Anti-money laundering and foreign asset control compliance programs.
Purpose:
To require banking organizations and certain licensees to demonstrate compliance with applicable anti-money laundering and foreign asset control programs.
Text of final rule:
PART 115
ANTI-MONEY LAUNDERING PROGRAMS FOR APPLICATIONS FOR CHARTERS, ACQUISITIONS AND MERGERS AND CHANGES OF CONTROL
This Part is issued to assure ongoing compliance with the existing practice of the Superintendent of Banks (the “Superintendent”) to require each applicant for a charter, or for approval of an acquisition, merger or change of control to demonstrate an anti-money laundering program that complies with applicable federal anti-money laundering laws, including a required customer identification program (31 U.S.C. Chapter 53, Subchapter ll and 31 U.S.C. 5318(l))* and regulations promulgated by the United States Department of Treasury (31 CFR part 103.120)*, and, as appropriate, regulations of the Board of Governors of the Federal Reserve System (12 CFR parts 208.63 and 211.24)*, regulations of the Federal Deposit Insurance Corporation (12 CFR 326.8)*, and regulations of the National Credit Union Administration (12 CFR part 748.2)*. In addition, the Department seeks to assure compliance with applicable regulations issued by the Office of Foreign Asset Control of the United States Department of the Treasury (“OFAC”) (31 CFR part 500 et seq)*.
(a) Each applicant shall demonstrate that it has, or on the effective date of the transaction that is the subject of the application, will have, an anti-money laundering program that complies with the applicable federal anti-money laundering laws and regulations referred to this section 115.1.
(b) For purposes of this Part, the required anti-money laundering program shall, at a minimum:
1) Provide for a system of internal controls to assure ongoing compliance;
2) Provide for independent testing for compliance to be conducted by bank personnel or by an outside party;
3) Designate an individual or individuals responsible for coordinating and monitoring day-to-day compliance; and
4) Provide training for appropriate personnel.
(c) The anti-money laundering program shall be in writing, approved by the institution's board of directors or equivalent body, and such approval shall be noted in the minutes of the board of directors or equivalent body.
(d) Each applicant shall also maintain, as part of its anti-money laundering program, a customer identification program that complies with the applicable federal anti-money laundering laws and regulations referred to in this section 115.1.
(e) Each applicant also shall demonstrate that it has, or on the effective date of the transaction, will have, risk-based policies, procedures and practices to ensure, to the maximum extent practicable, that its transactions comply with OFAC requirements.
(f) Compliance with the applicable federal requirements shall constitute compliance with this Part.
Sec. 115.2 Charter and License Applications
All applications submitted for approval by the Department to establish a bank or trust company, private banker, savings bank, savings and loan association, safe deposit company, investment company, credit union, to establish a branch or agency in New York State of a foreign banking corporation or to establish a representative office of a foreign banking corporation shall be accompanied by information demonstrating that the applicant maintains or will maintain an anti-money laundering program that satisfies the requirements set forth in section 115.1.
Sec. 115.3 Merger, Purchase and Assumption, Acquisition and Change of Control Applications
All applications for approval by the Department to merge with, purchase and/or assume, or acquire control (as defined in the applicable provisions of the Banking Law) of, any bank or trust company, savings bank, savings and loan association, investment company, safe deposit company or credit union shall be accompanied by information demonstrating that the applicant has or will have an anti-money laundering program that satisfies the requirements set forth in section 115.1.
Sec. 115.4 Waivers
In considering an application, the Department may determine, for good cause shown, that lack of compliance with any of the requirements of this Part does not necessarily preclude approval of the application.
* For information regarding the United States Code (USC or U.S.C.), the Code of Federal Regulations (CFR) and the Federal Register, see Supervisory Policy G 1.
PART 116
MAINTENANCE OF ANTI-MONEY LAUNDERING COMPLIANCE PROGRAMS BY BANKING ORGANIZATIONS AND FOREIGN BANKING CORPORATIONS LICENSED TO MAINTAIN A BRANCH OR AGENCY
(Statutory authority: Banking Law Sections 10, 14(1), 37(3), 39 and 44.)
Sec. 116.1 Covered Entities
(a) This Part shall apply to all “Banking Organizations” and “Foreign Banking Corporations.”
(b) The term “Banking Organization” shall have the meaning ascribed to it in section 2 of the New York Banking Law.
(c) The term “Foreign Banking Corporation” shall mean any branch, agency or representative office located in New York State of a foreign banking corporation licensed to maintain such a facility under Article V or Article V-B of the Banking Law.
Sec. 116.2 Anti-Money Laundering Programs
Every Banking Organization and every Foreign Banking Corporation, in order to guard against money laundering through their institutions, shall establish and maintain an anti-money laundering program that complies with applicable federal anti-money laundering laws (31 U.S.C. Chapter 53, subchapter II)*, including the obligation to file Suspicious Activity Reports (“SARS”) (31 U.S.C. 5318(g))* and a customer identification program (31 U.S.C. 5318(l))*, and regulations promulgated by the United States Department of Treasury (12 CFR part 103.120)*, and, as appropriate, regulations of the Board of Governors of the Federal Reserve Board (12 CFR parts 208.63 and 211.24)*, the Federal Deposit Insurance Corporation (12 CFR part 326.8)* and the National Credit Union Administration (12 CFR part 748.2)*. In addition, when ordered, each such entity shall provide within 30 days a written report to the Superintendent of Banks (the “Superintendent”) detailing the extent to which it has established such a program. Every Banking Organization and Foreign Banking Corporation also shall comply with applicable regulations issued by the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”) (31 CFR part 500 et. seq.)*.
(a) For purposes of this Part, the required anti-money laundering program shall, at a minimum:
1) Provide for a system of internal controls to assure ongoing compliance;
2) Provide for independent testing for compliance to be conducted by bank personnel or by an outside party;
3) Designate an individual or individuals responsible for coordinating and monitoring day-to-day compliance; and
4) Provide training for appropriate personnel.
(b) The anti-money laundering program shall be in writing, approved by the institution's board of directors or equivalent body, and such approval shall be noted in the minutes of the board of directors or equivalent body.
(c) Every Banking Organization and every Foreign Banking Corporation will also be required to demonstrate, as part of their anti-money laundering programs, a customer identification program that complies with the applicable federal anti-money laundering laws and regulations referred to in this section 116.1
(d) Every Banking Organization and every Foreign Banking Corporation will further be required to demonstrate they have in place risk-based policies, procedures and practices to ensure, to the maximum extent practicable, that its transactions will comply with OFAC requirements.
(e) Every Banking Organization and every Foreign Banking Corporation shall file SARs in accordance with applicable federal law and regulations.
(f) Compliance with applicable federal requirements shall constitute compliance with this Part.
Sec. 116.3 Additional Reports
Every Banking Organization and every Foreign Banking Corporation shall provide such additional reports regarding its compliance with this Part as shall be directed by the Superintendent.
* For information regarding the United States Code (USC or U.S.C.), the Code of Federal Regulations (CFR) and the Federal Register, see Supervisory Policy G 1.
Part 416
ANTI-MONEY LAUNDERING PROGRAMS FOR APPLICATIONS FOR LICENSES, BRANCHES AND ACQUISITIONS BY LICENSED CHECK CASHERS AND LICENSED MONEY TRANSMITTERS
(Statutory authority: Law Sections 10, 39, 44, 367, 369, 370, 371, 370-a, 641, 646, 649 and 652-a.)
Sec. 416.1 Anti-Money Laundering Programs
This Part is issued to assure ongoing compliance with the existing practice of the Superintendent of Banks (the “Superintendent”) to require each applicant for a licensed check casher license or licensed money transmitter license (each a “Licensee”), a branch office of a Licensee or for approval to acquire Licensee to demonstrate an anti-money laundering program that complies with applicable federal anti-money laundering laws (31 U.S.C. Chapter 53, subchapter II)* and regulations promulgated by the United States Department of the Treasury (31 CFR part103.125)* (hereinafter, referred to as “31 CFR 103”). In addition, the Superintendent seeks to assure compliance with applicable regulations of the Office of Foreign Asset Control regulations issued by the United States Department of the Treasury (“OFAC”) (31 CFR part 500 et. seq.)*.
(a) Each applicant shall demonstrate that it has, or on the effective date of the transaction that is the subject of the application, will have, an anti-money laundering program that complies with the applicable federal anti-money laundering laws and regulations referred to in this section 416.1.
(b) For purposes of this Part, the required anti-money laundering program shall, at a minimum:
(1) Incorporate policies, procedures, and internal controls reasonably designed to assure compliance with 31 CFR 103, including;
(i) Policies, procedures, internal controls developed and implemented under this section shall include provisions for complying with the requirements of 31 CFR 103 including, to the extent applicable to the Licensee, requirements for:
(A) Verifying customer identification;
(B) Filing reports;
(C) Creating and retaining records; and
(D) Responding to law enforcement requests.
(ii) A Licensee that has an automated data processing system should integrate its compliance procedures with such systems.
(2) Designate a person to assure day to day compliance with the program and 31 CFR 103. The responsibilities of such person shall include assuring that:
(i) Each Licensee properly files reports, and creates and retains records, in accordance with applicable requirements of 31 CFR Part 103;
(ii) The compliance program is updated as necessary to reflect current requirements of 31 CFR Part 103, and related guidance issued by the Department of the Treasury; and
(iii) Each Licensee provides appropriate training and education in accordance with 31 CFR Part 103.
(3) Provide education and/or training of appropriate personnel concerning their responsibilities under the program, including training in the detection of suspicious transactions to the extent that the entity is required to report such transactions under applicable federal law and regulations; and
(4) Provide for independent review to monitor and maintain an adequate program.
(b) The anti-money laundering program shall be in writing and each Licensee shall make copies of the anti-money laundering program available for inspection by the Superintendent as appropriate.
(c) Each Licensee will further be required to demonstrate that it has, or on the effective date of the transaction that is the subject of the application, will have, risk-based policies, procedures and practices to ensure, to the maximum extent practicable, that its transactions comply with OFAC requirements.
(d) Compliance with applicable federal requirements shall constitute compliance with the provisions of this Part.
Sec. 416.2 License Applications
All applications submitted for prior approval of the Superintendent to become a Licensed Check Casher or Licensed Money Transmitter shall be accompanied by information demonstrating that the applicant will maintain an anti-money laundering program that satisfies the requirements set forth in section 416.1.
Sec. 416.3 Branching Applications
All applications submitted for the prior approval of the Superintendent to establish a branch or branches by any Licensed Check Casher shall be accompanied by information demonstrating that the applicant has or will have an anti-money laundering program that satisfies the requirements set forth in section 416.1.
Sec. 416.4 Acquisition Applications
All applications submitted for the prior approval of the Superintendent to merge with, purchase and/or assume, or acquire control (as defined in the applicable provisions of the Banking Law) of, any Licensed Check Casher or Licensed Money Transmitter shall in every case be accompanied by information demonstrating compliance with, or a plan that would comply with, the requirements set forth in section 416.1.
Sec. 416.5 Waivers
In considering an application subject to this Part, the Superintendent may determine, for good cause shown, that the lack of compliance with any of the requirements of this Part does not necessarily preclude approval of the application.
* For information regarding the United States Code (USC or U.S.C.), the Code of Federal Regulations (CFR) and the Federal Register, see Supervisory Policy G 1.
PART 417
MAINTENANCE OF ANTI-MONEY LAUNDERING COMPLIANCE PROGRAMS BY LICENSED CHECK CASHERS AND LICENSED MONEY TRANSMITTERS
(Statutory authority: Banking Law Sections 10, 37(3), 39, 44, 371, 646 and 649.)
Sec. 417.1 Covered Entities
This Part shall apply to all Licensed Check Cashers and Licensed Transmitters of Money (each a “Licensee”).
Sec. 417.2 Anti-Money Laundering Programs
Each Licensee, in order to guard against money laundering through their businesses, shall establish and maintain an anti-money laundering program that complies with applicable federal anti-money laundering law (31 U.S.C. Chapter 53, subchapter II)*, including the obligation to file Suspicious Activity Reports (“SARS”) (31 U.S.C. § 5318(g))*, and regulations promulgated by the Department of Treasury (31 CFR part 103.125)* (hereinafter referred to as “31 CFR Part 103”), and, when ordered, such entities shall provide within 30 days a written report to the Superintendent of Banks (the “Superintendent”) detailing the extent to which each such institution has established such a program. In addition, the Superintendent seeks to assure compliance with applicable regulations of the Office of Foreign Assets Control promulgated by the United States Department of the Treasury (31 CFR part 500 et seq.)*.
(a) For purposes of this Part, the required anti-money laundering program shall, at a minimum:
(1) Incorporate policies, procedures, and internal controls reasonably designed to assure compliance with this 31 CFR Part 103, including;
(i) Policies, procedures, internal controls developed and implemented under this section shall include provisions for complying with the requirements of 31 CFR Part 103 including, to the extent applicable to the money services business, requirements for:
(A) Verifying customer identification;
(B) Filing reports;
(C) Creating and retaining records; and
(D) Responding to law enforcement requests.
(ii) Every Licensee that has an automated data processing system should integrate its compliance procedures with such systems.
(2) Designate a person to assure day to day compliance with the program and 31 CFR Part 103. The responsibilities of such person shall include assuring that:
(i) The Licensee properly files reports, and creates and retains records, in accordance with applicable requirements of 31 CFR Part 103;
(ii) The compliance program is updated as necessary to reflect current requirements of 31 CFR Part 103, and related guidance issued by the Department of the Treasury; and
(iii) The Licensee provides appropriate training and education in accordance with 31 CFR Part 103.
(3) Provide education and/or training of appropriate personnel concerning their responsibilities under the program, including training in the detection of suspicious transactions to the extent that the entity is required to report such transactions under applicable federal law and regulations; and
(4) Provide for independent review to monitor and maintain an adequate program.
(b) The anti-money laundering program shall be in writing and each Licensee shall make copies of the anti-money laundering program available for inspection as appropriate by the Superintendent.
(c) Each Licensee will further be required to demonstrate that it has in place risk-based policies, procedures and practices to ensure, to the maximum extent practicable, that it's transactions comply with OFAC requirements.
(d) Every Licensee shall file SARS in accordance with applicable federal law and regulations.
(e) Compliance with applicable federal requirements shall constitute compliance with the provisions of this Part.
Sec. 417.3 Additional Reports
Each Licensee shall provide such additional reports regarding its compliance with this Part as shall be directed by the Superintendent.
* For information regarding the United States Code (USC or U.S.C.), the Code of Federal Regulations (CFR) and the Federal Register, see Supervisory Policy G 1.
Final rule as compared with last published rule:
Nonsubstantive changes were made in sections 115.1–115.3; 116.1 and 116.2; 416.1–416.4; 417.1 and 417.2.
Text of rule and any required statements and analyses may be obtained from:
Sam L. Abram, Secretary to the Banking Board, Banking Department, One State St., New York, NY 10004-1417, (212) 709-1658, e-mail: sam.abram@banking.state.ny.us
Revised Regulatory Impact Statement
1. Statutory Authority:
Part 115 — (Sections 10, 14(1), 24, 26, 29, 39, 44, 142, 143-a, 143-b, 201, 324, 367, 369, 370, 371, 413, 450, 461, 513, 519, 601, 601-a, 601-b, 641, 646, 649 and 652-a): Banking Law Section 10 sets forth the policy of New York State with respect to the supervision of banking in this State, including that it is to be supervised in a manner “to protect the public interest”; Section 14(1) sets forth the general powers of the Banking Board, including the power to promulgate regulations; Section 24 provides the Superintendent with broad authority to investigate applications to charter banking organizations; Section 26 gives the Superintendent similar authority to investigate foreign banking corporations seeking to license branches and agencies in New York; Section 29 sets forth the power of the Superintendent to approve branch offices of banking organizations; Section 39 grants the Superintendent authority to issue orders regarding various practices of banking institutions and bank related institutions; Section 44 provides authority for the imposition of penalties for various violations; Section 142 provides the Superintendent with authority to process various applications involving a “bank holding company” under New York Law; Section 143-a grants the Superintendent similar authority with respect to applications involving the acquisition of the capital stock of various banking organizations; Section 143-b provides the Superintendent with similar authority with respect to various other applications for control of banking institutions under New York Law; Section 201 provides authority to the Superintendent with respect to applications by foreign banking corporations to establish licensed branches and agencies in New York; Section 324 provides the Superintendent with broad authority to investigate applications for change of control of safe deposit companies; Section 413 relates to the Superintendent's authority to approve interstate acquisitions involving savings and loan associations; Section 450 provides for the formation of credit unions; Section 519 provides for the approval of a change of control of an investment company; and Section 601, 601-a and 601-b all relate to the approval of mergers and purchase and assumption agreements involving banking institutions.
Part 116 — (Sections 10, 37(3), 39, 44 and Section 513): In addition to the authority provided by Sections 10, 39 and 44 (discussed above), Section 37(3) of the Banking Law provides the Superintendent with broad discretion to require various banking organizations, licensed check cashers and licensed money transmitters to make reports to the Superintendent. Section 513 also provides the Superintendent with authority to request special reports from investment companies.
Part 416 — Sections 10, 39, 44, 367, 369, 370, 370-a, 371, 641, 646 and 652-a): In addition to the authority provided by Sections 10, 39 and 44 (discussed above), Sections 367, 369, 371 and 370-a provide the Superintendent with broad authority to impose restrictions on the operations of licensed check cashers, including a change of control with respect to such entities. Similarly, Sections 641, 646, 649 and 652-a set out the Superintendent's authority with respect to licensing, change of control and operating requirements for licensed transmitters of money.
Part 417 — (Sections 10, 37(3), 39, 44, 371, 646 and 649.) In addition to the authority provided by Sections 10, 37(3), 39, 44, 371 and 646 (discussed above), Section 649 provides general authority for the Superintendent to make rules and regulations, including by imposing reporting requirements, for licensed money transmitters.
2. Legislative Objective:
In enacting the above-cited provisions, the legislature intended the Superintendent of Banks to have broad discretion to adopt requirements for the chartering and licensing of banking and other financial services organizations.
3. Needs and Benefits:
Currently, the Department requests information from applicants regarding their compliance with AML requirements, but these requests are informal. In the period since September 11, 2001, federal and state regulators have moved to increase their scrutiny of regulated entities in the anti-money laundering (“AML”) context. The AML requirements are intended to protect the financial system from abuse by criminal organizations and terrorist groups. New York does not currently have formal application or compliance requirements in this area, although it does generally require applicants to demonstrate compliance with AML requirements and does examine for such compliance after chartering or licensing. The proposed regulations would simply convert these current practices into regulatory requirements.
The purpose of Part 115 would be to require applicants seeking to charter or license banks, trust companies, savings banks, savings and loan associations, private bankers, investment companies, safe deposit companies, credit unions and foreign bank branches, agencies or representative offices to demonstrate their ability to comply with existing federal AML requirements. Proposed Part 115 also would impose similar requirements on applications to acquire such entities chartered under New York Law. The purpose of Part 116 would be to impose these requirements on entities already chartered or licensed as banking institutions.
Part 416 would require applicants seeking a license to establish a check casher or money transmitter to make a similar showing to that required by Part 115 with respect to compliance with federal AML requirements. Part 417 would impose on existing licensed check cashers and money transmitters requirements similar to those imposed by Part 116 on banking institutions.
Adoption of these regulations will increase the Department's ability to mandate compliance in what is considered an extremely important area. It will also increase the Department's ability to take enforcement action against entities found to be in violation of AML requirements.
All of these institutions are subject to a federal AML requirement and will be able to demonstrate compliance with these new rules by evidencing compliance with their existing federal requirements. No additional showing will be required.
4. Costs:
All institutions subject to these new rules are already subject to a federal AML requirement. Since entities will be able to demonstrate compliance with these new regulations by demonstrating that they meet the federal AML requirement to which they are subject, any new costs imposed will be nominal. Entities not subject to the federal AML requirements will not be affected by these rules.
5. Local Government Mandates:
The proposed rules impose no burdens on local governments.
6. Paperwork:
Paperwork and reporting requirements for institutions subject to this new rules are expected to be modest. Only entities already subject to federal AML requirements will have to demonstrate compliance with these new rules. Moreover, compliance with federal rules will constitute compliance with these rules. Both banking organizations and licensees will demonstrate compliance in the application process by submitting copies of their proposed or existing AML and foreign asset control policies. On-going compliance will be confirmed as it is now through the Department's examination processes.
7. Duplication:
While the requirements imposed by these proposed regulations are identical to existing requirements imposed by the federal government, the impact of such duplication will be minimal since compliance with existing federal requirements will constitute compliance with the proposed rules. Only institutions subject to existing federal AML requirements will be subject to the requirements imposed by Parts 115, 116, 416 and 417.
8. Alternatives:
The Department considered not implementing the proposed rules, but after review it was determined that AML compliance is of such importance to the public safety and the safety of the financial services industry that increasing the Department's ability to review and enhance such compliance through adoption of the regulations was appropriate.
9. Federal Standards:
As discussed above, the proposed regulations would only apply to entities with existing federal AML compliance obligations. Compliance with existing federal requirements would constitute compliance with these new requirements.
10. Compliance Schedule:
Compliance with the proposed regulations would be would be required immediately upon their becoming effective, but, as noted, compliance would require only a showing that the applicant is in compliance with the federal AML requirements to which it is already subject.
Revised Regulatory Flexibility Analysis
The proposed rules will not have a material impact on small businesses and do not affect local governments. Specifically, the proposed rules require persons or entities seeking to charter banks, trust companies, savings banks, savings and loan associations, investment companies, private bankers, credit unions, safe deposit companies and foreign banking corporations seeking a branch, agency or representative office license in New York and persons and entities seeking licenses for licensed check cashers and licensed money transmitters to demonstrate compliance with applicable federal anti-money laundering (“AML”) requirements as part of their chartering or licensing applications to this Department. Similar requirements are imposed on acquisition applications involving banks, trust companies, savings banks, savings and loan associations, investment companies, private bankers, credit unions, safe deposit companies, money transmitters and licensed check cashers. Finally, the proposals impose ongoing compliance obligations on these same entities to demonstrate their compliance with federal AML requirements. These new requirements are satisfied by a showing that the covered entity is in compliance with applicable federal AML requirements. As is the Department's current practice, this will be accomplished by the entity filing a copy of its federal AML compliance program with the Department in the case of new applications, and in the case of existing entities through the Department's existing examination procedures. Hence, no new regulatory compliance initiatives are required by these proposals, and, accordingly, the new rules will not impose any adverse economic impact or reporting, record keeping or other compliance requirements on small businesses and local governments.
Revised Rural Area Flexibility Analysis
The proposed rules will not have a material impact on public or private entities in rural areas. Specifically, the proposed rules require persons or entities seeking to charter or license banks, trust companies, savings banks, savings and loan associations, investment companies, private bankers, credit unions, safe deposit companies, foreign banking corporation branches, agencies or representative offices, check cashers and licensed money transmitters to demonstrate compliance with applicable federal anti-money laundering (“AML”) requirements as part of their chartering or licensing applications to this Department. Similar requirements are imposed on acquisition applications involving banks, trust companies, savings banks, savings and loan associations, investment companies, private bankers, credit unions, safe deposit companies, money transmitters and licensed check cashers. Finally, the proposals impose an ongoing compliance obligation on these same entities to demonstrate their compliance with federal AML requirements. Compliance with existing federal AML requirements will satisfy these requirements. Hence, no new regulatory compliance initiatives are required by these proposals, and the new rules will not impose any adverse economic impact or reporting, record keeping or other compliance requirements on public or private entities in rural areas.
Revised Job Impact Statement
The changes to New Parts 115 and 116 of the General Regulations of the Banking Board and New Parts 416 and 417 of the Superintendent's Regulations as proposed do not necessitate revision of the previously published document referred to above.
Assessment of Public Comment
Summary of Comments:
The proposed regulations were published in the August 29, 2007 State Register. Three comments on the proposals were received:
1. The New York State Credit Union League, Inc. noted that, in its view, current federal regulations are sufficient to ensure compliance with Bank Secrecy Act requirements. It urged the Department to interpret these proposals as narrowly as possible so as to minimize undue regulatory burden on its members. It also recommended that the proposals include guidance on how compliance with the federal requirements could be demonstrated to the Department. Finally, it recommended that any provisions in the proposals that allowed the Department to request “such additional reports” as directed by the Superintendent be deleted.
2. A comment letter filed on behalf of The Money Services Round Table (“TMSRT”) argued that Part 417.2(c) is vague because, while it calls for each licensee to demonstrate policies, procedures and practices designed to ensure compliance with regulations issued by the Office of Foreign Assets Control (“OFAC”), OFAC itself does not prescribe any such compliance procedures and practices. The comment recommended that the proposal be deleted or modified to require licensees to demonstrate, to the maximum extent practicable, that their transactions will not transgress OFAC prohibitions. It also stated that the requirement in Part 417 that licensees also provide “such additional reports” as required by the Superintendent was overbroad.
3. Comments filed on behalf of the Financial Services Centers of New York, Inc. (“FSCNY”) paralleled those of TMSRT, although the FSCNY comments applied equally to proposed Parts 416 and 417.
Changes Made to Proposed Rule:
In response to these comments, the proposals have been modified to require any covered entity to demonstrate only “risk based policies, procedures and practices to ensure, to the maximum extent practicable, that its transactions comply with OFAC requirements.”
In addition, the regulations have been redrafted to simplify them, and references to federal laws and regulations have been redrafted to be consistent with the new format contained in the amended Supervisory Policy G 1. Finally, Parts 115 and 116 have been modified to include representative offices of foreign banking corporations as covered entities. This latter change was made to conform the proposals to their federal counterparts.
