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

<NOTICE> DEPARTMENT OF THE TREASURY <SUBAGY>Financial Crimes Enforcement Network</SUBAGY> <SUBJECT>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</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Financial Crimes Enforcement Network (FinCEN), Treasury. <HD SOURCE="HED">ACTION:</HD> Notice and request for comments. <SUM> <HD SOURCE="HED">SUMMARY:</HD> 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 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. </SUM> <DATES> <HD SOURCE="HED">DATES:</HD> Written comments are welcome and must be received on or before October 7, 2024. </DATES> <HD SOURCE="HED">ADDRESSES:</HD> Comments may be submitted by any of the following methods: • <E T="03">Federal E-rulemaking Portal: http://www.regulations.gov.</E> Follow the instructions for submitting comments. Refer to Docket Number FINCEN-2024-0015 and Office of Management and Budget (OMB) control number 1506-0012. • <E T="03">Mail:</E> 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. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> FinCEN's Regulatory Support Section at 1-800-767-2825 or electronically at <E T="03">frc@fincen.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Statutory and Regulatory Provisions</HD> 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)  <SU>1</SU> <FTREF/> and other legislation, including the Anti-Money Laundering Act of 2020 (AML Act). <SU>2</SU> <FTREF/> 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. <FTNT> <SU>1</SU>  USA PATRIOT Act, Public Law 107-56. </FTNT> <FTNT> <SU>2</SU>  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). </FTNT> The BSA authorizes the Secretary of the Treasury (Secretary) to, <E T="03">inter alia,</E> 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. <SU>3</SU> <FTREF/> The authority of the Secretary to administer the BSA has been delegated to the Director of FinCEN. <SU>4</SU> <FTREF/> <FTNT> <SU>3</SU>   <E T="03">See</E> 31 U.S.C. 5311; <E T="03">see also</E> 12 U.S.C. 1829b(a). </FTNT> <FTNT> <SU>4</SU>  Treasury Order 180-01 (Jan. 14, 2020). </FTNT> 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. <SU>5</SU> <FTREF/> 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. <FTNT> <SU>5</SU>  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). </FTNT> 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. <SU>6</SU> <FTREF/> <FTNT> <SU>6</SU>  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). </FTNT> 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. <SU>7</SU> <FTREF/> <FTNT> <SU>7</SU>  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). </FTNT> 31 CFR 1020.315(c)(1) requires a bank to designate an exempt person by filing the DOEP Report  <SU>8</SU> <FTREF/> 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. <SU>9</SU> <FTREF/> 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 ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 22k characters. 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