (aaa) [Reserved] (bbb) Transaction. (1) Except as provided in paragraph (bbb)(2) of this section, transaction means a purchase, sale, loan, pledge, gift, transfer, delivery, or other disposition, and with respect to a financial institution includes a deposit, withdrawal, transfer between accounts, exchange of currency, loan, extension of credit, purchase or sale of any stock, bond, certificate of deposit, or other monetary instrument, security, contract of sale of a commodity for future delivery, option on any contract of sale of a commodity for future delivery, option on a commodity, purchase or redemption of any money order, payment or order for any money remittance or transfer, purchase or redemption of casino chips or tokens, or other gaming instruments or any other payment, transfer, or delivery by, through, or to a financial institution, by whatever means effected. (2) For purposes of Sec. Sec. 1010.311, 1010.313, 1020.315, 1021.311, 1021.313, and other provisions of this chapter relating solely to the report required by those sections, the term ``transaction in currency'' shall mean a transaction involving the physical transfer of currency from one person to another. A transaction which is a transfer of funds by means of bank check, bank draft, wire transfer, or other written order, and which does not include the physical transfer of currency, is not a transaction in currency for this purpose. (ccc) Transaction account. Transaction accounts include those accounts described in 12 U.S.C. 461(b)(1)(C), money market accounts and similar accounts that take deposits and are subject to withdrawal by check or other negotiable order. (ddd) Transmittal of funds. A series of transactions beginning with the transmittor's transmittal order, made for the purpose of making payment to the recipient of the order. The term includes any transmittal order issued by the transmittor's financial institution or an intermediary financial institution intended to carry out the transmittor's transmittal order. The term transmittal of funds includes a funds transfer. A transmittal of funds is completed by acceptance by the recipient's financial institution of a transmittal order for the benefit of the recipient of the transmittor's transmittal order. Funds transfers governed by the Electronic Fund Transfer Act of 1978 (Title XX, Pub. L. 95-630, 92 Stat. 3728, 15 U.S.C. 1693, et seq.), as well as any other funds transfers that are made through an automated clearinghouse, an automated teller machine, or a point-of-sale system, are excluded from this definition. (eee) Transmittal order. The term transmittal order includes a payment order and is an instruction of a sender to a receiving financial institution, transmitted orally, electronically, or in writing, to pay, or cause another financial institution or foreign financial agency to pay, a fixed or determinable amount of money to a recipient if: (1) The instruction does not state a condition to payment to the recipient other than time of payment; (2) The receiving financial institution is to be reimbursed by debiting an account of, or otherwise receiving payment from, the sender; and (3) The instruction is transmitted by the sender directly to the receiving financial institution or to an agent or communication system for transmittal to the receiving financial institution. (fff) Transmittor. The sender of the first transmittal order in a transmittal of funds. The term transmittor includes an originator, except where the transmittor's financial institution is a financial