FinCEN expected its North Korea correspondent-account measure to build on controls financial institutions already used. That is an implementation argument, not a measured price tag. The final rule, published November 9, 2016 and effective December 9, combines an account prohibition with diligence aimed at preventing indirect use by North Korean financial institutions. [2016-27049]

The June proposal explained the expected economics: direct exposure was already constrained by sanctions, institutions screened transactions, and notices to certain foreign correspondent-account holders could accompany those procedures. FinCEN anticipated only marginal additional burden. A reader assessing costs should retain the distinction between an agency expectation and hours or money actually spent by a particular institution. [2016-27049][2016-13037]

The adopted mechanism nevertheless requires work. Institutions must take reasonable steps to identify specified use of their foreign correspondent accounts from records held in normal business and decide on other diligence through a risk-based approach. They must notify correspondents known or reasonably believed to serve a North Korean financial institution and document that notice. The final provision does not add reports beyond existing legal reporting requirements. [2016-27049]

The useful business question is how those duties fit the institution's actual account relationships and controls, not whether an average burden claim eliminates the task. Proposal and final rule come from the same agency chain, so they cannot independently verify the cost assessment. Nor do they demonstrate reduced competition or improved payment efficiency. The scope remains specified institutional account access, not a new prohibition on every person or every kind of trade. [2016-27049][2016-13037]

Source documents

  1. Imposition of Special Measure Against North Korea as a Jurisdiction of Primary Money Laundering Concernhttps://www.govinfo.gov/content/pkg/FR-2016-11-09/html/2016-27049.htm
  2. Imposition of Special Measure Against North Korea as a Jurisdiction of Primary Money Laundering Concernhttps://www.govinfo.gov/content/pkg/FR-2016-06-03/html/2016-13037.htm