• Military Menu                       

• Introduction
• Systems
• Facilities
• Agencies
• Industry
• Operations
• Countries
• Hot Documents
• News
• Reports
• Policy
• Budget
• Congress
• Links

• WMD
• Intelligence
• Homeland Security
• Space

Text: U.S. Issues Guidance on New Anti-Money Laundering Laws

(New measures target use of shell banks to launder money) (520)
The U.S. Treasury has issued guidelines to help banks comply with two
anti-money laundering provisions of the USA PATRIOT Act that becomes
effective on December 25.
The law was passed in the wake of the September 11 terrorist attacks
against the United States, and aims to combat terrorism on a number of
fronts, including terrorists' use of international financial networks
to fund their activities.
Under the law, banking institutions in the United States may no longer
directly provide correspondent accounts to foreign shell banks. The
law also requires banks to take steps to avoid using correspondent
accounts to provide banking services indirectly to such shell banks,
the Treasury Department said in a November 20 news release.
Correspondent accounts allow foreign banks to use U.S. banking
services, and thus give their clients direct access to the U.S.
financial system. Following is the text of the news release:
(begin text)
U.S. DEPARTMENT OF THE TREASURY
FROM THE OFFICE OF PUBLIC AFFAIRS
FOR IMMEDIATE RELEASE
November 20, 2001
Treasury Announces Interim Guidance on Compliance with the USA PATRIOT
Act
The Treasury Department today announced interim guidance for banking
institutions on how they may comply with two anti-money laundering
provisions of the USA PATRIOT Act that become 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 Treasury Department 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. 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.
A link to the interim guidance can be found on the Treasury
Department's web site www.treas.gov/press/
(end text)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)