International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, Title III of P.L. 107-56 (USA PATRIOT Act)

Summary

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 Related Measures; Bank

Secrecy Act Amendments and Related Improvements; and, Currency Crimes and Protection. It

contains a list of 10 findings and 13 purposes, relating the scope of international money laundering

to the financing of global terrorism and focusing on problems in the international banking 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 money laundering and the

financing of terrorism, to provide a national mandate for subjecting to special scrutiny foreign

jurisdictions, financial institutions operating outside the United States, and classes of international

transactions or types of accounts that pose particular opportunities for criminal abuse, and to ensure

that all appropriate elements of the financial services industry are subject to appropriate 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 administrative

proceedings; others enhance criminal penalties for various types of financial crimes. Among the

provisions that have garnered the most attention are those that affect financial institutions such as

the grant of authority to the Secretary of the Treasury to impose special measures, including

requiring the closure of certain accounts with foreign banks. To impose these special measures, the

Secretary must find that a jurisdiction, class of transactions, or institution is of "primary money

laundering concern." In addition, there are provisions that specifically address and specify increased

due diligence for correspondent accounts, payable-through accounts, and private banking accounts

for non-U.S. persons as well as accounts with off-shore or foreign shell banks. There are

requirements and standards for increased cooperation by financial institutions in responding to

government requests for information and new requirements for regulations mandating standards for

identifying persons opening accounts. The legislation also requires financial institutions to institute

anti-money laundering programs, and the Secretary of the Treasury, within 3 months, to issue

regulations 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 implementing

regulations. The full impact, therefore, will emerge over the course of time. By including many

requirements for studies and reports, Congress has indicated that it is prepared to conduct fine tuning

should the need arise.