Guidance (Interpretive Release No. 2004-02) - Unitary Filing of Suspicious Activity and Blocking Reports (Final Rule)

76847

Federal Register / Vol. 69, No. 246 / Thursday, December 23, 2004 / Rules and Regulations

1 See 31 U.S.C. 5318(g)(1).

2 See 31 CFR 103.17–21. The threshold for most

financial institutions is $5,000; transactions

conducted at points of sale for money services

businesses have a reporting threshold of $2,000. See

31 CFR 103.20.

3 See TD F 90–22.47 (depository institutions); TD

F 22.56 (money services businesses); FinCEN Form

101 (securities and futures industries); FinCEN

Form 102 (casinos and card clubs).

4 31 CFR 501.603.

5 31 CFR 501.603(b)(1)(i).

6 The specific designations are as follows:

Specially designated terrorist; foreign terrorist

organization; specially designated global terrorist;

specially designated narcotics trafficker; specially

designated narcotics trafficker kingpin. See 31 CFR

parts 595, 597, 598 and the Foreign Narcotics

Kingpin Act, 21 U.S.C. 1901–08, 8 U.S.C. 1182.

These categories of designations are subject solely

to blocking requirements.

Dated: December 14, 2004.

Leslye M. Fraser,

Director, Office of Regulations and Policy,

Center for Food Safety and Applied Nutrition.

[FR Doc. 04–28043 Filed 12–22–04; 8:45 am]

BILLING CODE 4160–01–S

DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 103

Interpretive Release No. 2004–02—

Unitary Filing of Suspicious Activity

and Blocking Reports

AGENCY: Financial Crimes Enforcement

Network (‘‘FinCEN’’), Department of the

Treasury.

ACTION: Final rule; interpretive release

afety and Applied Nutrition.

[FR Doc. 04–28043 Filed 12–22–04; 8:45 am]

BILLING CODE 4160–01–S

DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 103

Interpretive Release No. 2004–02—

Unitary Filing of Suspicious Activity

and Blocking Reports

AGENCY: Financial Crimes Enforcement

Network (‘‘FinCEN’’), Department of the

Treasury.

ACTION: Final rule; interpretive release.

SUMMARY: This FinCEN interpretive

guidance clarifies that reports filed with

the Department of the Treasury’s Office

of Foreign Assets Control (‘‘OFAC’’) of

blocked transactions with Specially

Designated Global Terrorists, Specially

Designated Terrorists, Foreign Terrorist

Organizations, Specially Designated

Narcotics Trafficker Kingpins, and

Specially Designated Narcotics

Traffickers will be deemed by FinCEN

to fulfill the requirement to file

suspicious activity reports on such

transactions for purposes of FinCEN’s

suspicious activity reporting rules.

However, the filing of a blocking report

with OFAC will not be deemed to

satisfy a financial institution’s

obligation to file a suspicious activity

report if the transactions would be

reportable under FinCEN’s suspicious

activity reporting rules even if there

were no OFAC match. Moreover, to the

extent that the financial institution is in

possession of information not included

on the blocking report filed with OFAC,

a separate suspicious activity report

should be filed with FinCEN including

that information.

DATES: This final rule is effective

December 23, 2004. The DATES section

of the rule published on December 14,

2004, at 69 FR 74439 is corrected to read

as follows:

DATES: Appendix C is added to part

103 effective December 14, 2004;

however, Release 2004–01 is not

effective until June 13, 2005.

FOR FURTHER INFORMATION CONTACT:

Regulatory Policy and Programs

Division, 1–800–949–2732, Financial

Crimes Enforcement Network

ve

December 23, 2004. The DATES section

of the rule published on December 14,

2004, at 69 FR 74439 is corrected to read

as follows:

DATES: Appendix C is added to part

103 effective December 14, 2004;

however, Release 2004–01 is not

effective until June 13, 2005.

FOR FURTHER INFORMATION CONTACT:

Regulatory Policy and Programs

Division, 1–800–949–2732, Financial

Crimes Enforcement Network.

SUPPLEMENTARY INFORMATION: FinCEN is

publishing this interpretation to clarify

that the filing of required blocking

reports with OFAC on transactions

involving an individual or entity

designated as a Specially Designated

Global Terrorist, Specially Designated

Terrorist, Foreign Terrorist

Organization, Specially Designated

Narcotics Trafficker Kingpin, or

Specially Designated Narcotics

Trafficker shall be deemed to satisfy the

requirement, under existing and any

forthcoming suspicious activity

reporting regulations, that financial

institutions file suspicious activity

reports based on the fact of such a

match.

List of Subjects in 31 CFR Part 103

Authority delegations (government

agencies), Banks, Banking, Currency,

Investigations, Reporting and

recordkeeping requirements.

Department of the Treasury

1 CFR Chapter I

Authority and Issuance

I For the reasons set forth in the

preamble, part 103 of title 31 of the Code

of Federal Regulations is amended as

follows:

PART 103—FINANCIAL

RECORDKEEPING AND REPORTING

OF CURRENCY AND FOREIGN

TRANSACTIONS

I 1. The authority citation for part 103

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. 312, 313, 314, 319, 326, 352. Pub. L.

107–56, 115 Stat. 307, 21 U.S.C. 1786(q).

I 2. Part 103 is amended by adding a

new Intrepretive Release at the end of

Appendix C to read as follows:

APPENDIX C TO PART 103—

INTERPRETIVE RULES

*

*

*

*

*

Release No

ion for part 103

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. 312, 313, 314, 319, 326, 352. Pub. L.

107–56, 115 Stat. 307, 21 U.S.C. 1786(q).

I 2. Part 103 is amended by adding a

new Intrepretive Release at the end of

Appendix C to read as follows:

APPENDIX C TO PART 103—

INTERPRETIVE RULES

*

*

*

*

*

Release No. 2004–02

This FinCEN interpretive guidance clarifies

that reports filed with the Department of the

Treasury’s Office of Foreign Assets Control

(‘‘OFAC’’) of blocked transactions with

Specially Designated Global Terrorists,

Specially Designated Terrorists, Foreign

Terrorist Organizations, Specially Designated

Narcotics Trafficker Kingpins, and Specially

Designated Narcotics Traffickers will be

deemed by FinCEN to fulfill the requirement

to file suspicious activity reports on such

transactions for purposes of FinCEN’s

suspicious activity reporting rules. However,

the filing of a blocking report with OFAC will

not be deemed to satisfy a financial

institution’s obligation to file a suspicious

activity report if the transactions would be

reportable under FinCEN’s suspicious

activity reporting rules even if there were no

OFAC match. Moreover, to the extent that the

financial institution is in possession of

information not included on the blocking

report filed with OFAC, a separate suspicious

activity report should be filed with FinCEN

including that information

file a suspicious

activity report if the transactions would be

reportable under FinCEN’s suspicious

activity reporting rules even if there were no

OFAC match. Moreover, to the extent that the

financial institution is in possession of

information not included on the blocking

report filed with OFAC, a separate suspicious

activity report should be filed with FinCEN

including that information.

Background

The Bank Secrecy Act authorizes the

Secretary of the Treasury to require financial

institutions to report ‘‘any suspicious

transaction relevant to a possible violation of

law or regulation.’’ 1 Under this authority,

FinCEN has issued regulations requiring

banks, securities broker-dealers, introducing

brokers, casinos, futures commission

merchants, and money services businesses, to

report suspicious activity that meets a

particular dollar threshold.2 Each rule

includes filing procedures requiring that a

suspicious transaction shall be reported by

completing a suspicious activity report and

filing it with FinCEN in a central location to

be determined by FinCEN. Generally, the

rules provide a financial institution with

thirty days from the date of the initial

detection of suspicious activity to file a

report, with an additional thirty days if the

financial institution is unable to identify a

suspect. Reports are filed on forms developed

for each industry subject to the reporting

requirement.3

OFAC administers and enforces economic

and trade sanctions based on U.S. foreign

policy and national security goals against

targeted foreign countries, terrorists,

international narcotics traffickers, and those

engaged in activities related to the

proliferation of weapons of mass destruction.

OFAC’s Reporting, Procedures and Penalties

Regulations at 31 CFR part 501 require U.S

equirement.3

OFAC administers and enforces economic

and trade sanctions based on U.S. foreign

policy and national security goals against

targeted foreign countries, terrorists,

international narcotics traffickers, and those

engaged in activities related to the

proliferation of weapons of mass destruction.

OFAC’s Reporting, Procedures and Penalties

Regulations at 31 CFR part 501 require U.S.

financial institutions to block and file reports

on accounts, payments, or transfers in which

an OFAC-designated country, entity, or

individual has any interest.4 These reports

must be filed with OFAC within ten business

days of the blocking of the property.5

Prior Guidance

Transactions involving an individual or

entity designated on OFAC’s list of Specially

Designated Nationals and Blocked Persons as

a global terrorist, terrorist, terrorist

organization, narcotics trafficker, or narcotics

kingpin 6 may be in furtherance of a criminal

act, and therefore relevant to a possible

violation of law. Thus, blocking reports

related to such persons also describe

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76848

Federal Register / Vol. 69, No. 246 / Thursday, December 23, 2004 / Rules and Regulations

7 Issue 6 (Nov. 2003).

8 Such a report would be a voluntary report under

the statute and regulations. See 31 U.S.C. 5318(g)(3)

(extending safe harbor protection from civil liability

to voluntary filings).

potentially suspicious activity. In the

November 2003 edition of its ‘‘SAR Activity

Review,’’ 7 FinCEN instructed financial

institutions to file suspicious activity reports

on verified matches of persons designated by

OFAC

ort would be a voluntary report under

the statute and regulations. See 31 U.S.C. 5318(g)(3)

(extending safe harbor protection from civil liability

to voluntary filings).

potentially suspicious activity. In the

November 2003 edition of its ‘‘SAR Activity

Review,’’ 7 FinCEN instructed financial

institutions to file suspicious activity reports

on verified matches of persons designated by

OFAC. While this guidance ensured that the

relevant information would be available to

law enforcement, it also resulted in financial

institutions being required to make two

separate filings with the Department of the

Treasury—one with OFAC pursuant to its

Reporting, Procedures and Penalties

Regulations, and one with FinCEN pursuant

to its suspicious activity reporting rules.

Revised Guidance

FinCEN is hereby revising its prior

guidance to eliminate the need for

duplicative reporting in cases where a

financial institution identifies a verified

match with individuals or entities designated

by OFAC. As of the date of publication of this

interpretation, FinCEN will deem its rules

requiring the filing of suspicious activity

reports to be satisfied by the filing of a

blocking report with OFAC in accordance

with OFAC’s Reporting, Penalties and

Procedures Regulations. OFAC will then

provide the information to FinCEN for

inclusion in the suspicious activity reporting

database where it will be made available to

law enforcement. This construction of the

suspicious activity reporting rules will serve

the public interest by enabling FinCEN to

obtain and provide potentially important

information about terrorists and major drug

traffickers to law enforcement on an

expedited basis without imposing

duplicative reporting burdens on the

regulated industry

ting

database where it will be made available to

law enforcement. This construction of the

suspicious activity reporting rules will serve

the public interest by enabling FinCEN to

obtain and provide potentially important

information about terrorists and major drug

traffickers to law enforcement on an

expedited basis without imposing

duplicative reporting burdens on the

regulated industry.

Accordingly, a financial institution that

files a blocking report with OFAC due to the

involvement in a transaction or account of a

person designated as a Specially Designated

Global Terrorist, a Specially Designated

Terrorist, a Foreign Terrorist Organization, a

Specially Designated Narcotics Trafficker

Kingpin, or a Specially Designated Narcotics

Trafficker, shall be deemed to have

simultaneously filed a suspicious activity

report on the fact of the match with FinCEN,

in satisfaction of the requirements of the

applicable suspicious activity reporting rule.

This interpretation does not affect a financial

institution’s obligation to identify and report

suspicious activity beyond the fact of the

OFAC match. To the extent that the financial

institution is in possession of information not

included on the blocking report filed with

OFAC, a separate suspicious activity report

should be filed with FinCEN including that

information. This interpretation also does not

affect a financial institution’s obligation to

file a suspicious activity report even if it has

filed a blocking report with OFAC, to the

extent that the facts and circumstances

surrounding the OFAC match are

independently suspicious—and are

otherwise required to be reported under

existing FinCEN regulations. In those cases,

the OFAC blocking report would not satisfy

a financial institution’s suspicious activity

report filing obligation

le a suspicious activity report even if it has

filed a blocking report with OFAC, to the

extent that the facts and circumstances

surrounding the OFAC match are

independently suspicious—and are

otherwise required to be reported under

existing FinCEN regulations. In those cases,

the OFAC blocking report would not satisfy

a financial institution’s suspicious activity

report filing obligation.

Further, nothing in this interpretation is

intended to preclude a financial institution

from filing a suspicious activity report to

disclose additional information concerning

the OFAC match,8 nor does it preclude a

financial institution from filing a suspicious

activity report if the financial institution has

reason to believe that terrorism or drug

trafficking is taking place, even though there

is no OFAC match. Finally, this

interpretation does not apply to blocking

reports filed to report transactions and

accounts involving persons owned by, or

who are nationals of, countries subject to

OFAC-administered sanctions programs.

Such transactions should be reported on

suspicious activity reports under the

suspicious activity reporting rules if, and

only, if, the activity itself appears to be

suspicious under the criteria established by

the suspicious activity reporting rules.

William J. Fox,

Director.

[FR Doc. 04–27739 Filed 12–22–04; 8:45 am]

BILLING CODE 4810–02–P

NATIONAL ARCHIVES AND RECORDS

ADMINISTRATION

36 CFR Part 1228

RIN 3095–AB41

Records Management; Unscheduled

Records; Correction

AGENCY: National Archives and Records

Administration (NARA).

ACTION: Final rule; correction.

SUMMARY: NARA published in the

Federal Register of December 15, 2004,

a final rule allowing the transfer of

unscheduled records to records storage

facilities. Inadvertently, a word was

deleted from the preamble, changing the

meaning of a sentence. This document

corrects that deletion.

DATES: This rule is effective January 14,

2005

rds

Administration (NARA).

ACTION: Final rule; correction.

SUMMARY: NARA published in the

Federal Register of December 15, 2004,

a final rule allowing the transfer of

unscheduled records to records storage

facilities. Inadvertently, a word was

deleted from the preamble, changing the

meaning of a sentence. This document

corrects that deletion.

DATES: This rule is effective January 14,

2005.

FOR FURTHER INFORMATION CONTACT:

Cheryl Stadel-Bevans at telephone

number (301) 837–3021 or fax number

(301) 837–0319.

SUPPLEMENTARY INFORMATION: NARA

published a final rule on December 15,

2004, at 69 FR 74976. The second

sentence in the SUPPLEMENTARY

INFORMATION contains an error. This

correction inserts the missing word.

In the final rule published at 69 FR

74976, make the following correction.

On page 74977, in the first column,

insert the word ‘‘not’’ in line 6 so that

the line reads ‘‘* * * Executive Order

12866 and has not been * * *’’.

Dated: December 17, 2004.

Nancy Y. Allard,

Federal Register Liaison Officer.

[FR Doc. 04–28048 Filed 12–22–04; 8:45 am]

BILLING CODE 7515–01–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[R05–OAR–2004–MI–0002; FRL–7849–1]

Approval and Promulgation of

Implementation Plans: Michigan:

Oxides of Nitrogen

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Direct final rule.

SUMMARY: The EPA is approving a

revision to the plan prepared by

Michigan that will limit the emissions

of oxides of nitrogen (NOX) from large

stationary sources (i.e. power plants,

industrial boilers and cement kilns).

This plan meets all of the requirements

contained in an EPA rule that was

published in the Federal Register on

April 16, 2004. This rule, otherwise

known as the NOX SIP Call Phase I

provides for NOX reductions from

sources in 20 States in the eastern half

of the country

ns

of oxides of nitrogen (NOX) from large

stationary sources (i.e. power plants,

industrial boilers and cement kilns).

This plan meets all of the requirements

contained in an EPA rule that was

published in the Federal Register on

April 16, 2004. This rule, otherwise

known as the NOX SIP Call Phase I

provides for NOX reductions from

sources in 20 States in the eastern half

of the country. The effect of this

approval is to ensure federal

enforceability of the state air program

plan and to maintain consistency

between the state-adopted plan and the

approved State Implementation Plan

(SIP).

DATES: This ‘‘direct final’’ rule is

effective February 22, 2005, unless EPA

receives written adverse comment by

January 24, 2005. If written adverse

comment is received, EPA will publish

a timely withdrawal of the direct final

rule in the Federal Register and inform

the public that the rule will not take

effect.

ADDRESSES: Submit comments,

identified by Regional Material in

EDocket (RME) ID No. R05–OAR–2004–

MI–0002, by one of the following

methods:

Federal eRulemaking Portal: http://

www.regulations.gov. Follow the on-line

instructions for submitting comments.

Agency Web site: http://

docket.epa.gov/rmepub/. Regional

Material in EDocket (RME), EPA’s

electronic public docket and comments

system, is EPA’s preferred method for

receiving comments. Once in the

system, select ‘‘quick search,’’ then key

in the appropriate RME Docket

identification number. Follow the on-

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