Agency Information Collection Activities; Proposed Renewal; Comment Request; Renewal Without Change of Reports of Foreign Financial Accounts Regulations and FinCEN Form 114, Report of Foreign Bank and Financial Accounts

Published date10 August 2023
Record Number2023-17092
Citation88 FR 54397
CourtFinancial Crimes Enforcement Network
SectionNotices
Federal Register, Volume 88 Issue 153 (Thursday, August 10, 2023)
[Federal Register Volume 88, Number 153 (Thursday, August 10, 2023)]
                [Notices]
                [Pages 54397-54399]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2023-17092]
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                DEPARTMENT OF THE TREASURY
                Financial Crimes Enforcement Network
                Agency Information Collection Activities; Proposed Renewal;
                Comment Request; Renewal Without Change of Reports of Foreign Financial
                Accounts Regulations and FinCEN Form 114, Report of Foreign Bank and
                Financial Accounts
                AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.
                ACTION: Notice and request for comments.
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                SUMMARY: As part of its continuing effort to reduce paperwork and
                respondent burden, FinCEN invites comment on a renewal, without change,
                of existing information collection requirements concerning reports of
                foreign financial accounts and FinCEN Form 114, Report of Foreign Bank
                and Financial Accounts (FBAR). This request for comments is made
                pursuant to the Paperwork Reduction Act of 1995 (PRA).
                DATES: Written comments are welcome and must be received on or before
                October 10, 2023
                ADDRESSES: Comments may be submitted by any of the following methods:
                 Federal E-rulemaking Portal: http://www.regulations.gov.
                Follow the instructions for submitting comments. Refer to Docket Number
                FINCEN-2023-0008 and the Office of Management and Budget (OMB) control
                number 1506-0009.
                 Mail: Policy Division, Financial Crimes Enforcement
                Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-
                2023-0008 and OMB control number 1506-0009.
                 Please submit comments by one method only. Comments will be
                reviewed consistent with the PRA \1\ and applicable OMB regulations and
                guidance. All comments submitted in response to this notice will become
                a matter of public record. Therefore, you should submit only
                information that you wish to make publicly available.
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                 \1\ Public Law 104-13, 44 U.S.C. 3506(c)(2)(A).
                FOR FURTHER INFORMATION CONTACT: FinCEN's Regulatory Support Section
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                (RSS) at 1-800-767-2825 or electronically at [email protected].
                SUPPLEMENTARY INFORMATION:
                I. Statutory and Regulatory Provisions
                 The legislative framework generally referred to as the Bank Secrecy
                Act (BSA) consists of the Currency and Foreign Transactions Reporting
                Act of 1970, as amended by the Uniting and Strengthening America by
                Providing Appropriate Tools Required to Intercept and Obstruct
                Terrorism Act of 2001 (USA PATRIOT Act), Public Law 107-56 (October 26,
                2001), and other legislation, including the Anti-Money Laundering Act
                of 2020 (AML Act).\2\ The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C.
                1951-1960, and 31 U.S.C. 5311-5314 and 5316-5336, and notes
                [[Page 54398]]
                thereto, with implementing regulations at 31 CFR chapter X.
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                 \2\ The AML Act was enacted as Division F, sections 6001-6511,
                of the William M. (Mac) Thornberry National Defense Authorization
                Act for Fiscal Year 2021, Public Law 116-283, 134 stat. 3388 (2021).
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                 The BSA authorizes the Secretary of the Treasury (the
                ``Secretary''), inter alia, to require financial institutions to keep
                records and file reports that are determined to have a high degree of
                usefulness in criminal, tax, or regulatory matters, risk assessments or
                proceedings, or in the conduct of intelligence or counter-intelligence
                activities to protect against international terrorism, and to implement
                AML programs and compliance procedures.\3\ Regulations implementing the
                BSA appear at 31 CFR chapter X. The authority of the Secretary to
                administer the BSA has been delegated to the Director of FinCEN.\4\
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                 \3\ Section 358 of the USA PATRIOT Act expanded the purpose of
                the BSA by including a reference to reports and records ``that have
                a high degree of usefulness in intelligence or counterintelligence
                activities to protect against international terrorism.'' Section
                6101 of the AML Act further expanded the purpose of the BSA to cover
                such matters as preventing money laundering, tracking illicit funds,
                assessing risk, and establishing appropriate frameworks for
                information sharing.
                 \4\ Treasury Order 180-01 (Jan. 14, 2020).
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                 Under 31 U.S.C. 5314, the Secretary ``shall require a resident or
                citizen of the United States or a person in, and doing business in, the
                United States, to . . . keep records and file reports, when the
                resident, citizen, or person makes a transaction or maintains a
                relation for any person with a foreign financial agency.'' The term
                ``foreign financial agency'' encompasses the activities found in the
                statutory definition of ``financial agency,'' \5\ notably, ``a person
                acting for a person as a financial institution, bailee, depository
                trustee, or agent, or acting in a similar way related to money, credit,
                securities, gold, or a transaction in money, credit, securities, or
                gold.'' \6\ The Secretary is also authorized to prescribe exemptions to
                the reporting requirement and to prescribe other matters the Secretary
                considers necessary to carry out 31 U.S.C. 5314.
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                 \5\ 31 U.S.C. 5312(b)(2).
                 \6\ See 31 U.S.C. 5312(a)(1), which exempts from the definition
                of financial agency a person acting for a country, a monetary or
                financial authority acting as a monetary or financial authority, or
                an international financial institution of which the United States
                Government is a member.
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                 The regulations implementing 31 U.S.C. 5314 appear at 31 CFR
                1010.350, 1010.306, and 1010.420. Section 1010.350 generally requires
                each U.S. person having a financial interest in, or signature or other
                authority over, a bank, securities, or other financial account in a
                foreign country to report such relationship to the Commissioner of
                Internal Revenue for each year such relationship exists, and to provide
                and report such information specified in a reporting form prescribed
                under 31 U.S.C. 5314. The FBAR is used to file the information required
                by this section and must be filed electronically with FinCEN.\7\ 31 CFR
                1010.306(c) requires the FBAR to be filed for foreign financial
                accounts exceeding $10,000 maintained during the previous calendar
                year. No FBAR is required to be filed if the aggregate value of foreign
                financial accounts did not exceed $10,000 at any time during the
                previous calendar year.
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                 \7\ Formerly Form TD-F 90-22.1. FinCEN Form 114 can be completed
                by accessing FinCEN's BSA E-Filing System website at http://bsaefiling.fincen.treas.gov/main.html.
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                 The FBAR must be filed on or before April 15 of each calendar year
                for accounts maintained during the previous calendar year.\8\
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                 \8\ In accordance with section 2006(b)(11) of Public Law 114-41,
                the filing due date for the report is April 15 effective as of the
                2016 reporting year. The statute permits the Secretary to extend the
                filing due date for up to six months. Filers who submit complete and
                accurate reports to FinCEN no later than October 15 of the year the
                report is due will be deemed to have timely filed. FinCEN issued a
                statement on its website in 2016 noting the FBAR date change as a
                result of the statutory change. FinCEN intends to revise the FBAR
                regulations at 31 CFR 1010.306(c) to reflect the statutory date
                change.
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                 31 CFR 1010.420 outlines the recordkeeping requirements associated
                with foreign financial accounts required to be reported under section
                1010.350. Specifically, filers must retain records of such accounts, to
                include type of account, account number, name of foreign financial
                institution maintaining the account, address of the foreign financial
                institution, and maximum value of the account during the calendar year,
                for a period of five years and make the records available for
                inspection as authorized by law.
                II. Paperwork Reduction Act of 1995
                 Title: Reports of foreign financial accounts (31 CFR 1010.350),
                records to be made and retained by persons having financial interests
                in foreign financial accounts (31 CFR 1010.420), filing of reports (31
                CFR 1010.306(c)), and FinCEN Form 114--FBAR.
                 OMB Control Number: 1506-0009.
                 Form Number: FinCEN Form 114--FBAR.
                 Abstract: FinCEN is issuing this notice to renew the OMB control
                number for the FBAR regulations and form.
                 Affected Public: Individuals, businesses or other for-profit
                institutions, and non-profit institutions that qualify as U.S. persons.
                 Type of Review: Renewal without change of a currently approved
                information collection.
                 Frequency: Annual.
                 Estimated Number of Respondents: 1,503,807 FBAR filers.\9\
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                 \9\ The total number of FBARs filed in 2022 for foreign
                financial accounts held during calendar year 2021 is 1,503,807.
                Multiple foreign financial accounts may be reported on a single
                FBAR.
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                 Estimated Reporting and Recordkeeping Burden:
                 The estimated average burden associated with the FBAR reporting and
                recordkeeping requirements will vary depending on the number of
                reportable foreign financial accounts and the applicability of special
                rules provided in the regulations which provide some relief from the
                full scope of the reporting obligations.\10\
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                 \10\ 31 CFR 1010.350(g).
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                 The information required to be reported on the FBAR is basic
                information U.S. persons will have received on account statements from
                the foreign financial institutions where the accounts are opened and
                maintained. Those statements will provide a U.S. person with the
                information needed to complete and file the FBAR. No special accounting
                or legal skills are necessary to transfer the basic information
                required to be reported, such as the name of the foreign financial
                institution, the type of account, and the account number, to the FBAR.
                 The special rules located at 31 CFR 1010.350(g) provide a variety
                of relief to FBAR filers by (1) limiting the information reported in
                the FBAR to the number of accounts and certain other basic identifying
                information, if the filer has a financial interest in, or signature or
                other authority over, 25 or more reportable accounts; (2) allowing for
                entities to file consolidated FBARs on their own behalf and on behalf
                of entities for which they have a direct or indirect ownership interest
                of over 50 percent; and (3) exempting reporting of foreign financial
                interest in accounts involving certain trust and retirement plans.
                However, filers reporting financial interest in, or signature authority
                over, 25 or more foreign financial accounts are required to maintain a
                record of the detailed account information on each of their foreign
                financial accounts, including the account number, the name of the
                foreign financial institution that holds the account, the address of
                the foreign financial institution, the maximum value of the account
                during the calendar year, and the type of account.\11\
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                 \11\ Filers availing themselves of special rules under 31 CFR
                1010.350(g)(1) and (2) involving 25 or more reportable foreign
                financial accounts are required to maintain and provide detailed
                account information for each foreign financial account, if requested
                by the Secretary or their delegate.
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                [[Page 54399]]
                 For the reasons noted above, FinCEN estimates that the approximate
                FBAR reporting burden will vary depending on the number of reportable
                foreign financial accounts and will range from approximately 20 minutes
                to 90 minutes. FinCEN estimates the average reporting burden per FBAR
                filer will be 55 minutes.
                 Past estimates of the FBAR recordkeeping requirement took into
                account time to store paper copies of the FBAR form and estimated that
                the approximate recordkeeping burden was 30 minutes. Since 2011, FBARs
                have been filed electronically. Electronically filing the FBAR allows a
                filer to save an electronic copy of the report, which satisfies the
                recordkeeping part of the requirement. FinCEN estimates it would take a
                filer five minutes to save an electronic copy of the FBAR. In addition
                to maintaining a copy of the form, those filers who take advantage of
                the special rules related to financial interests in or signature
                authority over 25 or more accounts would be required to respond to
                requests for detailed information on those accounts. However, FinCEN
                believes that in most cases, such information would be maintained by
                filers in the ordinary course of business in the form of periodic
                account statements and other business records which would be maintained
                mostly electronically. There is no requirement in the FBAR regulations
                to maintain such information in any particular format.
                 For these reasons, FinCEN estimates that the FBAR recordkeeping
                burden will be approximately five minutes.
                 FinCEN estimates the total annual reporting and recordkeeping
                burden per FBAR filer will be one hour (55 minutes for FBAR reporting,
                and five minutes for FBAR recordkeeping).
                 Estimated Total Annual Reporting and Recordkeeping Burden: The
                estimated total annual PRA burden is 1,503,807 hours (1,503,807 \12\
                FBARs multiplied by one hour).
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                 \12\ FinCEN received 1,503,807 FBARs in calendar year 2022.
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                 Estimated Total Annual Reporting and Recordkeeping Cost: Of the
                1,503,807 FBARs filed in calendar year 2022, 1,434,362 were filed by
                individuals, and 69,445 were filed by entities. FinCEN cannot quantify
                the cost to individuals who file FBARs on their own behalf. For
                entities, FinCEN estimates the following annual burden cost: 69,445
                hours x $52.55 \13\ per hour = $3,649,334.75.
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                 \13\ The average hourly wage rate is calculated from the May
                2022 U.S. Bureau of Labor Statistics average hourly wage for ``13-
                1041 Compliance Officer'' of $37.01, plus an additional 42% for
                benefits to produce a fully-loaded rate of $52.55. The ratio between
                benefits and wages for private industry workers is $11.86 (hourly
                benefits)/$28.37 (hourly wages) = 0.42, as of March 2023. The
                benefit factor is 1 plus the benefit/wages ratio, or 1.42. $37.01
                multiplied by 1.42 equals $52.55. See U.S. Bureau of Labor
                Statistics, Employer Costs for Employee Compensation: Private
                Industry dataset (March 2023), available at https://www.bls.gov/web/ecec/ecec-private-dataset.xlsx.
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                 An agency may not conduct or sponsor, and a person is not required
                to respond to, a collection of information unless the collection of
                information displays a valid OMB control number. Records required to be
                retained under the BSA must be retained for five years.
                 Request for Comments:
                 Comments submitted in response to this notice will be summarized
                and/or included in the request for OMB approval. All comments will
                become a matter of public record. Comments are invited on: (i) whether
                the collection of information is necessary for the proper performance
                of the functions of the agency, including whether the information shall
                have practical utility; (ii) the accuracy of the agency's estimate of
                the burden of the collection of information; (iii) ways to enhance the
                quality, utility, and clarity of the information to be collected; (iv)
                ways to minimize the burden of the collection of information on
                respondents, including through the use of automated collection
                techniques or other forms of information technology; and (v) estimates
                of capital or start-up costs and costs of operation, maintenance, and
                purchase of services to provide information.
                Himamauli Das,
                Acting Director, Financial Crimes Enforcement Network.
                [FR Doc. 2023-17092 Filed 8-9-23; 8:45 am]
                BILLING CODE 4810-02-P
                

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