Imposition of Special Measures Against Myanmar Mayflower Bank and Asia Wealth Bank

PART 103—FINANCIAL
RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGN TRANSACTIONS

• 1. The authority citation for part 103
     is revised to read as follows:
     Authority: 12 U.S.C. 1829b and 1951–1959; 31 U.S.C. 5311–5314, 5316–5332; title III, sec. 311, 312, 313, 314, 319, 326, 352, Pub.
     L. 107–56, 115 Stat. 307; 12 U.S.C. 1818; 12
     U.S.C. 1786(q).
• 2. Subpart I of part 103 is amended by
     adding § 103.186 under the undesignated centerheading ‘‘SPECIAL DUE DILIGENCE FOR CORRESPONDENT ACCOUNTS AND PRIVATE BANKING ACCOUNTS’’ to read as follows:
     § 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 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) 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. Dated: April 2, 2004. William J. Fox, Director, Financial Crimes Enforcement Network. [FR Doc. 04–8027 Filed 4–9–04; 8:45 am] BILLING CODE 4810–02–P DEPARTMENT OF THE TREASURY Financial Crimes Enforcement Network 31 CFR Part 103 RIN 1506–AA63 Imposition of Special Measures Against Myanmar Mayflower Bank and Asia Wealth Bank AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury. ACTION: Final rule. SUMMARY: On November 18, 2003, the Secretary of the Treasury (Secretary) designated Myanmar Mayflower Bank (Mayflower Bank) and Asia Wealth Bank, both Burmese banks, as financial institutions of primary money laundering concern, and proposed a special measure certain U.S. financial institutions would be required to take concerning these two banks, pursuant to 31 U.S.C. 5318A, as added by section 311 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001. FinCEN is issuing this final rule to require certain U.S. financial institutions to take the proposed special measure with respect to these two institutions. DATES: Effective date: May 12, 2004. FOR FURTHER INFORMATION CONTACT:
     Office of Regulatory Programs (FinCEN), (202) 354–6400 or; the Office of Chief Counsel (FinCEN), (703) 905–3590 (not toll free numbers). SUPPLEMENTARY INFORMATION: The Secretary has designated Mayflower Bank and Asia Wealth Bank as financial institutions of primary money laundering concern under 31 U.S.C. 5318A, as added by section 311(a) of the USA PATRIOT Act (Pub. L. 107–56) (the Act). To protect the U.S. financial system from the money laundering threat posed by these financial institutions, FinCEN is imposing one of the special measures authorized by
     section 5318A(b), specifically, the fifth
     special measure. The fifth special measure prohibits certain U.S. financial institutions from maintaining correspondent or payable-through accounts in the United States for, or on behalf of, Mayflower Bank and Asia Wealth Bank. This prohibition extends to correspondent or payable-through accounts maintained for other foreign banks when such accounts are used to provide banking services to the two named Burmese banks indirectly. Additionally, by separate notice and final rule, the Department is imposing the fifth special measure to prohibit certain U.S. financial institutions from maintaining correspondent or payable￾through accounts for, or on behalf of, any Burmese banking institution. Notwithstanding any exemption in that notice and final rule applicable to other Burmese financial institutions under Executive Order 13310 of July 28, 2003, the special measure in this notice prohibits certain U.S. financial institutions from establishing, maintaining, administering, or managing correspondent or payable￾through accounts for, or on behalf of, Myanmar Mayflower Bank or Asia Wealth Bank.