80 FR 80308 - Notice of Availability of Regulatory Impact Assessment and Initial Regulatory Flexibility Analysis Regarding the Customer Due Diligence Requirements for Financial Institutions
DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network Federal Register Volume 80, Issue 247 (December 24, 2015)
Financial Crimes Enforcement Network
Federal Register Volume 80, Issue 247 (December 24, 2015)
| Page Range | 80308-80310 | |
| FR Document | 2015-32378 |
[Federal Register Volume 80, Number 247 (Thursday, December 24, 2015)] [Proposed Rules] [Pages 80308-80310] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-32378] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Financial Crimes Enforcement Network 31 CFR Parts 1010, 1020, 1023, 1024, and 1026 [Docket Number: FinCEN-2014-0001] Notice of Availability of Regulatory Impact Assessment and Initial Regulatory Flexibility Analysis Regarding the Customer Due Diligence Requirements for Financial Institutions AGENCY: Financial Crimes Enforcement Network (FinCEN), Department of the Treasury. ACTION: Notice of availability; Regulatory Impact Assessment and Initial Regulatory Flexibility Analysis. ----------------------------------------------------------------------- SUMMARY: By this notice, the Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury (Treasury) announces the availability of two related documents that are part of the Customer Due Diligence Requirements for Financial Institutions Proposed Rulemaking: A Regulatory Impact Assessment (RIA) and an Initial Regulatory Flexibility Analysis (IRFA). DATES: Written comments on the RIA and IRFA must be received on or before January 25, 2016. ADDRESSES: The RIA and IRFA are available on FinCEN's Web site at http://www.fincen.gov and at http://www.regulations.gov. Comments on the RIA and IRFA may be submitted, identified by Regulatory Identification Number (RIN) 1506-AB25, by any of the following methods:Federal E-rulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. Include RIN 1506-AB25 in the submission. Refer to Docket Number FINCEN-2014-0001. Mail: FinCEN, P.O. Box 39, Vienna, VA 22183. Include 1506- AB25 in the body of the text. Please submit comments by one method only. All comments submitted in response to this Notice of Availability will become a matter of public record. Therefore, you should submit only information that you wish to make publicly available. Inspection of comments: The public dockets for FinCEN can be found at Regulations.gov. Federal Register notices published by FinCEN 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 notice. FinCEN uses the electronic, Internet- accessible dockets at Regulations.gov as their complete, official- record docket; [[Page 80309]] 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: FinCEN's Resource Center, (800) 767- 2825. SUPPLEMENTARY INFORMATION: I. Background The Secretary has delegated to the Director of FinCEN the authority to implement, administer and enforce compliance with the Bank Secrecy Act (BSA) and associated regulations.\1\ FinCEN is authorized to impose anti-money laundering (AML) program requirements on financial institutions, \2\ as well as to require financial institutions to maintain procedures to ensure compliance with the BSA and the regulations promulgated thereunder or to guard against money laundering.\3\ --------------------------------------------------------------------------- \1\ Treasury Order 180-01 (Jul. 1, 2014). \2\ 31 U.S.C. 5318(h)(2). \3\ 31 U.S.C. 5318(a)(2). --------------------------------------------------------------------------- II. The Notice of Proposed Rulemaking On August 4, 2014, FinCEN published a Notice of Proposed Rulemaking (NPRM) in the Federal Register entitled ``Customer Due Diligence Requirements for Financial Institutions,'' that would amend existing BSA regulations to clarify and strengthen customer due diligence (CDD) requirements for banks, brokers or dealers in securities, mutual funds, and futures commission merchants and introducing brokers in commodities (collectively covered financial institutions). It also proposed to impose a new requirement under the BSA to identify the beneficial owners of legal entity customers, subject to certain exemptions. III. Comments The comment period for the proposed rule closed on October 3, 2014. FinCEN received a total of 135 comments representing a wide range of views covering most aspects of the NPRM. A large number of commenters asserted that the NPRM lacked sufficient data to support its estimate of costs and substantially underestimated implementation and compliance-related costs. A. Regulatory Impact Assessment The primary purpose of the proposed CDD requirements is to assist financial investigations by law enforcement in order to severely impair criminals' ability to exploit the anonymity provided by the of use legal entities to engage in financial crimes including fraud, money laundering, terrorist financing, corruption, and sanctions evasion. Based on comments and information received during further outreach to some financial institutions that provided comments on the proposal, FinCEN determined that the implementation and compliance-related costs may exceed $100 million annually, making this rulemaking an ``economically significant regulatory action.'' In such cases, Executive Orders 13563 and 12866 require agencies to conduct an RIA, which the agencies must publish for comment. At FinCEN's request, Treasury's Office of Economic Policy conducted an RIA of the proposed rule, developed in accordance with these Executive Orders, which evaluates the economic costs and benefits of the CDD rule and its alternatives. According to Office of Management and Budget (OMB) guidance, an RIA must contain the following three basic elements: (1) A statement of the need for the regulatory action; (2) a clear identification of a range of regulatory approaches; and (3) an estimate of the benefits and costs--both quantitative and qualitative--of the proposed regulatory action and its alternatives. The 2015 National Money Laundering Risk Assessment estimated the annual volume of money laundering or illicit proceeds generated in the United States due to financial crimes at $300 billion. The RIA for the proposed CDD rule provides an economic rationale for the rulemaking, and outlines the anticipated costs and benefits of the proposal. Because some of the important benefits and costs generated by the proposed rule cannot be fully quantified, the RIA employs a ``threshold'' or ``breakeven'' analysis to evaluate how minimally effective the proposed rule would have to be such that its benefits would just justify its costs. Such analysis is utilized to evaluate how likely it is that a proposed policy change would create a net benefit to society in instances where the costs or benefits are not fully quantifiable.\4\ --------------------------------------------------------------------------- \4\ See Custom and Border Protection, Department of Homeland Security, ``Importer Security Filings and Additional Carrier Requirements,'' 73 FR 71730 (November 25, 2008). See also Customs and Border Protection, Department of Homeland Security, ``Advance Electronic Transmission of Passenger and Crew Member Manifests for Commercial Aircraft and Vessels,'' 72 FR 48320 (August 23, 2007). --------------------------------------------------------------------------- To disrupt the flow of illicit proceeds more effectively, the proposed CDD rule would provide Federal and state regulators and law enforcement with easier access to beneficial ownership information of legal entities--i.e., the natural persons who own or control these entities--to support law enforcement and counter-terrorism investigations. FinCEN believes that the proposed CDD rule would lead to a meaningful reduction in the flow of illicit proceeds in the United States. For example, shell and front companies are often used to launder proceeds of drug trafficking and fraud. The imposition of a beneficial ownership requirement, through the proposed CDD rule, would provide increased transparency into shell or front companies, thereby assisting law enforcement and regulators to identify the bad actors behind such companies and providing a greater deterrent to their use with respect to illicit gains. Furthermore, FinCEN believes that the proposed CDD rule would lead to a reduction in other illicit activities, the costs of which can run into the billions of dollars in terms of property destruction, foregone tax revenues, and even loss of life when considering the violent actions undertaken by terrorist and other criminal organizations that are facilitated by the movement of funds through legal entities. Although the potential benefits of the rule are difficult to quantify, the breakeven analysis utilized in the RIA indicates that the proposed CDD rule would only need to generate a very modest relative decrease in illicit activity to justify the costs it would impose. Taking into account only the estimated annual flow of illicit funds in the United States of $300 billion, the breakeven analysis allows FinCEN to conservatively conclude that the CDD rule would need to reduce the estimated annual flow of illicit proceeds by only 0.45 percent (in each year of 2016-2025, the years covered by the RIA) in order to justify the costs the rule would impose over a ten-year period. FinCEN expects more benefits given that greater transparency would reduce illicit activity in other ways, as referenced above. B. Initial Regulatory Flexibility Analysis The IRFA evaluates the economic impact of the CDD rule on small entities, and was developed in accordance with the Regulatory Flexibility Act, 5 U.S.C. 601-612. The Regulatory Flexibility Act requires agencies to assess the impact of regulatory action on small entities, and is a requirement independent from the RIA (although the IRFA relies in part on the analysis conducted in the RIA). As a result of this analysis, Treasury and FinCEN continue to believe that, while [[Page 80310]] the proposed rule would apply to a substantial number of small entities, it would not have a significant economic impact on a substantial number of small entities. Jamal El-Hindi, Deputy Director, Financial Crimes Enforcement Network. [FR Doc. 2015-32378 Filed 12-23-15; 8:45 am] BILLING CODE P
![80308 Federal Register / Vol. 80, No. 247 / Thursday, December 24, 2015 / Proposed Rules
DATES: Interested persons are invited to will also make all the comments it DEPARTMENT OF THE TREASURY
submit written comments on the receives available for public inspection
proposed rule on or before January 20, during normal business hours at the Financial Crimes Enforcement Network
2016. The comment period for the Employment and Training
proposed rule published on November Administration’s (ETA) Office of Policy 31 CFR Parts 1010, 1020, 1023, 1024,
6, 2015 (80 FR 68907) is extended. Development and Research at the above and 1026
Comments, identified by RIN 1205– address. If you need assistance to review
[Docket Number: FinCEN–2014–0001]
AB59, must be received on or before the comments, the Department will
January 20, 2016. provide you with appropriate aids such Notice of Availability of Regulatory
ADDRESSES: You may submit comments, as readers or print magnifiers. The Impact Assessment and Initial
identified by Regulatory Information Department will make copies of the rule Regulatory Flexibility Analysis
Number (RIN) 1205–AB59, by any one available, upon request, in large print Regarding the Customer Due Diligence
of the following methods: and as an electronic file on computer Requirements for Financial Institutions
• Federal e-Rulemaking Portal disk. The Department will consider
www.regulations.gov. Follow the Web providing the proposed rule in other AGENCY: Financial Crimes Enforcement
site instructions for submitting formats upon request. To schedule an Network (FinCEN), Department of the
comments. appointment to review the comments Treasury.
• Mail or Hand Delivery/Courier: and/or obtain the rule in an alternate ACTION: Notice of availability;
Please submit all written comments format, contact the ETA Office of Policy Regulatory Impact Assessment and
(including disk and CD–ROM Development and Research at (202) Initial Regulatory Flexibility Analysis.
submissions) to Adele Gagliardi, 693–3700 (VOICE) (this is not a toll-free
Administrator, Office of Policy number) or 1–877–889–5627 (TTY/ SUMMARY: By this notice, the Financial
Development and Research, TDD). Crimes Enforcement Network (FinCEN)
Employment and Training of the Department of the Treasury
FOR FURTHER INFORMATION CONTACT:
Administration, U.S. Department of (Treasury) announces the availability of
Adele Gagliardi, Office of Policy two related documents that are part of
Labor, 200 Constitution Avenue NW., Development and Research, ETA, U.S.
Room N–5641, Washington, DC 20210. the Customer Due Diligence
Department of Labor, 200 Constitution Requirements for Financial Institutions
Please submit your comments by only Avenue NW., Room N–5641,
one method and within the designated Proposed Rulemaking: A Regulatory
Washington, DC 20210; Telephone (202) Impact Assessment (RIA) and an Initial
comment period. Comments received by 693–3700 (this is not a toll-free
means other than those listed above or Regulatory Flexibility Analysis (IRFA).
number). Individuals with hearing or
received after the comment period has DATES: Written comments on the RIA
speech impairments may access the
closed will not be reviewed. The telephone number above via TTY by and IRFA must be received on or before
Department will post all comments calling the toll-free Federal Information January 25, 2016.
received on http://www.regulations.gov Relay Service at 1–800–877–8339. ADDRESSES: The RIA and IRFA are
without making any change to the SUPPLEMENTARY INFORMATION: This
available on FinCEN’s Web site at
comments, including any personal document extends the public comment http://www.fincen.gov and at http://
information provided. The http:// period established in the Federal www.regulations.gov. Comments on the
www.regulations.gov Web site is the Register proposed rule of November 6, RIA and IRFA may be submitted,
Federal e-rulemaking portal and all 2015. In that document, the Department identified by Regulatory Identification
comments posted there are available proposed amendments to its regulations Number (RIN) 1506–AB25, by any of the
and accessible to the public. The governing equal opportunity regulations following methods:
Department cautions commenters that implement the National • Federal E-rulemaking Portal: http://
against including personal information Apprenticeship Act of 1937. These www.regulations.gov. Follow the
such as Social Security Numbers, regulations prohibit discrimination in instructions for submitting comments.
personal addresses, telephone numbers, registered apprenticeship on the basis of Include RIN 1506–AB25 in the
and email addresses in their comments race, color, religion, national origin, and submission. Refer to Docket Number
as such information will become sex, and require that sponsors of FINCEN–2014–0001.
viewable by the public on the http:// registered apprenticeship programs take • Mail: FinCEN, P.O. Box 39, Vienna,
www.regulations.gov Web site. It is the affirmative action to provide equal VA 22183. Include 1506–AB25 in the
commenter’s responsibility to safeguard opportunity in such programs. The body of the text. Please submit
his or her information. Comments Department is hereby extending the comments by one method only. All
submitted through http:// comment period, which was set to end comments submitted in response to this
www.regulations.gov will not include on January 5, 2016 to January 20, 2016. Notice of Availability will become a
the commenter’s email address unless matter of public record. Therefore, you
the commenter chooses to include that List of Subjects in 20 CFR Parts 29 and should submit only information that
information as part of his or her 30 you wish to make publicly available.
comment. Postal delivery in Administrative practice and • Inspection of comments: The public
Washington, DC, may be delayed due to procedure, Apprenticeship, dockets for FinCEN can be found at
security concerns. Therefore, the Employment, Equal employment Regulations.gov. Federal Register
tkelley on DSK3SPTVN1PROD with PROPOSALS
Department encourages the public to opportunity, Reporting and notices published by FinCEN are
submit comments through the http:// recordkeeping requirements, Training. searchable by docket number, RIN, or
www.regulations.gov Web site. document title, among other things, and
Docket: For access to the docket to Portia Wu, the docket number, RIN, and title may
read background documents or Assistant Secretary, Employment and be found at the beginning of the notice.
comments received, go to the Federal Training Administration. FinCEN uses the electronic, Internet-
eRulemaking portal at http:// [FR Doc. 2015–32310 Filed 12–23–15; 8:45 am] accessible dockets at Regulations.gov as
www.regulations.gov. The Department BILLING CODE 4510–FP–P their complete, official-record docket;
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![80310 Federal Register / Vol. 80, No. 247 / Thursday, December 24, 2015 / Proposed Rules
the proposed rule would apply to a ‘‘NOAA–NMFS–2013–0146’’ by either federally managed fish stocks. The
substantial number of small entities, it of the following methods: Magnuson-Stevens Act requires that in
would not have a significant economic • Electronic Submission: Submit all allocating fishing privileges among
impact on a substantial number of small electronic public comments via the fishermen, such allocation shall be fair
entities. Federal e-Rulemaking Portal. Go to and equitable to all such fishermen,
www.regulations.gov/ reasonably calculated to promote
Jamal El-Hindi,
#!docketDetail;D=NOAA-NMFS-2013- conservation, and carried out in such a
Deputy Director, Financial Crimes 0146, click the ‘‘Comment Now!’’ icon, manner that no particular individual,
Enforcement Network.
complete the required fields, and enter corporation, or other entity acquires an
[FR Doc. 2015–32378 Filed 12–23–15; 8:45 am] excessive share of such privileges. For
or attach your comments.
BILLING CODE P • Mail: Submit written comments to stocks like red snapper, which are
Peter Hood, Southeast Regional Office, subject to a rebuilding plan, the
NMFS, 263 13th Avenue South, St. Magnuson-Stevens Act also requires
DEPARTMENT OF COMMERCE Petersburg, FL 33701. that harvest restrictions and recovery
Instructions: Comments sent by any benefits are fairly and equitably
National Oceanic and Atmospheric other method, to any other address or allocated among the commercial,
Administration individual, or received after the end of recreational, and charter fishing sectors.
the comment period, may not be These mandates are intended to ensure
50 CFR Part 622 considered by NMFS. All comments fishery resources are managed for the
received are a part of the public record greatest overall benefit to the nation,
RIN 0648–BD68 particularly with respect to providing
and will generally be posted for public
viewing on www.regulations.gov food production and recreational
Fisheries of the Caribbean, Gulf of
without change. All personal identifying opportunities, and protecting marine
Mexico, and South Atlantic; Reef Fish
information (e.g., name, address, etc.), ecosystems. Amendment 28 would
Fishery of the Gulf of Mexico; Red
confidential business information, or reallocate red snapper harvest from the
Snapper Management Measures;
otherwise sensitive information commercial sector to the recreational
Amendment 28
submitted voluntarily by the sender will sector. The reallocation would reduce
AGENCY: National Marine Fisheries be publicly accessible. NMFS will the current commercial allocation from
Service (NMFS), National Oceanic and accept anonymous comments (enter ‘‘N/ 51 percent to 48.5 percent of the stock
Atmospheric Administration (NOAA), A’’ in the required fields if you wish to ACL and the recreational allocation
Commerce. remain anonymous). would increase from 49 percent to 51.5
ACTION: Notice of availability; request Electronic copies of Amendment 28, percent of the stock ACL. All weights
for comments. which includes an environmental described in this notice are in round
impact statement, a fishery impact (whole) weight.
SUMMARY: The Gulf of Mexico Fishery statement, a Regulatory Flexibility Act Management Measures Contained in
Management Council (Council) has analysis, and a regulatory impact Amendment 28
submitted Amendment 28 to the Fishery review, may be obtained from the
Management Plan for the Reef Fish The initial Gulf red snapper allocation
Southeast Regional Office Web site at
Resources of the Gulf of Mexico (FMP) was set in Reef Fish Amendment 1 to
http://sero.nmfs.noaa.gov.
for review, approval, and the FMP and was based on the
FOR FURTHER INFORMATION CONTACT: percentage of total landings during the
implementation by NMFS. Amendment Peter Hood, Southeast Regional Office,
28 would revise the Gulf of Mexico base period of 1979–1987 (55 FR 2078,
NMFS, telephone: 727–824–5305; email: January 22, 1990). In Amendment 28,
(Gulf) red snapper commercial and Peter.Hood@noaa.gov.
recreational sector allocations of the the Council evaluated several different
SUPPLEMENTARY INFORMATION: The Gulf red snapper allocation alternatives.
stock annual catch limit (ACL). If
Magnuson-Stevens Fishery These alternatives included
Amendment 28 is approved and
Conservation and Management Act straightforward allocation percentage
implemented, it would result in changes
(Magnuson-Stevens Act) requires each changes, changes based on the red
to the red snapper commercial and
regional fishery management council to snapper stock ACL increases, and
recreational quotas and the recreational
submit any FMP or amendment to changes in the recreational catch
annual catch target (ACT). Additionally,
NMFS for review and approval, partial information used in the 2014 update
the Federal charter vessel/headboat and
approval, or disapproval. The assessment to the 2013 Gulf red snapper
private angling component ACLs and
Magnuson-Stevens Act also requires Southeast Data, Assessment, and
ACTs, which are based on the
that NMFS, upon receiving a plan or Review (SEDAR) 31 benchmark
recreational sector’s ACL and ACT,
amendment, publish an announcement assessment. The Council initially
would also be revised. The intent of
in the Federal Register notifying the considered alternatives that would
Amendment 28 is to reallocate the Gulf
public that the plan or amendment is increase the commercial sector’s red
red snapper harvest consistent with the
available for review and comment. snapper allocation. At that time,
2014 red snapper update assessment analyses from the NMFS Southeast
The FMP being revised by
while ensuring the allowable catch and Fisheries Science Center (SEFSC)
Amendment 28 was prepared by the
recovery benefits from the rebuilding suggested that shifting red snapper
Council and implemented through
red snapper stock are fairly and
tkelley on DSK3SPTVN1PROD with PROPOSALS
regulations at 50 CFR part 622 under the allocation from the commercial to the
equitably allocated between the recreational sector would increase net
authority of the Magnuson-Stevens Act.
commercial and recreational sectors to economic benefits. Thus, the Council
achieve optimum yield (OY). Background determined that reallocating red
DATES: Written comments must be The Magnuson-Stevens Act requires snapper to the commercial sector would
received on or before February 22, 2016. NMFS and regional fishery management not achieve the purpose of the
ADDRESSES: You may submit comments councils to prevent overfishing and amendment at that time, which was to
on Amendment 28, identified by achieve, on a continuing basis, OY from increase the net benefits from red
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Document Created: 2015-12-24 02:24:50
Document Modified: 2015-12-24 02:24:50
| 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 | Notice of availability; Regulatory Impact Assessment and Initial Regulatory Flexibility Analysis. | |
| Dates | Written comments on the RIA and IRFA must be received on or before January 25, 2016. | |
| Contact | FinCEN's Resource Center, (800) 767- 2825. | |
| FR Citation | 80 FR 80308 | |
| CFR Citation | 31
CFR
1010 31 CFR 1020 31 CFR 1023 31 CFR 1024 31 CFR 1026 |
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