	Introduction

The USA PATRIOT ACT, Pub. L. 107-56, 15 Stat. Title III derives from H.R. Among the purposes of the legislation are: increasing the strength of U.S. measures to prevent, detect, and prosecute international money laundering and the financing of terrorism. Another aimis to provide a national mandate for subjecting to special scrutiny foreign jurisdictions, financialinstitutions operating outside the United States, and classes of international transactions or types ofaccounts that pose particular opportunities for criminal abuse. Another significant purpose of thelegislation is to ensure that all appropriate elements of the financial services industry are subject toappropriate requirements to report potential money laundering transactions to proper authorities. The legislation contains over forty separate sections, each of which is summarized in this report. Some of them are technical in the sense that they address criminal and civil judicial or administrativeproceedings; others enhance criminal penalties for various types of financial crimes. Among theprovisions that have garnered the most attention are those that affect financial institutions such assection 311' s grant of authority to the Secretary of the Treasury to impose special measures onfinancial institutions upon finding a jurisdiction, class of transactions, or institution to be of "primarymoney laundering concern" that could include opening or maintaining accounts. In addition, thereare provisions that specifically address and specify increased due diligence for correspondentaccounts, payable-through accounts, and private banking accounts for non-U.S. persons as well asaccounts with off-shore or foreign shell banks. There are requirements and standards for increasedcooperation by financial institutions in responding to government requests for information and newrequirements for regulations mandating standards for identifying persons opening accounts. Thelegislation also requires financial institutions to institute anti-money laundering programs and theSecretary of the Treasury, within 3 months, to issue regulations setting minimum requirements. Since much of the legislation requires implementing regulations, the full impact will emerge over the course of time. Because many of its provisions impose requirements for studies and reports,Congress has indicated that it is prepared to conduct fine tuning should the need arise. 312.

	International Money Laundering Abatement and Financial Anti-Terrorism Act

		SUBTITLE A-International Counter Money Laundering and Related Measures

Special Measures. Prohibition on Correspondent Accounts for Foreign Shell Banks. SUBTITLE B-BANK Secrecy Act Amendments and Related Improvements

Amendments Relating to Reporting of Suspicious Activities.
Title III, of the USA PATRIOT Act, P.L. 107-56 ( H.R. 3162 ), 115 Stat. 272 (2001), the "International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001,"contains three subtitles that deal with: International Counter Money Laundering and RelatedMeasures; Bank Secrecy Act Amendments and Related Improvements; and, Currency Crimes andProtection. It contains a list of 10 findings and 13 purposes, relating the scope of internationalmoney laundering to the financing of global terrorism and focusing on problems in the internationalbanking system that have facilitated money laundering. Among the purposes of the legislation are:increasing the strength of U.S. measures to prevent, detect, and prosecute international moneylaundering and the financing of terrorism, to provide a national mandate for subjecting to specialscrutiny foreign jurisdictions, financial institutions operating outside the United States, and classesof international transactions or types of accounts that pose particular opportunities for criminalabuse, and to ensure that all appropriate elements of the financial services industry are subject toappropriate requirements to report potential money laundering transactions to proper authorities.
The legislation contains over forty separate sections, each of which is summarized in this report. Some of them are technical in the sense that they address criminal and civil judicial or administrativeproceedings; others enhance criminal penalties for various types of financial crimes. Among theprovisions that have garnered the most attention are those that affect financial institutions such asthe grant of authority to the Secretary of the Treasury to impose special measures, includingrequiring the closure of certain accounts with foreign banks. To impose these special measures, theSecretary must find that a jurisdiction, class of transactions, or institution is of "primary moneylaundering concern." In addition, there are provisions that specifically address and specify increaseddue diligence for correspondent accounts, payable-through accounts, and private banking accountsfor non-U.S. persons as well as accounts with off-shore or foreign shell banks. There arerequirements and standards for increased cooperation by financial institutions in responding togovernment requests for information and new requirements for regulations mandating standards foridentifying persons opening accounts. The legislation also requires financial institutions to instituteanti-money laundering programs, and the Secretary of the Treasury, within 3 months, to issueregulations setting minimum requirements.
Some of the provisions of the legislation went into effect with the President's signature. Some need no implementing regulations. Much of the legislation, however, requires implementingregulations. The full impact, therefore, will emerge over the course of time. By including manyrequirements for studies and reports, Congress has indicated that it is prepared to conduct fine tuningshould the need arise.