Topics of Interest
Money Laundering
U.S. Issues Guidance on New Anti-Money Laundering Laws
U.S. Department of the Treasury
Office of Public Affairs
On November 20, 2001, the U.S. Department of the Treasury issued guidelines to help banks comply with two anti-money laundering provisions of the USA PATRIOT Act that becomes effective on December 25, 2001. Beginning on that date, banking institutions in the United States will be prohibited from providing correspondent accounts directly to foreign shell banks and will be required to take steps to avoid using correspondent accounts to provide banking services indirectly to such shell banks. In addition, banking institutions will be required to keep records of the owners of foreign banks to which they provide correspondent accounts and the foreign banks' agents for service of legal process.
After consultation with the federal financial regulators, the Secretary of the Treasury is publishing in the Federal Register a model certification that U.S. banking institutions may choose to use as an interim means to assist them in meeting their obligations related to dealing with foreign shell banks under 31 U.S.C. 5318(j) and recordkeeping under 31 U.S.C. 5318(k).
It is the expectation of the Department of the Treasury that banking financial institutions will accord priority to meeting their compliance obligations in connection with foreign banks for which they maintain correspondent deposit accounts or their equivalents.
The interim guidance will remain in effect until superseded by regulation or subsequent guidance. The Department of the Treasury intends to issue expeditiously a proposed rule that would also prohibit broker-dealers from maintaining accounts with foreign shell banks and from using accounts to provide banking services indirectly to such shell banks. The Department of the Treasury also intends to propose a rule requiring broker-dealers to keep records of the owners of foreign banks to which they provide accounts and the foreign banks' agents for service of legal process.
12/20/02 - Treasury Department Issues Regulations
on Compliance with USA PATRIOT Act
Washington, D.C.
December 20, 2001