81 FR 9139 - Financial Crimes Enforcement Network; Withdrawal of Finding and Notice of Proposed Rulemaking Regarding Liberty Reserve S.A.

DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network

Federal Register Volume 81, Issue 36 (February 24, 2016)

This document withdraws FinCEN's finding that Liberty Reserve S.A. (``Liberty Reserve'') is a financial institution of primary money laundering concern and the related notice of proposed rulemaking seeking to impose the fifth special measure regarding Liberty Reserve, pursuant to section 311 of the USA PATRIOT Act (``Section 311''). Because of material subsequent developments that have mitigated the money laundering risks associated with Liberty Reserve, FinCEN has determined that Liberty Reserve is no longer a primary money laundering concern that warrants the implementation of a special measure under Section 311.

[Federal Register Volume 81, Number 36 (Wednesday, February 24, 2016)]
[Proposed Rules]
[Page 9139]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-03830]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 1010

RIN 1506-AB23


Financial Crimes Enforcement Network; Withdrawal of Finding and 
Notice of Proposed Rulemaking Regarding Liberty Reserve S.A.

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

ACTION: Withdrawal of finding and notice of proposed rulemaking.

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SUMMARY: This document withdraws FinCEN's finding that Liberty Reserve 
S.A. (``Liberty Reserve'') is a financial institution of primary money 
laundering concern and the related notice of proposed rulemaking 
seeking to impose the fifth special measure regarding Liberty Reserve, 
pursuant to section 311 of the USA PATRIOT Act (``Section 311''). 
Because of material subsequent developments that have mitigated the 
money laundering risks associated with Liberty Reserve, FinCEN has 
determined that Liberty Reserve is no longer a primary money laundering 
concern that warrants the implementation of a special measure under 
Section 311.

DATES: The finding and notice of proposed rulemaking are withdrawn as 
of February 24, 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) through 
(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.

II. The Finding and Notice of Proposed Rulemaking

A. The Finding and Notice of Proposed Rulemaking

    Based upon review and analysis of relevant information, 
consultations with relevant Federal agencies and departments, and after 
consideration of the factors enumerated in Section 311, the Director of 
FinCEN found that reasonable grounds existed for concluding that 
Liberty Reserve S.A. (``Liberty Reserve'') was a financial institution 
of primary money laundering concern. FinCEN published a proposed rule 
proposing the imposition of the fifth special measure on June 6, 2013, 
pursuant to the authority under 31 U.S.C. 5318A.\1\
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    \1\ See 78 FR 34008 (June 6, 2013) (RIN 1506-AB23).
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B. Subsequent Developments

    Since FinCEN's finding and related NPRM regarding Liberty Reserve, 
material facts regarding the circumstances of the proposed rulemaking 
have changed. Liberty Reserve was a web-based money transfer system 
when FinCEN published notice of its finding and NPRM on June 6, 2013. 
The Department of Justice announced on May 28, 2013 that it had charged 
seven of Liberty Reserve's principals and employees with money-
laundering, seized five domain names, including ``LibertyReserve.com,'' 
and seized or restricted the activity of 45 bank accounts related to 
Liberty Reserve. In light of these actions, Liberty Reserve has since 
ceased to function as a financial institution.

III. Withdrawal of the Finding and NPRM

    For the reasons set forth above, FinCEN hereby withdraws its 
finding that Liberty Reserve is of primary money laundering concern and 
the related NPRM published on June 6, 2013, seeking to impose the fifth 
special measure regarding Liberty Reserve.

Jamal El-Hindi,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2016-03830 Filed 2-23-16; 8:45 am]
 BILLING CODE 4810-02-P