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8000 - Miscellaneous Statutes and Regulations
Subpart I—Anti-Money Laundering Programs
§ 103.120 Anti-money laundering program requirements for
financial institutions regulated by a Federal functional regulator or a
self-regulatory organization, and casinos.
(a) Definitions. For purposes of this section:
(1) Financial institution means a financial
institution defined in 31 U.S.C.
5312(a)(2) or (c)(1) that is subject to regulation by a Federal
functional regulator or a self-regulatory organization.
(2) Federal functional regulator means:
(i) The Board of Governors of the Federal Reserve System;
(ii) The Office of the Comptroller of the Currency;
(iii) The Board of Directors of the Federal Deposit Insurance
Corporation;
(iv) The Office of Thrift Supervision;
(v) The National Credit Union Administration;
(vi) The Securities and Exchange Commission; or
(vii) The Commodity Futures Trading Commission.
(3) Self-regulatory organization:
(i) Shall have the same meaning as provided in section 3(a)(26)
of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)(26)); and
(ii) Means a "registered entity" or a "registered
futures association" as provided in section 1a(29) or 17,
respectively, of the Commodity Exchange Act (7 U.S.C. 1a(29), 21).
(4) Casino has the same meaning as provided in
§ 103.11(n)(5).
(b) Requirements for financial institutions regulated only by
a Federal functional regulator, including banks, savings associations,
and credit unions. A financial institution regulated by a Federal
functional regulator that is not subject to the regulations of a self
regulatory organization shall be deemed to satisfy the requirements of
31 U.S.C. 5318(h)(1) if it
implements and maintains an anti-money laundering program that complies
with the requirements of §§ 103.176 and 103.178 and the regulation
of its Federal functional regulator governing such programs.
(c) Requirements for financial institutions regulated by a
self-regulatory organization, including registered securities
broker-dealers and futures commission merchants. A financial
institution regulated by a self-regulatory organization shall be deemed
to satisfy the requirements of 31 U.S.C. 5318(h)(1) if:
(1) The financial institution complies with the requirements of
§§ 103.176 and 103.178 and any applicable regulation of its Federal
functional regulator governing the establishment and implementation of
anti-money laundering programs; and
(2)(i) The financial institution implements and maintains an
anti-money laundering program that complies with the rules,
regulations, or requirements of its self-regulatory organization
governing such programs; and
(ii) The rules, regulations, or requirements of the
self-regulatory organization have been approved, if required, by the
appropriate Federal functional regulator.
{{2-28-06 p.8516.06-D}}
(d) Requirements for casinos. A casino shall be deemed
to satisfy the requirements of 31 U.S.C. 5318(h)(1) if it implements
and maintains a compliance program described in § 103.64.
[Codified to 31 C.F.R. § 103.120]
[Section 103.120 added at 67 Fed. Reg. 21113 April 29,
2002, effective April 24, 2002; amended at 71 Fed. Reg. 512, January 4,
2006, effective February 3, 2006]
§ 103.121 Customer Identification Programs for banks, savings
associations, credit unions, and certain non-Federally regulated banks.
(a) Definitions. For purposes of this section:
(1)(i) Account means a formal banking relationship
established to provide or engage in services, dealings, or other
financial transactions including a deposit account, a transaction or
asset account, a credit account, or other extension of credit.
Account also includes a relationship established to provide
a safety deposit box or other safekeeping services, or cash management,
custodian, and trust services.
(ii) Account does not include:
(A) A product or service where a formal banking relationship is
not established with a person, such as check-cashing, wire transfer, or
sale of a check or money order;
(B) An account that the bank acquires through an acquisition,
merger, purchase of assets, or assumption of liabilities; or
(C) An account opened for the purpose of participating in an
employee benefit plan established under the Employee Retirement Income
Security Act of 1974.
(2) Bank means:
(i) A bank, as that term is defined in § 103.11(c), that is
subject to regulation by a Federal functional regulator; and
(ii) A credit union, private bank, and trust company, as set
forth in § 103.11(c), that does not have a Federal functional
regulator.
(3)(i) Customer means:
(A) A person that opens a new account; and
(B) An individual who opens a new account for:
(1) An individual who lacks legal capacity, such as a
minor; or
(2) An entity that is not a legal person, such as a
civic club.
(ii) Customer does not include:
(A) A financial institution regulated by a Federal functional
regulator or a bank regulated by a state bank regulator;
(B) A person described in § 103.22(d)(2)(ii) through (iv); or
(C) A person that has an existing account with the bank, provided
that the bank has a reasonable belief that it knows the true identity
of the person.
(4) Federal functional regulator is defined at
§ 103.120(a)(2).
(5) Financial institution is defined at 31 U.S.C.
5312(a)(2) and (c)(1).
(6) Taxpayer identification number is defined by
section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 6109) and
the Internal Revenue Service regulations implementing that section
(e.g., social security number or employer identification
number).
(7) U.S. person means:
(i) A United States citizen; or
(ii) A person other than an individual (such as a corporation,
partnership, or trust), that is established or organized under the laws
of a State or the United States.
(8) Non-U.S. person means a person that is not a U.S.
person.
(b) Customer Identification Program: minimum requirements.
(1) In general. A bank must implement a written
Customer Identification Program (CIP) appropriate for its size and type
of business that, at a minimum, includes each of the requirements of
paragraphs (b)(1) through (5) of this section. If a bank is required to
have an anti-money laundering compliance program under the regulations
implementing 31 U.S.C. 5318(h), 12 U.S.C. 1818(s), or 12 U.S.C.
1786(q)(1), then the CIP must be a part of the anti-money laundering
compliance program. Until such time as credit unions, private banks,
and trust companies without a Federal functional regulator are subject
to such a program, their CIPs must be approved by their boards of
directors.
{{6-30-03 p.8516.07}}
(2) Identity verification procedures. The CIP must
include risk-based procedures for verifying the identity of each
customer to the extent reasonable and practicable. The procedures must
enable the bank to form a reasonable belief that it knows the true
identity of each customer. These procedures must be based on the
bank's assessment of the relevant risks, including those presented by
the various types of accounts maintained by the bank, the various
methods of opening accounts provided by the bank, the various types of
identifying information available, and the bank's size, location, and
customer base. At a minimum, these procedures must contain the elements
described in this paragraph (b)(2).
(i) Customer information required. (A) In
general. The CIP must contain procedures for opening an account
that specify the identifying information that will be obtained from
each customer. Except as permitted by paragraphs (b)(2)(i)(B) and (C)
of this section, the bank must obtain, at a minimum, the following
information from the customer prior to opening an account:
(1) Name;
(2) Date of birth, for an individual;
(3) Address, which shall be:
(i) For an individual, a residential or business
street address;
(ii) For an individual who does not have a residential
or business street address, an Army Post Office (APO) or Fleet Post
Office (FPO) box number, or the residential or business street address
of next of kin or of another contact individual; or
(iii) For a person other than an individual (such as a
corporation, partnership, or trust), a principal place of business,
local office, or other physical location; and
(4) Identification number, which shall be:
(i) For a U.S. person, a taxpayer identification
number; or
(ii) For a non-U.S. person, one or more of the
following: a taxpayer identification number; passport number and
country of issuance; alien identification card number; or number and
country of issuance of any other government-issued document evidencing
nationality or residence and bearing a photograph or similar safeguard.
Note to paragraph
(b)(2)(i)(A)(4)(ii): When opening an
account for a foreign business or enterprise that does not have an
identification number, the bank must request alternative
government-issued documentation certifying the existence of the
business or enterprise.
(B) Exception for persons applying for a taxpayer
identification number. Instead of obtaining a taxpayer
identification number from a customer prior to opening the account, the
CIP may include procedures for opening an account for a customer that
has applied for, but has not received, a taxpayer identification
number. In this case, the CIP must include procedures to confirm that
the application was filed before the customer opens the account and to
obtain the taxpayer identification number within a reasonable period of
time after the account is opened.
(C) Credit card accounts. In connection with a
customer who opens a credit card account, a bank may obtain the
identifying information about a customer required under paragraph
(b)(2)(i)(A) by acquiring it from a third-party source prior to
extending credit to the customer.
(ii) Customer verification. The CIP must contain
procedures for verifying the identity of the customer, using
information obtained in accordance with paragraph (b)(2)(i) of this
section, within a reasonable time after the account is opened. The
procedures must describe when the bank will use documents,
non-documentary methods, or a combination of both methods as described
in this paragraph (b)(2)(ii).
(A) Verification through documents. For a bank relying
on documents, the CIP must contain procedures that set forth the
documents that the bank will use. These documents may include:
(1) For an individual, unexpired government-issued
identification evidencing nationality or residence and bearing a
photograph or similar safeguard, such as a driver's license or
passport; and
(2) For a person other than an individual (such as a
corporation, partnership, or trust), documents showing the existence of
the entity, such as certified articles of incorporation, a
government-issued business license, a partnership agreement, or trust
instrument.
{{6-30-03 p.8516.08}}
(B) Verification through non-documentary methods. For
a bank relying on non-documentary methods, the CIP must contain
procedures that describe the non-documentary methods the bank will use.
(1) These methods may include contacting a customer;
independently verifying the customer's identity through the comparison
of information provided by the customer with information obtained from
a consumer reporting agency, public database, or other source; checking
references with other financial institutions; and obtaining a financial
statement.
(2) The bank's non-documentary procedures must
address situations where an individual is unable to present an
unexpired government-issued identification document that bears a
photograph or similar safeguard; the bank is not familiar with the
documents presented; the account is opened without obtaining documents;
the customer opens the account without appearing in person at the bank;
and where the bank is otherwise presented with circumstances that
increase the risk that the bank will be unable to verify the true
identity of a customer through documents.
(C) Additional verification for certain customers. The
CIP must address situations where, based on the bank's risk assessment
of a new account opened by a customer that is not an individual, the
bank will obtain information about individuals with authority or
control over such account, including signatories, in order to verify
the customer's identity. This verification method applies only when
the bank cannot verify the customer's true identity using the
verification methods described in paragraphs (b)(2)(ii)(A) and (B) of
this section.
(iii) Lack of verification. The CIP must include
procedures for responding to circumstances in which the bank cannot
form a reasonable belief that it knows the true identity of a customer.
These procedures should describe:
(A) When the bank should not open an account;
(B) The terms under which a customer may use an account while the
bank attempts to verify the customer's identity;
(C) When the bank should close an account, after attempts to
verify a customer's identity have failed; and
(D) When the bank should file a Suspicious Activity Report in
accordance with applicable law and regulation.
(3) Recordkeeping. The CIP must include procedures for
making and maintaining a record of all information obtained under the
procedures implementing paragraph (b) of this section.
(i) Required records. At a minimum, the record must
include:
(A) All identifying information about a customer obtained under
paragraph (b)(2)(i) of this section;
(B) A description of any document that was relied on under
paragraph (b)(2)(ii)(A) of this section noting the type of document,
any identification number contained in the document, the place of
issuance and, if any, the date of issuance and expiration date;
(C) A description of the methods and the results of any measures
undertaken to verify the identity of the customer under paragraph
(b)(2)(ii)(B) or (C) of this section; and
(D) A description of the resolution of any substantive
discrepancy discovered when verifying the identifying information
obtained.
(ii) Retention of records. The bank must retain the
information in paragraph (b)(3)(i)(A) of this section for five years
after the date the account is closed or, in the case of credit card
accounts, five years after the account is closed or becomes dormant.
The bank must retain the information in paragraphs (b)(3)(i)(B), (C),
and (D) of this section for five years after the record is made.
(4) Comparison with government lists. The CIP must
include procedures for determining whether the customer appears on any
list of known or suspected terrorists or terrorist organizations issued
by any Federal government agency and designated as such by Treasury in
consultation with the Federal functional regulators. The procedures
must require the bank to make such a determination within a reasonable
period of time after the account is opened, or earlier, if required by
another Federal law or regulation or Federal directive issued in
connection with the applicable list. The procedures must also require
the bank to follow all Federal directives issued in connection with
such lists.
{{12-31-07 p.8516.08-A}}
(5)(i) Customer notice. The CIP must include
procedures for providing bank customers with adequate notice that the
bank is requesting information to verify their identities.
(ii) Adequate notice. Notice is adequate if the bank
generally describes the identification requirements of this section and
provides the notice in a manner reasonably designed to ensure that a
customer is able to view the notice, or is otherwise given notice,
before opening an account. For example, depending upon the manner in
which the account is opened, a bank may post a notice in the lobby or
on its website, include the notice on its account applications, or use
any other form of written or oral notice.
(iii) Sample notice. If appropriate, a bank may use
the following sample language to provide notice to its customers:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW
ACCOUNT
To help the government fight the funding of terrorism and
money laundering activities, Federal law requires all financial
institutions to obtain, verify, and record information that identifies
each person who opens an account.
What this means for you: When you open an account, we will
ask for your name, address, date of birth, and other information that
will allow us to identify you. We may also ask to see your driver's
license or other identifying documents.
(6) Reliance on another financial institution. The CIP
may include procedures specifying when a bank will rely on the
performance by another financial institution (including an affiliate)
of any procedures of the bank's CIP, with respect to any customer of
the bank that is opening, or has opened, an account or has established
a similar formal banking or business relationship with the other
financial institution to provide or engage in services, dealings, or
other financial transactions, provided that:
(i) Such reliance is reasonable under the circumstances;
(ii) The other financial institution is subject to a rule
implementing 31 U.S.C. 5318(h) and is regulated by a Federal functional
regulator; and
(iii) The other financial institution enters into a contract
requiring it to certify annually to the bank that it has implemented
its anti-money laundering program, and that it will perform (or its
agent will perform) the specified requirements of the bank's CIP.
(c) Exemptions. The appropriate Federal functional
regulator, with the concurrence of the Secretary, may, by order or
regulation, exempt any bank or type of account from the requirements of
this section. The Federal functional regulator and the Secretary shall
consider whether the exemption is consistent with the purposes of the
Bank Secrecy Act and with safe and sound banking, and may consider
other appropriate factors. The Secretary will make these determinations
for any bank or type of account that is not subject to the authority of
a Federal functional regulator.
(d) Other requirements unaffected. Nothing in this
section relieves a bank of its obligation to comply with any other
provision in this part, including provisions concerning information
that must be obtained, verified, or maintained in connection with any
account or transaction.
[Codified to 31 C.F.R. § 103.121]
[Section 103.121 added at 68 Fed. Reg. 25109, May 9, 2003,
effective June 9, 2003, compliance date October 1,
2003]
§ 103.122 Customer identification programs for broker-dealers.
(a) Definitions. For the purposes of this section:
(1)(i) Account means a formal relationship with a
broker-dealer established to effect transactions in securities,
including, but not limited to, the purchase or sale of securities and
securities loaned and borrowed activity, and to hold securities or
other assets for safekeeping or as collateral.
(ii) Account does not include:
(A) An account that the broker-dealer acquires through any
acquisition, merger, purchase of assets, or assumption of liabilities;
or
(B) An account opened for the purpose of participating in an
employee benefit plan established under the Employee Retirement Income
Security Act of 1974.
(2) Broker-dealer means a person registered or
required to be registered as a broker or dealer with the Commission
under the Securities Exchange Act of 1934 (15 U.S.C. 77a
{{12-31-07 p.8516.08-B}}et
seq.), except persons who register pursuant to 15 U.S.C.
78o(b)(11).
(3) Commission means the United States Securities and
Exchange Commission.
(4)(i) Customer means: (A) A person that opens a new
account; and (B) an individual who opens a new account for:
(1) An individual who lacks legal capacity; or
(2) an entity that is not a legal person.
(ii) Customer does not include: (A) A financial
institution regulated by a Federal functional regulator or a bank
regulated by a state bank regulator; (B) a person described in
§ 103.22(d)(2)(ii) through (iv); or (C) a person that has an existing
account with the broker-dealer, provided the broker-dealer has a
reasonable belief that it knows the true identity of the person.
(5) Federal functional regulator is defined at
§ 103.120(a)(2).
(6) Financial institution is defined at 31 U.S.C.
5312(a)(2) and (c)(1).
(7) Taxpayer identification number is defined by
section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 6109) and
the Internal Revenue Service regulations implementing that section
(e.g., social security number or employer identification
number).
(8) U.S. person means: (i) A United States citizen; or
(ii) a person other than an individual (such as a corporation,
partnership or trust) that is established or organized under the laws
of a State or the United States.
(9) Non-U.S. person means a person that is not a
U.S. person.
(b) Customer identification program: minimum
requirements.
(1) In general. A broker-dealer must establish,
document, and maintain a written Customer Identification Program
("CIP") appropriate for its size and business that, at a minimum,
includes each of the requirements of paragraphs (b)(1) through (b)(5)
of this section. The CIP must be a part of the broker-dealer's
anti-money laundering compliance program required under 31 U.S.C.
5318(h).
(2) Identity verification procedures. The CIP must
include risk-based procedures for verifying the identity of each
customer to the extent reasonable and practicable. The procedures must
enable the broker-dealer to form a reasonable belief that it knows the
true identity of each customer. The procedures must be based on the
broker-dealer's assessment of the relevant risks including those
presented by the various types of accounts maintained by the
broker-dealer, the various methods of opening accounts provided by the
broker-dealer, the various types of identifying information available
and the broker-dealer's size, location and customer base. At a
minimum, these procedures must contain the elements described in this
paragraph (b)(2).
(i)(A) Customer information required. The CIP must
contain procedures for opening an account that specify identifying
information that will be obtained from each customer. Except as
permitted by paragraph (b)(2)(i)(B) of this section, the broker-dealer
must obtain, at a minimum, the following information prior to opening
an account:
(1) Name;
(2) Date of birth, for an individual;
(3) Address, which shall be: (i) For an
individual, a residential or business street address; (ii)
for an individual who does not have a residential or business street
address, an Army Post Office (APO) or Fleet Post Office (FPO) box
number, or the residential or business street address of a next of kin
or another contact individual; or (iii) for a person other
than an individual (such as a corporation, partnership or trust), a
principal place of business, local office or other physical location;
and
(4) Identification number, which shall be: (i) For a
U.S. person, a taxpayer identification number; or (ii) for a
non-U.S. person, one or more of the following: a taxpayer
identification number, a passport number and country of issuance, an
alien identification card number, or the number and country of issuance
of any other government-issued document evidencing nationality or
residence and bearing a photograph or similar safeguard.
Note to paragraph (b)(2)(i)(A)(4)(ii): When
opening an account for a foreign business or enterprise that does not
have an identification number, the broker-dealer must request
alternative government-issued documentation certifying the existence of
the business or enterprise.
(B) Exception for persons applying for a taxpayer
identification number. Instead of obtaining a taxpayer
identification number from a customer prior to opening an account, the
CIP may include procedures for opening an account for a customer that
has applied for,
{{6-30-03 p.8516.08-C}}but has not
received, a taxpayer identification number. In this case, the CIP must
include procedures to confirm that the application was filed before the
customer opens the account and to obtain the taxpayer identification
number within a reasonable period of time after the account is opened.
(ii) Customer verification. The CIP must contain
procedures for verifying the identity of each customer, using
information obtained in accordance with paragraph (b)(2)(i) of this
section, within a reasonable time before or after the customer's
account is opened. The procedures must describe when the broker-dealer
will use documents, non-documentary methods, or a combination of both
methods, as described in this paragraph (b)(2)(ii).
(A) Verification through documents. For a
broker-dealer relying on documents, the CIP must contain procedures
that set forth the documents the broker-dealer will use. These
documents may include:
(1) For an individual, an unexpired government-issued
identification evidencing nationality or residence and bearing a
photograph or similar safeguard, such as a driver's license or
passport; and
(2) For a person other than an individual (such as a
corporation, partnership or trust), documents showing the existence of
the entity, such as certified articles of incorporation, a
government-issued business license, a partnership agreement, or a trust
instrument.
(B) Verification through non-documentary methods. For
a broker-dealer relying on non-documentary methods, the CIP must
contain procedures that set forth the non-documentary methods the
broker-dealer will use.
(1) These methods may include contacting a customer;
independently verifying the customer's identity through the comparison
of information provided by the customer with information obtained from
a consumer reporting agency, public database, or other source; checking
references with other financial institutions; or obtaining a financial
statement.
(2) The broker-dealer's non-documentary procedures
must address situations where an individual is unable to present an
unexpired government-issued identification document that bears a
photograph or similar safeguard; the broker-dealer is not familiar with
the documents presented; the account is opened without obtaining
documents; the customer opens the account without appearing in person
at the broker-dealer; and where the broker-dealer is otherwise
presented with circumstances that increase the risk that the
broker-dealer will be unable to verify the true identity of the
customer through documents.
(C) Additional verification for certain customers. The
CIP must address situations where, based on the broker-dealer's risk
assessment of a new account opened by a customer that is not an
individual, the broker-dealer will obtain information about individuals
with authority or control over such account. This verification method
applies only when the broker-dealer cannot verify the customer's true
identity using the verification methods described in paragraphs
(b)(2)(ii)(A) and (B) of this section.
(iii) Lack of verification. The CIP must include
procedures for responding to circumstances in which the broker-dealer
cannot form a reasonable belief that it knows the true identity of a
customer. These procedures should describe:
(A) When the broker-dealer should not open an account;
(B) The terms under which a customer may conduct transactions
while the broker-dealer attempts to verify the customer's identity;
(C) When the broker-dealer should close an account after attempts
to verify a customer's identity fail; and
(D) When the broker-dealer should file a Suspicious Activity
Report in accordance with applicable law and regulation.
(3) Recordkeeping. The CIP must include procedures for
making and maintaining a record of all information obtained under
procedures implementing paragraph (b) of this section.
(i) Required records. At a minimum, the record must
include;
(A) All identifying information about a customer obtained under
paragraph (b)(2)(i) of this section,
(B) A description of any document that was relied on under
paragraph (b)(2)(ii)(A) of this section noting the type of document,
any identification number
{{6-30-03 p.8516.08-D}}contained in
the document, the place of issuance, and if any, the date of issuance
and expiration date;
(C) A description of the methods and the results of any measures
undertaken to verify the identity of a customer under paragraphs
(b)(2)(ii)(B) and (C) of this section; and
(D) A description of the resolution of each substantive
discrepancy discovered when verifying the identifying information
obtained.
(ii) Retention of records. The broker-dealer must
retain the records made under paragraph (b)(3)(i)(A) of this section
for five years after the account is closed and the records made under
paragraphs (b)(3)(i)(B), (C) and (D) of this section for five years
after the record is made. In all other respects, the records must be
maintained pursuant to the provisions of 17 CFR 240.17a--4.
(4) Comparison with government lists. The CIP must
include procedures for determining whether a customer appears on any
list of known or suspected terrorists or terrorist organizations issued
by an Federal government agency and designated as such by Treasury in
consultation with the Federal functional regulators. The procedures
must require the broker-dealer to make such a determination within a
reasonable period of time after the account is opened, or earlier if
required by another Federal law or regulation or Federal directive
issued in connection with the applicable list. The procedures also must
require the broker-dealer to follow all Federal directives issued in
connection with such lists.
(5)(i) Customer notice. The CIP must include
procedures for providing customers with adequate notice that the
broker-dealer is requesting information to verify their identities.
(ii) Adequate notice. Notice is adequate if the
broker-dealer generally describes the identification requirements of
this section and provides such notice in a manner reasonably designed
to ensure that a customer is able to view the notice, or is otherwise
given notice, before opening an account. For example, depending upon
the manner in which the account is opened, a broker-dealer may post a
notice in the lobby or on its Web site, include the notice on its
account applications or use any other form of oral or written notice.
(iii) Sample notice. If appropriate, a broker-dealer
may use the following sample language to provide notice to its
customers:
Important Information About Procedures for Opening a New Account
To help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions
to obtain, verify, and record information that identifies each person
who opens an account.
What this means for you: When you open an account, we will ask for
your name, address, date of birth and other information that will allow
us to identify you. We may also ask to see your driver's license or
other identifying documents.
(6) Reliance on another financial institution. The CIP
may include procedures specifying when the broker-dealer will rely on
the performance by another financial institution (including an
affiliate) of any procedures of the broker-dealer's CIP, with respect
to any customer of the broker-dealer that is opening an account or has
established an account or similar business relationship with the other
financial institution to provide or engage in services, dealings, or
other financial transactions, provided that:
(i) Such reliance is reasonable under the circumstances;
(ii) The other financial institution is subject to a rule
implementing 31 U.S.C. 5318(h), and regulated by a Federal functional
regulator; and
(iii) The other financial institution enters into a contract
requiring it to certify annually to the broker-dealer that it has
implemented its anti-money laundering program, and that it will perform
(or its agent will perform) specified requirements of the
broker-dealer's CIP.
(c) Exemptions. The Commission, with the concurrence of
the Secretary, may by order or regulation exempt any broker-dealer that
registers with the Commission pursuant to 15 U.S.C. 78o or 15 U.S.C.
78o--4 or any type of account from the requirements of this section.
The Secretary, with the concurrence of the Commission, may exempt any
broker-dealer that registers with the Commission pursuant to 15 U.S.C.
78o--5. In issuing such exemptions, the Commission and the Secretary
shall consider whether the exemption is consistent with the purposes of
the Bank Secrecy Act, and in the public interest, and may consider
other necessary and appropriate factors.
{{12-31-07 p.8516.08-E}}
(d) Other requirements unaffected. Nothing in this
section relieves a broker-dealer of its obligation to comply with any
other provision of this part, including provisions concerning
information that must be obtained, verified, or maintained in
connection with any account or transaction.
[Codified to 31 C.F.R. § 103.122]
[Section 103.122 added at 68 Fed. Reg. 25129, May 9, 2003,
effective June 9, 2003, Brokers or Dealers subject to this final
regulation must comply by October 1, 2003]
§ 103.123 Customer identification programs for futures
commission merchants and introducing brokers.
(a) Definitions. For the purposes of this section:
(1)(i) Account means a formal relationship with a
futures commission merchant, including, but not limited to, those
established to effect transactions in contracts of sale of a commodity
for future delivery, options on any contract of sale of a commodity for
future delivery, or options on a commodity.
(ii) Account does not include:
(A) An account that the futures commission merchant acquires
through any acquisition, merger, purchase of assets, or assumption of
liabilities; or
(B) An account opened for the purpose of participating in an
employee benefit plan established under the Employee Retirement Income
Security Act of 1974.
(2) Commission means the United States Commodity
Futures Trading Commission.
(3) Commodity means any good, article, service, right,
or interest described in Section 1a(4) of the Commodity Exchange Act (7
U.S.C. 1a(4)).
(4) Contract of sale means any sale, agreement of sale
or agreement to sell as described in Section 1a(7) of the Commodity
Exchange Act (7 U.S.C. 1a(7)).
(5)(i) Customer means:
(A) A person that opens a new account with a futures commission
merchant; and
(B) An individual who opens a new account with a futures
commission merchant for:
(1) An individual who lacks legal capacity; or
(2) An entity that is not a legal person.
(ii) Customer does not include:
(A) A financial institution regulated by a Federal functional
regulator or a bank regulated by a state bank regulator;
(B) A person described in § 103.22(d)(2)(ii) through (iv); or
(C) A person that has an existing account, provided the futures
commission merchant or introducing broker has a reasonable belief that
it knows the true identity of the person.
(iii) When an account is introduced to a futures commission
merchant by an introducing broker, the person or individual opening the
account shall be deemed to be a customer of both the futures
commission merchant and the introducing broker for the purposes of this
section.
(6) Federal functional regulator is defined at
§ 103.120(a)(2).
(7) Financial institution is defined at 31 U.S.C.
5312(a)(2) and (c)(1).
(8) Futures commission merchant means any person
registered or required to be registered as a futures commission
merchant with the Commission under the Commodity Exchange Act (7 U.S.C.
1 et. seq.), except persons who register pursuant to Section
4f(a)(2) of the Commodity Exchange Act (7 U.S.C. 6f(a)(2)).
(9) Introducing broker means any person registered or
required to be registered as an introducing broker with the Commission
under the Commodity Exchange Act (7 U.S.C. 1 et seq.) except
persons who register pursuant to Section 4f(a)(2) of the Commodity
Exchange Act (7 U.S.C. 6f(a)(2)).
(10) Option means an agreement, contract or
transaction described in Section 1a(26) of the Commodity Exchange Act
(7 U.S.C. 1a(26)).
(11) Taxpayer identification number is defined by
section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 6109) and
the Internal Revenue Service regulations implementing that section
(e.g., social security number or employer identification
number).
(12) U.S. person means:
{{12-31-07 p.8516.08-F}}
(i) A United States citizen; or
(ii) A person other than an individual (such as a corporation,
partnership or trust) that is established or organized under the laws
of a State or the United States.
(13) Non-U.S. person means a person that is not a U.S.
person.
(b) Customer identification program: minimum
requirements--(1) In general. Each futures commission
merchant and introducing broker must implement a written Customer
Identification Program (CIP) appropriate for its size and business
that, at a minimum, includes each of the requirements of paragraphs
(b)(1) through (b)(5) of this section. The CIP must be a part of each
futures commission merchant's and introducing broker's anti-money
laundering compliance program required under 31 U.S.C. 5318(h).
(2) Identity verification procedures. The CIP must
include risk-based procedures for verifying the identity of each
customer to the extent reasonable and practicable. The procedures must
enable each futures commission merchant and introducing broker to form
a reasonable belief that it knows the true identity of each customer.
The procedures must be based on the futures commission merchant's or
introducing broker's assessment of the relevant risks, including those
presented by the various types of accounts maintained, the various
methods of opening accounts, the various types of identifying
information available, and the futures commission merchant's or
introducing broker's size, location and customer base. At a minimum,
these procedures must contain the elements described in paragraph
(b)(2) of this section.
(i)(A) Customer information required. The CIP must
include procedures for opening an account that specify identifying
information that will be obtained from each customer. Except as
permitted by paragraph (b)(2)(i)(B) of this section, each futures
commission merchant and introducing broker must obtain, at a minimum,
the following information prior to opening an account:
(1) Name;
(2) Date of birth, for an individual;
(3) Address, which shall be:
(i) For an individual, a residential or business
street address;
(ii) For an individual who does not have a residential
or business street address, an Army Post Office (APO) or Fleet Post
Office (FPO) box number, or the residential or business street address
of a next of kin or another contact individual; or
(iii) For a person other than an individual (such as a
corporation, partnership or trust), a principal place of business,
local office or other physical location; and
(4) Identification number, which shall be:
(i) For a U.S. person, a taxpayer identification
number; or
(ii) For a non-U.S. person, one or more of the
following: a taxpayer identification number, a passport number and
country of issuance, an alien identification card number, or the number
and country of issuance of any other government-issued document
evidencing nationality or residence and bearing a photograph or similar
safeguard.
Note to paragraph (b)(2)(i)(A)(4)(ii): When
opening an account for a foreign business or enterprise that does not
have an identification number, the futures commission merchant or
introducing broker must request alternative government-issued
documentation certifying the existence of the business or enterprise.
(B) Exception for persons applying for a taxpayer
identification number. Instead of obtaining a taxpayer
identification number from a customer prior to opening an account, the
CIP may include procedures for opening an account for a customer that
has applied for, but has not received, a taxpayer identification
number. In this case, the CIP must include procedures to confirm that
the application was filed before the customer opens the account and to
obtain the taxpayer identification number within a reasonable period of
time after the account is opened.
(ii) Customer verification. The CIP must obtain
procedures for verifying the identity of each customer, using
information obtained in accordance with paragraph (b)(2)(i) of this
section, within a reasonable time before or after the customer's
account is opened. The procedures must describe when the futures
commission merchant or introducing broker will use documents,
non-documentary methods, or a combination of both methods, as described
in this paragraph (b)(2)(ii).
(A) Verification through documents. For a futures
commission merchant or introducing broker relying on documents, the CIP
must contain procedures that set forth the
{{6-30-03 p.8516.08-G}}documents the futures
commission merchant or introducing broker will use. These documents may
include:
(1) For an individual, an unexpired government-issued
identification evidencing nationality or residence and bearing a
photograph or similar safeguard, such as a driver's license or
passport; and
(2) For a person other than an individual (such as a
corporation, partnership or trust), documents showing the existence of
the entity, such as certified articles of incorporation, a
government-issued business license, a partnership agreement, or a trust
instrument.
(B) Verification through non-documentary methods. For
a futures commission merchant or introducing broker relying on
non-documentary methods, the CIP must contain procedures that set forth
the non-documentary methods the futures commission merchant or
introducing broker will use.
(1) These methods may include contacting a customer;
independently verifying the customer's identity through the comparison
of information provided by the customer with information obtained from
a consumer reporting agency, public database, or other source; checking
references with other financial institutions; or obtaining a financial
statement.
(2) The futures commission merchant's or introducing broker's
non-documentary procedures must address situations where an individual
is unable to present an unexpired government-issued identification
document that bears a photograph or similar safeguard; the futures
commission merchant or introducing broker is not familiar with the
documents presented; the account is opened without obtaining documents;
the customer opens the account without appearing in person at the
futures commission merchant or introducing broker; and where the
futures commission merchant or introducing broker is otherwise
presented with circumstances that increase the risk that the futures
commission merchant or introducing broker will be unable to verify the
true identity of a customer through documents.
(C) Additional verification for certain customers. The
CIP must address situations where, based on the futures commission
merchant's or introducing broker's risk assessment of a new account
opened by a customer that is not an individual, the futures commission
merchant or introducing broker will obtain information about
individuals with authority or control over such account in order to
verify the customer's identity. This verification method applies only
when the futures commission merchant or introducing broker cannot
verify the customer's true identity after using the verification
methods described in paragraphs (b)(2)(ii)(A) and (B) of this section.
(iii) Lack of verification. The CIP must include
procedures for responding to circumstances in which the futures
commission merchant or introducing broker cannot form a reasonable
belief that it knows the true identity of a customer. These procedures
should describe:
(A) When an account should not be opened;
(B) The terms under which a customer may conduct transactions
while the futures commission merchant or introducing broker attempts to
verify the customer's identity;
(C) When an account should be closed after attempts to verify a
customer's identity have failed; and
(D) When the futures commission merchant or introducing broker
should file a Suspicious Activity Report in accordance with applicable
law and regulation.
(3) Recordkeeping. The CIP must include procedures for
making and maintaining a record of all information obtained under
procedures implementing paragraph (b) of this section.
(i) Required records. At a minimum, the record must
include:
(A) All identifying information about a customer obtained under
paragraph (b)(2)(i) of this section;
(B) A description of any document that was relied on under
paragraph (b)(2)(ii)(A) of this section noting the type of document,
any identification number contained in the document, the place of
issuance, and if any, the date of issuance and expiration
date;
{{6-30-03 p.8516.08-H}}
(C) A description of the methods and the results of any measures
undertaken to verify the identity of a customer under paragraphs
(b)(2)(ii)(B) and (C) of this section; and
(D) A description of the resolution of each substantive
discrepancy discovered when verifying the information obtained.
(ii) Retention of records. Each futures commission
merchant and introducing broker must retain the records made under
paragraph (b)(3)(i)(A) of this section for five years after the account
is closed and the records made under paragraphs (b)(3)(i)(B), (C), and
(D) of this section for five years after the record is made. In all
other respects, the records must be maintained pursuant to the
provisions of 17 CFR 1.31.
(4) Comparison with government lists. The CIP must
include procedures for determining whether a customer appears on any
list of known or suspected terrorists or terrorist organizations issued
by any Federal government agency and designated as such by Treasury in
consultation with the Federal functional regulators. The procedures
must require the futures commission merchant or introducing broker to
make such a determination within a reasonable period of time after the
account is opened, or earlier if required by another Federal law or
regulation or Federal directive issued in connection with the
applicable list. The procedures also must require the futures
commission merchant or introducing broker to follow all Federal
directives issued in connection with such lists.
(5)(i) Customer notice. The CIP must include
procedures for providing customers with adequate notice that the
futures commission merchant or introducing broker is requesting
information to verify their identities.
(ii) Adequate notice. Notice is adequate if the
futures commission merchant or introducing broker generally describes
the identification requirements of this section and provides such
notice in a manner reasonably designed to ensure that a customer is
able to view the notice, or is otherwise given notice, before opening
an account. For example, depending upon the manner in which the account
is opened, a futures commission merchant or introducing broker may post
a notice in the lobby or on its Web site, include the notice on its
account applications or use any other form of written or oral notice.
(iii) Sample notice. If appropriate, a futures
commission merchant or introducing broker may use the following sample
language to provide notice to its customers:
Important Information About Procedures For Opening a New
Account
To help the government fight the funding of terrorism and
money laundering activities, Federal law requires all financial
institutions to obtain, verify, and record information that identifies
each person who opens an account.
What this means for you: When you open an account, we will
ask for your name, address, date of birth and other information that
will allow us to identify you. We may also ask to see your driver's
license or other identifying documents.
(6) Reliance on another financial institution.
The CIP may include procedures specifying when the futures
commission merchant or introducing broker will rely on the performance
by another financial institution (including an affiliate) of any
procedures of its CIP, with respect to any customer of the futures
commission merchant or introducing broker that is opening an account,
or has established an account or similar business relationship with the
other financial institution to provide or engage in services, dealings,
or other financial transactions, provided that:
(i) Such reliance is reasonable under the circumstances;
(ii) The other financial institution is subject to a rule
implementing 31 U.S.C. 5318(h), and is regulated by a Federal
functional regulator; and
(iii) The other financial institution enters into a contract
requiring it to certify annually to the futures commission merchant or
introducing broker that it has implemented its antimoney laundering
program, and that it will perform (or its agent will perform) specified
requirements of the futures commission merchant's or introducing
broker's CIP.
(c) Exemptions. The Commission, with the concurrence of
the Secretary, may by order or regulation exempt any futures commission
merchant or introducing broker that registers with the Commission or
any type of account from the requirements of this section. In issuing
such exemptions, the Commission and the Secretary shall consider
whether the exemption is consistent with the purposes of the Bank
Secrecy Act, and in the public interest, and may consider other
necessary and appropriate factors.
{{6-30-06 p.8516.08-I}}
(d) Other requirements unaffected. Nothing in this
section relieves a futures commission merchant or introducing broker of
its obligation to comply with any other provision of this part,
including provisions concerning information that must be obtained,
verified, or maintained in connection with any account or transaction.
[Codified to 31 C.F.R. 103.123
[Section 103.123 added at 68 Fed. Reg. 12560, May 9, 2003,
effective June 9, 2003, futures commissions merchants and introducing
brokers subject to this final rule must comply by October 1,
2003]
§ 103.125 Anti-money laundering programs for money services
businesses.
(a) Each money services business, as defined by
§ 103.11(uu), shall
develop, implement, and maintain an effective anti-money laundering
program. An effective anti-money laundering program is one that is
reasonably designed to prevent the money services business from being
used to facilitate money laundering and the financing of terrorist
activities.
(b) The program shall be commensurate with the risks posed by the
location and size of, and the nature and volume of the financial
services provided by, the money services business.
(c) The program shall be in writing, and a money services business
shall make copies of the anti-money laundering program available for
inspection to the Department of the Treasury upon request.
(d) At a minimum, the program shall:
(1) Incorporate policies, procedures, and internal controls
reasonably designed to assure compliance with this part.
(i) Policies, procedures, and internal controls developed and
implemented under this section shall include provisions for complying
with the requirements of this part including, to the extent applicable
to the money services business, requirements for:
(A) Verifying customer identification;
(B) Filing reports;
(C) Creating and retaining records; and
(D) Responding to law enforcement requests.
(ii) Money services businesses that have automated data
processing systems should integrate their compliance procedures with
such systems.
(iii) A person that is a money services business solely because
it is an agent for another money services business as set forth in
§ 103.41(a)(2), and the
money services business for which it serves as agent, may by agreement
allocate between them responsibility for development of policies,
procedures, and internal controls required by this paragraph (d)(1).
Each money services business shall remain solely responsible for
implementation of the requirements set forth in this section, and
nothing in this paragraph (d)(1) relieves any money services business
from its obligation to establish and maintain an effective anti-money
laundering program.
(2) Designate a person to assure day to day compliance with the
program and this part. The responsibilities of such person shall
include assuring that:
(i) The money services business properly files reports, and
creates and retains records, in accordance with applicable requirements
of this part;
(ii) The compliance program is updated as necessary to reflect
current requirements of this part, and related guidance issued by the
Department of the Treasury; and
(iii) the money services business provides appropriate training
and education in accordance with paragraph (d)(3) of this section.
(3) Provide education and/or training of appropriate personnel
concerning their responsibilities under the program, including training
in the detection of suspicious transactions to the extent that the
money services business is required to report such transactions under
this part.
(4) Provide for independent review to monitor and maintain an
adequate program. The scope and frequency of the review shall be
commensurate with the risk of the financial services provided by the
money services business. Such review may be conducted by an officer or
employee of the money services business so long as the reviewer is not
the person designated in paragraph (d)(2) of this section.
{{6-30-06 p.8516.08-J}}
(e) Effective date. A money services business must
develop and implement an anti-money laundering program that complies
with the requirements of this section on or before the later of July
24, 2002, and the end of the 90-day period beginning on the day
following the date the business is established.
[Codified to 31 C.F.R. § 103.125]
[Section 103.125 added at 67 Fed. Reg. 21116, April 29, 2002,
effective April 24, 2002]
§ 103.130 Anti-money laundering programs for mutual funds.
(a) For purposes of this section, "mutual fund" means an
open-end company as defined in section 5(a)(1) of the Investment
Company act of 1940 (15 U.S.C.
80a--5(a)(1)).
(b) Effective July 24, 2002, each mutual fund shall develop and
implement a written anti-money laundering program reasonably designed
to prevent the mutual fund from being used for money laundering or the
financing of terrorist activities and to achieve and monitor compliance
with the applicable requirements of the Bank Secrecy Act
(31 U.S.C. 5311, et seq.),
and the implementing regulations promulgated thereunder by the
Department of the Treasury. Each mutual fund's anti-money laundering
program must be approved in writing by its board of directors or
trustees. A mutual fund shall make its anti-money laundering program
available for inspection by the Commission.
(c) The anti-money laundering program shall at a minimum:
(1) Establish and implement policies, procedures, and internal
controls reasonably designed to prevent the mutual fund from being used
for money laundering or the financing of terrorist activities and to
achieve compliance with the applicable provisions of the Bank Secrecy
Act and the implementing regulations thereunder;
(2) Provide for independent testing for compliance to be
conducted by the mutual fund's personnel or by a qualified outside
party;
(3) Designate a person or persons responsible for implementing
and monitoring the operations and internal controls of the program; and
(4) Provide ongoing training for appropriate persons.
[Codified to 31 C.F.R. § 103.130]
[Section 103.130 added at 67 Fed. Reg. 21121, April 29,
2002, effective April 24, 2002]
§ 103.131 Customer identification programs for mutual funds.
(a) Definitions. For purposes of this section:
(1)(i) Account means any contractual or other business
relationship between a person and a mutual fund established to effect
transactions in securities issued by the mutual fund, including the
purchase or sale of securities.
(ii) Account does not include:
(A) An account that a mutual fund acquires through any
acquisition, merger, purchase of assets, or assumption of liabilities;
or
(B) An account opened for the purpose of participating in an
employee benefit plan established under the Employee Retirement Income
Security Act of 1974.
(2)(i) Customer means:
(4) A person that opens a new account; and
(B) An individual who opens a new account for:
(1) An individual who lacks legal capacity, such as a
minor; or
(2) An entity that is not a legal person, such as a
civic club.
(ii) Customer does not include:
(A) A financial institution regulated by a federal functional
regulator or a bank regulated by a state bank regulator;
(B) A person described in § 103.22(d)(2)(ii) through (iv); or
(C) A person that has an existing account with the mutual fund,
provided that the mutual fund has a reasonable belief that it knows the
true identity of the person.
(3) Federal functional regulator is defined at
§ 103.120(a)(2).
(4) Financial institution is defined at 31 U.S.C.
5312(a)(2) and (c)(1).
(5) Mutual fund means an "investment company"
(as the term is defined in section 3 of the Investment Company Act (15
U.S.C. 80a--3)) that is an "open-end company" (as that term is
defined in section 5 of the Investment Company Act (15 U.S.C. 80a--5))
that is
{{6-30-03 p.8516.08-K}}registered or
is required to register with the Commission under section 8 of the
Investment Company Act (15 U.S.C. 80a--8).
(6) Non-U.S. person means a person that is not a
U.S. person.
(7) Taxpayer identification number is defined by
section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 6109) and
Internal Revenue Service regulations implementing that section (e.g.,
social security number or employer identification number).
(8) U.S. person means:
(i) A United States citizen; or
(ii) A person other than an individual (such as a corporation,
partnership or trust), that is established or organized under the laws
of a State or the United States.
(b) Customer identification program: minimum
requirements.
(1) In general. A mutual fund must implement a written
Customer Identification Program ("CIP") appropriate for its size
and type of business that, at a minimum, includes each of the
requirements of paragraphs (b)(1) through (5) of this section. The CIP
must be a part of the mutual fund's anti-money laundering program
required under the regulations implementing 31 U.S.C. 5318(h).
(2) Identity verification procedures. The CIP must
include risk-based procedures for verifying the identity of each
customer to the extent reasonable and practicable. The procedures must
enable the mutual fund to form a reasonable belief that it knows the
true identity of each customer. The procedures must be based on the
mutual fund's assessment of the relevant risks, including those
presented by the manner in which accounts are opened, fund shares are
distributed, and purchases, sales and exchanges are effected, the
various types of accounts maintained by the mutual fund, the various
types of identifying information available, and the mutual fund's
customer base. At a minimum, these procedures must contain the elements
described in this paragraph (b)(2).
(i) Customer information required. (A) In
general. The CIP must contain procedures for opening an account
that specify the identifying information that will be obtained with
respect to each customer. Except as permitted by paragraph (b)(2)(i)(B)
of this section, a mutual fund must obtain, at a minimum, the following
information prior to opening an account:
(1) Name;
(2) Date of birth, for an individual;
(3) Address, which shall be:
(i) For an individual, a residential or business
street address;
(ii) For an individual who does not have a residential
or business street address, an Army Post Office (APO) or Fleet Post
Office (FPO) box number, or the residential or business street address
of next of kin or of another contact individual; or
(iii) For a person other than an individual (such as a
corporation, partnership, or trust), a principal place of business,
local office or other physical location; and
(4) Identification number, which shall be:
(i) For a U.S. person, a taxpayer identification
number; or
(ii) For a non-U.S. person, one or more of the
following: a taxpayer identification number; passport number and
country of issuance; alien identification card number; or number and
country of issuance of any other government-issued document evidencing
nationality or residence and bearing a photograph or similar safeguard.
Note to paragraph
(b)(2)(i)(A)(4)(ii): When opening an
account for a foreign business or enterprise that does not have an
identification number, the mutual fund must request alternative
government-issued documentation certifying the existence of the
business or enterprise.
(B) Exception for persons applying for a taxpayer
identification number. Instead of obtaining a taxpayer
identification number from a customer prior to opening an account, the
CIP may include procedures for opening an account for a person that has
applied for, but has not received, a taxpayer identification number. In
this case, the CIP must include procedures to confirm that the
application was filed before the person opens the account and to obtain
the taxpayer identification number within a reasonable period of time
after the account is opened.
(ii) Customer verification. The CIP must contain
procedures for verifying the identity of the customer, using the
information obtained in accordance with paragraph (b)(2)(i) of this
section, within a reasonable time after the account is opened.
The
{{6-30-03 p.8516.08-L}}procedures must
describe when the mutual fund will use documents, non-documentary
methods, or a combination of both methods as described in this
paragraph (b)(2)(ii).
(A) Verification through documents. For a mutual fund
relying on documents, the CIP must contain procedures that set forth
the documents that the mutual fund will use. These documents may
include:
(1) For an individual, unexpired government-issued
identification evidencing nationality or residence and bearing a
photograph or similar safeguard, such as a driver's license or
passport; and
(2) For a person other than an individual (such as a
corporation, partnership, or trust), documents showing the existence of
the entity, such as certified articles of incorporation, a
government-issued business license, a partnership agreement, or trust
instrument.
(B) Verification through non-documentary methods. For
a mutual fund relying on non-documentary methods, the CIP must contain
procedures that describe the non-documentary methods the mutual fund
will use.
(1) These methods may include contacting a customer;
independently verifying the customer's identity through the comparison
of information provided by the customer with information obtained from
a consumer reporting agency, public database, or other source; checking
references with other financial institutions; and obtaining a financial
statement.
(2) The mutual fund's non-documentary procedures must
address situations where an individual is unable to present an
unexpired government-issued identification document that bears a
photograph or similar safeguard; the mutual fund is not familiar with
the documents presented; the account is opened without obtaining
documents; the customer opens the account without appearing in person;
and where the mutual fund is otherwise presented with circumstances
that increase the risk that the mutual fund will be unable to verify
the true identity of a customer through documents.
(C) Additional verification for certain customers. The
CIP must address situations where, based on the mutual fund's risk
assessment of a new account opened by a customer that is not an
individual, the mutual fund will obtain information about individuals
with authority of control over such account, including persons
authorized to effect transactions in the shareholder of record's
account, in order to verify the customer's identity. This verification
method applies only when the mutual fund cannot verify the customer's
true identity using the verification methods described in paragraphs
(b)(2)(ii)(A) and (B) of this section.
(iii) Lack of verification. The CIP must include
procedures for responding to circumstances in which the mutual fund
cannot form a reasonable belief that it knows the true identity of a
customer. These procedures should describe:
(A) When the mutual fund should not open an account;
(B) The terms under which a customer may use an account while the
mutual fund attempts to verify the customer's identity;
(C) When the mutual fund should file a Suspicious Activity Report
in accordance with applicable law and regulation; and
(D) When the mutual fund should close an account, after attempts
to verify a customer's identity have failed.
(3) Recordkeeping. The CIP must include procedures for
making and maintaining a record of all information obtained under
paragraph (b) of this section.
(i) Required records. At a minimum, the record must
include:
(A) All identifying information about a customer obtained under
paragraph (b)(2)(i) of this section;
(B) A description of any document that was relied on under
paragraph (b)(2)(ii)(A) of this section noting the type of document,
any identification number contained in the document, the place of
issuance, and if any, the date of issuance and expiration date;
(C) A description of the methods and the results of any measures
undertaken to verify the identity of the customer under paragraph
(b)(2)(ii)(B) or (C) of this section; and
(D) A description of the resolution of any substantive
discrepancy discovered when verifying the identifying information
obtained.
{{6-30-03 p.8516.08-M}}
(ii) Retention of records. The mutual fund must retain
the information in paragraph (b)(3)(i)(A) of this section for five
years after the date the account is closed. The mutual fund must retain
the information in paragraphs (b)(3)(i)(B), (C), and (D) of this
section for five years after the record is made.
(4) Comparison with government lists. The CIP must
include procedures for determining whether the customer appears on any
list of known or suspected terrorist or terrorist organizations issued
by any federal government agency and designated as such by the
Department of the Treasury in consultation with the federal functional
regulators. The procedures must require the mutual fund to make such a
determination within a reasonable period of time after the account is
open or earlier, if required by another federal law or regulation or
federal directive issued in connection with the applicable list. The
procedures must also require the mutual fund to follow all federal
directives issued in connection with such lists.
(5)(i) Customer notice. The CIP must include
procedures for providing mutual fund customers with adequate notice
that the mutual fund is requesting information to verify their
identities.
(ii) Adequate notice. Notice is adequate if the mutual
fund generally describes the identification requirements of this
section and provides the notice in a manner reasonably designed to
ensure that a customer is able to view the notice, or is otherwise
given notice, before opening an account. For example, depending on the
manner in which the account is opened, a mutual fund may post a notice
on its website, include the notice on its account applications, or use
any other form of written or oral notice.
(iii) Sample notice. If appropriate, a mutual fund may
use the following sample language to provide notice to its customers:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW
ACCOUNT
To help the government fight the funding of terrorism and
money laundering activities, Federal law requires all financial
institutions to obtain, verify, and record information that identifies
each person who opens an account.
What this means for you: When you open an account, we will
ask for your name, address, date of birth, and other information that
will allow us to identify you. We may also ask to see your driver's
license or other identifying documents.
(6) Reliance on other financial institutions.
The CIP may include procedures specifying when a mutual fund will
rely on the performance by another financial institution (including an
affiliate) of any procedures of the mutual fund's CIP, with respect to
any customer of the mutual fund that is opening, or has opened, an
account or has established a similar formal business relationship with
the other financial institution to provide or engage in services,
dealings, or other financial transactions, provided that:
(i) Such reliance is reasonable under the circumstances;
(ii) The other financial institution is subject to a rule
implementing 31 U.S.C. 5318(h) and is regulated by a federal functional
regulator; and
(iii) The other financial institution enters into a contract
requiring it to certify annually to the mutual fund that it has
implemented its anti-money laundering program, and that it (or its
agent) will perform the specific requirements of the mutual fund's
CIP.
(c) Exemptions. The Commission, with the concurrence of
the Secretary, may, by order or regulation, exempt any mutual fund or
type of account from the requirements of this section. The Commission
and the Secretary shall consider whether the exemption is consistent
with the purposes of the Bank Secrecy Act and is in the public
interest, and may consider other appropriate factors.
(d) Other requirements unaffected. Nothing in this
section relieves a mutual fund of its obligation to comply with any
other provision in this part, including provisions concerning
information that must be obtained, verified, or maintained in
connection with any account or transaction.
[Codified to 31 C.F.R. § 103.131]
[Section 103.131 added at 68 Fed. Reg. 25147, May 9, 2003,
effective June 9, 2003, each Mutual Fund must comply with this final
rule by October 1, 2003]
{{6-30-03 p.8516.08-N}}
§ 103.135 Anti-money laundering programs for operators of
credit card systems.
(a) Definitions. For purposes of this section:
(1) Operator of a credit card system means any person
doing business in the United States that operates a system for clearing
and settling transactions in which the operator's credit card, whether
acting as a credit or debit card, is used to purchase goods or services
or to obtain a cash advance. To fall within this definition, the
operator must also have authorized another person (whether located in
the United States or not) to be an issuing or acquiring institution for
the operator's credit card.
(2) Issuing institution means a person authorized by
the operator of a credit card system to issue the operator's credit
card.
(3) Acquiring institution means a person authorized by
the operator of a credit card system to contract, directly or
indirectly, with merchants or other persons to process transactions,
including cash advances, involving the operator's credit
card.
{{6-30-05 p.8516.09}}
(4) Operator's credit card means a credit card
capable of being used in the United States that:
(i) Has been issued by an issuing institution; and
(ii) Can be used in the operator's credit card system.
(5) Credit card has the same meaning as in
15 U.S.C. 1602(k). It includes
charge cards as defined in 12 CFR
226.2(15).
(6) Foreign bank means any organization that is
organized under the laws of a foreign country; engages in the business
of banking; is recognized as a bank by the bank supervisory or monetary
authority of the country of its organization or the country of its
principal banking operations; and receives deposits in the regular
course of its business. For purposes of this definition:
(i) The term foreign bank includes a branch of a foreign bank in
a territory of the United States, Puerto Rico, Guam, American Samoa, or
the U.S. Virgin Islands.
(ii) The term foreign bank does not include:
(A) A U.S. agency or branch of a foreign bank; and
(B) An insured bank organized under the laws of a territory of
the United States, Puerto Rico, Guam, American Samoa, or the U.S.
Virgin Islands.
(b) Anti-money laundering program
requirement. Effective July 24, 2002, each operator of a credit
card system shall develop and implement a written anti-money laundering
program reasonably designed to prevent the operator of a credit card
system from being used to facilitate money laundering and the financing
of terrorist activities. The program must be approved by senior
management. Operators of credit card systems must make their anti-money
laundering programs available to the Department of the Treasury or the
appropriate Federal regulator for review.
(c) Minimum requirements. At a minimum, the program
must:
(1) Incorporate policies, procedures, and internal controls
designed to ensure the following:
(i) That the operator does not authorize, or maintain
authorization for, any person to serve as an issuing or acquiring
institution without the operator taking appropriate steps, based upon
the operator's money laundering or terrorist financing risk
assessment, to guard against that person issuing the operator's credit
card or acquiring merchants who accept the operator's credit card in
circumstances that facilitate money laundering or the financing of
terrorist activities;
(ii) For purposes of making the risk assessment required by
paragraph (c)(1)(i) of this section, the following persons are presumed
to pose a heightened risk of money laundering or terrorist financing
when evaluating whether and under what circumstances to authorize, or
to maintain authorization for, any such person to serve as an issuing
or acquiring institution:
(A) A foreign shell bank that is not a regulated affiliate, as
those terms are defined in 31 CFR 104.10(e) and (j);
(B) A person appearing on the Specially Designated Nationals List
issued by Treasury's Office of Foreign Assets Control;
(C) A person located in, or operating under a license issued by,
a jurisdiction whose government has been identified by the Department
of State as a sponsor of international terrorism under 22 U.S.C. 2371;
(D) A foreign bank operating under an offshore banking license,
other than a branch of a foreign bank if such foreign bank has been
found by the Board of Governors of the Federal Reserve System under the
Bank Holding Company Act (12 U.S.C. 1841, et seq.) or the International
Banking Act (12 U.S.C. 3101, et seq.) to be subject to comprehensive
supervision or regulation on a consolidated basis by the relevant
supervisors in that jurisdiction;
(E) A person located in, or operating under a license issued by,
a jurisdiction that has been designated as noncooperative with
international anti-money laundering principles or procedures by an
intergovernmental group or organization of which the
United
{{6-30-05 p.8516.10}}States is a member, with
which designation the United States representative to the group or
organization concurs; and
(F) A person located in, or operating under a license issued by,
a jurisdiction that has been designated by the Secretary of the
Treasury pursuant to 31 U.S.C.
5318A as warranting special measures due to money laundering
concerns;
(iii) That the operator is in compliance with all applicable
provisions of subchapter II of chapter 53 of title 31, United States
Code and this part;
(2) Designate a compliance officer who will be responsible for
assuring that:
(i) The anti-money laundering program is implemented effectively;
(ii) The anti-money laundering program is updated as necessary to
reflect changes in risk factors or the risk assessment, current
requirements of part 103, and further guidance issued by the Department
of the Treasury; and
(iii) Appropriate personnel are trained in accordance with
paragraph (c)(3) of this section;
(3) Provide for education and training of appropriate personnel
concerning their responsibilities under the program; and
(4) Provide for an independent audit to monitor and maintain an
adequate program. The scope and frequency of the audit shall be
commensurate with the risks posed by the persons authorized to issue or
accept the operator's credit card. Such audit may be conducted by an
officer or employee of the operator, so long as the reviewer is not the
person designated in paragraph (c)(2) of this section or a person
involved in the operation of the program.
[Codified to 31 C.F.R. § 103.135]
[Section 103.135 added at 67 Fed. Reg. 21126, April 29,
2002, effective April 24, 2002]
§ 103.140 Anti-money laundering programs for dealers in
precious metals, precious stones, or jewels.
(a) Definitions. For purposes of this section:
(1) Covered goods means:
(i) Jewels (as defined in paragraph (a)(3) of this section);
(ii) Precious metals (as defined in paragraph (a)(4) of this
section);
(iii) Precious stones (as defined in paragraph (a)(5) of this
section); and
(iv) Finished goods (including, but not limited to, jewelry,
numismatic items, and antiques), that derive 50 percent or more of
their value from jewels, precious metals, or precious stones contained
in or attached to such finished goods;
(2) Dealer. (i) Except as provided in paragraphs
(a)(2)(ii) and (a)(2)(iii) of this section, the term "dealer"
means a person engaged within the United States as a business in the
purchase and sale of covered goods and who, during the prior calendar
or tax year:
(A) Purchased more than $50,000 in covered goods; and
(B) Received more than $50,000 in gross proceeds from the sale of
covered goods.
(ii) For purposes of this section, the term "dealer" does
not include:
(A) A retailer (as defined in paragraph (a)(7) of this section),
unless the retailer, during the prior calendar or tax year, purchased
more than $50,000 in covered goods from persons other than dealers or
other retailers (such as members of the general public or foreign
sources of supply); or
(B) A person licensed or authorized under laws of any State (or
political subdivision thereof) to conduct business as a pawnbroker, but
only to the extent such person is engaged in pawn transactions
(including the sale of pawn loan collateral).
(iii) For purposes of paragraph (a)(2) of this section, the terms
"purchase" and "sale" do not include a retail transaction
in which a retailer or a dealer accepts from a customer covered goods,
the value of which the retailer or dealer credits to the account of the
customer, and the retailer or dealer does not provide funds to the
customer in exchange for such covered goods.
(iv) For purposes of paragraphs (a)(2) and (b) of this section,
the terms "purchase" and "sale" do not include the purchase
of jewels, precious metals, or precious stones that are incorporated
into machinery or equipment to be used for industrial purposes, and the
purchase and sale of such machinery or equipment.
{{2-29-08 p.8516.10-A}}
(v) For purposes of applying the $50,000 thresholds in paragraphs
(a)(2)(i) and (a)(2)(ii)(A) of this section to finished goods defined
in paragraph (a)(1)(iv) of this section, only the value of jewels,
precious metals, or precious stones contained in, or attached to, such
goods shall be taken into account.
(3) Jewel means an organic substance with gem quality
market-recognized beauty, rarity, and value, and includes pearl, amber,
and coral.
(4) Precious metal means:
(i) Gold, iridium, osmium, palladium, platinum, rhodium,
ruthenium, or silver, having a level of purity of 500 or more parts per
thousand; and
(ii) An alloy containing 500 or more parts per thousand, in the
aggregate, of two or more of the metals listed in paragraph (a)(3)(i)
of this section.
(5) Precious stone means a substance with gem quality
market-recognized beauty, rarity, and value, and includes diamond,
corundum (including rubies and sapphires), beryl (including emeralds
and aquamarines), chrysoberyl, spinel, topaz, zircon, tourmaline,
garnet, crystalline and cryptocrystalline quartz, olivine peridot,
tanzanite, jadeite jade, nephrite jade, spodumene, feldspar, turquoise,
lapis lazuli, and opal.
(6) Person shall have the same meaning as provided in
§ 103.11(z).
(7) Retailer means a person engaged within the United
States in the business of sales primarily to the public of covered
goods.
(b) Anti-money laundering program requirement. (1) Each
dealer shall develop and implement a written anti-money laundering
program reasonably designed to prevent the dealer from being used to
facilitate money laundering and the financing of terrorist activities
through the purchase and sale of covered goods. The program must be
approved by senior management. A dealer shall make its anti-money
laundering program available to the Department of Treasury through
FinCEN or its designee upon request.
(2) To the extent that a retailer's purchases from persons other
than dealers and other retailers exceeds the $50,000 threshold
contained in paragraph (a)(2)(ii)(A), the anti-money laundering
compliance program required of the retailer under this paragraph need
only address such purchases.
(c) Minimum requirements. At a minimum, the anti-money
laundering program shall:
(1) Incorporate policies, procedures, and internal controls based
upon the dealer's assessment of the money laundering and terrorist
financing risks associated with its line(s) of business. Policies,
procedures, and internal controls developed and implemented by a dealer
under this section shall include provisions for complying with the
applicable requirements of the Bank Secrecy Act (31 U.S.C. 5311
et seq.), and this part.
(i) For purposes of making the risk assessment required by
paragraph (c)(1) of this section, a dealer shall take into account all
relevant factors including, but not limited to:
(A) The type(s) of products the dealer buys and sells, as well as
the nature of the dealer's customers, suppliers, distribution
channels, and geographic locations;
(B) The extent to which the dealer engages in transactions other
than with established customers or sources of supply, or other dealers
subject to this rule; and
(C) Whether the dealer engages in transactions for which payment
or account reconciliation is routed to or from accounts located in
jurisdictions that have been identified by the Department of State as a
sponsor of international terrorism under 22 U.S.C. 2371; designated as
non-cooperative with international anti-money laundering principles or
procedures by an intergovernmental group or organization of which the
United States is a member and with which designation the United States
representative or organization concurs; or designated by the Secretary
of the Treasury pursuant to 31 U.S.C. 5318A as warranting special
measures due to money laundering concerns.
(ii) A dealer's program shall incorporate policies, procedures,
and internal controls to assist the dealer in identifying transactions
that may involve use of the dealer to facilitate money laundering or
terrorist financing, including provisions for making reasonable
inquiries to determine whether a transaction involves money laundering
or terrorist financing, and for refusing to consummate, withdrawing
from, or terminating such transactions. Factors that may indicate a
transaction is designed to involve use of the dealer to facilitate
money laundering or terrorist financing include, but are not limited
to:
(A) Unusual payment methods, such as the use of large amounts of
cash, multiple or sequentially numbered money orders, traveler's
checks, or cashier's checks, or payment from third
parties;
{{2-29-08 p.8516.10-B}}
(B) Unwillingness by a customer or supplier to provide complete
or accurate contact information, financial references, or business
affiliations;
(C) Attempts by a customer or supplier to maintain an unusual
degree of secrecy with respect to the transaction, such as a request
that normal business records not be kept;
(D) Purchases or sales that are unusual for the particular
customer or supplier, or type of customer or supplier; and
(E) Purchases or sales that are not in conformity with standard
industry practice.
(2) Designate a compliance officer who will be responsible for
ensuring that:
(i) The anti-money laundering program is implemented effectively;
(ii) The anti-money laundering program is updated as necessary to
reflect changes in the risk assessment, requirements of this part, and
further guidance issued by the Department of the Treasury; and
(iii) Appropriate personnel are trained in accordance with
paragraph (c)(3) of this section.
(3) Provide for on-going education and training of appropriate
persons concerning their responsibilities under the program.
(4) Provide for independent testing to monitor and maintain an
adequate program. The scope and frequency of the testing shall be
commensurate with the risk assessment conducted by the dealer in
accordance with paragraph (c)(1) of this section. Such testing may be
conducted by an officer or employee of the dealer, so long as the
tester is not the person designated in paragraph (c)(2) of this section
or a person involved in the operation of the program.
(d) Effective date. A dealer must develop and implement
an anti-money laundering program that complies with the requirements of
this section on or before the later of January 1, 2006, or six months
after the date a dealer becomes subject to the requirements of this
section.
[Codified to 31 C.F.R. § 103.140]
[Section 103.140 added at 70 Fed. Reg. 33716, June 9, 2005,
effective July 11, 2005]
§ 103.170 Exempted anti-money laundering programs for certain
financial institutions.
(a) Exempt financial institutions. Subject to the
provisions of paragraph (c) and (d) of this section, the following
financial institutions (as defined in
31 U.S.C. 5312(a)(2) or
(c)(1)) are exempt from the requirement in
31 U.S.C. 5312(h)(1)
concerning the establishment of anti-money laundering programs:
(1) An agency of the United States Government, or of a State or
local government, carrying out a duty or power of a business described
in 31 U.S.C. 5312(a)(2); and
(2) [Reserved]
(b) Temporary exemption for certain financial institutions.
(1) Subject to the provisions of paragraphs (c) and (d) of this
section, the following financial institutions (as defined in 31 U.S.C.
5312(a)(2) or (c)(1)) are exempt from the requirement in 31 U.S.C.
5318(h)(1) concerning the establishment of anti-money laundering
programs:
(i) Pawnbroker;
(ii) Loan or finance company;
(iii) Travel agency;
(iv) Telegraph company;
(v) Seller of vehicles, including automobiles, airplanes, and
boats;
(vi) Person involved in real estate closings and settlements;
(vii) Private banker;
(viii) Commodity pool operator;
(ix) Commodity trading advisor; or
(x) Investment company.
(2) Subject to the provisions of paragraphs (c) and (d) of this
section, a bank (as defined in § 103.11(c)) that is not subject to
regulation by a Federal functional regulator (as defined in
§ 103.120(a)(2)) is exempt from the requirement in 31 U.S.C.
5318(h)(1) concerning the establishment of anti-money laundering
programs.
{{12-31-07 p.8516.10-C}}
(3) Subject to the provisions of paragraphs (c) and (d) of this
section, a person described in § 103.11(n)(7) is exempt from the
requirement in 31 U.S.C. 5318(h)(1) concerning the establishment of
anti-money laundering programs.
(c) Limitation on exemption. The exemptions described in
paragraphs (a)(2) and (b) of this section shall not apply to any
financial institution that is otherwise required to establish an
anti-money laundering program by this subpart I.
{{2-29-08 p.8516.11}}
(d) Compliance obligations of deferred financial
institutions. Nothing in this section shall be deemed to relieve
an exempt financial institution from its responsibility to comply with
any other applicable requirement of law or regulaiton, including title
31 of the U.S.C. and this part.
[Codified to 31 C.F.R. § 103.170]
[Section 103.170 added at 67 Fed. Reg. 21113, April 29, 2002,
effective April 24, 2002; 67 Fed. Reg. 68935, November 14, 2002;
amended at 73 Fed. Reg. 1976, January 11, 2008]
Special Due Diligence for Correspondent Accounts and Private
Banking Accounts
§ 103.175 Definitions.
Except as otherwise provided, the following definitions apply for
purposes of §§ 103.176 through 103.185;
(a) Attorney General means the Attorney General of the
United States.
(b) Beneficial owner of an account means an individual
who has a level of control over, or entitlement to, the funds or assets
in the account that, as a practical matter, enables the individual,
directly or indirectly, to control, manage or direct the account. The
ability to fund the account or the entitlement to the funds of the
account alone, however, without any corresponding authority to control,
manage or direct the account (such as in the case of a minor child
beneficiary), does not cause the individual to be a beneficial owner.
(c) Certification and recertification mean the
certification and recertification forms described in appendices A and
B, respectively, to this subpart.
(d) Correspondent account. (1) The term
correspondent account means:
(i) For purposes of § 103.176(a), (d) and (e), an account
established for a foreign financial institution to receive deposits
from, or to make payments or other disbursements on behalf of, the
foreign financial institution, or to handle other financial
transactions related to such foreign financial institution; and
(ii) For purposes of §§ 103.176(b) and (c), 103.177 and
103.185, an account established for a foreign bank to receive deposits
from, or to make payments or other disbursements on behalf of, the
foreign bank, or to handle other financial transactions related to such
foreign bank.
(2) For purposes of this definition, the term account:
(i) As applied to banks (as set forth in paragraphs (f)(1)(i)
through (vii) of this section);
(A) Means any formal banking or business relationship established
by a bank to provide regular services, dealings, and other financial
transactions; and
(B) Includes a demand deposit, savings deposit, or other
transaction or asset account and a credit account or other extension of
credit;
(ii) As applied to brokers or dealers in securities (as set forth
in paragraph (f)(1)(viii) of this section) means any formal
relationship established with a broker or dealer in securities to
provide regular services to effect transactions in securities,
including, but not limited to, the purchase or sale of securities and
securities loaned and borrowed activity, and to hold securities or
other assets for safekeeping or as collateral;
(iii) As applied to futures commission merchants and introducing
brokers (as set forth in paragraph (f)(1)(ix) of this section) means
any formal relationship established by a futures commission merchant to
provide regular services, including, but not limited to, those
established to effect transactions in contracts of sale of a commodity
for future delivery, options on any contract of sale of a commodity for
future delivery, or options on a commodity; and
(iv) As applied to mutual funds (as set forth in paragraph
(f)(1)(x) of this section) means any contractual or other business
relationship established between a person and a mutual fund to provide
regular services to effect transactions in securities issued by the
mutual fund, including the purchase or sale of securities.
(e) Correspondent relationship has the same meaning as
correspondent account for purposes of §§ 103.177 and 103.185.
(f) Covered financial institution means: (1) For
purposes of §§ 103.176 and 103.178:
(i) An insured bank (as defined in section 3(h) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(h)));
(ii) A commercial bank;
{{2-29-08 p.8516.12}}
(iii) An agency or branch of a foreign bank in the United States;
(iv) A federally insured credit union;
(v) A savings association;
(vi) A corporation acting under section 25A of the Federal
Reserve Act (12 U.S.C. 611 et seq.);
(vii) A trust bank or trust company that is federally regulated
and is subject to an anti-money laundering program requirement;
(viii) A broker or dealer in securities registered, or required
to be registered, with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.),
except persons who register pursuant to section 15(b)(11) of the
Securities Exchange Act of 1934;
(ix) A futures commission merchant or an introducing broker
registered, or required to be registered, with the Commodity Futures
Trading Commission under the Commodity Exchange Act (7 U.S.C. 1
et seq.), except persons who register pursuant to section
4(f)(a)(2) of the Commodity Exchange Act; and
(x) A mutual fund, which means an investment company (as defined
in section 3(a)(1) of the Investment Company Act of 1940
("Investment Company Act") (15 U.S.C. 80a--3(a)(1))) that is an
open-end company (as defined in section 5(a)(1) of the Investment
Company Act (15 U.S.C. 80a--5(a)(1))) and that is registered, or is
required to register, with the Securities and Exchange Commission
pursuant to the Investment Company Act.
(2) For purposes of §§ 103.177 and 103.185:
(i) An insured bank (as defined in section 3(h) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(h)));
(ii) A commercial bank or trust company;
(iii) A private banker;
(iv) An agency or branch of a foreign bank in the United States;
(v) A credit union;
(vi) A savings association;
(vii) A corporation acting under section 25A of the Federal
Reserve Act (12 U.S.C. 611 et seq.); and
(viii) A broker or dealer in securities registered, or required
to be registered, with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.),
except persons who register pursuant to section 15(b)(11) of the
Securities Exchange Act of 1934.
(g) Foreign bank. The term foreign bank has
the meaning provided in § 103.11(o).
(h) Foreign financial institution. (1) The term
foreign financial institution means:
(i) A foreign bank;
(ii) Any branch or office located outside the United States of
any covered financial institution described in paragraphs (f)(1)(viii)
through (x) of this section;
(iii) Any other person organized under foreign law (other than a
branch or office of such person in the United States) that, if it were
located in the United States, would be a covered financial institution
described in paragraphs (f)(1)(viii) through (x) of this section; and
(iv) Any person organized under foreign law (other than a branch
or office of such person in the Untied States) that is engaged in the
business of, and is readily identifiable as:
(A) A currency dealer or exchanger; or
(B) A money transmitter.
(2) For purposes of paragraph (h)(1)(iv) of this section, a
person is not "engaged in the business" of a currency dealer, a
currency exchanger or a money transmitter if such transactions are
merely incidental to the person's business.
(i) Foreign shell bank means a foreign bank without a
physical presence in any country.
(j) Non-United States person or non-U.S. person means a
natural person who is neither a Untied States citizen nor is accorded
the privilege of residing permanently in the United States pursuant to
title 8 of the United States Code. For purposes of this paragraph (j),
the definition of person in § 103.11(z) does not apply,
notwithstanding paragraph (m) of this section.
{{8-31-07 p.8516.13}}
(k) Offshore banking license means a license to conduct
banking activities that prohibits the licensed entity from conducting
banking activities with the citizens of, or in the local currency of,
the jurisdiction that issued the license.
(l) Owner. (1) The term owner means any
person who, directly or indirectly:
(i) Owns, controls, or has the power to vote 25 percent or more
of any class of voting securities or other voting interests of a
foreign bank; or
(ii) Controls in any manner the election of a majority of the
directors (or individuals exercising similar functions) of a foreign
bank.
(2) For purposes of this definition:
(i) Members of the same family shall be considered to be one
person.
(ii) The term same family means parents, spouses,
children, siblings, uncles, aunts, grandparents, grandchildren, first
cousins, stepchildren, stepsiblings, parents-in-law, and spouses of any
of the foregoing.
(iii) Each member of the same family who has an ownership
interest in a foreign bank must be identified if the family is an owner
as a result of aggregating the ownership interests of the members of
the family. In determining the ownership interests of the same family,
any voting interest of any family member shall be taken into account.
(iv) Voting securities or other voting interests means
securities or other interests that entitle the holder to vote for or to
select directors (or individuals exercising similar functions).
(m) Person has the meaning provided in § 103.11(z).
(n) Physical presence means a place of business that:
(1) Is maintained by a foreign bank;
(2) Is located at a fixed address (other than solely an
electronic address or a post-office box) in a country in which the
foreign bank is authorized to conduct banking activities, at which
location the foreign bank:
(i) Employs one or more individuals on a full-time basis; and
(ii) Maintains operating records related to its banking
activities; and
(3) Is subject to inspection by the banking authority that
licensed the foreign bank to conduct banking activities.
(o) Private banking account means an account (or any
combination of accounts) maintained at a covered financial institution
that:
(1) Requires a minimum aggregate deposit of funds or other assets
of not less than $1,000,000;
(2) Is established on behalf of or for the benefit of one or more
non-U.S. persons who are direct or beneficial owners of the account;
and
(3) Is assigned to, or is administered or managed by, in whole or
in part, an officer, employee, or agent of a covered financial
institution acting as a liaison between the covered financial
institution and the direct or beneficial owner of the account.
(p) Regulated affiliate. (1) The term regulated
affiliate means a foreign shell bank that:
(i) Is an affiliate of a depository institution, credit union, or
foreign bank that maintains a physical presence in the United States or
a foreign country, as applicable; and
(ii) Is subject to supervision by a banking authority in the
country regulating such affiliated depository institution, credit
union, or foreign bank.
(2) For purposes of this definition:
(i) Affiliate means a foreign bank that is controlled
by, or is under common control with, a depository institution, credit
union, or foreign bank.
(ii) Control means:
(A) Ownership, control, or power to vote 50 percent or more of
any class of voting securities or other voting interests of another
company; or
(B) Control in any manner the election of a majority of the
directors (or individuals exercising similar functions) of another
company.
(q) Secretary means the Secretary of the Treasury.
(r) Senior foreign political figure. (1) The term
senior foreign political figure means:
(i) A current or former:
(A) Senior official in the executive, legislative,
administrative, military, or judicial branches of a foreign government
(whether elected or not);
(B) Senior official of a major foreign political party;
or
{{8-31-07 p.8516.14}}
(C) Senior executive of a foreign government-owned commercial
enterprise;
(ii) A corporation, business, or other entity that has been
formed by, or for the benefit of, any such individual;
(iii) An immediate family member of any such individual; and
(iv) A person who is widely and publicly known (or is actually
known by the relevant covered financial institution) to be a close
associate of such individual.
(2) For purposes of this definition:
(i) Senior official or executive means an individual
with substantial authority over policy, operations, or the use of
government-owned resources; and
(ii) Immediate family member means spouses, parents,
siblings, children and a spouse's parents and siblings.
(s) Territories and Insular Possessions has the meaning
provided in § 103.11(tt).
(t) United States has the meaning provided in
§ 103.11(nn).
[Codified to 31 C.F.R. § 103.175]
[Source: Section 103.75 added at 67 Fed. Reg. 60570,
September 26, 2002, effective October 28, 2002; amended at 71 Fed. Reg.
512, January 4, 2006, effective February 3,
2006]
§ 103.176 Due diligence programs for correspondent accounts for
foreign financial institutions.
(a) In general. A covered financial institution shall
establish a due diligence program that includes appropriate, specific,
risk-based, and, where necessary, enhanced policies, procedures, and
controls that are reasonably designed to enable the covered financial
institution to detect and report, on an ongoing basis, any known or
suspected money laundering activity conducted through or involving any
correspondent account established, maintained, administered, or managed
by such covered financial institution in the United States for a
foreign financial institution. The due diligence program required by
this section shall be a part of the anti-money laundering program
otherwise required by this subpart. Such policies, procedures, and
controls shall include:
(1) Determining whether any such correspondent account is subject
to paragraph (b) of this section;
(2) Assessing the money laundering risk presented by such
correspondent account, based on a consideration of all relevant
factors, which shall include, as appropriate:
(i) The nature of the foreign financial institution's business
and the markets it serves;
(ii) The type, purpose, and anticipated activity of such
correspondent account;
(iii) The nature and duration of the covered financial
institution's relationship with the foreign financial institution (and
any of its affiliates);
(iv) The anti-money laundering and supervisory regime of the
jurisdiction that issued the charter or license to the foreign
financial institution, and, to the extent that information regarding
such jurisdiction is reasonably available, of the jurisdiction in which
any company that is an owner of the foreign financial institution is
incorporated or chartered; and
(v) Information known or reasonably available to the covered
financial institution about the foreign financial institution's
anti-money laundering record; and
(3) Applying risk-based procedures and controls to each such
correspondent account reasonably designed to detect and report known or
suspected money laundering activity, including a periodic review of the
correspondent account activity sufficient to determine consistency with
information obtained about the type, purpose, and anticipated activity
of the account.
(b) Enhanced due diligence for certain foreign banks. In
the case of a correspondent account established, maintained,
administered, or managed in the United States for a foreign bank
described in paragraph (c) of this section, the due diligence program
required by paragraph (a) of this section shall include enhanced due
diligence procedures designed to ensure that the covered financial
institution, at a minimum, takes reasonable steps to:
(1) Conduct enhanced scrutiny of such correspondent account to
guard against money laundering and to identify and report any
suspicious transactions in accordance with applicable law and
regulation. This enhanced scrutiny shall reflect the risk assessment of
the account and shall include as appropriate:
{{12-31-07 p.8516.14-A}}
(i) Obtaining and considering information relating to the foreign
bank's anti-money laundering program to assess the risk of money
laundering presented by the foreign bank's correspondent account;
(ii) Monitoring transactions to, from, or through the
correspondent account in a manner reasonably designed to detect money
laundering and suspicious activity; and
(iii)(A) Obtaining information from the foreign bank about the
identity of any person with authority to direct transactions through
any correspondent account that is a payable-through account, and the
sources and beneficial owner of funds or other assets in the
payable-through account.
(B) For purposes of paragraph (b)(1)(iii)(A) of this section, a
payable-through account means a correspondent account
maintained by a covered financial institution for a foreign bank by
means of which the foreign bank permits its customers to engage, either
directly or through a subaccount, in banking activities usual in
connection with the business of banking in the United States.
(2) Determine whether the foreign bank for which the
correspondent account is established or maintained in turn maintains
correspondent accounts for other foreign banks that use the foreign
correspondent account established or maintained by the covered
financial institution and, if so, take reasonable steps to obtain
information relevant to assess and mitigate money laundering risks
associated with the foreign bank's correspondent accounts for other
foreign banks, including, as appropriate, the identity of those foreign
banks.
(3)(i) Determine, for any correspondent account established or
maintained for a foreign bank whose shares are not publicly traded, the
identity of each owner of the foreign bank and the nature and extent of
each owner's ownership interest.
(ii) For purposes of paragraph (b)(3)(i) of this section:
(A) Owner means any person who directly or indirectly
owns, controls, or has the power to vote 10 percent or more of any
class of securities of a foreign bank. For purposes of this paragraph
(b)(3)(ii)(A):
(1) Members of the same family shall be considered to
be one person; and
(2) Same family has the meaning provided in
§ 103.175(1)(2)(ii).
(B) Publicly traded means shares that are traded on an
exchange or an organized over-the-counter market that is regulated by a
foreign securities authority as defined in section 3(a)(50) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(50)).
(c) Foreign banks to be accorded enhanced due diligence.
The due diligence procedures described in paragraph (b) of this section
are required for any correspondent account maintained for a foreign
bank that operates under:
(1) An offshore banking license:
(2) A banking license issued by a foreign country that has been
designated as non-cooperative with international anti-money laundering
principles or procedures by an intergovernmental group or organization
of which the United States is a member and with which designation the
U.S. representative to the group or organization concurs; or
(3) A banking license issued by a foreign country that has been
designated by the Secretary as warranting special measures due to money
laundering concerns.
(d) Special procedures when due diligence or enhanced due
diligence cannot be performed. The due diligence program required
by paragraphs (a) and (b) of this section shall include procedures to
be followed in circumstances in which a covered financial institution
cannot perform appropriate due diligence or enhanced due diligence with
respect to a correspondent account, including when the covered
financial institution should refuse to open the account, suspend
transaction activity, file a suspicious activity report, or close the
account.
(e) Applicability rules for general due diligence. The
provisions of paragraph (a) of this section apply to covered financial
institutions as follows:
(1) General rules--(i) Correspondent accounts
established on or after July 5, 2006. Effective July 5, 2006, the
requirements of paragraph (a) of this section shall apply to each
correspondent account established on or after that date.
(ii) Correspondent accounts established before July 5,
2006. Effective October 2, 2006, the requirements of paragraph (a)
of this section shall apply to each correspondent account established
before July 5, 2006.
(2) Special rules for certain banks. Until the
requirements of paragraph (a) of this section become applicable as set
forth in paragraph (e)(1) of this section, the due diligence
{{12-31-07 p.8516.14-B}}requirements of
31 U.S.C. 5318(i)(1) shall
continue to apply to any covered financial institution listed in
§ 103.175(f)(1)(i) through (vi).
(3) Special rules for all other covered financial
institutions. The due diligence requirements of 31 U.S.C.
5318(i)(1) shall not apply to a covered financial institution listed in
§ 103.175(f)(1)(vii) through (x) until the requirements of paragraph
(a) of this section become applicable as set forth in paragraph (e)(1)
of this section.
(f) Applicability rule for enhanced due diligence. The
provisions of paragraph (b) of this section apply to covered financial
institutions as follows:
(1) General rule--(i) Correspondent accounts
established on or after February 5, 2008. Effective February 5,
2008, the requirements of paragraph (b) of this section shall apply to
each correspondent account established on or after such date.
(ii) Correspondent accounts established before
February 5, 2008. Effective May 5, 2008, the requirements of paragraph
(b) of this section shall apply to each correspondent account
established before February 5, 2008.
(2) Special rules for certain banks. Until the
requirements of paragraph (b) of this section become applicable as set
forth in paragraph (f)(1) of this section, the enhanced due diligence
requirements of 31 U.S.C. 5318(i)(2) shall continue to apply to any
covered financial institutions listed in § 103.175(f)(1)(i) through
(vi).
(3) Special rules for all other covered financial
institutions. The enhanced due diligence requirements of 31 U.S.C.
5318(i)(2) shall not apply to a covered financial institution listed in
§ 103.175(f)(1)(vii) through (x) until the requirements of paragraph
(b) of this section become applicable, as set forth in paragraph (f)(1)
of this section.
(g) Exemptions--(1) Exempt financial
institutions. Except as provided in this section, a financial
institution defined in 31 U.S.C.
5312(a)(2) or (c)(1), or § 103.11(n) is exempt from the
requirements of 31 U.S.C. 5318(i)(1) and (i)(2) pertaining to
correspondent accounts.
(2) Other compliance obligations of financial institutions
unaffected. Nothing in paragraph (g) of this section shall be
construed to relieve a financial institution from its responsibility to
comply with any other applicable requirement of law or regulation,
including title 31, United States Code, and this part.
[Codified to 31 C.F.R. § 103.176]
[Source: Section 103.176 added at 71 Fed. Reg. 514, January 4,
2006, effective February 3, 2006; amended at 71 Fed. Reg. 512, January
4, 2006, effective February 3, 2006; 72 Fed. Reg. 44774, August 9,
2007, effective September 10, 2007]
§ 103.177 Prohibition on correspondent accounts for foreign
shell banks; records concerning owners of foreign banks and agents for
service of legal process.
(a) Requirements for covered financial institutions. (1)
Prohibition on correspondent accounts for foreign shell banks.
(i) A covered financial institution shall not establish, maintain,
administer, or manage a correspondent account in the United States for,
or on behalf of, a foreign shell bank.
(ii) A covered financial institution shall take reasonable steps
to ensure that any correspondent account established, maintained,
administered, or managed by that covered financial institution in the
United States for a foreign bank is not being used by that foreign bank
to indirectly provide banking services to a foreign shell bank.
(iii) Nothing in paragraph (a)(1) of this section prohibits a
covered financial institution from providing a correspondent account or
banking services to a regulated affiliate.
(2) Records of owners and agents. (i) Except as
provided in paragraph (a)(2)(ii) of this section, a covered financial
institution that maintains a correspondent account in the United States
for a foreign bank shall maintain records in the United States
identifying the owners of each such foreign bank whose shares are not
publicly traded and the name and street address of a person who resides
in the United States and is authorized, and has agreed to be an agent
to accept service of legal process for records regarding each such
account.
(ii) A covered financial institution need not maintain records of
the owners of any foreign bank that is required to have on file with
the Federal Reserve Board a Form FR Y--7 that identifies the current
owners of the foreign bank as required by such form.
{{12-31-07 p.8516.14-C}}
(iii) For purposes of paragraph (a)(2)(i) of this section,
publicly traded refers to shares that are traded on an
exchange or on an organized over-the-counter market that is regulated
by a foreign securities authority as defined in section 3(a)(50) of the
Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(50)).
(b) Safe harbor. Subject to paragraphs (c) and (d) of
this section, a covered financial institution will be deemed to be in
compliance with the requirements of paragraph (a) of this section with
respect to a foreign bank if the covered financial institution obtains,
at least once every three years, a certification or recertification
from the foreign bank.
(c) Interim verification. If at any time a covered
financial institution knows, suspects, or has reason to suspect, that
any information contained in a certification or recertification
provided by a foreign bank, or otherwise relied upon by the covered
financial institution for purposes of this section, is no longer
correct, the covered financial institution shall request that the
foreign bank verify or correct such information, or shall take other
appropriate measures to ascertain the accuracy of the information or to
obtain correct information, as appropriate. See paragraph (d)(3) of
this section for additional requirements if a foreign bank fails to
verify or correct the information or if a covered financial institution
cannot ascertain the accuracy of the information or obtain correct
information.
(d) Closure of correspondent accounts. (1)
Accounts existing on October 28, 2002. In the case of any
correspondent account that was in existence on October 28, 2002, if the
covered financial institution has not obtained a certification (or
recertification) from the foreign bank, or has not otherwise obtained
documentation of the information required by such certification (or
recertification), on or before December 26, 2002, and at least once
every three years thereafter, the covered financial institution shall
close all correspondent accounts with such foreign bank within a
commercially reasonable time, and shall not permit the foreign bank to
establish any new positions or execute any transaction through any such
account, other than transactions necessary to close the account.
(2) Accounts established after October 28, 2002. In
the case of any correspondent account established after October 28,
2002, if the covered financial institution has not obtained a
certification (or recertification), or has not otherwise obtained
documentation of the information required by such certification (or
recertification) within 30 calendar days after the date the account is
established, and at least once every three years thereafter, the
covered financial institution shall close all correspondent accounts
with such foreign bank within a commercially reasonable time, and shall
not permit the foreign bank to establish any new positions or execute
any transaction through any such account, other than transactions
necessary to close the account.
(3) Verification of previously provided information.
In the case of a foreign bank with respect to which the covered
financial institution undertakes to verify information pursuant to
paragraph (c) of this section, if the covered financial institution has
not obtained, from the foreign bank or otherwise, verification of the
information or corrected information within 90 calendar days after the
date of undertaking the verification, the covered financial institution
shall close all correspondent accounts with such foreign bank within a
commercially reasonable time, and shall not permit the foreign bank to
establish any new positions or execute any transaction through any such
account, other than transactions necessary to close the account.
(4) Reestablishment of closed accounts and establishment of
new accounts. A covered financial institution shall not
reestablish any account closed pursuant to this paragraph (d), and
shall not establish any other correspondent account with the concerned
foreign bank, until it obtains from the foreign bank the certification
or the recertification, as appropriate.
(5) Limitation on liability. A covered financial
institution shall not be liable to any person in any court or
arbitration proceeding for terminating a correspondent account in
accordance with this paragraph (d).
(e) Recordkeeping requirement. A covered financial
institution shall retain the original of any document provided by a
foreign bank, and the original or a copy of any document otherwise
relied upon by the covered financial institution, for purposes of this
section, for at least 5 years after the date that the covered financial
institution no longer maintains any correspondent account for such
foreign bank. A covered financial institution shall retain such records
with respect to any foreign bank for such longer period as the
Secretary may direct.
{{12-31-07 p.8516.14-D}}
(f) Special rules concerning information requested prior to
October 28, 2002. (1) Definition. For purposes of this
paragraph (f) the term "Interim Guidance" means:
(i) The Interim Guidance of the Department of the Treasury dated
November 20, 2001 and published in the Federal Register on November 27,
2001; or
(ii) The guidance issued in a document published in the Federal
Register on December 28, 2001.
(2) Use of Interim Guidance certification. In the case
of a correspondent account in existence on October 28, 2002, the term
"certification" as used in paragraphs (b), (c), (d)(1), and
(d)(3) of this section shall also include the certification appended to
the Interim Guidance, provided that such certification was requested
prior to October 28, 2002 and obtained by the covered financial
institution on or before December 26, 2002.
(3) Recordkeeping requirement. Paragraph (e) of this
section shall apply to any document provided by a foreign bank, or
otherwise relied upon by a covered financial institution, for purposes
of the Interim Guidance.
(Approved by the Office of Management and Budget under
Control Number 1505--0184.)
[Codified to 31 C.F.R. § 103.77]
[Source: Section 103.77 added at 67 Fed. Reg. 60571, September 26,
2002, effective October 28, 2002]
§ 103.178 Due diligence programs for private banking accounts.
(a) In general. A covered financial institution shall
maintain a due diligence program that includes policies, procedures,
and controls that are reasonably designed to detect and report any
known or suspected money laundering or suspicious activity conducted
through or involving any private banking account that is established,
maintained, administered, or managed in the United States by such
financial institution. The due diligence program required by this
section shall be a part of the anti-money laundering program otherwise
required by this subpart.
(b) Minimum requirements. The due diligence program
required by paragraph (a) of this section shall be designed to ensure,
at a minimum, that the financial institution takes reasonable steps to:
(1) Ascertain the identity of all nominal and beneficial owners
of a private banking account;
(2) Ascertain whether any person identified under paragraph
(b)(1) of this section is a senior foreign political figure;
(3) Ascertain the source(s) of funds deposited into a private
banking account and the purpose and expected use of the account; and
(4) Review the activity of the account to ensure that it is
consistent with the information obtained about the client's source of
funds, and with the stated purpose and expected use of the account, as
needed to guard against money laundering, and to report, in accordance
with applicable law and regulation, any known or suspected money
laundering or suspicious activity conducted to, from, or through a
private banking account.
(c) Special requirements for senior foreign political
figures. (1) In the case of a private banking account for which a
senior foreign political figure is a nominal or beneficial owner, the
due diligence program required by paragraph (a) of this section shall
include enhanced scrutiny of such account that is reasonably designed
to detect and report transactions that may involve the proceeds of
foreign corruption.
(2) For purposes of this paragraph (c), the term proceeds
of foreign corruption means any asset or property that is acquired
by, through, or on behalf of a senior foreign political figure through
misappropriation, theft, or embezzlement of public funds, the unlawful
conversion of property of a foreign government, or through acts of
bribery or extortion, and shall include any other property into which
any such assets have been transformed or converted.
(d) Special procedures when due diligence cannot be
performed. The due diligence program required by paragraph (a) of
this section shall include procedures to be followed in circumstances
in which a covered financial institution cannot perform appropriate due
diligence with respect to a private banking account, including when the
covered financial institution should refuse to open the account,
suspend transaction activity, file a suspicious activity report, or
close the account.
{{10-31-07 p.8516.14-E}}
(e) Applicability rules. The provisions of this section
apply to covered financial institutions as follows:
(1) General rules--(i) Private banking accounts
established on or after July 5, 2006. Effective July 5, 2006, the
requirements of this section shall apply to each private banking
account established on or after such date.
(ii) Private banking accounts established before July 5,
2006. Effective October 2, 2006, the requirements of this section
shall apply to each private banking account established before July 5,
2006.
(2) Special rules for certain banks and for brokers or
dealers in securities, futures commission merchants, and introducing
brokers. Until the requirements of this section become applicable
as set forth in paragraph (e)(1) of this section, the requirements of
31 U.S.C. 5318(i)(3) shall
continue to apply to a covered financial institution listed in
§ 103.175(f)(1)(i) through (vi), (viii), or (ix).
(3) Special rules for federally regulated trsut banks or
trust companies, and mutual funds. Until the requirements of this
section become applicable as set forth in paragraph (e)(1) of this
section, the requirements of 31
U.S.C. 5318(i)(3) shall not apply to a covered financial
institution listed in § 103.175(f)(1)(vii), or (x).
(4) Exemptions--(i) Exempt financial
institutions. Except as provided in this section, a financial
institution defined in 31 U.S.C.
5312(a)(2) or (c)(1) or § 103.11(n) is exempt from the
requirements of 31 U.S.C. 5318(i)(3) pertaining to private banking
accounts.
(ii) Other compliance obligations of financial institutions
unaffected. Nothing in paragraph (e)(4) of this section shall be
construed to relieve a financial institution from its responsibility to
comply with any other applicable requirement of law or regulation,
including title 31, United States Code, and this part.
[Codified to 31 C.F.R. § 103.178]
[Source: Section 103.178 added at 71 Fed. Reg. 515, January 4,
2006, effective February 3, 2006; amended at 71 Fed. Reg. 16041; March
30, 2006]
{{10-31-07 p.8516.15}}
Law Enforcement Access to Foreign Bank
Records
§ 103.185 Summons or subpoena of foreign bank records;
Termination of correspondent relationship.
(a) Definitions. The definitions in § 103.175 apply to
this section.
(b) Issuance to foreign banks. The Secretary or the
Attorney General may issue a summons or subpoena to any foreign bank
that maintains a correspondent account in the United States and may
request records related to such correspondent account, including
records maintained outside the United States relating to the deposit of
funds into the foreign bank. The summons or subpoena may be served on
the foreign bank in the United States if the foreign bank has a
representative in the United States, or in a foreign country pursuant
to any mutual legal assistance treaty, multilateral agreement, or other
request for international law enforcement assistance.
(c) Issuance to covered financial institutions. Upon
receipt of a written request from a Federal law enforcement officer for
information required to be maintained by a covered financial
institution under paragraph (a)(2) of § 103.177, the covered
financial institution shall provide the information to the requesting
officer not later than 7 days after receipt of the request.
(d) Termination upon receipt of notice. A covered
financial institution shall terminate any correspondent relationship
with a foreign bank not later than 10 business days after receipt of
written notice from the Secretary or the Attorney General (in each
case, after consultation with the other) that the foreign bank has
failed:
(1) To comply with a summons or subpoena issued under paragraph
(b) of this section; or
(2) To initiate proceedings in a United States court contesting
such summons or subpoena.
(e) Limitation on liability. A covered financial
institution shall not be liable to any person in any court or
arbitration proceeding for terminating a correspondent relationship in
accordance with paragraph (d) of this section.
(f) Failure to terminate relationship. Failure to
terminate a correspondent relationship in accordance with this section
shall render the covered financial institution liable for a civil
penalty of up to $10,000 per day until the correspondent relationship
is so terminated.
[Codified to 31 C.F.R. § 103.185]
[Source: Section 103.185 added at 67 Fed. Reg. 60572, September 26,
2002, effective October 28, 2002]
§ 103.186 Special measures against Burma.
(a) Definitions. For purposes of this section:
(1) Correspondent account has the same meaning as
provided in § 103.175(d).
(2) Covered financial institution has the same meaning
as provided in § 103.175(f)(2) and also includes the following:
(i) A futures commission merchant or an introducing broker
registered, or required to register, with the Commodity Futures Trading
Commission under the Commodity Exchange Act (7 U.S.C. 1 et
seq.); and
(ii) An investment company (as defined in section 3 of the
Investment Company Act of 1940 (15 U.S.C. 80a--5)) that is an open-end
company (as defined in section 5 of the Investment Company Act (15
U.S.C. 80a--5)) and that is registered, or required to register, with
the Securities and Exchange Commission pursuant to that Act.
(3) Burmese banking institution means any foreign
bank, as that term is defined in § 103.11(o), chartered or licensed
by Burma, including branches and offices located outside Burma.
(b) Requirements for covered financial
institutions--(1) Prohibition on correspondent
accounts. A covered financial institution shall terminate any
correspondent account that is established, maintained, administered, or
managed in the United States for, or on behalf of, a Burmese banking
institution.
(2) Prohibition on indirect correspondent
accounts. (i) If a covered financial institution has or obtains
knowledge that a correspondent account established, maintained,
administered, or managed by that covered financial institution in the
United States for a
{{10-31-07 p.8516.16}}foreign bank is
being used by the foreign bank to provide banking services indirectly
to a Burmese banking institution, the covered financial institution
shall ensure that the correspondent account is no longer used to
provide such services, including, where necessary, terminating the
correspondent account; and
(ii) A covered financial institution required to terminate an
account pursuant to paragraph (b)(2)(i) of this section:
(A) Shall do so within a commercially reasonable time, and shall
not permit the foreign bank to establish any new positions or execute
any transactions through such account, other than those necessary to
close the account; and
(B) May reestablish an account closed pursuant to this paragraph
if it determines that the account will not be used to provide banking
services indirectly to a Burmese banking institution.
(3) Exception. The provisions of paragraphs (b)(1) and
(2) of this section shall not apply to a correspondent account provided
that the operation of such account is not prohibited by Executive Order
13310 and the transactions involving Burmese banking institutions that
are conducted through the correspondent account are limited solely to
transactions that are exempted from, or otherwise authorized by
regulation, order, directive, or license pursuant to, Executive Order
13310.
{{4-28-06 p.8516.16-A}}
(4) Reporting and recordkeeping not required. Nothing
in this section shall require a covered financial institution to
maintain any records, obtain any certification, or report any
information not otherwise required by law or regulation.
[Codified to 31 C.F.R. § 103.186]
[Source: Section 103.186 added at 69 Fed. Reg. 19103, effective May
12, 2004]
Sec. 103.187 Special measures against Myanmar Mayflower Bank and
Asia Wealth Bank.
(a) Definitions. For purposes of this section:
(1) Correspondent account has the same meaning as provided in
Sec. 103.175(d).
(2) Covered financial institution has the same meaning as
provided in Sec. 103.175(f)(2) and also includes the following:
(i) A futures commission merchant or an introducing broker
registered, or required to register, with the Commodity Futures Trading
Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.); and
(ii) An investment company (as defined in section 3 of the
Investment Company Act of 1940 (15 U.S.C. 80a--5)) that is an open-end
company (as defined in section 5 of the Investment Company Act (15
U.S.C. 80a--5)) and that is registered, or required to register, with
the Securities and Exchange Commission pursuant to that Act.
(3) Myanmar Mayflower Bank means all headquarters, branches, and
offices of Myanmar Mayflower Bank operating in Burma or in any
jurisdiction.
(4) Asia Wealth Bank means all headquarters, branches, and
offices of Asia Wealth Bank operating in Burma or in any jurisdiction.
(b) Requirements for covered financial
institutions--(1) Prohibition on correspondent accounts. A covered
financial institution shall terminate any correspondent account that is
established, maintained, administered, or managed in the United States
for, or on behalf of, Myanmar Mayflower Bank or Asia Wealth Bank.
(2) Prohibition on indirect correspondent accounts. (i) If a
covered financial institution has or obtains knowledge that a
correspondent account established, maintained, administered, or managed
by that covered financial institution in the United States for a
foreign bank is being used by the foreign bank to provide banking
services indirectly to Myanmar Mayflower Bank or Asia Wealth Bank, the
covered financial institution shall ensure that the correspondent
account is no longer used to provide such services, including, where
necessary, terminating the correspondent account; and
(ii) A covered financial institution required to terminate an
account pursuant to paragraph (b)(2)(i) of this section:
(A) Shall do so within a commercially reasonable time, and shall
not permit the foreign bank to establish any new positions or execute
any transactions through such account, other than those necessary to
close the account; and
(B) May reestablish an account closed pursuant to this paragraph
if it determines that the account will not be used to provide banking
services indirectly to Myanmar Mayflower Bank or Asia Wealth Bank.
(3) Reporting and recordkeeping not required. Nothing in this
section shall require a covered financial institution to maintain any
records, obtain any certification, or to report any information not
otherwise required by law or regulation.
[Codified to 31 C.F.R. § 103.87]
[Source: Section 103.87 added at 69 Fed. Reg. 19103, effective May
12, 2004]
§ 103.188 Special measures against Commercial Bank of Syria.
(a) Definitions. For purposes of this section:
(1) Commercial Bank of Syria means any branch, office,
or subsidiary of Commercial Bank of Syria operating in Syria or in any
other jurisdiction, including Syrian Lebanese Commercial
Bank.
{{4-28-06 p.8516.16-B}}
(2) Correspondent account has the same meaning as
provided in § 103.175(d)(1)(ii).
(3) Covered financial institution includes:
(i) An insured bank (as defined in section 3(h) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(h)));
(ii) A commercial bank;
(iii) An agency or branch of a foreign bank in the United States;
(iv) A federally insured credit union;
(v) A savings association;
(vi) A corporation acting under section 25A of the Federal
Reserve Act (12 U.S.C. 611 et seq.);
(vii) A trust bank or trust company that is federally regulated
and is subject to an anti-money laundering program requirement;
(viii) A broker or dealer in securities registered, or required
to be registered, with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.),
except persons who register pursuant to section 15(b)(11) of the
Securities Exchange Act of 1934;
(ix) A futures commission merchant or an introducing broker
registered, or required to be registered, with the Commodity Futures
Trading Commission under the Commodity Exchange Act (7 U.S.C. 1
et seq.), except persons who register pursuant to section
4(f)(a)(2) of the Commodity Exchange Act; and
(x) A mutual fund, which means an investment company (as defined
in section 3(a)(1) of he Investment Company Act of 1940
(("Investment Company Act") (15 U.S.C. 80a--3(a)(1))) that is an
open-end company (as defined in section 5(a)(1) of the Investment
Company Act (15 U.S.C. 80a--5(a)(1))) and that is registered, or is
required to register, with the Securities and Exchange Commission
pursuant to the Investment Company Act.
(4) Subsidiary means a company of which more than 50
percent of the voting stock or analogous equity interest is owned by
another company.
(b) Requirements for covered financial
institutions -- (1) Prohibition on direct use of
correspondent accounts. A covered financial institution shall
terminate any correspondent account that is open or maintained in the
United States for, or on behalf of, Commercial Bank of Syria.
(2) Due diligence of correspondent accounts to prohibit
indirect use. (i) A covered financial institution shall apply due
diligence to its correspondent accounts that is reasonably designed to
guard against their indirect use by Commercial Bank of Syria. At a
minimum, that due diligence must include:
(A) Notifying correspondent account holders that the
correspondent account may not be used to provide Commercial Bank of
Syria with access to the covered financial institution; and
(B) Taking reasonable steps to identify any indirect use of its
correspondent accounts by Commercial Bank of Syria, to the extent that
such indirect use can be determined from transactional records
maintained in the covered financial institution's normal course of
business.
(ii) A covered financial institution shall take a risk-based
approach when deciding what, if any, additional due diligence measures
it should adopt to guard against the indirect use of its correspondent
accounts by Commercial Bank of Syria.
(iii) A covered financial institution that obtains knowledge that
a correspondent account is being used by the foreign bank to provide
indirect access to Commercial Bank of Syria shall take all appropriate
steps to prevent such indirect access, including, where necessary,
terminating the correspondent account.
(iv) A covered financial institution required to terminate a
correspondent account pursuant to paragraph (b)(2)(iii) of this
section:
(A) Should do so within a commercially reasonable time, and
should not permit the foreign bank to establish any new positions or
execute any transaction through such correspondent account, other than
those necessary to close the correspondent account; and
{{10-31-07 p.8516.16-C}}
(B) May reestablish a correspondent account closed pursuant to
this paragraph if it determines that the correspondent account will not
be used to provide banking services indirectly to Commercial Bank of
Syria.
(3) Recordkeeping and reporting. (i) A covered
financial institution is required to document its compliance with the
notice requirement set forth in paragraph (b)(2)(i)(A) of this section.
(ii) Nothing in this section shall require a covered financial
institution to report any information not otherwise required to be
reported by law or regulation.
[Codified to 31 C.F.R. § 103.188]
[Section 103.188 added at 71 Fed. Reg. 13267, effective April 14,
2006]
§ 103.192 Special measures against VEF Bank.
(a) Definitions. For purposes of this section:
(1) Correspondent account has the same meaning as
provided in § 103.175(d)(1)(ii).
(2) Covered financial institution includes:
(i) An insured bank (as defined in section 3(h) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(h)));
(ii) A commercial bank;
(iii) An agency or branch of a foreign bank in the United States;
(iv) A federally insured credit union;
(v) A savings association;
(vi) A corporation acting under section 25A of the Federal
Reserve Act (12 U.S.C. 611 et seq.);
(vii) A trust bank or trust company that is federally regulated
and is subject to an anti-money laundering program requirement;
(viii) A broker or dealer in securities registered, or required
to be registered, with the U.S. Securities and Exchange Commission
under the Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.), except persons who register pursuant to section 15(b)(11)
of he Securities Exchange Act of 1934;
(ix) A futures commission merchant or an introducing broker
registered, or required to be registered, with the Commodity Futures
Trading Commission under the Commodity Exchange Act (7 U.S.C. 1
et seq.), except persons who register pursuant to section
4(f)(a)(2) of the Commodity Exchange Act; and
(x) A mutual fund, which means an investment company (as defined
in section 3(a)(1) of the Investment Company Act of 1940
(("Investment Company Act") (15 U.S.C. 80a--3(a)(1))) that is an
open-end company (as defined in section 5(a)(1) of the Investment
Company Act (15 U.S.C. 80a--5(a)(1))) and that is registered, or is
required to register, with the U.S. Securities and Exchange Commission
pursuant to the Investment Company Act.
(3) Subsidiary means a company of which more than 50
percent of the voting stock or analogous equity interest is owned by
another company.
(4) VEF Bank means any branch, office, or subsidiary
of joint stock company VEF Banka operating in the Republic of Latvia or
in any other jurisdiction. The one known VEF Bank subsidiary, Veiksmes
Lizings, and any branches or offices, are included in the definition.
(b) Requirements for covered financial institutions--(1)
Prohibition on direct use of correspondent accounts. A
covered financial institution shall terminate any correspondent account
that is opened or maintained in the United States for, or on behalf of,
VEF Bank.
(2) Due diligence of correspondent accounts to prohibit
indirect use. (i) A Covered financial institution shall apply due
diligence to its correspondent accounts that is reasonably designed to
guard against their indirect use by VEF Bank. At a minimum, that due
diligence must include:
(A) Notifying correspondent accountholders that the correspondent
account may not be used to provide VEF Bank with access to the covered
financial institution; and
{{10-31-07 p.8516.16-D}}
(B) Taking reasonable steps to identify any indirect use of its
correspondent accounts by VEF Bank, to the extent that such indirect
use can be determined from transactional records maintained in the
covered financial institution's normal course of business.
(ii) A covered financial institution shall take a risk-based
approach when deciding what, if any, additional due diligence measures
it should adopt to guard against the indirect use of its correspondent
accounts by VEF Bank.
(iii) A covered financial institution that obtains knowledge that
a correspondent account is being used by the foreign bank to provide
indirect access to VEF Bank shall take all appropriate steps to prevent
such indirect access, including, where necessary, terminating the
correspondent account.
(iv) A covered financial institution required to terminate a
correspondent account pursuant to paragraph (b)(2)(iii) of this
section:
(A) Should do so within a commercially reasonable time, and
should not permit the foreign bank to establish any new positions or
execute any transaction through such correspondent account, other than
those necessary to close the correspondent account; and
(B) May reestablish a correspondent account closed pursuant to
this paragraph if it determines that the correspondent account will not
be used to provide banking services indirectly to VEF Bank.
(3) Recordkeeping and reporting. (i) A covered
financial institution is required to document its compliance with the
notice requirement set forth in paragraph (b)(2)(i)(A) of this section.
(ii) Nothing in this section shall require a covered financial
institution to report any information not otherwise required to be
reported by law or regulation.
[Codified to 31 C.F.R. § 103.192]
[Section 103.192 added at 71 Fed. Reg. 39560, July 13, 2006,
effective August 14, 2006]
§ 103.193 Special measures against Banco Delta Asia.
(a) Definitions. For purposes of this section:
(1) Banco Delta Asia means all branches, offices, and
subsidiaries of Banco Delta Asia operating in any jurisdiction,
including its subsidiaries Delta Asia Credit Limited and Delta Asia
Insurance Limited.
(2) Correspondent account has the same meaning as
provided in § 103.175(d)(1)(ii).
(3) Covered financial institution includes:
(i) An insured bank (as defined in section 3(h) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(h)));
(ii) A commercial bank;
(iii) An agency or branch of a foreign bank in the United States;
(iv) A federally insured credit union;
(v) A savings association;
(vi) A corporation acting under section 25A of the Federal
Reserve Act (12 U.S.C. 611 et seq.);
(vii) A trust bank or trust company that is federally regulated
and is subject to an anti-money laundering program requirement;
(viii) A broker or dealer in securities registered, or required
to be registered, with the U.S. Securities and Exchange Commission
under the Securities Exchange Act of 1934 (15 U.S.C.78a et
seq.), except persons who register pursuant to section 15(b)(11)
of the Securities Exchange Act of 1934;
(ix) A futures commission merchant or an introducing broker
registered, or required to register, with the Commodity Futures Trading
Commission under the Commodity Exchange Act (7 U.S.C. 1 et
seq.), except persons who register pursuant to section 4(f)(a)(2)
of the Commodity Exchange Act; and
(x) A mutual fund, which means an investment company (as defined
in section 3(a)(1) of the Investment Company Act of 1940
("Investment Company Act") (15 U.S.C.
{{4-30-07 p.8516.16-D-1}}80a-3)a)(1))) that is an open-end company (as defined in
section 5(a)(1) of the Investment Company Act (15 U.S.C. 80a-5(a)(1)))
and that is registered, or is required to register, with the U.S.
Securities and Exchange Commission pursuant to the Investment Company
Act.
(4) Subsidiary means a company of which more than 50
percent of the voting stock or analogous equity interest is owned by
another company.
(b) Requirements for covered financial
institutions--(1) Prohibition on direct use of correspondent accounts.
A covered financial institution shall terminate any correspondent
account that is established, maintained, administered, or managed in
the United States for, or on behalf of, Banco Delta Asia.
(2) Due to diligence of correspondent accounts to prohibit
indirect use.
(i) A covered financial institution shall apply due diligence to
its correspondent accounts that is reasonably designed to guard against
their indirect use by Banco Delta Asia. At a minimum, that due
diligence must include:
(A) Notifying correspondent accountholders the correspondent
account may not be used to provide Banco Delta Asia with access to the
covered financial institution; and
(B) Taking reasonable steps to identify any direct use of its
correspondent accounts by Banco Delta Asia, to the extent that such
indirect use can be determined from transactional records maintained in
the covered financial institution's normal course of business.
(ii) A covered financial institution shall take a risk-based
approach when deciding what, if any, additional due diligence measures
it should adopt to guard against the indirect use of its correspondent
accounts by Banco Delta Asia.
(iii) A covered financial institution that obtains knowledge that
a correspondent account is being used by the foreign bank to provide
indirect access to Banco Delta Asia shall take all appropriate steps to
prevent such indirect access, including, where necessary, terminating
the correspondent account.
(iv) A covered financial institution required to terminate a
correspondent account pursuant to paragraph (b)(2)(iii) of this
section:
(A) Should do so within a commercially reasonable time, and
should not permit the foreign bank to establish any new positions or
execute any transaction through such correspondent account, other than
those necessary to close the correspondent account; and
(B) May reestablish a correspondent account closed pursuant to
this paragraph if it determines that the correspondent account will not
be used to provide banking services indirectly to Banco Delta Asia.
(3) Recordkeeping and reporting. (i) A covered
financial institution is required to document its compliance with the
notice requirement set forth in paragraph (b)(2)(i)(A) of this section.
(ii) Nothing in this section shall require a covered financial
institution to report any information not otherwise required to be
reported by law or regulation.
[Codified to 31 C.F.R. § 103.193]
[Section 103.193 added at 72 Fed. Reg. 12739, March 19, 2007,
effective April 18, 2007]
APPENDIX A TO SUBPART I OF PART 103 — CERTIFICATION REGARDING
CORRESPONDENT ACCOUNTS FOR FOREIGN BANKS
[OMB Control Number 1505-0184]
The information contained in this Certification is sought
pursuant to Sections 5318(j) and 5318(k) of Title 31 of the United
States Code, as added by sections 313 and 319(b) of the USA Patriot Act
of 2001 (Public Law 107--56).
This Certification should be completed by any foreign
bank that maintains a correspondent account with any
U.S. bank or U.S. broker-dealer in securities (a covered
financial institution as defined in
31 C.F.R. 103.175(f)). An
entity that is not a foreign bank is not required to complete this
Certification.
{{4-30-07 p.8516.16-D-2}}A foreign bank is a bank organized under
foreign law and located outside of the United States (see definition at
31 C.F.R. 103.11(o)). A
bank includes offices, branches, and agencies of commercial
banks or trust companies, private banks, national banks, thrift
institutions, credit unions, and other organizations chartered under
laws and supervised by banking supervisors of any state (see definition
at 31 C.F.R.
103.11(c)).*
A Correspondent Account for a foreign bank is any
account to receive deposits from, make payments or other disbursements
on behalf of a foreign bank, or handle other financial transactions
related to the foreign bank.
Special instruction for foreign branches of U.S.
banks: A branch or office of a U.S. bank outside the United States
is a foreign bank. Such a branch or office is not required to complete
this Certification with respect to Correspondent Accounts with U.S.
branches and offices of the same U.S. bank.
Special instruction for covering multiple branches on
a single Certification: A foreign bank may complete one
Certification for its branches and offices outside the United States.
The Certification must list all of the branches and offices that are
covered and must include the information required in Part C for
each branch or office that maintains a Correspondent Account
with a Covered Financial Institution. Use attachment sheets as
necessary.
A. The undersigned financial
institution, ____________________________________________ ("Foreign Bank") hereby
certifies as follows:
B. Correspondent Accounts Covered by this
Certification: Check one box.
 This Certification applies to all
accounts established for Foreign Bank by Covered Financial
Institutions.
* A "foreign bank" does not include any foreign
central bank or monetary authority that functions as a central bank, or
any international financial institution or regional development bank
formed by treaty or international agreement.
{{10-31-02 p.8516.17}}
This Certification applies to Correspondent Accounts
established by ____________________________________________ (name of Covered Financial
Institution(s)) for Foreign Bank.
C. Physical Presence/Regulated Affiliate
Status: Check one box and complete the blanks.
Foreign Bank maintains a physical presence
in any country. That means:
• Foreign Bank has a place of business at the
following street address: ____________________________________________, where Foreign Bank employs
one or more individuals on a full-time basis and maintains operating
records related to its banking activities.
• The above address is in _______ (insert
country), where Foreign Bank is authorized to conduct banking
activities.
• Foreign Bank is subject to inspection
by _______, (insert Banking Authority), the banking authority
that licensed Foreign Bank to conduct banking activities.
Foreign Bank does not have a physical presence in
any country, but Foreign Bank is a regulated affiliate. That
means:
• Foreign Bank is an affiliate of a depository
institution, credit union, or a foreign bank that maintains a physical
presence at the following street address: ____________________________________________, where it
employs one or more persons on a full-time basis and maintains
operating records related to its banking activities.
• The above address is in ____________________________________________ (insert
country), where the depository institution, credit union, or foreign
bank is authorized to conduct banking activities.
• Foreign Bank is subject to supervision
by _______, (insert Banking Authority), the same banking authority
that regulates the depository institution, credit union, or foreign
bank.
Foreign Bank does not have a
physical presence in a country and is not a regulated
affiliate.
D. Indirect Use of Correspondent
Accounts: Check box to certify.
No Correspondent Account maintained by a
Covered Financial Institution may be used to indirectly provide banking
services to certain foreign banks. Foreign Bank hereby certifies that
it does not use any Correspondent Account with a Covered Financial
Institution to indirectly provide banking services to any foreign bank
that does not maintain a physical presence in any country and that is
not a regulated affiliate.
E. Ownership Information: Check box 1 or 2
below, if applicable.
1. Form FR Y-7 is on file. Foreign
Bank has filed with the Federal Reserve Board a current Form FR Y-7 and
has disclosed its ownership information on Item 4 of Form FR Y-7.
2. Foreign Bank's shares are publicly
traded. Publicly traded means that the shares are traded on an
exchange or an organized over-the-counter market that is regulated by a
foreign securities authority as defined in section 3(a)(50) of the
Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(50)).
If neither box 1 or 2 of Part E is checked, complete
item 3 below, if applicable.
3. Foreign Bank has no owner(s)
except as set forth below. For purposes of this Certification,
owner means any person who, directly or indirectly, (a)
owns, controls, or has power to vote 25 percent or more of any class of
voting securities or other voting interests of Foreign Bank; or (b)
controls in any manner the election of a majority of the directors (or
individuals exercising similar functions) of Foreign Bank. For purposes
of this Certification, (i) person means any individual,
bank, corporation, partnership, limited liability
{{10-31-02 p.8516.18}}company or any other legal entity; (ii) voting
securities or other voting interests means securities or other
interests that entitle the holder to vote for or select directors (or
individuals exercising similar functions); and (iii) members of the
same family* shall be considered one
person.
F. Process Agent: complete the following.
The following individual or entity: ____________________________________________ is
a resident of the United States at the following street
address: ____________________________________________, and is authorized to accept
service of legal process on behalf of Foreign Bank from the Secretary
of the Treasury or the Attorney General of the United States pursuant
to Section 5318(k) of title 31, United Sates Code.
G. General
Foreign Bank hereby agrees to notify in writing each
Covered Financial Institution at which it maintains any Correspondent
Account of any change in facts or circumstances reported in this
Certification. Notification shall be given within 30 calendar days of
such change.
Foreign Bank understands that each Covered Financial
Institution at which it maintains a Correspondent Account may provide a
copy of this Certification to the Secretary of the Treasury and the
Attorney General of the United States. Foreign Bank further understands
that the statements contained in this Certification may be transmitted
to one or more departments or agencies of the United States of America
for the purpose of fulfilling such departments' and agencies'
governmental functions.
I, _____________________ (name of signatory), certify that I
have read and understand this Certification, that the statements made
in this Certification are complete and correct, and that I am
authorized to execute this Certification on behalf of Foreign
Bank.
____________________________________________ [Name of Foreign Bank]
____________________________________________ [Signature]
____________________________________________ [Printed Name]
____________________________________________ [Title]
Executed on this _______ day of _______,
200 _______ .
Received and reviewed by:
Name: ____________________________________________
Title: ____________________________________________
For: ____________________________________________ [Name of Covered Financial
Institution]
Date: _______
________________________________________________________
* The
same family means parents, spouses, children, siblings, uncles, aunts,
grandparents, grandchildren, first cousins, stepchildren, stepsiblings,
parents-in-law and spouses of any of the foregoing. In determining the
ownership interests of the same family, any voting interest of any
family member shall be taken into account.
{{10-31-02 p.8516.18-A}}
[Codified to Appendix A to Subpart I of Part 103]
[Source: Appendix A to Subpart I of Part 103 added at 67 Fed. Reg.
60574, September 26, 2002, effective October 28,
2002]
APPENDIX B TO SUBPART I OF PART 103 — RECERTIFICATION REGARDING
CORRESPONDENT ACCOUNTS FOR FOREIGN BANKS
[OMB CONTROL NUMBER 1505-0184]
The information contained in this Certification is sought
pursuant to Sections 5318(j) and 5318(k) of Title 31 of the United
States Code, as added by sections 313 and 319(b) of the USA PATRIOT Act
of 2001 (Public Law 107--56).
The undersigned financial institution, ____________________________________________ ("Foreign
Bank"), hereby certifies as follows:
1. Foreign Bank has executed a Certification dated _______,
20 _______ (the "Certification") relating to one or more
Correspondent Accounts maintained by one or more Covered Financial
Institutions for Foreign Bank. Terms defined in the Certification have
the same meaning in this Recertification.
2. The information contained in the Certification:
remains true and correct.
is revised by the information provided with this
Recertification (attach a statement describing the information that is
no longer correct and stating the correct information).
Foreign Bank understands that each Covered Financial Institution at
which it maintains a Correspondent Account may provide a copy of this
Recertification to the Secretary of the Treasury and the Attorney
General of the United States. Foreign Bank further understands that the
statements contained in this Recertification may be transmitted to one
or more departments or agencies of the United States of America for the
purpose of fulfilling such departments' and agencies' governmental
functions.
I, _____________________ (name of signatory), certify that I
have read and understand this Recertification, that the statements made
in this Recertification are complete and correct, and that I am
authorized to execute this Recertification on behalf of Foreign
Bank.
____________________________________________ [Name of Foreign Bank]
____________________________________________ [Signature]
____________________________________________ [Title]
Executed on this _______ day of _______, 200_______.
Received and reviewed by:
Name: ____________________________________________
Title: ____________________________________________
For: ____________________________________________ [Name of Covered Financial Institution]
Date: _______
[Codified to Appendix B to Subpart I of Part 103]
[Source: Appendix B to Subpart I of Part 103 added at 67
Fed. Reg. 60578, September 26, 2002, effective October 28,
2002]
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