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About the USA Patriot Act
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The USA Patriot Act

Important Dates:

By April 24, 2002 - every financial institution is required to have adopted policies, procedures and controls to detect and prevent money laundering.

By July 23, 2002 - every financial institution is required to have adopted special due diligence procedures for correspondent accounts and private banking accounts maintained by non-U.S. persons.

By October 26, 2002 - every financial institution is required to have implemented "know your customer" procedures for opening customers accounts.

THE UNITING AND STRENGTHENING AMERICA BY PROVIDING APPROPRIATE TOOLS REQUIRED TO INTERCEPT AND OBSTRUCT TERRORISM ACT OF 2001- The USA Patriot Act (the "Act")- was signed on October 26, 2001 to amend the Bank Secrecy Act and other legislation to require that financial institutions establish anti-money laundering programs which are intended to fight terrorism and other criminal activities.

The Act places new or additional requirements on financial institutions. Some of the new requirements include:

  • Having appropriate controls reasonably designed to detect and report instances of money laundering
  • Ensuring that U.S. correspondent accounts for foreign banks are not used to indirectly provide banking services to foreign "shell" banks- banks that have no physical presence in any country
  • Identifying accounts maintained by senior foreign political figures, their immediate families or close associates
  • Establishing procedures for identifying customers opening accounts, including procedures to verify customer identity and maintaining records of information used to verify identity
  • Designating a compliance officer, conducting ongoing employee training and establishing an independent auditing function to test the anti-money laundering programs in place

Financial Institutions and the USA Patriot Act

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