82 FR 45182 - Customer Due Diligence Requirements for Financial Institutions; Correction

DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network

Federal Register Volume 82, Issue 187 (September 28, 2017)

FinCEN is making technical corrections to a final rule published in the Federal Register on Wednesday, May 11, 2016. The final rule relates to certain customer due diligence standards applicable to covered financial institutions, defined as banks, brokers or dealers in securities, mutual funds, and futures commission merchants and introducing brokers in commodities. As published, the final rule contains technical errors that could cause confusion if not corrected.

[Federal Register Volume 82, Number 187 (Thursday, September 28, 2017)]
[Rules and Regulations]
[Pages 45182-45187]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-20777]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Parts 1010 and 1024

[Docket No. Fincen-2014-0001]

RIN 1506-AB25


Customer Due Diligence Requirements for Financial Institutions; 
Correction

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

ACTION: Correcting amendments.

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SUMMARY: FinCEN is making technical corrections to a final rule 
published in the Federal Register on Wednesday, May 11, 2016. The final 
rule relates to certain customer due diligence standards applicable to 
covered financial institutions, defined as banks, brokers or dealers in 
securities, mutual funds, and futures commission merchants and 
introducing brokers in commodities. As published, the final rule 
contains technical errors that could cause confusion if not corrected.

DATES: Effective Date: These corrections are effective September 28, 
2017.
    Applicability date: Covered financial institutions must comply with 
these rules and the rules published in the Federal Register on May 11, 
2016 (81 FR 29398) by May 11, 2018.

FOR FURTHER INFORMATION CONTACT: FinCEN Resource Center at 1-800-767-
2825. E-mail inquiries can be sent to [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    On May 11, 2016, FinCEN published a final rule (81 FR 29398) 
entitled ``Customer Due Diligence Requirements for Financial 
Institutions.'' The final rule amends the Bank Secrecy Act regulations 
to include a new requirement for covered financial institutions to 
identify and verify the identity of beneficial owners of legal entity 
customers, subject to certain exclusions and exemptions. The final rule 
also amends the anti-money laundering (AML) program requirements for 
all covered institutions. This document makes technical corrections to 
the Certification Form located in appendix A to 31 CFR 1010.230 and 
adds a paragraph to 31 CFR 1024.210(b) that was inadvertently omitted 
in the final rule published in the Federal Register with an effective 
date of July 11, 2016, and an applicability date of May 11, 2018.

II. Description of the Technical Corrections

A. Correction to Appendix A to Sec.  1010.230

    This document makes technical corrections to Appendix A 
(Certification Form) to 31 CFR 1010.230. Appendix A inadvertently 
omitted the words ``, Type,'' after ``Name'' in the heading of Section 
II.b.\1\ Appendix A also included the term ``foreign persons'' in lieu 
of the term ``non-U.S. persons'' in several places and omitted the term 
``Social Security number'' as described below. Because appendix A was 
originally

[[Page 45183]]

printed in the Federal Register from camera-ready copy rather than from 
typed text, the entire Appendix A, with the corrections, must be 
reprinted in the Federal Register from new camera-ready copy. As 
revised, appendix A (Certification Form) is identical to the original 
version except for the following: In the first sentence in Part I under 
the heading ``What information do I have to provide?'', the term 
``foreign persons'' is changed to ``non-U.S. persons''; and in Part II: 
The heading of Section II b. is changed to ``b. Name, Type, and Address 
of Legal Entity for Which the Account is Being Opened:''; and in the 
headings of the last column in the Tables in Section II c and Section 
II d, the term ``Foreign Persons'' is changed to ``Non-U.S. Persons'' 
and the term ``Social Security Number'' is added after the term 
``persons''; and in footnote 1, the term ``Foreign Persons'' is changed 
to ``Non-U.S. Persons'' and ``a Social Security Number,'' is inserted 
after the word ``provide''.
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    \1\ See 81 FR 29398, 29455.
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B. Correction to Sec.  1024.210

    This document also makes a technical correction in 31 CFR 1024.210 
by reinserting the training element of the AML program requirements for 
mutual funds, which was inadvertently omitted from the final rule. 
Consistent with 31 U.S.C. 5318(h)(1)(C) and the AML program 
requirements for mutual funds adopted in 2002,\2\ the training element 
appeared in the proposal amending the AML program requirements for 
mutual funds to add a new requirement relating to customer due 
diligence.\3\ In the final rule, however, the training element was 
inadvertently omitted from 31 CFR 1024.210(b). The training element is 
being reinserted by this correction document.
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    \2\ 67 FR 21117, 21121 (April 29, 2002).
    \3\ See 31 CFR 1024.210(b)(4) and (5) in the proposed rule 
published August 4, 2014 (79 FR 45151, 45173).
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III. Administrative Procedure Act and Effective Date

    Under 5 U.S.C. 553(b)(3)(B) of the Administrative Procedure Act 
(APA), an agency may, for good cause, find (and incorporate the finding 
and a brief statement of reasons therefore in the rules issued) that 
notice and public comment procedure thereon are impracticable, 
unnecessary, or contrary to the public interest. This correcting 
document reinserts language inadvertently omitted from the ``Customer 
Due Diligence Requirements for Financial Institutions'' final rule, 
specifically the training element in the AML program rule for mutual 
funds, and deletes a term and adds language that was inadvertently 
omitted from the Certification Form which accompanied the final rule. 
The agency has determined that publishing a notice of proposed 
rulemaking and providing opportunity for public comment is unnecessary.
    Under 5 U.S.C. 553(d)(3) of the APA, the required publication or 
service of a substantive rule shall be made not less than 30 days 
before its effective date, except, among other things, as provided by 
the agency for good cause found and published with the rule. FinCEN 
finds that there is good cause for shortened notice since the revisions 
made by this final rule are minor, non-substantive, and technical. This 
final rule takes effect September 28, 2017 with an applicability date 
of May 11, 2018.

IV. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) does not apply to a rulemaking 
where a general notice of proposed rulemaking is not required.\4\ As 
noted previously, FinCEN has determined that it is unnecessary to 
publish a notice of proposed rulemaking for this final rule. 
Accordingly, the RFA's requirements relating to an initial and final 
regulatory flexibility analysis do not apply.
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    \4\ See 5 U.S.C. 603 and 604.
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V. Executive Order 13563 and 12866

    FinCEN has determined that Executive Orders 13563 and 12866 do not 
apply in this final rulemaking.

VI. Paperwork Reduction Act Notices

    There are no collection of information requirements in this final 
rule.

VII. Unfunded Mandates Act of 1995 Statement

    Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 
1532 (Unfunded Mandates Act), requires that an agency must prepare a 
budgetary impact statement before promulgating any rule likely to 
result in a Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector of $100 million or more in any one year. If a budgetary 
impact statement is required, section 205 of the Unfunded Mandates Act 
also requires an agency to identify and consider a reasonable number of 
regulatory alternatives before promulgating a rule. FinCEN has 
determined that no portion of this final rule will result in 
expenditures by State, local, and tribal governments, or by the private 
sector, of $100 million or more in any one year. Accordingly, this 
final rule is not subject to section 202 of the Unfunded Mandates Act.

List of Subjects in 31 CFR Parts 1010 and 1024

    Administrative practice and procedure, Banks, Banking, Brokers, 
Counter money laundering, Counter-terrorism, Currency, Foreign banking, 
Reporting and recordkeeping requirement, Securities, Terrorism.

Authority and Issuance

    For the reasons set forth in the preamble, chapter X of title 31 of 
the Code of Federal Regulations is amended as follows:

PART 1010--GENERAL PROVISIONS

0
1. The authority citation for part 1010 continues to read as follows:

    Authority:  12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, sec. 314 Pub. L. 107-56, 115 Stat. 307; 
sec. 701, Pub. L. 114-74, 129 Stat. 599.


0
2. In Sec.  1010.230, revise appendix A to read as follows:


Sec.  1010.230  Beneficial ownership requirements for legal entity 
customers.

* * * * *
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PART 1024--RULES FOR MUTUAL FUNDS

0
3. The authority citation for part 1024 continues to read as follows:

    Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5332; title III, sec. 314 Pub. L. 107-56, 115 Stat. 307; 
sec. 701, Pub. L. 114-74, 129 Stat. 599.


0
4. In Sec.  1024.210:
0
a. Redesignate paragraph (b)(4) as paragraph (b)(5);
0
b. In newly redesignated paragraph (b)(5)(ii), remove the words 
``paragraph (b)(4)(ii)'' and add in their place the words ``paragraph 
(b)(5)(ii)''; and
0
c. Add a new paragraph (b)(4).
    The addition reads as follows:


Sec.  1024.210  Anti-money laundering program requirements for mutual 
funds.

* * * * *
    (b) * * *
    (4) Provide ongoing training for appropriate persons; and
* * * * *

    Dated: September 14, 2017.
Jamal El-Hindi,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2017-20777 Filed 9-27-17; 8:45 am]
BILLING CODE 4810-02-C