81 FR 11648 - Financial Crimes Enforcement Network; Withdrawal of Finding Regarding Banca Privada d'Andorra

DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network

Federal Register Volume 81, Issue 43 (March 4, 2016)

This document withdraws FinCEN's finding that Banca Privada d'Andorra (``BPA'') is a financial institution of primary money laundering concern, pursuant to Section 311 of the USA PATRIOT Act (``Section 311''), codified at 31 U.S.C. 5318A. Because of material subsequent developments that have mitigated the money laundering risks associated with BPA, FinCEN has determined that BPA is no longer a primary money laundering concern that warrants the implementation of a special measure under Section 311. Elsewhere in this issue of the Federal Register, FinCEN is publishing a withdrawal of the related notice of proposed rulemaking that would have imposed a special measure against BPA.

[Federal Register Volume 81, Number 43 (Friday, March 4, 2016)]
[Notices]
[Pages 11648-11649]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-04767]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network


Financial Crimes Enforcement Network; Withdrawal of Finding 
Regarding Banca Privada d'Andorra

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

ACTION: Withdrawal of finding.

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SUMMARY: This document withdraws FinCEN's finding that Banca Privada 
d'Andorra (``BPA'') is a financial institution of primary money 
laundering concern, pursuant to Section 311 of the USA PATRIOT Act 
(``Section 311''), codified at 31 U.S.C. 5318A. Because of material 
subsequent developments that have mitigated the money laundering risks 
associated with BPA, FinCEN has determined that BPA is no longer a 
primary money laundering concern that warrants the implementation of a 
special measure under Section 311. Elsewhere in this issue of the 
Federal Register, FinCEN is publishing a withdrawal of the related 
notice of proposed rulemaking that would have imposed a special measure 
against BPA.

DATES: The finding is withdrawn as of March 4, 2016.

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

SUPPLEMENTARY INFORMATION:

I. Background

    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 (``Section 311'') 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 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)-(b)(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 
by covered U.S. financial institutions.

II. The Finding and Notice of Proposed Rulemaking

    On March 13, 2015, FinCEN provided notice in the Federal Register 
that it had found Banca Privada d'Andorra (``BPA''), a bank 
headquartered in Andorra, to be of primary money laundering concern.\1\ 
Based on the finding, FinCEN also published on March 13, 2015 a notice 
of proposed rulemaking (``NPRM'') proposing the imposition of the fifth 
special measure with respect to BPA, and invited public comment.\2\ 
Specifically, FinCEN proposed to prohibit covered financial 
institutions from establishing, maintaining, administering, or managing 
in the United States any correspondent account for, or on behalf of, 
BPA. FinCEN also proposed to require a covered financial institution to 
apply special due diligence to all of its foreign correspondent 
accounts that is reasonably designed to guard against processing 
transactions involving BPA. Among other things, covered financial 
institutions would have been required to notify those foreign 
correspondent account holders that the covered financial institutions 
know or have reason to know provide services to BPA that such 
correspondents may not provide BPA with access to the correspondent 
account maintained at the covered financial institution.
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    \1\ 80 FR 13464 (Mar. 13, 2015).
    \2\ 80 FR 13304 (Mar. 13, 2015) (RIN 1506-AB30). FinCEN publicly 
announced the finding and NPRM on March 10, 2015.
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III. Subsequent Developments

    Significant developments regarding BPA have occurred since FinCEN 
announced its finding and related NPRM regarding BPA, as described 
below. As a result, BPA is no longer operating as a financial 
institution that poses a money laundering threat to the U.S. financial 
system.
    On March 11, 2015, the Institut Nacional Andorr[agrave] de Finances 
(``INAF''), the Andorran regulator and supervisor of financial 
institutions, appointed two INAF representatives to oversee BPA's 
operations. On March 12, 2015, the INAF suspended the authority of 
BPA's board of directors, the chief executive officer and two other 
senior managers and appointed special administrators to assume full 
control of BPA. On March 13, 2015, Andorran law enforcement arrested 
BPA's chief executive officer in Andorra on suspicion of money 
laundering.
    The next month, in April 2015, the Andorran parliament enacted a 
law regarding the restructuring and resolution of banks, which created 
a new government agency, Ag[egrave]ncia Estatal de Resoluci[oacute] 
d'Entitats Banc[agrave]ries (``AREB''), for that purpose. On April 27, 
2015, AREB took over control of BPA.\3\ In June 2015, AREB approved a 
resolution plan for BPA, under which the bank's ``good'' and ``bad'' 
assets, liabilities, and clients would be separated. Under the 
resolution plan, the ``good'' assets, liabilities, and clients are to 
be transferred to a bridge bank, and the bridge bank sold.\4\ In July 
2015, AREB announced the creation of the bridge bank, named Vall Banc, 
to receive the transfer of BPA's legitimate assets, liabilities, and 
clients. Vall Banc is wholly-owned by AREB, is registered with the 
INAF, and is supervised by

[[Page 11649]]

Andorran banking supervisory authorities. Vall Banc will not employ the 
high-level BPA managers described in FinCEN's Notice of Finding. In 
addition, any other person who has been or may be identified as related 
to the issues described in the Notice of Finding will not be employed 
at Vall Banc.
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    \3\ Press Release, AREB, AREB Assumes the Tutelage of BPA, April 
27, 2015, (http://areb.ad/images/areb/comunicats/27042015_AREB_ENG.pdf.)
    \4\ Press Release, AREB, AREB Will Create a `Good Bank' with 
Legitimate Assets and Liabilities Segregated from BPA, June 15, 
2015, (http://areb.ad/images/areb/comunicats/15062015_AREB_ENG.pdf.)
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    After the good assets, liabilities, and clients are transferred 
from BPA to Vall Banc, BPA will remain under the control of AREB. 
FinCEN understands that BPA will not be reactivated as an operational 
financial institution at any point except to facilitate the 
finalization of the resolution process. AREB, in coordination with 
other authorities in Andorra, ultimately intends to liquidate BPA 
following the resolution of judicial proceedings in Andorra and other 
jurisdictions.

IV. Withdrawal of the Finding

    Because of these subsequent developments, BPA no longer operates in 
a manner that poses a money laundering threat to the U.S. financial 
system. FinCEN has determined that the steps taken by the authorities 
in Andorra sufficiently protect the U.S. financial system from the 
money laundering risks previously associated with BPA. FinCEN therefore 
has determined that BPA no longer is a primary money laundering concern 
and will not impose any special measures under Section 311 with respect 
to BPA.
    For these reasons, FinCEN hereby withdraws its finding that BPA is 
of primary money laundering concern published on March 13, 2015, and 
announced on March 10, 2015.

Jamal El-Hindi,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2016-04767 Filed 3-3-16; 8:45 am]
 BILLING CODE 4810-02-P