Money Laundering, Terrorism & Financial Institutions
Published by Civic Research Institute,

News Releases

USA PATRIOT Act Monitor News Release 12/25/2002 3:50:59 PM Eastern Standard Time

FinCEN has extended the time by which a covered financial institution must obtain the information necessary to satisfy the requirements of sections 313(a) and 319(b) of the USA PATRIOT Act from December 26, 2002, to March 31, 2003. The final rule was printed in the Federal Register on December 24, 2002 (67 Fed. Reg. 78383). FinCEN indicates that securities firms in particular were having trouble obtaining the information in part because of language problems, in part because of the broad regulatory definition of "correspondent account," which was based on section 311 of the USA PATRIOT Act (see discussion of the breadth of the definition at 67 Fed. Reg. 60563-4, September 26, 2002) . 31 CFR 103.177(d)(1) now reads as follows:

§ 103.177 Prohibition on correspondent accounts for foreign shell banks; records
concerning owners of foreign banks and agents for service of legal process.
* * * * *
(d) Closure of correspondent accounts. (1) Accounts existing on October 28, 2002. In the case of any correspondent account that was in existence on October 28, 2002, if the covered financial institution has not obtained a certification (or recertification) from the foreign bank, or has not otherwise obtained documentation of the information required by such certification (or recertification), on or before March 31, 2003, and at least once every three years thereafter, the covered financial institution shall close all correspondent accounts with such foreign bank within a commercially reasonable time, and shall not permit the foreign bank to establish any new positions or execute any transaction through any such account, other than transactions necessary to close the account.

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