80 FR 74064 - Imposition of Special Measure Against FBME Bank Ltd., Formerly Known as the Federal Bank of the Middle East Ltd., as a Financial Institution of Primary Money Laundering Concern

DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network

Federal Register Volume 80, Issue 228 (November 27, 2015)

Page Range		74064-74067
FR Document		2015-30119
On July 29, 2015, FinCEN issued a Final Rule imposing the fifth special measure against FBME Bank Ltd. (FBME), formerly known as the Federal Bank of the Middle East, Ltd., with an effective date of August 28, 2015. On August 27, 2015, the United States District Court for the District of Columbia granted FBME's motion for a preliminary injunction and enjoined the Final Rule from taking effect. On November 6, 2015, the Court granted the Government's motion for voluntary remand to allow for further rulemaking proceedings. FinCEN is hereby re-opening the Final Rule to solicit additional comment in connection with the rulemaking, particularly with respect to the unclassified, non-protected documents that support the rulemaking and whether any alternatives to the prohibition of the opening or maintaining of correspondent accounts with FBME would effectively mitigate the risk to domestic financial institutions.
Federal Register, Volume 80 Issue 228 (Friday, November 27, 2015)
[Federal Register Volume 80, Number 228 (Friday, November 27, 2015)]
[Proposed Rules]
[Pages 74064-74067]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-30119]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 1010

RIN 1506-AB27


Imposition of Special Measure Against FBME Bank Ltd., Formerly 
Known as the Federal Bank of the Middle East Ltd., as a Financial 
Institution of Primary Money Laundering Concern

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

ACTION: Proposed rule; re-opening of comment period and availability of 
supplemental information.

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SUMMARY: On July 29, 2015, FinCEN issued a Final Rule imposing the 
fifth special measure against FBME Bank Ltd. (FBME), formerly known as 
the Federal Bank of the Middle East, Ltd., with an effective date of 
August 28, 2015. On August 27, 2015, the United States District Court 
for the District of Columbia granted FBME's motion for a preliminary 
injunction and enjoined the

[[Page 74065]]

Final Rule from taking effect. On November 6, 2015, the Court granted 
the Government's motion for voluntary remand to allow for further 
rulemaking proceedings. FinCEN is hereby re-opening the Final Rule to 
solicit additional comment in connection with the rulemaking, 
particularly with respect to the unclassified, non-protected documents 
that support the rulemaking and whether any alternatives to the 
prohibition of the opening or maintaining of correspondent accounts 
with FBME would effectively mitigate the risk to domestic financial 
institutions.

DATES: Written comments on this document must be submitted on or before 
January 26, 2016.

ADDRESSES: You may submit comments, identified by 1506-AB27, by any of 
the following methods:
     Federal E-rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. Include 1506-AB27 in 
the submission.
     Mail: The Financial Crimes Enforcement Network, P.O. Box 
39, Vienna, VA 22183. Include 1506-AB27 in the body of the text. Please 
submit comments by one method only.
     Absent a sufficient showing that a submission warrants 
confidential treatment, comments submitted in response to this document 
will become a matter of public record. Therefore, you should generally 
only submit information that you wish to make publicly available.
    Inspection of comments: The public dockets for FinCEN can be found 
at www.Regulations.gov. Proposed and final rules published by FinCEN in 
the Federal Register are searchable by docket number, RIN, or document 
title, among other things, and the docket number, RIN, and title may be 
found at the beginning of the document. FinCEN uses the electronic, 
Internet-accessible dockets at Regulations.gov as their complete 
docket; all hard copies of materials that should be in the docket, 
including public comments, are electronically scanned and placed in the 
docket. In general, FinCEN will make all comments publicly available by 
posting them on http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: The FinCEN Resource Center at (800) 
767-2825.

SUPPLEMENTARY INFORMATION: 

I. Regulatory Background

    On July 22, 2014, FinCEN published in the Federal Register a Notice 
of Finding (NOF) in which the Director of FinCEN explained that 
reasonable grounds exist for concluding that FBME Bank Ltd. (FBME) is a 
financial institution of primary money laundering concern pursuant to 
Section 311 of the USA PATRIOT Act (Section 311),\1\ which is codified 
at 31 U.S.C. 5318A. FinCEN's NOF identified two main areas of concern: 
(i) FBME's facilitation of money laundering, terrorist financing, 
transnational organized crime, fraud schemes, sanctions evasion, 
weapons proliferation, corruption by politically-exposed persons, and 
other financial crime; and (ii) FBME's weak anti-money laundering 
controls, which allow its customers to perform a significant volume of 
obscured transactions and activities through the U.S. financial system. 
Simultaneously with the issuance of the NOF, FinCEN also published in 
the Federal Register a related Notice of Proposed Rulemaking (NPRM) 
proposing the imposition of the fifth special measure available under 
Section 311 against FBME.\2\ In particular, FinCEN proposed to prohibit 
covered U.S. financial institutions from opening or maintaining a 
correspondent account in the United States for, or on behalf of, FBME. 
On July 29, 2015, after considering comments from the public on these 
documents, and other information available to FinCEN, including both 
public and non-public reporting, FinCEN published in the Federal 
Register a Final Rule imposing the fifth special measure as proposed in 
the NPRM, with an effective date of August 28, 2015.\3\
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    \1\ Uniting and Strengthening America by Providing Appropriate 
Tools Required to Intercept and Obstruct Terrorism Act of 2001, 
Public Law 107-56.
    \2\ 79 FR 42486 (July 22, 2014) (RIN 1506-AB27).
    \3\ 80 FR 45057 (July 29, 2015) (RIN 1506-AB27).
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    FBME filed suit on August 7, 2015 in the United States District 
Court for the District of Columbia and sought a preliminary injunction 
against the Final Rule. On August 27, 2015, the Court granted the 
motion for preliminary injunction and enjoined the Final Rule from 
taking effect.\4\ In its order, the Court found that FBME was likely to 
succeed on the merits of two of its claims: (i) That FinCEN provided 
insufficient notice of unclassified, non-protected information on which 
it relied during the rulemaking proceedings, and (ii) that FinCEN 
failed to adequately consider at least one potentially significant, 
viable, and obvious alternative to the special measure it imposed.\5\ 
On November 6, 2015, the Court granted FinCEN's motion for voluntary 
remand so that FinCEN may engage in further rulemaking to address the 
procedural issues identified by the Court in enjoining the Final Rule. 
Accordingly, FinCEN is issuing this document to solicit additional 
comment regarding the Section 311 rulemaking related to FBME. In 
addition, FinCEN is making available for comment the unclassified, non-
protected material that FinCEN relied upon and intends to rely upon 
during the rulemaking proceeding.\6\ That unclassified, non-protected 
material is available at www.regulations.gov [Fincen-2014-0007]. Those 
comments previously submitted in connection with the rulemaking need 
not be resubmitted, as FinCEN will consider all comments received to 
date. In addition, if FinCEN decides to consider any additional 
unclassified, non-protected material other than that provided in the 
comments, such information will be added to www.regulations.gov 
[Fincen-2014-0007].
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    \4\ FBME Bank Ltd. v. Lew, No. 1:15-cv-01270, 2015 WL 5081209 
(D.D.C. Aug. 27, 2015).
    \5\ Id. at *5.
    \6\ As previously disclosed in the litigation involving the 
Final Rule, FinCEN notes that it does not intend to rely on three 
documents that were originally included in its administrative record 
supporting the NOF and NPRM: Two were law enforcement sensitive 
documents and the other was mistakenly included.
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II. Proposed Imposition of the Fifth Special Measure

    On October 26, 2001, the President signed into law the Uniting and 
Strengthening America by Providing Appropriate Tools Required to 
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (the 
USA PATRIOT Act). Title III of the USA PATRIOT Act amends the anti-
money laundering provisions of the Bank Secrecy Act (BSA), codified at 
12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-5314, 5316-
5332, to promote the prevention, detection, and prosecution of 
international money laundering and the financing of terrorism. 
Regulations implementing the BSA appear at 31 CFR chapter X. The 
authority of the Secretary of the Treasury to administer the BSA and 
its implementing regulations has been delegated to the Director of 
FinCEN.
    Section 311 of the USA PATRIOT Act grants the Director of FinCEN 
the authority, upon finding that reasonable grounds exist for 
concluding that a foreign jurisdiction, foreign financial institution, 
class of transactions, or type of account is of ``primary money 
laundering concern,'' to require domestic financial institutions and 
financial agencies to take certain ``special measures'' to address the 
primary money laundering concern. The special measures enumerated under 
Section 311 are prophylactic safeguards

[[Page 74066]]

that defend the U.S. financial system from money laundering and 
terrorist financing. FinCEN may impose one or more of these special 
measures in order to protect the U.S. financial system from these 
threats. To that end, special measures one through four, codified at 31 
U.S.C. 5318A(b)(1-4), impose additional recordkeeping, information 
collection, and information reporting requirements on covered U.S. 
financial institutions. The fifth special measure, codified at 31 
U.S.C. 5318A(b)(5), allows the Director to prohibit or impose 
conditions on the opening or maintaining of correspondent or payable-
through accounts for the identified institution by U.S. financial 
institutions.
    Given FinCEN's finding that FBME is of primary money laundering 
concern, in the Final Rule, FinCEN imposed the fifth special measure's 
prohibition on the opening or maintaining of a correspondent account in 
the United States for FBME. In further evaluation of alternative 
measures pursuant to the Court's November 6, 2015 opinion and order, 
FinCEN is reopening the Final Rule to solicit additional comment. 
First, FinCEN seeks comment on whether any of special measures one 
through four under Section 311 with respect to covered U.S. financial 
institutions' activities involving FBME would be an effective 
alternative to mitigate the risk posed by FBME, as explained in the 
Notice of Finding. FinCEN also seeks comment on whether, pursuant to 
special measure five of Section 311, FinCEN should impose conditions, 
rather than a prohibition, on the opening or maintaining of 
correspondent accounts with FBME.

III. Request for Comments

    FinCEN invites comments on all aspects of this rulemaking, 
including, but not limited to, the following:
    1. The unclassified, non-protected information that FinCEN intends 
to rely upon during the rulemaking proceeding; \7\
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    \7\ FinCEN anticipates that certain confidential business 
information (``CBI'') pertaining to FBME will not be made available. 
To the extent documents containing such CBI can be disclosed 
publicly in redacted form, they will be added to 
www.regulations.gov.
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    2. Whether any of special measures one through four under Section 
311 with respect to covered U.S. financial institutions' activities 
involving FBME would be an effective alternative to mitigate the risk 
posed by FBME as explained in the Notice of Finding;
    3. Whether, pursuant to special measure five of Section 311, FinCEN 
should impose conditions, rather than a prohibition, on the opening or 
maintaining of correspondent accounts with FBME as an effective 
alternative to mitigate the risk posed by FBME as explained in the 
Notice of Finding; and
    4. Any material developments that have occurred with respect to 
FBME since the issuance of the NOF and NPRM on July 22, 2014, including 
whether reasonable grounds continue to exist for concluding that FBME 
is a primary money laundering concern.

IV. Regulatory Flexibility Act

    When an agency issues a rulemaking proposal, the Regulatory 
Flexibility Act (RFA) requires the agency to ``prepare and make 
available for public comment an initial regulatory flexibility 
analysis'' that will ``describe the impact of the proposed rule on 
small entities.'' (5 U.S.C. 603(a)). Section 605 of the RFA allows an 
agency to certify a rule, in lieu of preparing an analysis, if the 
proposed rulemaking is not expected to have a significant economic 
impact on a substantial number of small entities. FinCEN previously 
provided information about the number and types of entities that would 
be affected by the earlier proposal to impose special measure five.\8\ 
FinCEN is restating that information in this document so that persons 
may comment on FinCEN's proposed certification concerning whether the 
imposition of any of the special measures would have a significant 
economic impact on a substantial number of small entities. As explained 
in more detail, the limited number of foreign banking institutions with 
which FBME maintains or will maintain accounts will likely limit the 
number of affected covered financial institutions to the largest U.S. 
banks, which actively engage in international transactions.
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    \8\ 79 FR 42486, 42489 (July 22, 2014) and 80 FR 45057, 45063 
(July 29, 2015).
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A. Estimate of the Number of Small Entities to Whom Any of Special 
Measures One Through Five Would Apply

    For purposes of the RFA, both banks and credit unions are 
considered small entities if they have less than $500,000,000 in 
assets.\9\ Of the estimated 7,000 banks, 80 percent have less than 
$500,000,000 in assets and are considered small entities.\10\ Of the 
estimated 7,000 credit unions, 94 percent have less than $500,000,000 
in assets.\11\
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    \9\ Table of Small Business Size Standards Matched to North 
American Industry Classification System Codes, Small Business 
Administration Size Standards (SBA Jan. 22, 2014) [hereinafter SBA 
Size Standards].
    \10\ Federal Deposit Insurance Corporation, Find an Institution, 
http://www2.fdic.gov/idasp/main.asp; select Size or Performance: 
Total Assets, type Equal or less than $: ``500000'' and select Find.
    \11\ National Credit Union Administration, Credit Union Data, 
http://webapps.ncua.gov/customquery/ select Search Fields: Total 
Assets, select Operator: Less than or equal to, type Field Values: 
``500000000'' and select Go.
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    Broker-dealers are defined in 31 CFR 1010.100(h) as those broker-
dealers required to register with the Securities and Exchange 
Commission (SEC). Because FinCEN and the SEC regulate substantially the 
same population, for the purposes of the RFA, FinCEN relies on the 
SEC's definition of small business as previously submitted to the Small 
Business Administration (SBA). The SEC has defined the term ``small 
entity'' to mean a broker or dealer that: (a) Had total capital (net 
worth plus subordinated liabilities) of less than $500,000 on the date 
in the prior fiscal year as of which its audited financial statements, 
were prepared pursuant to Rule 17a-5(d) or, if not required to file 
such statements, a broker or dealer that had total capital (net worth 
plus subordinated debt) of less than $500,000 on the last business day 
of the preceding fiscal year (or in the time that it has been in 
business if shorter); and (b) is not affiliated with any person (other 
than a natural person) that is not a small business or small 
organization as defined in this release.\12\ Based on SEC estimates, 17 
percent of broker-dealers are classified as ``small'' entities for 
purposes of the RFA.\13\
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    \12\ 17 CFR 240.0-10(c).
    \13\ 76 FR 37572, 37602 (June 27, 2011) (the SEC estimates 871 
small broker-dealers of the 5,063 total registered broker-dealers).
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    Futures commission merchants (FCMs) are defined in 31 CFR 
1010.100(x) as those FCMs that are registered or required to be 
registered as a FCM with the Commodity Futures Trading Commission 
(CFTC) under the Commodity Exchange Act (CEA), except persons who 
register pursuant to section 4f(a)(2) of the CEA, 7 U.S.C. 6f(a)(2). 
Because FinCEN and the CFTC regulate substantially the same population, 
for the purposes of the RFA, FinCEN relies on the CFTC's definition of 
small business as previously submitted to the SBA. In the CFTC's 
``Policy Statement and Establishment of Definitions of `Small Entities' 
for Purposes of the Regulatory Flexibility Act,'' the CFTC concluded 
that registered FCMs should not be considered to be small entities for 
purposes of the RFA.\14\ The CFTC's determination in this regard was 
based, in part, upon the obligation of registered

[[Page 74067]]

FCMs to meet the capital requirements established by the CFTC.
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    \14\ 47 FR 18618, 18619 (Apr. 30, 1982).
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    For purposes of the RFA, an introducing broker-commodities dealer 
is considered small if it has less than $35,500,000 in gross receipts 
annually.\15\ Based on information provided by the National Futures 
Association (NFA), 95 percent of introducing brokers-commodities 
dealers have less than $35.5 million in Adjusted Net Capital and are 
considered to be small entities.
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    \15\ SBA Size Standards at 28.
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    Mutual funds are defined in 31 CFR 1010.100(gg) as those investment 
companies that are open-end investment companies that are registered or 
are required to register with the SEC. Because FinCEN and the SEC 
regulate substantially the same population, for the purposes of the 
RFA, FinCEN relies on the SEC's definition of small business as 
previously submitted to the SBA. The SEC has defined the term ``small 
entity'' under the Investment Company Act to mean an investment company 
that, together with other investment companies in the same group of 
related investment companies, has net assets of $50 million or less as 
of the end of its most recent fiscal year.\16\ Based on SEC estimates, 
7 percent of mutual funds are classified as ``small entities'' for 
purposes of the RFA under this definition.\17\
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    \16\ 17 CFR 270.0-10.
    \17\ 78 FR 23637, 23658 (April 19, 2013).
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B. Special Measures One Through Five

    As noted above, 80 percent of banks, 94 percent of credit unions, 
17 percent of broker-dealers, 95 percent of introducing brokers-
commodities, zero FCMs, and 7 percent of mutual funds are small 
entities. The limited number of foreign banking institutions with which 
FBME maintains or will maintain accounts will likely limit the number 
of affected covered financial institutions to the largest U.S. banks, 
which actively engage in international transactions. Thus, the 
imposition of the recordkeeping, information collection, or reporting 
provisions in any of special measures one through four would not impact 
a substantial number of small entities. Similarly, the imposition of 
the prohibition on maintaining correspondent accounts for foreign 
banking institutions that engage in transactions involving FBME under 
the fifth special measure, together with related notice and special due 
diligence, would not impact a substantial number of small entities. 
Finally, imposing conditions on the opening or maintenance of such a 
correspondent account under special measure five would not impact a 
substantial number of small entities.

C. Certification

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

Jamal El-Hindi,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2015-30119 Filed 11-25-15; 8:45 am]
BILLING CODE 4810-02-P
74064 Federal Register / Vol. 80, No. 228 / Friday, November 27, 2015 / Proposed Rules

air traffic service routes, and reporting with FAA Order 1050.1F, each side of the Walla Walla 35° bearing from
points. ‘‘Environmental Impacts: Policies and the airport extending from the 4.3-mile
Procedures’’ prior to any FAA final radius of Walla Walla Regional Airport to
The Proposal 13.4 miles northeast of the airport.
regulatory action.
The FAA is proposing an amendment Paragraph 6005: Class E Airspace Areas
to Title 14 Code of Federal Regulations List of Subjects in 14 CFR Part 71 Extending Upward from 700 feet or More
Above the Surface of the Earth.
(14 CFR) Part 71 by modifying Class D Airspace, Incorporation by reference,
airspace, Class E surface area airspace, Navigation (air). * * * * *
Class E surface area airspace designated ANM WA E5 Walla Walla, WA [Modified]
as an extension, and Class E airspace The Proposed Amendment
Walla Walla Regional Airport, WA
extending upward from 700 feet above Accordingly, pursuant to the (Lat. 46°05′43″ N., long. 118°17′09″ W.)
the surface at Walla Walla Regional authority delegated to me, the Federal Walla Walla Regional Airport, point in space
Airport, Walla Walla, WA. The Class E Aviation Administration proposes to coordinates
airspace area designated as an extension amend 14 CFR part 71 as follows: (Lat. 46°03′27″ N., long.118°12′20″ W.)
would extend from the 4.3-mile radius That airspace extending upward from 700
of Walla Walla Regional Airport to 7.5 PART 71—DESIGNATION OF CLASS A, feet above the surface bounded by a line
miles southwest and 13.4 miles B, C, D, AND E AIRSPACE AREAS; AIR beginning at lat. 45°52′29″ N., long.
northeast of the airport. Class E airspace TRAFFIC SERVICE ROUTES; AND 118°23′027″ W.; to lat. 45°49′51″ N., long.
REPORTING POINTS 118°26′02″ W.; to lat. 45°57′17″ N., long.
extending upward from 700 feet above 118°40′49″ W.; to lat. 46°10′22″ N., long.
the surface would be modified to an 118°27′48″ W.; to lat. 46°08′46″ N., long.
area 5.7 miles to the west, 16.5 miles to ■ 1. The authority citation for 14 CFR
part 71 continues to read as follows: 118°24′32″ W.; to lat. 46°14′38″ N., long.
the southwest, 22.5 miles northeast and 118°18′44″ W.; to lat. 46°16′07″ N., long.
within a 13.4-mile radius of a point in Authority: 49 U.S.C. 106(f), 106(g), 40103, 118°21′47″ W.; to lat. 46°29′20″ N., long.
space location east of Walla Walla 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 118°08′35″ W.; to lat. 46°22′02″ N., long.
Regional Airport. This action would 1959–1963 Comp., p. 389. 117°53′24″ W.; to lat. 46°14′25″ N., long.
also update the geographic coordinates 118°01′11″ W.; and that airspace within a
§ 71.1 [Amended] 13.4-mile radius of point in space
of the airport for the Class D and E ■ 2. The incorporation by reference in coordinates at lat. 46°03′27″ N.,
airspace areas listed above. 14 CFR 71.1 of FAA Order 7400.9Z, long.118°12′20″ W., from the 052° bearing
Class D and Class E airspace from the Walla Walla Regional Airport
Airspace Designations and Reporting
designations are published in paragraph clockwise to the 198° bearing.
Points, dated August 6, 2015, and
5000, 6002, 6004, and 6005,
effective September 15, 2015, is Issued in Seattle, Washington, on
respectively, of FAA Order 7400.9Z,
amended as follows: November 10, 2015.
dated August 6, 2015, and effective
September 15, 2015, which is Paragraph 5000: Class D Airspace. Christopher Ramirez,
incorporated by reference in 14 CFR * * * * * Manager, Operations Support Group, Western
71.1. The Class D and Class E airspace Service Center.
ANM WA D Walla Walla, WA [Modified] [FR Doc. 2015–29784 Filed 11–25–15; 8:45 am]
designations listed in this document
will be published subsequently in the Walla Walla Regional Airport, WA BILLING CODE 4910–13–P
(Lat. 46°05′43″ N., long. 118°17′09″ W.)
Order. That airspace extending upward from the
Regulatory Notices and Analyses surface to and including 3,700 feet MSL
within a 4.3-mile radius of Walla Walla DEPARTMENT OF THE TREASURY
The FAA has determined that this Regional Airport. This Class D airspace area
regulation only involves an established is effective during the specific dates and Financial Crimes Enforcement Network
body of technical regulations for which times established in advance by a Notice to
frequent and routine amendments are Airmen. The effective date and time will 31 CFR Part 1010
necessary to keep them operationally thereafter be continuously published in the
Airport/Facility Directory. RIN 1506–AB27
current, is non-controversial and
unlikely to result in adverse or negative Paragraph 6002: Class E Airspace Designated
as Surface Areas. Imposition of Special Measure Against
comments. It, therefore: (1) is not a FBME Bank Ltd., Formerly Known as
‘‘significant regulatory action’’ under * * * * *
the Federal Bank of the Middle East
Executive Order 12866; (2) is not a ANM WA E2 Walla Walla, WA [Modified] Ltd., as a Financial Institution of
‘‘significant rule’’ under DOT Walla Walla Regional Airport, WA Primary Money Laundering Concern
Regulatory Policies and Procedures (44 (Lat. 46°05′43″ N., long. 118°17′09″ W.)
FR 11034; February 26, 1979); and (3) That airspace extending upward from the AGENCY: Financial Crimes Enforcement
does not warrant preparation of a surface within a 4.3-mile radius of Walla Network (FinCEN), Treasury.
regulatory evaluation as the anticipated Walla Regional Airport. ACTION: Proposed rule; re-opening of
impact is so minimal. Since this is a Paragraph 6004: Class E Airspace Areas comment period and availability of
routine matter that will only affect air Designated as an Extension to a Class D or supplemental information.
traffic procedures and air navigation, it Class E Surface Area.
is certified that this rule, when * * * * * SUMMARY: On July 29, 2015, FinCEN
issued a Final Rule imposing the fifth
mstockstill on DSK4VPTVN1PROD with PROPOSALS

promulgated, would not have a ANM WA E4 Walla Walla, WA [Modified]
significant economic impact on a special measure against FBME Bank Ltd.
Walla Walla Regional Airport, WA (FBME), formerly known as the Federal
substantial number of small entities (Lat. 46°05′43″ N., long. 118°17′09″ W.)
under the criteria of the Regulatory Bank of the Middle East, Ltd., with an
That airspace extending upward from the
Flexibility Act. surface within 2.7 miles each side of the
effective date of August 28, 2015. On
Walla Walla 215° bearing from the airport August 27, 2015, the United States
Environmental Review District Court for the District of
extending from the 4.3-mile radius of Walla
This proposal will be subject to an Walla Regional Airport to 7.5 miles Columbia granted FBME’s motion for a
environmental analysis in accordance southwest of the airport, and within 4.1 miles preliminary injunction and enjoined the

VerDate Sep<11>2014 16:45 Nov 25, 2015 Jkt 238001 PO 00000 Frm 00061 Fmt 4702 Sfmt 4702 E:\FR\FM\27NOP1.SGM 27NOP1
Federal Register / Vol. 80, No. 228 / Friday, November 27, 2015 / Proposed Rules 74065

Final Rule from taking effect. On Bank Ltd. (FBME) is a financial the procedural issues identified by the
November 6, 2015, the Court granted the institution of primary money laundering Court in enjoining the Final Rule.
Government’s motion for voluntary concern pursuant to Section 311 of the Accordingly, FinCEN is issuing this
remand to allow for further rulemaking USA PATRIOT Act (Section 311),1 document to solicit additional comment
proceedings. FinCEN is hereby re- which is codified at 31 U.S.C. 5318A. regarding the Section 311 rulemaking
opening the Final Rule to solicit FinCEN’s NOF identified two main related to FBME. In addition, FinCEN is
additional comment in connection with areas of concern: (i) FBME’s facilitation making available for comment the
the rulemaking, particularly with of money laundering, terrorist financing, unclassified, non-protected material that
respect to the unclassified, non- transnational organized crime, fraud FinCEN relied upon and intends to rely
protected documents that support the schemes, sanctions evasion, weapons upon during the rulemaking
rulemaking and whether any proliferation, corruption by politically- proceeding.6 That unclassified, non-
alternatives to the prohibition of the exposed persons, and other financial protected material is available at
opening or maintaining of crime; and (ii) FBME’s weak anti-money www.regulations.gov [Fincen–2014–
correspondent accounts with FBME laundering controls, which allow its 0007]. Those comments previously
would effectively mitigate the risk to customers to perform a significant submitted in connection with the
domestic financial institutions. volume of obscured transactions and rulemaking need not be resubmitted, as
DATES: Written comments on this activities through the U.S. financial FinCEN will consider all comments
document must be submitted on or system. Simultaneously with the received to date. In addition, if FinCEN
before January 26, 2016. issuance of the NOF, FinCEN also decides to consider any additional
ADDRESSES: You may submit comments,
published in the Federal Register a unclassified, non-protected material
identified by 1506–AB27, by any of the related Notice of Proposed Rulemaking other than that provided in the
following methods: (NPRM) proposing the imposition of the comments, such information will be
• Federal E-rulemaking Portal: fifth special measure available under added to www.regulations.gov [Fincen–
http://www.regulations.gov. Follow the Section 311 against FBME.2 In 2014–0007].
instructions for submitting comments. particular, FinCEN proposed to prohibit
II. Proposed Imposition of the Fifth
Include 1506–AB27 in the submission. covered U.S. financial institutions from
Special Measure
• Mail: The Financial Crimes opening or maintaining a correspondent
account in the United States for, or on On October 26, 2001, the President
Enforcement Network, P.O. Box 39,
behalf of, FBME. On July 29, 2015, after signed into law the Uniting and
Vienna, VA 22183. Include 1506–AB27
considering comments from the public Strengthening America by Providing
in the body of the text. Please submit
on these documents, and other Appropriate Tools Required to Intercept
comments by one method only.
information available to FinCEN, and Obstruct Terrorism Act of 2001,
• Absent a sufficient showing that a
including both public and non-public Public Law 107–56 (the USA PATRIOT
submission warrants confidential
reporting, FinCEN published in the Act). Title III of the USA PATRIOT Act
treatment, comments submitted in
Federal Register a Final Rule imposing amends the anti-money laundering
response to this document will become
the fifth special measure as proposed in provisions of the Bank Secrecy Act
a matter of public record. Therefore, you
the NPRM, with an effective date of (BSA), codified at 12 U.S.C. 1829b, 12
should generally only submit
August 28, 2015.3 U.S.C. 1951–1959, and 31 U.S.C. 5311–
information that you wish to make
FBME filed suit on August 7, 2015 in 5314, 5316–5332, to promote the
publicly available.
Inspection of comments: The public the United States District Court for the prevention, detection, and prosecution
dockets for FinCEN can be found at District of Columbia and sought a of international money laundering and
www.Regulations.gov. Proposed and preliminary injunction against the Final the financing of terrorism. Regulations
final rules published by FinCEN in the Rule. On August 27, 2015, the Court implementing the BSA appear at 31 CFR
Federal Register are searchable by granted the motion for preliminary chapter X. The authority of the
docket number, RIN, or document title, injunction and enjoined the Final Rule Secretary of the Treasury to administer
among other things, and the docket from taking effect.4 In its order, the the BSA and its implementing
number, RIN, and title may be found at Court found that FBME was likely to regulations has been delegated to the
succeed on the merits of two of its Director of FinCEN.
the beginning of the document. FinCEN
claims: (i) That FinCEN provided Section 311 of the USA PATRIOT Act
uses the electronic, Internet-accessible
insufficient notice of unclassified, non- grants the Director of FinCEN the
dockets at Regulations.gov as their
protected information on which it relied authority, upon finding that reasonable
complete docket; all hard copies of
during the rulemaking proceedings, and grounds exist for concluding that a
materials that should be in the docket,
(ii) that FinCEN failed to adequately foreign jurisdiction, foreign financial
including public comments, are
consider at least one potentially institution, class of transactions, or type
electronically scanned and placed in the
significant, viable, and obvious of account is of ‘‘primary money
docket. In general, FinCEN will make all
alternative to the special measure it laundering concern,’’ to require
comments publicly available by posting
imposed.5 On November 6, 2015, the domestic financial institutions and
them on http://www.regulations.gov.
Court granted FinCEN’s motion for financial agencies to take certain
FOR FURTHER INFORMATION CONTACT: The
voluntary remand so that FinCEN may ‘‘special measures’’ to address the
FinCEN Resource Center at (800) 767– engage in further rulemaking to address primary money laundering concern. The
2825.
mstockstill on DSK4VPTVN1PROD with PROPOSALS

special measures enumerated under
SUPPLEMENTARY INFORMATION: 1 Uniting and Strengthening America by
Section 311 are prophylactic safeguards
Providing Appropriate Tools Required to Intercept
I. Regulatory Background and Obstruct Terrorism Act of 2001, Public Law 6 As previously disclosed in the litigation
107–56.
On July 22, 2014, FinCEN published 2 79 FR 42486 (July 22, 2014) (RIN 1506–AB27).
involving the Final Rule, FinCEN notes that it does
in the Federal Register a Notice of not intend to rely on three documents that were
3 80 FR 45057 (July 29, 2015) (RIN 1506–AB27).
originally included in its administrative record
Finding (NOF) in which the Director of 4 FBME Bank Ltd. v. Lew, No. 1:15–cv–01270,
supporting the NOF and NPRM: Two were law
FinCEN explained that reasonable 2015 WL 5081209 (D.D.C. Aug. 27, 2015). enforcement sensitive documents and the other was
grounds exist for concluding that FBME 5 Id. at *5. mistakenly included.

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Federal Register / Vol. 80, No. 228 / Friday, November 27, 2015 / Proposed Rules 74067

FCMs to meet the capital requirements account under special measure five ADDRESSES: Submit your comments,
established by the CFTC. would not impact a substantial number identified by Docket ID Number EPA–
For purposes of the RFA, an of small entities. R03–OAR–2015–0686 by one of the
introducing broker-commodities dealer following methods:
is considered small if it has less than C. Certification A. www.regulations.gov. Follow the
$35,500,000 in gross receipts For these reasons, FinCEN certifies on-line instructions for submitting
annually.15 Based on information that the proposals contained in this comments.
provided by the National Futures rulemaking would not have a significant B. Email: fernandez.cristina@epa.gov.
Association (NFA), 95 percent of impact on a substantial number of small C. Mail: EPA–R03–OAR–2015–0686,
introducing brokers-commodities businesses. Cristina Fernandez, Associate Director,
dealers have less than $35.5 million in FinCEN invites comments from Office of Air Program Planning, Air
Adjusted Net Capital and are considered members of the public who believe Protection Division, Mailcode 3AP30,
to be small entities. there would be a significant economic U.S. Environmental Protection Agency,
Mutual funds are defined in 31 CFR impact on small entities from the Region III, 1650 Arch Street,
1010.100(gg) as those investment imposition of any of special measures Philadelphia, Pennsylvania 19103.
companies that are open-end investment one through five. D. Hand Delivery: At the previously-
companies that are registered or are listed EPA Region III address. Such
required to register with the SEC. Jamal El-Hindi, deliveries are only accepted during the
Because FinCEN and the SEC regulate Deputy Director, Financial Crimes Docket’s normal hours of operation, and
substantially the same population, for Enforcement Network. special arrangements should be made
the purposes of the RFA, FinCEN relies [FR Doc. 2015–30119 Filed 11–25–15; 8:45 am] for deliveries of boxed information.
on the SEC’s definition of small BILLING CODE 4810–02–P Instructions: Direct your comments to
business as previously submitted to the Docket ID No. EPA–R03–OAR–2015–
SBA. The SEC has defined the term 0686. EPA’s policy is that all comments
‘‘small entity’’ under the Investment received will be included in the public
ENVIRONMENTAL PROTECTION docket without change, and may be
Company Act to mean an investment
AGENCY made available online at
company that, together with other
investment companies in the same www.regulations.gov, including any
40 CFR Part 52
group of related investment companies, personal information provided, unless
has net assets of $50 million or less as [EPA–R03–OAR–2015–0686; FRL– 9939–37–
the comment includes information
of the end of its most recent fiscal Region 3] claimed to be Confidential Business
year.16 Based on SEC estimates, 7 Information (CBI) or other information
percent of mutual funds are classified as Approval and Promulgation of Air whose disclosure is restricted by statute.
‘‘small entities’’ for purposes of the RFA Quality Implementation Plans; Virginia; Do not submit information that you
under this definition.17 Revision to the Definition of Volatile consider to be CBI or otherwise
Organic Compound protected through www.regulations.gov
B. Special Measures One Through Five or email. The www.regulations.gov Web
As noted above, 80 percent of banks, AGENCY: Environmental Protection site is an ‘‘anonymous access’’ system,
94 percent of credit unions, 17 percent Agency (EPA). which means EPA will not know your
of broker-dealers, 95 percent of ACTION: Proposed rule. identity or contact information unless
introducing brokers-commodities, zero you provide it in the body of your
FCMs, and 7 percent of mutual funds SUMMARY: The Environmental Protection comment. If you send an email
are small entities. The limited number Agency (EPA) proposes to approve the comment directly to EPA without going
of foreign banking institutions with State Implementation Plan (SIP) through www.regulations.gov, your
which FBME maintains or will maintain revision submitted by the email address will be automatically
accounts will likely limit the number of Commonwealth of Virginia for the captured and included as part of the
affected covered financial institutions to purpose of revising the definition of comment that is placed in the public
the largest U.S. banks, which actively volatile organic compound (VOC). In the docket and made available on the
engage in international transactions. Final Rules section of this Federal Internet. If you submit an electronic
Thus, the imposition of the Register, EPA is approving the State’s comment, EPA recommends that you
recordkeeping, information collection, SIP submittal as a direct final rule include your name and other contact
or reporting provisions in any of special without prior proposal because the information in the body of your
measures one through four would not Agency views this as a noncontroversial comment and with any disk or CD–ROM
impact a substantial number of small submittal and anticipates no adverse you submit. If EPA cannot read your
entities. Similarly, the imposition of the comments. A detailed rationale for the comment due to technical difficulties
prohibition on maintaining approval is set forth in the direct final and cannot contact you for clarification,
correspondent accounts for foreign rule. If no adverse comments are EPA may not be able to consider your
banking institutions that engage in received in response to this action, no comment. Electronic files should avoid
transactions involving FBME under the further activity is contemplated. If EPA the use of special characters, any form
fifth special measure, together with receives adverse comments, the direct of encryption, and be free of any defects
final rule will be withdrawn and all or viruses.
mstockstill on DSK4VPTVN1PROD with PROPOSALS

related notice and special due diligence,
would not impact a substantial number public comments received will be Docket: All documents in the
of small entities. Finally, imposing addressed in a subsequent final rule electronic docket are listed in the
conditions on the opening or based on this proposed rule. EPA will www.regulations.gov index. Although
maintenance of such a correspondent not institute a second comment period. listed in the index, some information is
Any parties interested in commenting not publicly available, i.e., CBI or other
15 SBA Size Standards at 28.
on this action should do so at this time. information whose disclosure is
16 17 CFR 270.0–10. DATES: Comments must be received in restricted by statute. Certain other
17 78 FR 23637, 23658 (April 19, 2013). writing by December 28, 2015. material, such as copyrighted material,

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Document Created: 2015-12-14 14:05:34
Document Modified: 2015-12-14 14:05:34
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Proposed Rules
Action		Proposed rule; re-opening of comment period and availability of supplemental information.
Dates		Written comments on this document must be submitted on or before January 26, 2016.
Contact		The FinCEN Resource Center at (800) 767-2825.
FR Citation		80 FR 74064
RIN Number		1506-AB27
80 FR 74064 - Imposition of Special Measure Against FBME Bank Ltd., Formerly Known as the Federal Bank of the Middle East Ltd., as a Financial Institution of Primary Money Laundering Concern

DEPARTMENT OF THE TREASURYFinancial Crimes Enforcement Network

Federal Register Volume 80, Issue 228 (November 27, 2015)

DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
