Supporting Statement
OMB Control Number 1506-0036
Imposition of Special Measure Against Commercial Bank of Syria,
Including its Subsidiary, Syrian Lebanese Commercial Bank,
As a Financial Institution of Primary Money Laundering Concern
31 CFR Part 103
A. JUSTIFICATION
1. Circumstances that make the collection necessary:
The Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury issued a final rule under the authority of section 5318A of Title 31, United States Code, to impose a special measure against Commercial Bank of Syria, including its subsidiary, Syrian Lebanese Commercial Bank (See 71 FR 13260, dated March 15, 2006). (Unless context dictates otherwise, for purposes of this document all references to Commercial Bank of Syria includes its subsidiary, Syrian Lebanese Commercial Bank.) FinCEN has determined that Commercial Bank of Syria is a financial institution of primary money laundering concern, and that the imposition of the special measure selected—prohibiting domestic financial institutions from maintaining foreign correspondent accounts with Commercial Bank of Syria—is a necessary step to ensure the Bank is not able to access the U.S. financial system for terrorist financing or money laundering, or for any other criminal purpose.
2. Use of the information:
The collection of information in the rule relates to both disclosure and recordkeeping. The information required to be disclosed by domestic financial institutions to a third-party—i.e., a one-time notice to correspondent account holders—is intended to ensure cooperation from correspondent account holders in denying access to the U.S. financial system, as well as to increase awareness within the international financial community of the risks and deficiencies of Commercial Bank of Syria. The information required to be maintained by domestic financial institutions will be used by federal agencies and certain self-regulatory organizations to verify compliance with the requirement that a domestic financial institution notify its correspondent account holders that they many not provide Commercial Bank of Syria with access to the correspondent account maintained at the institution.
3. Use of improved information technology to reduce burden:
Under the proposed rule, satisfactory notice could be given by including a one-time notice by mail, fax, e-mail, or including the notice in the next regularly occurring transmittal from the covered financial institution to its correspondent account holders. Financial institutions may use any method of improved information technology to document its compliance with the notice requirement in the proposed rule, including keeping an electronic copy of the actual notice that is sent to financial institutions.
4. Efforts to identify duplication:
The rule is unique in that it would be the only federal rule prohibiting domestic financial institutions from maintaining correspondent accounts for the Commercial Bank of Syria.
5. Methods used to minimize burden on small businesses or other small entities:
The information requirements in the rule will not have a significant impact on a substantial number of small entities. The Commercial Bank of Syria currently maintains a correspondent account at only a handful of banks in the United States. In addition, all U.S. persons, including U.S. financial institutions, currently exercise some degree of due diligence in order to comply with U.N. sanctions programs applicable to Syrian entities. Thus, the one-time notice to correspondent account holders and the requirement to document compliance with that notice requirement are not expected to impose a significant additional economic burden upon small entities.
6. Consequences to Federal program or policy activities if collection is not conducted or is conducted less frequently:
Under the rule, a financial institution must notify its correspondent account holders that they may not provide Commercial Bank of Syria with access to the correspondent account maintained at the financial institution. The failure to transmit such notice will make it more difficult for the special measure to achieve its goal of denying Commercial Bank of Syria with access to the U.S. financial system. A financial institution further must document its compliance with the requirement that it notify its correspondent account holders that they may not provide Commercial Bank of Syria with access to the correspondent account maintained at the covered financial institution. The failure to maintain such documentation will make it impossible to verify compliance with this notice requirement, and by extension, to guard against the use of the U.S. financial market by a financial institution found to be of primary money laundering concern.
7. Special circumstances requiring data collection inconsistent with the guidelines in 5 CFR 1320.5(d)(2):
Not applicable.
8. Efforts to consult with persons outside the agency:
On June 16, 2010, FinCEN published in the Federal Register (See 75 FR 34215) a notice of intent to renew, without change, the current collection. No responses or comments were received.
9. Payment or gift to respondents.
Not applicable.
10. Assurance of confidentiality provided to respondents and basis for the assurance in statute, regulation, or agency policy:
The information collected would be available to Treasury or its designee to verify compliance with the notice requirement; all such information collections under the BSA must further a criminal, tax, regulatory, or intelligence purpose, in accordance with 31 U.S.C. 5311.
11. Justification for questions of a sensitive nature:
Not applicable.
12. Burden estimate:
The rule requires a financial institution to provide notice to its correspondent account holders and to document its compliance with that notice requirement.
Estimated number of affected financial institutions: 5,000.
Estimated average annual burden per affected financial institution: 1 hour.
Estimated annual hour burden: 5,000 hours.
The rule applies to all domestic financial institutions that maintain correspondent accounts for foreign banks. There are approximately 5,000 such financial institutions doing business in the United States.
13. Estimated total annual cost burden:
Not applicable.
14. Estimated annualized cost to the Federal government:
Not applicable.
15. Change in burden:
Not applicable.
16. Plans for tabulation or publication:
Not applicable.
17. Reason why display of expiration date for OMB approval is not appropriate:
FinCEN requests that it not be required to display the expiration date, in order to avoid amending the regulation every three years.
18. Exception to the certification statement in OMB Form 83-I:
This collection will not have a significant impact on a substantial number of small entities, for the reasons discussed above in item 5. The collection also does not employ statistical survey methodology.
B. COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
Not applicable.
| File Type | application/msword |
| File Title | Supporting Statement |
| Author | ZaratA |
| Last Modified By | stephr |
| File Modified | 2010-08-19 |
| File Created | 2010-08-17 |