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)
Financial Crimes Enforcement Network
Federal Register Volume 82, Issue 187 (September 28, 2017)
| Page Range | 45182-45187 | |
| FR Document | 2017-20777 |
[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] ======================================================================= ----------------------------------------------------------------------- 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. ----------------------------------------------------------------------- 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''. --------------------------------------------------------------------------- \1\ See 81 FR 29398, 29455. --------------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \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). --------------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \4\ See 5 U.S.C. 603 and 604. --------------------------------------------------------------------------- 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. * * * * * BILLING CODE 4810-02-P [[Page 45184]] [GRAPHIC] [TIFF OMITTED] TR28SE17.004 [[Page 45185]] [GRAPHIC] [TIFF OMITTED] TR28SE17.005 [[Page 45186]] [GRAPHIC] [TIFF OMITTED] TR28SE17.006 [[Page 45187]] [GRAPHIC] [TIFF OMITTED] TR28SE17.007 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
![45182 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations
the Commission determines that it does upholds the Commission’s SUMMARY: FinCEN is making technical
not reasonably describe the records determination in whole or in part must corrections to a final rule published in
sought, the Commission must inform contain a statement that identifies the the Federal Register on Wednesday,
the requester what additional reasons for the affirmance, including May 11, 2016. The final rule relates to
information is needed or why the any FOIA exemptions applied. The certain customer due diligence
request is otherwise insufficient. decision must provide the requester standards applicable to covered
Requesters who are attempting to with notification of the statutory right to financial institutions, defined as banks,
reformulate or modify such a request file a lawsuit and will inform the brokers or dealers in securities, mutual
may discuss their request with the requester of the dispute resolution funds, and futures commission
Commission’s FOIA contact or FOIA services offered by the Office of merchants and introducing brokers in
Public Liaison. If a request does not Government Information Services of the commodities. As published, the final
reasonably describe the records sought, National Archives and Records rule contains technical errors that could
the agency’s response to the request may Administration as a non-exclusive cause confusion if not corrected.
be delayed. alternative to litigation. If the DATES: Effective Date: These corrections
(1) A written request for inspection or Commission’s decision is remanded or are effective September 28, 2017.
copying of a record of the Commission modified on appeal, the Commission Applicability date: Covered financial
may be presented in person, by mail, by will notify the requester of that institutions must comply with these
fax, by email at FOIA@eeoc.gov, online determination in writing. The rules and the rules published in the
at https://publicportalfoiapal.eeoc.gov/ Commission will then further process Federal Register on May 11, 2016 (81
palMain.aspx, or through the the request in accordance with that FR 29398) by May 11, 2018.
Commission employee designated in appeal determination and will respond FOR FURTHER INFORMATION CONTACT:
§ 1610.7. directly to the requester. FinCEN Resource Center at 1–800–767–
(2) A request must be clearly and (d) Engaging in dispute resolution 2825. E-mail inquiries can be sent to
prominently identified as a request for services provided by OGIS. Dispute frc@fincen.gov.
information under the ‘‘Freedom of resolution is a voluntary process. If the SUPPLEMENTARY INFORMATION:
Information Act.’’ If submitted by mail, Commission agrees to participate in the
or otherwise submitted under any cover, dispute resolution services provided by I. Background
the envelope or other cover must be OGIS, it will actively engage as a partner On May 11, 2016, FinCEN published
similarly identified. to the process in an attempt to resolve a final rule (81 FR 29398) entitled
(3) A respondent must always provide the dispute. ‘‘Customer Due Diligence Requirements
a copy of the ‘‘Filed’’ stamped court for Financial Institutions.’’ The final
* * * * *
complaint when requesting a copy of a rule amends the Bank Secrecy Act
charge file. The charging party must ■ 5. Revise § 1610.13 to read as follows:
regulations to include a new
provide a copy of the ‘‘Filed’’ stamped § 1610.13 Maintenance of files. requirement for covered financial
court complaint when requesting a copy institutions to identify and verify the
The Commission must preserve all
of the charge file if the Notice of Right identity of beneficial owners of legal
correspondence pertaining to the
to Sue has expired as of the date of the entity customers, subject to certain
requests that it receives under this
charging party’s request. exclusions and exemptions. The final
subpart, as well as copies of all
(4) Each request must contain rule also amends the anti-money
requested records, until disposition or
information which reasonably describes laundering (AML) program
destruction is authorized pursuant to
the records sought and, when known, requirements for all covered
Title 44 of the United States Code or the
should contain date, title or name, institutions. This document makes
General Records Schedule 4.2 of the
author, recipient, subject matter of the technical corrections to the Certification
National Archives and Records
record, case number, file designation, or Form located in appendix A to 31 CFR
Administration. The Commission must
reference number and location for the 1010.230 and adds a paragraph to 31
not dispose of or destroy records while
records requested in order to permit the CFR 1024.210(b) that was inadvertently
they are the subject of a pending
records to be promptly located. omitted in the final rule published in
(c) Format. Requests may specify the request, appeal, or lawsuit under the
FOIA. the Federal Register with an effective
preferred form or format (including date of July 11, 2016, and an
electronic formats) for the records the [FR Doc. 2017–19897 Filed 9–27–17; 8:45 am]
applicability date of May 11, 2018.
requester seeks. The Commission will BILLING CODE 6570–01–P
accommodate the request if the records II. Description of the Technical
are readily reproducible in that form or Corrections
format. DEPARTMENT OF THE TREASURY A. Correction to Appendix A to
(d) Requester information. Requesters § 1010.230
must provide contact information, such Financial Crimes Enforcement Network
as their phone number, email address, This document makes technical
and/or mailing address, to assist the 31 CFR Parts 1010 and 1024 corrections to Appendix A (Certification
agency in communicating with them Form) to 31 CFR 1010.230. Appendix A
and providing released records. [Docket No. Fincen–2014–0001] inadvertently omitted the words ‘‘,
■ 4. Amend § 1610.11 by revising
Type,’’ after ‘‘Name’’ in the heading of
RIN 1506–AB25 Section II.b.1 Appendix A also included
paragraphs (c) and (d) to read as follows:
jstallworth on DSKBBY8HB2PROD with RULES
the term ‘‘foreign persons’’ in lieu of the
§ 1610.11 Appeals to the legal counsel Customer Due Diligence Requirements term ‘‘non-U.S. persons’’ in several
from initial denials. for Financial Institutions; Correction places and omitted the term ‘‘Social
* * * * * AGENCY: Financial Crimes Enforcement Security number’’ as described below.
(c) Decisions on appeals. The Network (FinCEN), Treasury. Because appendix A was originally
Commission must provide its decision
ACTION: Correcting amendments.
on an appeal in writing. A decision that 1 See 81 FR 29398, 29455.
VerDate Sep<11>2014 14:07 Sep 27, 2017 Jkt 241001 PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 E:\FR\FM\28SER1.SGM 28SER1](https://thefederalregister.org/doc/82_FR_45369/page/1.svg)
Document Created: 2017-09-28 01:32:57
Document Modified: 2017-09-28 01:32:57
| 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 | Rules and Regulations | |
| Action | Correcting amendments. | |
| Dates | Effective Date: These corrections are effective September 28, 2017. | |
| Contact | FinCEN Resource Center at 1-800-767- 2825. E-mail inquiries can be sent to [email protected] | |
| FR Citation | 82 FR 45182 | |
| RIN Number | 1506-AB25 | |
| CFR Citation | 31
CFR
1010 31 CFR 1024 | |
| CFR Associated | Administrative Practice and Procedure; Banks; Banking; Brokers; Counter Money Laundering; Counter-Terrorism; Currency; Foreign Banking; Reporting and Recordkeeping Requirement; Securities and Terrorism |
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