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Casinos, retail stores, online financial companies, securities firms, and money-transfer businesses. It’s not just banks anymore that are worried about money-laundering regulations. After Sept. 11, an expanding list of clients needs help navigating the new regulations in the USA Patriot Act. With compliance deadlines already past for some businesses and looming over others, financial regulation lawyers are fielding phone calls from worried clients wondering if and how the law applies to them. Banking lawyers are providing guidance and reviewing policies for a new crop of companies that now must monitor and report on various financial transactions under the anti-terrorism law passed last fall. “The banking industry has been subject to many of the requirements that are imposed by the act for many years,” says William Sweet Jr., a partner at the Washington, D.C., office of Skadden, Arps, Slate, Meagher & Flom who has represented Citigroup Inc., SunTrust Banks Inc., and BankBoston. “Most of the other industries have had very little in the way of previous obligations.” Skadden Arps, like many other firms, has been setting up crash courses for their clients, hosting two large seminars on the issue at the firm itself and then running numerous private sessions with banks, broker-dealers, and securities companies on what the Patriot Act means for them. The law has given lawyers who specialize in banking regulation and money laundering a whole new client base. Clients who may have worked with a law firm in mergers and acquisitions or in Securities and Exchange Commission compliance are now being steered to the banking experts for help with the Patriot Act rules. Congress enacted the USA Patriot Act in October, giving the government a bag of new tools to fight terrorism. The financial provisions were designed to stymie the free flow of funds to and from terrorist networks. It was clear to banks from the day the Patriot Act was proposed that they needed to follow the legislation closely. Trade groups such as the American Bankers Association supported the bill, and since then have closely watched the Treasury Department’s implementation of it. But it was also clear that the banking industry was one that would have to do the least to adapt. A few provisions — such as rules for information sharing between the government and financial institutions or those on domestic banks’ financial relationships with foreign banks — would create some changes or increase paperwork. But for the most part, banks already had pretty tough regulations in place and regular examinations on their compliance. “For some that are in nonbank industries, this is a real change,” says John Byrne, senior counsel with the American Bankers Association. “For us, however, with 20 years of experience in dealing with anti-money laundering requirements, there is less of a challenge.” It was in the months after the Patriot Act was passed that law firms started fielding calls from other clients — the new class of financial institutions that will have to track and report a significant new amount of information to the federal government. “It wasn’t immediately apparent to people who was covered by it and what the Patriot Act would require,” says Judith Lee, a partner at Gibson, Dunn & Crutcher who specializes in international trade and customs law. Just about every firm in town with a financial services practice is now developing an expertise in Patriot Act compliance. And those firms are dealing with a motley assortment of businesses-hedge funds, venture capital firms, credit card companies, casinos, and retail stores that sell money orders-that are facing new reporting requirements. The exact contours of the law are still emerging. Between now and October, the Treasury Department will issue proposed and final rules and various interpretations of what the law requires. Lawyers in private practice are managing the flow of information between the Treasury Department and businesses. In some cases, the lawyers are writing or reviewing comment letters that companies are sending, asking for clarifications on definitions of transactions, or expressing concern about the impact of the way the Treasury Department plans to interpret the law. In other cases, lawyers are instructing the Treasury Department in the real-world operations of various institutions. “I am getting calls from senior government lawyers who say, ‘I know you have this client who does X. Can you tell me more about about how they do cross-border transactions? I am trying to educate myself on it,’ ” says Mark Plotkin, a partner at Covington & Burling, who has represented large banks such as Bank of America, Bank One, and FleetBoston. Few see Patriot Act compliance emerging as a stand-alone practice. Rather, firms with financial institution practices will offer it as part of a full-service regulatory practice. “I think where the permanent practice is is on the enforcement side,” says Brian Smith, a partner at Mayer, Brown, Rowe & Maw. “Nobody has yet been brought up on charges under the new law. But that is going to happen. There will be significant and very time-intensive and very sophisticated investigations which will lead to enforcement activities.” As for the increased work in helping clients navigate new financial disclosure laws, nobody is complaining. L. Richard Fischer, a partner in the Washington, D.C., office of Morrison & Foerster, says the only thing he is missing out on is rest. “But I have told people for a long time that I think sleep is overrated,” says Fischer. “When the train is going by, you can sit back and watch it or get on. And this is a train that you don’t want to miss.”

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