The tragic events of Sept. 11 had a dramatic impact on our financial and political systems. One of the government’s major responses was the enactment of the USA-PATRIOT Act (act) which was approved by the House on Oct. 24, 2001 by a 356-66 vote and by the Senate on Oct. 25 by a 98-1 vote and signed by President George W. Bush on Oct. 26.
The anti-money-laundering provisions of such act include the following, a number of which must be implemented by Department of the Treasury (Treasury) orders or regulations: strengthening existing “know your customer” requirements; barring U.S. banks from doing business with foreign “shell banks” and placing restrictions and enhanced due diligence requirements, e.g. taking reasonable steps to determine the nominal owner and all beneficial owners of an account, on banks that do business with offshore banks or banks located in countries with poor money laundering controls; authorizing the government to block access to U.S. markets by financial institutions based in countries that fail to cooperate with anti-laundering efforts; and giving the Department of Justice (Justice) more enforcement powers such as seizing subject assets and bringing criminal actions against persons that should know they are dealing in financial transactions involving proceeds of terrorists acts. The main thrust of this legislation is to enable the government to shut off the flow of funds (whatever their source) to terrorist organizations and to provide for the confiscation of such funds.
