Finding and NPRM: Special measure regarding transactions involving the A7 Network's sub-agents (91 FR 63208) (Part 2 of 2)
Document text
Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.
notices of
prohibition on their interests, as well as transmittal of funds that involves any proposed rulemaking (NPRMs) and final
to facilitate compliance and to aid A7 Network Sub-Agent as an originator rules published in the Federal Register,
cooperation in preventing transactions or beneficiary or otherwise references the violation of which may constitute
involving the A7 Network’s Sub-Agents any A7 Network Sub-Agent in a manner criminal regulatory offenses, should
from accessing the U.S. financial detectable under the covered financial include a statement identifying that the
system. Pursuant to this requirement, institution’s normal screening rule or proposed rule is a criminal
covered financial institutions may mechanisms. An appropriate screening regulatory offense and the authorizing
notify affected persons directly or, mechanism could be the mechanisms statute.81 Executive Order 14294 directs
through financial institutions of other used by a covered financial institution agencies to draft this statement in
intermediaries, indirectly. Methods of to comply with various legal consultation with the Department of
compliance with the notice requirement requirements, such as commercially Justice.
could include, for example, transmitting available software programs used to Executive Order 14294 further directs
a notice by mail, fax, or email. comply with the economic sanctions that the regulatory text of all NPRMs
Importantly, FinCEN does not propose programs administered by the OFAC. and final rules with criminal
requiring covered financial institutions consequences published in the Federal
to obtain a certification to comply with 5. Recordkeeping and Reporting
Register after May 9, 2025, should
this notice requirement. Proposed section 1010.668(b)(5) explicitly state a mens rea requirement
3. Procedures for Removal From the List clarifies that the proposed rule does not for each element of a criminal regulatory
of A7 Network Sub-Agents impose any reporting requirement upon offense, accompanied by citations to the
any covered financial institution that is relevant provisions of the authorizing
Pursuant to proposed section not otherwise required by applicable
1010.668(b)(3), FinCEN has proposed a statute.
law or regulation. A covered financial Willful violations of any final
mechanism through which entities
institution must, however, document its regulations set forth in this proposed
identified as Sub-Agents might seek
compliance with the notification rule may be subject to criminal penalties
reconsideration. As set out in proposed
requirement described above in section pursuant to 31 U.S.C. 5322 and
section 1010.668(b)(2), covered financial
1010.668(b)(3). regulations promulgated in 31 CFR
institutions affected persons associated
with the transmittal of funds with C. Reservation of Authority Chapter X. The statutory authority for
which the covered financial institution criminal liability requires a mens rea of
The proposal provides that FinCEN willfulness as an element pursuant to 31
maintains a direct commercial
reserves its authority to impose U.S.C. 5322(a) and 31 U.S.C. 5322(b).
relationship, including that a party to
conditions on certain transmittals of FinCEN’s existing regulation, 31 CFR
the transaction is a Sub-Agent of the A7
funds and to grant appropriate 1010.840, that sets out criminal
Network, and thus, identified on a list
exemptions from the requirements penalties for violations of regulations
provided by FinCEN.
In proposed section 1010.668(b)(3), proposed in this NPRM. promulgated in 31 CFR Chapter X also
FinCEN has proposed a petition process D. Request for Comments includes a mens rea of willfulness. In
through which a person identified as a drafting this statement, FinCEN has
Sub-Agent might submit arguments or FinCEN is requesting comments for 30 consulted with the Department of
evidence to establish that there is days after the publication of this NPRM. Justice.
insufficient grounds to establish that the Given the A7 Network and its Sub-
Agents’ consistent and longstanding ties VII. Regulatory Impact Analysis
person is a Sub-Agent or that
circumstances have changed such that to facilitating transactions for illicit FinCEN has analyzed this proposed
the person should no longer be actors, FinCEN assesses that a 30-day rule under Executive Order 12866,82
identified as a Sub-Agent. As set out in comment period for this NPRM strikes Executive Order 13563,83 the Regulatory
the proposed section, all such petitions an appropriate balance between Flexibility Act (RFA),84 the Unfunded
should be submitted to FinCEN, in the ensuring sufficient time for notice to the Mandates Reform Act (UMRA),85 and
first instance. FinCEN will then review public and opportunity for comment on the Paperwork Reduction Act (PRA).86
and provide a written decision. the proposed rule, while minimizing As discussed above,87 the intended
undue national security risk posed to
4. Special Due Diligence the U.S. financial system in processing 81 Executive Order 14294, Fighting
Pursuant to proposed section illicit transfers. FinCEN invites Overcriminalization in Federal Regulations, 90 FR
1010.668(b)(4), covered financial comments on all aspects of the proposed 20367 (issued May 9, 2025; published May 14,
rule, including the following specific 2025), https://www.federalregister.gov/executive-
institutions shall take a risk-based order/14294.
approach when deciding what, if any, matters: 82 Executive Order 12866, Regulatory Planning
1. FinCEN’s proposal of a prohibition
lotter on DSK8BHNXB4PROD with PROPOSALS1
other due diligence measures it and Review, 58 FR 51735 (issued Sept. 30,1993;
reasonably must adopt to guard against on certain transmittal of funds, as published Oct. 4, 1993).
processing prohibited transmittals of opposed to imposing special measures 83 Executive Order 13563, Improving Regulation
one through five or imposing conditions and Regulatory Review, 76 FR 3821 (issued Jan. 18,
funds associated with transactions 2011; published Jan. 21, 2011).
involving any A7 Network Sub-Agent. under any special measure; 84 5 U.S.C. 601 et seq.
As contemplated by the proposed 2. The form and scope of the notice 85 2 U.S.C. 1532.
section, any such due diligence should to certain account holders that would be 86 44 U.S.C. 3507(a)(1)(D).
include implementing risk-based required under the rule; and 87 See supra Section V.
VerDate Sep<11>2014 17:42 Oct 02, 2026 Jkt 271001 PO 00000 Frm 00052 Fmt 4702 Sfmt 4702 E:\FR\FM\05OCP1.SGM 05OCP1
63220 Federal Register / Vol. 91, No. 191 / Monday, October 5, 2026 / Proposed Rules
effects of the imposition of the proposed expected to accompany adoption of the A. Analysis of Impact
special measure with respect to the any rule as proposed and assesses such
1. Institutional Baseline and Affected
A7 Network Sub-Agent are twofold. The expectations in more granular detail. Parties
proposed rule is expected to: (1) combat This discussion includes an explanation
and deter money laundering in of how the assumptions in FinCEN’s To assess potential economic impact
facilitation of Russian and Iranian illicit cost model and methodological choices of the proposed rule, FinCEN took into
financing by the A7 Network’s Sub- have influenced FinCEN’s conclusions. account the baseline population of
Agents; and (2) prevent A7 Network The public is invited to comment on all potentially affected financial
Sub-Agents from using the U.S. aspects of FinCEN’s practice.88 institutions to which the proposed
financial system to enable illicit definition of ‘‘covered financial
financial activity. institution’’ would apply. A summary of
In the analysis below, FinCEN these populations by type of financial
discusses the economic effects that are institution is presented in table 1.
TABLE 1—ESTIMATES OF COVERED FINANCIAL INSTITUTIONS BY TYPE
Number of
Financial institution type 1 financial
institutions
Banks 2 or Persons Subject to Supervision by Any State or Federal Bank Supervisory Authority 3 ............................................ 4 8,988
Broker-Dealers 5 ............................................................................................................................................................................. 6 3,277
Money Services Businesses (MSBs) 7 .......................................................................................................................................... 8 332,068
Telegraph Companies 9 ................................................................................................................................................................. 10 0
Casinos or Card Clubs 11 .............................................................................................................................................................. 12 1,304
Futures Commission Merchants (FCMs) or Introducing Brokers in Commodities (IBCs) 13 ........................................................ 14 954
Mutual Funds 15 ............................................................................................................................................................................. 16 1,335
Total ........................................................................................................................................................................................ 347,926
1 See 31 U.S.C. 5312(a)(2); see also 31 CFR 1010.100(t) (definition of financial institution).
2 See 31 CFR 1010.100(t)(1); see also 31 CFR 1010.100(d).
3 See 31 CFR 1010.100(t)(7)
4 This includes 4,336 Federal Deposit Insurance Corporation- (FDIC-)insured depository institutions (i.e., federally regulated banks) according
to the FDIC’s Quarterly Bank Profile for Q4 2025, p. 2 (https://www.fdic.gov/quarterly-banking-profile/past-quarterly-banking-profiles). It also in-
cludes 4,287 National Credit Union Administration (NCUA) insured credit unions as of December 31, 2025, according to NCUA’s Quarterly Credit
Union Data Summary: 2025 Q4, p. I (https://ncua.gov/analysis/credit-union-corporate-call-report-data/quarterly-data-summary-reports). The Board
of Governors of the Federal Reserve System Master Account and Services Database (https://www.federalreserve.gov/paymentsystems/master-
account-and-services-database-existing-access.htm) contains data as of November 30, 2025, on financial institutions that use Federal Reserve
Bank financial services, including those with no additional Federal regulator. FinCEN used this data to identify 365 banks and credit unions with
no additional Federal regulator using Federal Reserve Bank financial services. It is unclear to FinCEN at this time whether any entities exist in
the ‘‘Persons subject to supervision by any state or Federal bank supervisory’’ category that, for purposes of being counted towards unique po-
tentially affected parties that could incur burdens associated with regulations issued pursuant to 31 CFR 1010.668, are not already captured by
concurrent status in another category of financial institution under the 31 CFR 1010.100(t) definition. To the extent that additional data can better
inform this estimate, public comment including provision of such data is invited.
5 See 31 U.S.C. 5312(a)(2)(G); see also 31 CFR 1010.100(t)(2).
6 This estimate is based on U.S. Securities and Exchange Commission (SEC) data on active broker-dealers available at ‘‘Company Information
About Active Broker-Dealers’’ (https://www.sec.gov/foia-services/frequently-requested-documents/company-information-about-active-broker-deal-
ers), which listed 3,277 active broker-dealers registered with the SEC as of December 31, 2025.
7 See 31 U.S.C. 5312(a)(2)(J,K,R); see also 31 CFR 1010.100(t)(3) and 31 CFR 1010.100(ff) (definition of MSB).
8 The definition of MSB (31 CFR 1010.100(ff)) covers both principal and agent MSBs. FinCEN estimated there were 24,856 uniquely identifi-
able registered principal MSBs with indicia of active business operations as of the three year-ends 2023–2025. FinCEN has estimated that the
number of agent MSBs is approximately 307,212 based on internal data.
9 See 31 CFR 1010.100(t)(4)
10 As an estimate of uniquely registered, potentially affected entities, FinCEN expects this category to contain no additional persons or organi-
zations not already included in other counts, particularly as money transmitters.
11 See 31 U.S.C. 5312(a)(2)(X); see also 31 CFR 1010.100(t)(5)–(6).
12 This includes 1,304 casinos, as of December 31, 2025, from the American Gaming Association, State of the States 2026: The AGA Analysis
of the Commercial Casino Industry, May 2026, p. 17 (https://www.americangaming.org/wp-content/uploads/2026/05/AGA-State-of-the-States-
2026.pdf).
13 See 31 U.S.C. 5312(a)(2)(H); see also 31 CFR 1010.100(t)(8–9).
14 According to Commodity Futures Trading Commission data on FCMs available at ‘‘Financial Data for FCMs’’ (https://www.cftc.gov/
MarketReports/financialfcmdata/index.htm), there were 66 registered FCMs as of December 31, 2025. The number of IBCs as of December 31,
2025 (888) was obtained from the National Futures Association ‘‘NFA Membership and Registration’’ website (https://www.nfa.futures.org/reg-
istration-membership/membership-and-directories.html). Because deduplication of entities registered as both FCMs and IBCs was not feasible,
this estimate may double-count some entities registered in both categories. FinCEN, however, believes this subpopulation may be small.
15 See 31 U.S.C. 5312(a)(2)(I); see also 31 CFR 1010.100(t)(10) and 31 CFR 1010.100(gg).
16 This estimate is based on the number of registered investment companies filing Form N–1A in SEC’s Annual Registered Investment Com-
pany Update: Form N–CEN Data, Period Ending December 2025, May 2025, table1.3, p. 4 (https://www.sec.gov/files/annual-registered-invest-
ment-company-update-20260512.pdf).
lotter on DSK8BHNXB4PROD with PROPOSALS1
FinCEN also took certain current effects can most meaningfully be financial institutions use to comply
market practices into consideration as assessed. These considerations include with those requirements related to
well as the regulatory baseline against both the (1) current legal requirements sanctions compliance, AML/CFT
which the proposed rule’s expected and (2) the processes and technologies
88 See Sections VI and VIII.D.
VerDate Sep<11>2014 17:42 Oct 02, 2026 Jkt 271001 PO 00000 Frm 00053 Fmt 4702 Sfmt 4702 E:\FR\FM\05OCP1.SGM 05OCP1
Federal Register / Vol. 91, No. 191 / Monday, October 5, 2026 / Proposed Rules 63221
program obligations, and the BSA, more substantially across financial incidence or absence of a relevant
broadly. institutions. As a threshold matter, of policy nexus is observable for all
those financial institutions to whom the institutions within a category of
2. Description of the Proposed
Requirements proposed definition of ‘‘covered financial institutions over a given time
financial institution’’ would apply, period (which is not available across all
The proposed rule would require many may not experience any economic covered types)—by a full order of
covered financial institutions to take impact beyond a de minimis cost of magnitude.
reasonable steps not to process a being familiarized with the proposed
transaction in the United States if such Of those more substantively impacted
regulatory obligations if in practice they by the proposed rule, FinCEN expects
a transaction involves a Sub-Agent of do not process any transactions
the A7 Network. Covered financial that certain covered financial
involving Sub-Agents of the A7 Network institutions would need to take on a
institutions, under the proposed rule, nor would be likely to at a given point
must notify affected persons associated broader set of newly required activities,
in the future. Furthermore, not all and that, on average, this would amount
with the transmittal of funds with expected affected covered financial
which the covered financial institution to double the burden borne by covered
institutions would face the same costs financial institutions that would not
maintains a direct commercial associated with compliance due to the
relationship where the covered financial face the expanded, or full, scope of the
nature of the proposed rule, which rule’s proposed obligations. In
institution knows or has reason to includes certain provisions that allow
believe the transmittal of funds is particular, covered financial institutions
for a covered financial institution’s that undertake notification activities
associated with any transaction that exercise of discretion and other
involves any A7 Network Sub-Agent and must consider and/or adopt
provisions that are only required of additional due diligence measures on a
and that such transmittal is prohibited.
certain, but not all, types of financial risk-basis would be expected to incur
Further, covered financial institutions
institutions. additional costs accordingly. For
would be required to take a reasonable,
risk-based approach to the adoption of FinCEN conservatively estimates that purposes of burden estimation, FinCEN
any additional due diligence measures of the population of 347,926 potentially conservatively assumes that the full
necessary to guard against the use of affected covered financial institutions, population of covered financial
correspondent accounts to process only ten percent, or approximately institutions it has previously estimated
transactions involving Sub-Agents of the 35,000 are likely to incur more than a to maintain foreign correspondent
A7 Network. de minimis compliance burden in accounts would incur the expanded, or
connection with the proposed special full, burden, including those elements
3. Expected Economic Effects on measure. This upper-bound estimate over which the proposed rule would
Covered Financial Institutions exceeds the observed proportions— allow the exercise of discretion.
FinCEN expects the economic effects which range from 0.8 to one percent, of Population estimates of this
of the proposed rule to vary select subpopulations where the subpopulation are presented in table 2.
TABLE 2—ESTIMATES OF FINANCIAL INSTITUTIONS WITH CORRESPONDENT ACCOUNTS BY TYPE
Number of
Financial institution type financial
institutions
Banks or Persons Subject to Supervision by Any State or Federal Bank Supervisory Authority:
Banks with a Federal Functional Regulator (FFR) ................................................................................................................ 1 66
Banks Without an FFR ........................................................................................................................................................... 2 12
Broker-Dealers ............................................................................................................................................................................... 3 29
FCMs or IBCs ................................................................................................................................................................................ 49
Mutual Funds ................................................................................................................................................................................. 5 12
Total ........................................................................................................................................................................................ 128
1 Data are from the Federal Financial Institutions Examination Council (FFIEC) Central Data Repository for Reports on Condition and Income
(Call Reports) and Uniform Bank Performance Reports, available for most FDIC-insured institutions. Using this source of data, FinCEN deter-
mines that as of Q4 2025, approximately 66 banks (as defined by FinCEN regulations, see 31 CFR 1010.100(d)) would be affected by this pro-
posed rule in any given year. Specifically, as of Q4 2025, there were approximately 66 banks that reported non-zero values for deposit liabilities
of banks in foreign countries. Deposit liabilities in a foreign country is an indication that a bank maintains correspondent accounts with a foreign
financial institution.
2 The Board of Governors of the Federal Reserve System Master Account and Services Database contains data on financial institutions that
use Federal Reserve Bank financial services, including those with no additional Federal regulator. FinCEN used this data to identify an additional
12 international banking entities with no additional Federal regulator and that do not file Call Reports, but that are also likely to maintain cor-
respondent accounts with a foreign financial institution.
3 Broker-dealers, unless they are publicly traded, are not required to make reports indicating whether they have foreign correspondent ac-
counts or hold foreign deposits. FinCEN reviewed financial statement data from 10–Q and 6–K filings with the SEC and identified nine publicly
traded broker-dealers with U.S. operations that reported foreign deposits. FinCEN also examined Suspicious Activity Reports filed by broker-deal-
ers in 2024 to identify another two non-publicly traded broker-dealers who appeared likely to be maintaining foreign deposits. However, because
many broker-dealers are not publicly traded—so there may be less information about their business publicly available—and because many did
not file Suspicious Activity Reports, FinCEN conservatively estimates that the proportion of broker-dealers with foreign correspondent accounts is
lotter on DSK8BHNXB4PROD with PROPOSALS1
similar to the proportion for banks (approximately 0.9 percent). 0.9 percent of 3,277 active broker-dealers is approximately 29 broker-dealers as-
sumed to have foreign correspondent accounts.
4 FCMs, IBCs, and mutual funds generally use intermediary U.S. banks to move and maintain client deposits and funds for investment. There-
fore, it is unlikely that many of these institutions maintain direct correspondent accounts with foreign financial institutions outside of their existing
upstream banking relationships. However, because these institutions may in some cases receive deposits from, make payments or other dis-
bursements, or otherwise transact directly with foreign financial institutions, FinCEN conservatively estimates that the proportion of FCMs, IBCs,
and mutual funds with foreign correspondent accounts is similar to the proportion for banks (approximately 0.9 percent). 0.9 percent of 954 active
FCMs and IBCs is approximately nine FCMs and IBCs assumed to have foreign correspondent accounts.
5 0.9 percent of 1,335 active mutual funds is approximately 12 mutual funds assumed to have foreign correspondent accounts.
VerDate Sep<11>2014 17:42 Oct 02, 2026 Jkt 271001 PO 00000 Frm 00054 Fmt 4702 Sfmt 4702 E:\FR\FM\05OCP1.SGM 05OCP1
63222 Federal Register / Vol. 91, No. 191 / Monday, October 5, 2026 / Proposed Rules
As described further in the PRA benefits of available regulatory C. Regulatory Flexibility Act
Analysis in Section VIII.E below, alternatives and, if regulation is When an agency issues a rulemaking
FinCEN anticipates that the necessary, to select regulatory proposal, the RFA requires the agency to
recordkeeping and disclosure costs to approaches that maximize net benefits ‘‘prepare and make available for public
covered financial institutions, on (including potential economic, comment an initial regulatory flexibility
aggregate, may be up to approximately environmental, public health and safety analysis’’ that will ‘‘describe the impact
USD 18 million per year. However, effects; distributive impacts; and of the proposed rule on small
given the volume of transactions equity). Executive Order 13563 entities.’’ 89 However, section 605 of the
conducted via the A7 Network, FinCEN emphasizes the importance of RFA allows an agency to certify a rule,
considers the necessity to curtail
quantifying both costs and benefits, in lieu of preparing an analysis, if the
facilitation by A7 Network Sub-Agents
reducing costs, harmonizing rules, and proposed rulemaking is not expected to
and the enhanced ability to do so via
promoting flexibility. have a significant economic impact on
imposition of the proposed special
Based on the analysis in Section a substantial number of small entities.
measure commensurate.
VIII.A, it has been determined that this The population of affected covered
4. Consideration of Alternatives financial institutions under the
proposed rule is not an economically
As part of its analysis, FinCEN took proposed rule is presented in table 3,
significant regulatory action under
into consideration select alternatives to which includes the estimated
section 3(f) of Executive Order 12866.
the rule as proposed. These proportion, by category of financial
Accordingly, further regulatory impact institution, that would be considered
considerations, as discussed in Section analysis is not required. Public
IV.C, are incorporated here by reference. small entities for purposes of RFA
comment is invited on the analysis.
B. Executive Orders reasonableness and accuracy of this BILLING CODE 4810–02–P
Executive Orders 12866 and 13563 assessment.
direct agencies to assess costs and 89 5 U.S.C. 603(a).
lotter on DSK8BHNXB4PROD with PROPOSALS1
VerDate Sep<11>2014 17:42 Oct 02, 2026 Jkt 271001 PO 00000 Frm 00055 Fmt 4702 Sfmt 4702 E:\FR\FM\05OCP1.SGM 05OCP1
Federal Register / Vol. 91, No. 191 / Monday, October 5, 2026 / Proposed Rules 63223
lotter on DSK8BHNXB4PROD with PROPOSALS1
BILLING CODE 4810–02–C
EP05OC26.000</GPH>
VerDate Sep<11>2014 17:42 Oct 02, 2026 Jkt 271001 PO 00000 Frm 00056 Fmt 4702 Sfmt 4702 E:\FR\FM\05OCP1.SGM 05OCP1
63224 Federal Register / Vol. 91, No. 191 / Monday, October 5, 2026 / Proposed Rules
Under the proposed special measure, D. Unfunded Mandates Reform Act document by selecting ‘‘Currently under
covered financial institutions would be Section 202 of the UMRA 90 requires Review—Open for Public Comments’’ or
prohibited from facilitating or that an agency prepare a budgetary by using the search function. Comments
participating in certain transmittal of impact statement before promulgating a are welcome and must be received by
funds involving A7 Network Sub- rule that may result in expenditure by November 4, 2026. In accordance with
Agents. As discussed above in Section the state, local, and tribal governments, requirements of the PRA, 44 U.S.C.
VIII.A, FinCEN does not expect the rule in the aggregate, or by the private sector, 3506(c)(2)(A), and its implementing
to affect all financial institutions that it of USD 193 million or more in any one regulations, 5 CFR part 1320, the
proposes to cover equally, and many, if year (USD 100 million in 1995, adjusted following information concerning the
not most small entities are less likely to for inflation).91 92 If a budgetary impact collection of information as required by
incur substantive costs than de minimis statement is required, section 202 of the 31 CFR 1010.668 is presented to assist
ones because of their lower likelihood of UMRA also requires an agency to those persons wishing to comment on
interaction with A7 Network Sub- identify and consider a reasonable the information collections.
Agents. number of regulatory alternatives before The provisions in this proposed rule
While small covered financial promulgating a rule. pertaining to the collection of
institutions would be required to take FinCEN has determined that this information can be found in section
reasonable measures to detect and proposed rule would not result in 1010.668(b). The notification
prevent the transmittal of funds expenditures by state, local, and tribal requirement in section 1010.668(b)(2)
involving A7 Network Sub-Agents, governments in the aggregate, or by the are intended to aid cooperation from
neither set of newly required activities private sector, of USD 193 million or foreign account holders in preventing
proposed is expected to introduce more in any one year. Accordingly, transactions involving any A7 Network
significant incremental burdens relative FinCEN has not prepared a budgetary Sub-Agent from being processed by the
to those covered financial institutions’ impact statement or considered the U.S. financial system. The information
current obligations and ongoing regulatory alternatives outlined in required to be maintained by section
diligence activities. For example, all Section IV.C above within the 1010.668(b)(5) would be used by federal
U.S. persons, including U.S. financial framework of the UMRA. agencies and certain self-regulatory
institutions, must comply with OFAC organizations to verify compliance by
E. Paperwork Reduction Act
sanctions, and most covered U.S. covered financial institutions with the
financial institutions generally have The recordkeeping and disclosure requirements in section 1010.668(b).
suspicious activity reporting requirements contained in this proposed The collection of information would be
requirements and systems in place to rule that qualify as ‘‘collections of mandatory.
screen transactions to comply with information’’ under the PRA will be Frequency: As required.
OFAC sanctions and section 9714(a) submitted to the Office of Management Description of Affected Financial
special measures administered by and Budget (OMB) for review in Institutions: Only those covered
FinCEN. The systems that U.S. financial accordance with the PRA.93 Under the financial institutions defined in section
institutions have in place to comply PRA, an agency may not conduct or 1010.668(a)(4) that are engaged in
with these requirements are expected to sponsor, and a person is not required to certain transmittals of funds as defined
be easily modified to adapt to this respond to, a collection of information in proposed section 1010.668(a)(5) with,
proposed rule. FinCEN believes that the unless it displays a valid control or processing transactions potentially
increase in burden would be minimal in number assigned by the OMB.94 Written involving, A7 Network Sub-Agents as
part because FinCEN would provide a comments and recommendations for the defined in section 1010.668(a)(1) and (2)
comprehensive list of A7 Network Sub- proposed prohibition can be submitted are expected to incur incremental
Agents known to FinCEN to covered by visiting www.reginfo.gov/public/do/ economic effects.95
financial institutions, who in turn PRAMain. Find this particular Estimated Number of Potential
would simply incorporate the list into Respondents: 347,926 covered financial
90 2 U.S.C. 1532, Public Law 104–4 (Mar. 22,
their existing screening tools and institutions.
1995).
processes. Thus, the special due 91 Id.
Estimated Number of Expected
diligence that would be required under 92 The U.S. Bureau of Economic Analysis reports Respondents: 34,793 covered financial
the proposed rule—i.e., preventing the the annual value of the gross domestic product institutions.
transmittal of funds involving A7 implicit price deflator for calendar year 1995 (the Estimated Average Annual Burden in
year UMRA was enacted), as 66.939, and as 128.974 Hours per Affected Financial
Network Sub-Agents and the transmittal for the calendar year 2025 (the most recent
of notification to certain correspondent available). Thus, the inflation-adjusted estimate for Institution: Imposing the special
account holders—is not expected to $100 million is 128.974 ÷ 66.939 × $100 million, or measure described in this proposed rule
require a significant change in due $192.7 million. U.S. Bureau of Economic Analysis, is expected to result in a new,
Table 1.1.9. Implicit Price Deflators for Gross
diligence activities for small U.S. Domestic Product, BEA Interactive Data
incremental recordkeeping and
financial institutions. For these reasons, Application. potential disclosure burden on certain
FinCEN certifies that the proposals 93 See 44 U.S.C. 3507(a)(1)(D). The PRA defines
contained in this rulemaking are not a ‘‘collection of information’’ as ‘‘the obtaining, 95 FinCEN recognizes that the petition process
causing to be obtained, soliciting, or requiring the that would be provided under proposed 31 CFR
expected to have a significant impact on disclosure to third parties or the public, of facts or 1010.668(b)(3) would also generate required
a substantial number of small opinions by or for an agency, regardless of form or paperwork and thereby impose burden on affected
businesses. format, calling for either (i) answers to identical respondents. However, because (1) a petition is only
lotter on DSK8BHNXB4PROD with PROPOSALS1
FinCEN invites comments from questions posed to, or identical reporting or expected to be undertaken by a listed A7 Network
recordkeeping requirements imposed on, ten or Sub-Agent that believed itself capable of
members of the public who believe more persons, other than agencies, demonstrating why it should be removed from the
there would be a significant economic instrumentalities, or employees of the United list and (2) the likelihood of this occurring 10 or
impact on small entities from the States; or (ii) answers to questions posed to more times in a given year is exceptionally low,
imposition of a prohibition under the agencies, instrumentalities, or employees of the FinCEN has not estimated or assigned a separate
United States which are to be used for general PRA burden to the reporting, recordkeeping, or
proposed special measure regarding A7 statistical purposes[.]’’ See 44 U.S.C. 3502(3). disclosure activities accompanying proposed
Network Sub-Agents. 94 44 U.S.C. 3507(a)(3). subsection 1010.668(b)(3).
VerDate Sep<11>2014 17:42 Oct 02, 2026 Jkt 271001 PO 00000 Frm 00057 Fmt 4702 Sfmt 4702 E:\FR\FM\05OCP1.SGM 05OCP1
Federal Register / Vol. 91, No. 191 / Monday, October 5, 2026 / Proposed Rules 63225
covered financial institutions as whether the information would have the following: Galadriel Trading FZCO,
described above. practical utility; (2) the accuracy of Gimli Trade LLC–FZ, Hydrofusion
The estimated burden includes the FinCEN’s estimate of the burden of the Resources FZ–LLC, Pearl Bridge, Power
time required to determine whether a proposed collection of information; (3) Sphere LLC–FZ, and Sigizmund FZCO,
notification is required, prepare and ways to enhance the quality, utility, and and any other entity identified by
transmit any notifications required clarity of the information required to be FinCEN as a Sub-Agent of the A7
under 1010.668(b)(2), and create and maintained; (4) ways to minimize the Network.
maintain the records required under burden of the required collection of (3) Convertible Virtual Currency
1010.668(b)(5). This estimated average information, including through the use (CVC). The term ‘‘convertible virtual
annual burden in this proposed rule is, of automated collection techniques or currency (CVC)’’ means a medium of
in total, one business day, or eight hours other forms of information technology; exchange that either has an equivalent
per affected financial institution with and (5) estimates of capital or start-up value as currency, or acts as a substitute
expanded obligations (n = 128) and, in costs and costs of operation, for currency, but lacks legal tender
total, one-half business day, or four maintenance, and purchase of services status. Despite having legal tender status
hours per affected financial institution to report the information. in at least one jurisdiction, for the
under more limited requirements (n = purpose of this NPRM, the A7A5
34,665). VIII. Regulatory Text
stablecoin is included as a type of CVC.
Estimated Total Annual Burden: List of Subjects in 31 CFR Part 1010 (4) Covered Financial Institution. The
Approximately 139,700 hours.96 Administrative practice and term ‘‘covered financial institution’’ has
Estimated Total Annual Cost: the same meaning as ‘‘financial
procedure, Banks, banking, Brokers,
Approximately USD 17,740,000.97 institution’’ in 31 CFR 1010.100(t).
Crime, Foreign banking, Terrorism.
General Request for Comments: (5) Transmittals of Funds. The term
Comments are invited on: (1) whether Authority and Issuance ‘‘transmittals of funds’’ means the
the proposed collection of information For the reasons set forth in the sending and receiving of funds,
found in section 1010.668(b)(5) is preamble, FinCEN proposes amending including convertible virtual currency.
necessary for the proper performance of 31 CFR part 1010 as follows: For avoidance of doubt, for this section
the mission of FinCEN, including this definition of transmittal of funds
PART 1010—GENERAL PROVISIONS applies rather than the definition of
96 (128 financial institutions with expanded
transmittal of funds in section
obligations × 8 hours per institution) + (34,665 ■ 1. The authority citation for part 1010
financial institutions with limited obligations × 4 1010.100(ddd).
continues to read as follows:‘‘ (6) Recipient. The Term ‘‘Recipient’’
hours per institution)) = 139,682 hours = ∼ 139,700
hours. Authority: 12 U.S.C. 1829b and 1951– means the person to be paid by the
97 The wage rate applied here is a general 1959; 31 U.S.C. 5311–5314, 5316–5336; title recipient’s covered financial institution.
composite hourly wage (USD 89.24), scaled by a III, sec. 314, Pub. L. 107–56, 115 Stat. 307;
private-sector benefits factor of 1.42 (USD 127.03 =
(7) Meaning of Other Terms. All terms
sec. 2006, Pub. L. 114–41, 129 Stat. 458–459; used but not otherwise defined herein
USD 89.24 × 1.42). This incorporates Bureau of sec. 701 Pub. L. 114–74, 129 Stat. 599; sec.
Labor Statistics (BLS) mean wage data associated
6403, Pub. L. 116–283, 134 Stat. 3388.’’
shall have the meaning set forth in 31
with the six occupational codes (11–1010: Chief CFR Chapter X, 31 U.S.C. 5312, and 21
Executives; 11–3021: Computer and Information ■ 2. Add 1010.668 to read as follows:
Systems Managers; 11–3031: Financial Managers;
U.S.C. 2302.
13–1041: Compliance Officers; 23–1010: Lawyers 1010.668 Special measures regarding any (b) Prohibition on transmittals of
and Judicial Law Clerks; 43–3099: Financial Clerks, A7 Network Sub-Agent. funds and due diligence requirements
All Other) for each of the nine groupings of North for covered financial institutions.
American Industry Classification System industry (a)Definitions. For purposes of this
codes that FinCEN determined are most directly section, the following terms have the (1) Prohibition of certain transmittals
comparable to its 11 categories of potentially following meanings. To the extent there of funds. A covered financial institution
affected financial institutions as delineated in 31
is a differing definition in § 1010.100 of is prohibited from engaging in a
CFR parts 1020 to 1030. See BLS, May 2025— transmittal of funds involving any A7
National industry-specific and by ownership, this chapter, the definition in this
https://www.bls.gov/oes/tables.htm. Given that Section is what applies to this Section. Network Sub-Agent, including any
many occupations provide benefits beyond wages (1) A7 Network. The term ‘‘A7 transmittal of funds from or to an A7
(e.g., insurance and paid leave), FinCEN applies the Network’’ means the core grouping of Network Sub-Agent, or from or to any
private sector benefit factor to the unloaded wage account or CVC address administered by
rate to reflect the total cost to the employer. The entities and persons involved in the
benefit factor is the ratio of total compensation operation of a Russian-Kyrgyzstan based or on behalf of an A7 Network Sub-
(which includes wages and benefits) to wages. Total sanctions evasion and money Agent.
compensation = USD 45.65 and Wages and salaries laundering network including: A7 (i) A covered financial institution will
= USD 32.07 (1.42 = USD 45.65 ÷ USD 32.07) as be deemed not to have violated this
of June 2025, based on the private industry workers Liability Company, A71 Limited
series data downloaded from BLS, Employer Costs Liability Company, A7 Agent Limited prohibition where, upon determining
for Employee Compensation data, https:// Liability Company, Old Vector LLC, that it received CVC that originated from
www.bls.gov/news.release/archives/ecec_ Garantex, Grinex, Independent an A7 Network Sub-Agent or from an
09122025.pdf. 139,682 total annual burden hours account or CVC address administered by
multiplied by USD 127.03 per hour equals a total Decentralize Finance Smartbank and
annual cost of USD 17,743,855, or approximately Ecosystem, ExVed, Sergey Mendeleev, or on behalf of an A7 Network Sub-
USD 17,740,000. Ilan Shor, and Promsvyazbank Public Agent, that covered financial institution,
See discussion of how compliance with the Joint Stock Company, and any other if required under other authorities,
proposed rule is expected to be integrated into blocks the CVC or rejects the
lotter on DSK8BHNXB4PROD with PROPOSALS1
covered financial institutions’ broader OFAC
persons whose property and interests in
property have been blocked, by transaction, preventing the intended
sanctions and 311 special measures compliance
activities at Section X.B. designation, order, or by operation of Recipient from accessing such CVC and
See FinCEN, Renewal Without Change of law, in light of their connection to the returning the CVC to the A7 Network
Prohibition on Correspondent Accounts for Foreign A7 Network, an OFAC-designated TCO. Sub-Agent, or to the account or CVC
Shell Banks; Records Concerning Owners of Foreign address from which the CVC originated.
Banks and Agents for Service of Legal Process, 90
(2) A7 Network Sub-Agents. The term
FR 21987, 21994 (May 22, 2025), https:// ‘‘A7 Network Sub-Agents’’ means Note 1 to paragraph (b)(1): Covered
www.federalregister.gov/d/2025-09162/p-134. businesses including, but not limited to, financial institutions should block and report
VerDate Sep<11>2014 20:31 Oct 02, 2026 Jkt 271001 PO 00000 Frm 00058 Fmt 4702 Sfmt 4702 E:\FR\FM\05OCP1.SGM 05OCP1
63226 Federal Register / Vol. 91, No. 191 / Monday, October 5, 2026 / Proposed Rules
to OFAC any accounts, property, or interests DEPARTMENT OF HEALTH AND SUPPLEMENTARY INFORMATION:
in property that are blocked pursuant to any HUMAN SERVICES
OFAC sanctions authority and in compliance I. Statutory Authority
with the Reporting Procedures and Penalties Administration for Children and The Department published this NPRM
Regulations, 31 CFR part 501. Families under the authority granted to the
(2) Notification. If a transmittal of Secretary of the Department of Health
funds is prohibited pursuant to 45 CFR Part 1355 and 1357 and Human Services (the Secretary) by
paragraph (b)(1) or is blocked consistent Section 1102 of the Social Security Act
RIN 0970–AD32
with Note 1 to paragraph (b)(1), the (the Act), 42 U.S.C. 1302, which
covered financial institution must notify Reforming Federal Reporting and authorizes the Secretary to publish
affected persons associated with the Assessments in Child Welfare regulations, not inconsistent with the
transmittal of funds with which the Act, as may be necessary for the
covered financial institution maintains a AGENCY: Children’s Bureau (CB), efficient administration of the functions
direct commercial relationship. Administration on Children, Youth and with which the Secretary is charged
(3) Procedures for Removal from the Families (ACYF), Administration for under the Act.
List of A7 Network Sub-Agents. Children and Families (ACF),
Department of Health and Human II. Background
(i) A person identified by FinCEN as
an A7 Network Sub-Agent may submit Services (Department). Title IV–B of the Act provides funding
petition presenting arguments or ACTION: Notice of proposed rulemaking. to states (including Washington, DC,
evidence that the person believes territories, insular areas, (herein referred
SUMMARY: ACF proposes to remove to as states) and Indian tribes, Tribal
establishes that insufficient basis exists
regulations that implement title IV–B of organizations and tribal consortia
for the person to be identified as an A7
the Social Security Act (the Act) (herein referred to as tribes) to develop,
Network Sub-Agent or that the
because they are outdated and refer to expand, and coordinate child and
circumstances resulting in being
dates that have passed, have been family services programs that use
identified as an A7 Network Sub-Agent superseded by subsequent amendments
no longer apply. This submission must community-based agencies for family
to the Act, duplicate or restate support services, family preservation
be made via email to requirements already in title IV–B of the
[email protected]. services, adoption promotion and
Act or other Federal law, and/or impose support services, and family
(ii) For the purposes of such petitions: administrative and reporting
(A) The information submitted by the reunification services to ensure all
requirements on agencies that do not children are raised in safe, loving
person submitting a petition will be
meaningfully support Federal program families. The Stephanie Tubbs Jones
reviewed by FinCEN, which may
oversight and administration of title IV– Child Welfare Services Program
request clarifying, corroborating, or B programs. Four of these regulatory
other additional information. authorized under title IV–B, subpart 1 of
requirements are redesignated to the the Act (herein referred to as ‘‘subpart
(B) A person submitting a petition
regulations addressing titles IV–E and 1’’) funds preventive intervention,
may request a meeting with FinCEN;
IV–B plan requirements. ACF also alternative placements, and
however, such meetings are not proposes to remove the regulation that
required, and FinCEN may, at its reunification efforts to keep families
articulates the principles of child and together (section 421 et seq. of the Act).
discretion, decline to conduct such family services reviews because it does
meetings prior to completing a review of The MaryLee Allen Promoting Safe and
not prescribe any requirements that Stable Families Program authorized
the petition. states and tribes must follow, but rather
(C) After FinCEN has conducted a under title IV–B, subpart 2 of the Act
provides unenforceable (herein referred to as ‘‘subpart 2’’) funds
review of the petition, it will provide a recommendations, and to remove
written decision to the person that family support services, family
redundant cross-references. preservation services, family
submitted the petition.
DATES: Comments on this proposed rule reunification services, and services to
(4) Special Due Diligence. A covered
financial institution shall take a risk- must be received by November 4, 2026. support adoptions (section 430 et seq. of
based approach when deciding what, if ADDRESSES: You may submit written the Act).
any, other due diligence measures it comments, identified by docket number To receive Federal funding under title
reasonably must adopt to guard against ACF–2026–0562 and/or Regulatory IV–B, a state or tribal child welfare
processing prohibited transmittals of Information Number (RIN) 0970–AD32, agency (agency) submits a Child and
funds associated with transactions through the Federal eRulemaking Portal: Family Services Plan (CFSP) for ACF
involving any A7 Network Sub-Agent. https://www.regulations.gov on or approval (section 432 of the Act). The
(5) Recordkeeping and reporting. before the due date. Follow the CFSP is a five-year strategic plan that
(i) A covered financial institution is instructions for submitting comments. consolidates the requirements in title
required to document its compliance All comments received will be posted IV–B subparts 1 and 2. It identifies goals
with the notification requirement set without change to www.regulations.gov, for the continuum of child welfare
forth in this section. including any personal information services, focusing on safety,
(ii) Nothing in paragraph (b) of this provided. In accordance with 5 U.S.C. permanency, and the well-being of
section shall require a covered financial 553(b)(4), a summary of this proposed children and families (section 432(a)(2)
institution to report any information not rule may be found at [INSERT of the Act). Annually, agencies submit
REGULATIONS.GOV CITE].
lotter on DSK8BHNXB4PROD with PROPOSALS1
otherwise required to be reported by law to ACF a review of progress toward
or regulation. FOR FURTHER INFORMATION CONTACT: accomplishment of those goals in the
Jennifer Haight, 202–329–6464; Annual Progress and Services Report
Jimmy L. Kirby, Administration on Children, Youth and (APSR), revise the goals of the CFSP if
Deputy Director, Financial Crimes Families, Administration for Children necessary, and describe services that
Enforcement Network. and Families, Department of Health and they will provide in the subsequent
[FR Doc. 2026–20371 Filed 10–2–26; 8:45 am] Human Services; cbcomments@ fiscal year (section 432(a)(2)(C) and (5)
BILLING CODE 4810–02–P acf.hhs.gov. of the Act). In addition, agencies must
VerDate Sep<11>2014 17:42 Oct 02, 2026 Jkt 271001 PO 00000 Frm 00059 Fmt 4702 Sfmt 4702 E:\FR\FM\05OCP1.SGM 05OCP1