Proposed Amendments to Bank Secrecy Act Regulations Regarding Casino Recordkeeping and Reporting Requirements

1The statute generally referred to as the ‘‘Bank Secrecy Act,’’ Titles I and II of Public Law 91–508, as amended, is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951–1959, and 31 U.S.C. 5311–5314, 5316– 5332. 2Language expanding the scope of the Bank Secrecy Act to intelligence or counter-intelligence activities to protect against international terrorism was added by section 358 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (‘‘USA PATRIOT’’) Act of 2001, Public Law 107– 56 (October 26, 2001). In pertinent part, regulations implementing Title II of the Bank Secrecy Act appear at 31 CFR part 103. 3See 50 FR 5065 (February 6, 1985). Casinos whose gross annual gaming revenue did not exceed $1 million were, and continue to be, excluded from Bank Secrecy Act requirements otherwise applicable to casinos and card clubs. 4See 31 U.S.C. 5312(a)(2)(Y) and (Z). 5See section 409 of the Money Laundering Suppression Act of 1994, Title IV of the Riegle Community Development and Regulatory Improvement Act of 1994, Public Law 103–325. The current statutory specification reads:
(2) Financial institution means—

(X) A casino, gambling casino, or gaming establishment with an annual gaming revenue of more than $1,000,000 which— (i) Is licensed as a casino, gambling casino, or gaming establishment under the laws of any State or any political subdivision of any State; or (ii) Is an Indian gaming operation conducted under or pursuant to the Indian Gaming Regulatory Act other than an operation which is limited to class I gaming (as defined in section 4(6) of such Act); * * * 31 U.S.C. 5312(a)(2)(X). 6See 61 FR 7054 (February 23, 1996). 7See 63 FR 1919 (January 13, 1998). Card clubs generally are subject to the same rules as casinos, unless a different treatment for card clubs is explicitly stated in 31 CFR Part 103. Therefore, for purposes of this Notice of Proposed Rulemaking, and unless the context indicates otherwise, the term ‘‘casino’’ refers to both casinos and to card clubs. 8See 31 CFR 103.11(ii)(2). (2) Before using any AMOC approved in accordance with § 39.19 on any airplane to which the AMOC applies, notify the appropriate principal inspector in the FAA Flight Standards Certificate Holding District Office. Issued in Renton, Washington, on March 10, 2006. Kalene C. Yanamura, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E6–4051 Filed 3–20–06; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF THE TREASURY Financial Crimes Enforcement Network 31 CFR Part 103 RIN 1506–AA84 Proposed Amendments to Bank Secrecy Act Regulations Regarding Casino Recordkeeping and Reporting Requirements AGENCY: Financial Crimes Enforcement Network, Department of the Treasury. ACTION: Notice of proposed rulemaking. SUMMARY: We are proposing to amend the Bank Secrecy Act regulations relating to currency transaction reporting by casinos. Specifically, we are proposing to exclude, as reportable transactions in currency, jackpots from slot machines and video lottery terminals. We are also proposing to exclude certain transactions between casinos and currency dealers or exchangers and casinos and check cashers as reportable transactions in currency. Finally, we are proposing several other amendments that would update or clarify the ‘‘cash in’’ and ‘‘cash out’’ examples of transactions that are set forth in our currency transaction reporting regulations. DATES: Written comments on all aspects of the proposal are welcome and may be submitted on or before May 22, 2006. ADDRESSES: You may submit comments identified by Regulatory Information Number (RIN) 1506–AA84, by any of the following methods:

• Federal E-rulemaking Portal: http://
  www.regulations.gov. Follow the instructions for submitting comments. Include 1506–AA84 in the submission.
• E-mail: regcomments@fincen.
  treas.gov. Include 1506–AA84 in the subject line of the message.
• Mail: Financial Crimes Enforcement
  Network, P.O. Box 39, Vienna, VA

22183. Include 1506–AA84 in the body
       of the text.
       Instructions: Electronic comments are preferred because paper mail in the Washington, DC, area may be delayed. Please submit comments by one method only. Any submissions received must include the agency name and the RIN for this rulemaking. All comments received will be posted without change to http://www.fincen.gov, including any personal information provided. Comments may be inspected in the Financial Crimes Enforcement Network reading room between 10 a.m. and 4 p.m. in Washington, DC. Persons wishing to inspect the comments submitted must request an appointment by telephone at (202) 354–6400 (not a toll-free number). FOR FURTHER INFORMATION CONTACT:
       Regulatory Policy and Programs Division, Financial Crimes Enforcement Network, (800) 949–2732 (toll-free number) or (202) 354–6400 (not a toll￾free number). SUPPLEMENTARY INFORMATION:
       I. Background
       A. Statutory and Regulatory Background The Director of the Financial Crimes Enforcement Network is the delegated administrator of the Bank Secrecy Act.1 The Act authorizes the Director to issue regulations to require all financial institutions defined as such in the Act to maintain or file certain reports or records that have been determined to have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, or in the conduct of intelligence or counter￾intelligence activities, including analysis, to protect against international terrorism, and to implement anti-money laundering programs and compliance procedures.2 Casinos are cash-intensive businesses that offer a broad array of financial services. These services include customer deposit or credit accounts, facilities for transmitting and receiving funds transfers directly from other financial institutions, and check cashing and currency exchange services. Consequently, these services offered by casinos are similar to and may serve as substitutes for services ordinarily provided by depository institutions and certain non-bank financial institutions. As such, casinos are vulnerable to abuse by money launderers, terrorist financiers, and tax evaders. In general, state-licensed casinos were made subject to the Bank Secrecy Act by regulation in 1985.3 The 1985 rulemaking was based on the authority of the Secretary of the Treasury to designate as financial institutions for Bank Secrecy Act purposes: (i) Businesses that engage in activities that are ‘‘similar to, related to, or a substitute for’’ the activities of covered businesses listed in the Bank Secrecy Act and (ii) other businesses ‘‘whose cash transactions have a high degree of usefulness in criminal, tax, or regulatory matters.’’ 4 Congress later explicitly added casinos and other gaming establishments to the list of financial institutions regulated pursuant to the Bank Secrecy Act.5 Casinos authorized to conduct business under the Indian Gaming Regulatory Act became subject to the Bank Secrecy Act by regulation in 1996,6 and card clubs became subject to the Bank Secrecy Act by regulation in 1998.7 B. Casino Currency Transaction Reporting Requirements Regulations under the Bank Secrecy Act define a ‘‘transaction in currency’’ as any transaction ‘‘involving the physical transfer of currency from one person to another.’’ 8 Casinos must report each transaction in currency involving cash in or cash out of more cprice-sewell on PROD1PC66 with PROPOSALS