[Code of Federal Regulations]
[Title 12, Volume 2]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR211.3]

[Page 348]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 211--INTERNATIONAL BANKING OPERATIONS (REGULATION K)--Table of Contents
 
    Subpart A--International Operations of U.S. Banking Organizations
 
Sec. 211.3  Foreign branches of U.S. banking organizations.

    (a) General--(1) Definition of banking organization. For purposes of 
this section, a banking organization is defined as a member bank and its 
affiliates.
    (2) A banking organization is considered to be operating a branch in 
a foreign country if it has an affiliate that is a member bank, Edge or 
agreement corporation, or foreign bank that operates an office (other 
than a representative office) in that country.
    (3) For purposes of this subpart, a foreign office of an operating 
subsidiary of a member bank shall be treated as a foreign branch of the 
member bank and may engage only in activities permissible for a branch 
of a member bank.
    (4) At any time upon notice, the Board may modify or suspend 
branching authority conferred by this section with respect to any 
banking organization.
    (b) (1) Establishment of foreign branches. (i) Foreign branches may 
be established by any member bank having capital and surplus of 
$1,000,000 or more, an Edge corporation, an agreement corporation, any 
subsidiary the shares of which are held directly by the member bank, or 
any other subsidiary held pursuant to this subpart.
    (ii) The Board grants its general consent under section 25 of the 
FRA (12 U.S.C. 601-604a) for a member bank to establish a branch in the 
Commonwealth of Puerto Rico and the overseas territories, dependencies, 
and insular possessions of the United States.
    (2) Prior notice. Unless otherwise provided in this section, the 
establishment of a foreign branch requires 30 days' prior written notice 
to the Board.
    (3) Branching into additional foreign countries. After giving the 
Board 12 business days prior written notice, a banking organization that 
operates branches in two or more foreign countries may establish a 
branch in an additional foreign country.
    (4) Additional branches within a foreign country. No prior notice is 
required to establish additional branches in any foreign country where 
the banking organization operates one or more branches.
    (5) Branching by nonbanking affiliates. No prior notice is required 
for a nonbanking affiliate of a banking organization (i.e., an 
organization that is not a member bank, an Edge or agreement 
corporation, or foreign bank) to establish branches within a foreign 
country or in additional foreign countries.
    (6) Expiration of branching authority. Authority to establish 
branches, when granted following prior written notice to the Board, 
shall expire one year from the earliest date on which the authority 
could have been exercised, unless extended by the Board.
    (c) Reporting. Any banking organization that opens, closes, or 
relocates a branch shall report such change in a manner prescribed by 
the Board.
    (d) Reserves of foreign branches of member banks. Member banks shall 
maintain reserves against foreign branch deposits when required by 
Regulation D (12 CFR part 204).
    (e) Conditional approval; access to information. The Board may 
impose such conditions on authority granted by it under this section as 
it deems necessary, and may require termination of any activities 
conducted under authority of this section if a member bank is unable to 
provide information on its activities or those of its affiliates that 
the Board deems necessary to determine and enforce compliance with U.S. 
banking laws.