Money Laundering, Terrorism & Financial Institutions
Published by Civic Research Institute,
USA PATRIOT Act Monitor News Release 12-24-2002 12/24/2002 12:26:09 PM Eastern Standard Time

Treasury has, for the first time, invoked its authority under section 311 of the USA PATRIOT Act, designating the Ukraine and Nauru as being of "primary money laundering concern." The cover release ("Fact Sheet Regarding the Treasury Department's Use of Sanctions Authorized under Section 311 of the USA PATRIOT Act," available in the archives of Treasury press releases, as of 12-24-2002 at states: "The world stands on notice: these jurisdictions do not take the fight against money laundering and financial crime seriously." Under section 311, Treasury may impose "special measures" on U.S. financial institutions dealing either directly with the jurisdiction designated as one of primary money laundering concern, or dealing with those having direct dealings with the designated jurisdiction. Under the fifth of these special measures, a U.S. financial institution may be prohibited from opening or maintaining in the U.S. a correspondent account or a payable-through account for a foreign financial institution if the account involves the designee. Treasury proposes to impose this special measure, but is soliciting comments from U.S. financial institutions regarding the parameters of the proposed special measure. Treasury's action follows that of the Financial Action Task Force (FATF), which has called on its members to impose countermeasures regarding the Ukraine and Nauru as a result of the failure of these jurisdictions to put into place sufficient anti-money laundering frameworks. On December 20, 2002 (, the FATF announced that it was imposing counter-measures to the Ukraine, noting that although the country had, on December 7, 2002, enacted a "Law on Prevention and Counteraction of the Legalization (Laundering) of the Proceeds from Crime," this legislation did not address the main deficiencies identified by the FATF in its June 2001 review of the Ukraine's anti-money laundering program." More on these developments will be described in the January 2003 issue of the USA PATRIOT Act Monitor.


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