Sec. 103.135 Anti-money laundering programs for operators of credit card systems.
(a) Definitions. For purposes of this section:
(1) Operator of a credit card system means any person doing business
in the United States that operates a system for clearing and settling
transactions in which the operator's credit card, whether acting as a
credit or debit card, is used to purchase goods or services or to obtain
a cash advance. To fall within this definition, the operator must also
have authorized another person (whether located in the United States or
not) to be an issuing or acquiring institution for the operator's credit
card.
(2) Issuing institution means a person authorized by the operator of
a credit card system to issue the operator's credit card.
(3) Acquiring institution means a person authorized by the operator
of a credit card system to contract, directly or indirectly, with
merchants or other persons to process transactions, including cash
advances, involving the operator's credit card.
(4) Operator's credit card means a credit card capable of being used
in the United States that:
(i) Has been issued by an issuing institution; and
(ii) Can be used in the operator's credit card system.
(5) Credit card has the same meaning as in 15 U.S.C. 1602(k). It
includes charge cards as defined in 12 CFR 226.2(15).
(6) Foreign bank means any organization that is organized under the
laws of a foreign country; engages in the business of banking; is
recognized as a bank by the bank supervisory or monetary authority of
the country of its organization or the country of its principal banking
operations; and receives deposits in the regular course of its business.
For purposes of this definition:
(i) The term foreign bank includes a branch of a foreign bank in a
territory of the United States, Puerto Rico, Guam, American Samoa, or
the U.S. Virgin Islands.
(ii) The term foreign bank does not include:
(A) A U.S. agency or branch of a foreign bank; and
(B) An insured bank organized under the laws of a territory of the
United States, Puerto Rico, Guam, American Samoa, or the U.S. Virgin
Islands.
(b) Anti-money laundering program requirement. Effective July 24,
2002, each operator of a credit card system shall develop and implement
a written anti-money laundering program reasonably designed to prevent
the operator of a credit card system from being used to facilitate money
laundering and the financing of terrorist activities. The program must
be approved by senior management. Operators of credit card systems must
make their anti-money laundering programs available to the Department of
the Treasury or the appropriate Federal regulator for review.
(c) Minimum requirements. At a minimum, the program must:
(1) Incorporate policies, procedures, and internal controls designed
to ensure the following:
(i) That the operator does not authorize, or maintain authorization
for, any person to serve as an issuing or acquiring institution without
the operator taking appropriate steps, based upon the operator's money
laundering or terrorist financing risk assessment, to guard against that
person issuing the operator's credit card or acquiring merchants who
accept the operator's credit card in circumstances that facilitate money
laundering or the financing of terrorist activities;
(ii) For purposes of making the risk assessment required by
paragraph (c)(1)(i) of this section, the following persons are presumed
to pose a heightened risk of money laundering or terrorist financing
when evaluating whether and under what circumstances to authorize, or to
maintain authorization for, any such person to serve as an issuing or
acquiring institution:
(A) A foreign shell bank that is not a regulated affiliate, as those
terms are defined in 31 CFR 104.10(e) and (j);
(B) A person appearing on the Specially Designated Nationals List
issued by Treasury's Office of Foreign Assets Control;
(C) A person located in, or operating under a license issued by, a
jurisdiction whose government has been identified
by the Department of State as a sponsor of international terrorism under
22 U.S.C. 2371;
(D) A foreign bank operating under an offshore banking license,
other than a branch of a foreign bank if such foreign bank has been
found by the Board of Governors of the Federal Reserve System under the
Bank Holding Company Act (12 U.S.C. 1841, et seq.) or the International
Banking Act (12 U.S.C. 3101, et seq.) to be subject to comprehensive
supervision or regulation on a consolidated basis by the relevant
supervisors in that jurisdiction;
(E) A person located in, or operating under a license issued by, a
jurisdiction that has been designated as noncooperative with
international anti-money laundering principles or procedures by an
intergovernmental group or organization of which the United States is a
member, with which designation the United States representative to the
group or organization concurs; and
(F) A person located in, or operating under a license issued by, a
jurisdiction that has been designated by the Secretary of the Treasury
pursuant to 31 U.S.C. 5318A as warranting special measures due to money
laundering concerns;
(iii) That the operator is in compliance with all applicable
provisions of subchapter II of chapter 53 of title 31, United States
Code and this part;
(2) Designate a compliance officer who will be responsible for
assuring that:
(i) The anti-money laundering program is implemented effectively;
(ii) The anti-money laundering program is updated as necessary to
reflect changes in risk factors or the risk assessment, current
requirements of part 103, and further guidance issued by the Department
of the Treasury; and
(iii) Appropriate personnel are trained in accordance with paragraph
(c)(3) of this section;
(3) Provide for education and training of appropriate personnel
concerning their responsibilities under the program; and
(4) Provide for an independent audit to monitor and maintain an
adequate program. The scope and frequency of the audit shall be
commensurate with the risks posed by the persons authorized to issue or
accept the operator's credit card. Such audit may be conducted by an
officer or employee of the operator, so long as the reviewer is not the
person designated in paragraph (c)(2) of this section or a person
involved in the operation of the program.
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