[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]
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