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

USA PATRIOT Act Monitor News Release: Ukraine Designation Lifted
4/16/2003 8:23:40 AM Eastern Daylight Time

Treasury and FinCEN have rescinded their designation of Ukraine as of primary money laundering concern under section 311 of the USA PATRIOT Act. (US Treasury News Release via email 4/15/2003) This reverses the designation made in December, when Treasury for the first time invoked the designation authority provided by the Act. (See USA PATRIOT Act Monitor News Release 12/24/2002.) Treasury indicates that it is rescinding the designation because of "important steps" the country has taken to address deficiencies, including amending its anti-money laundering laws and a pledge to implement the changes. Ukraine does remain on the FATF's non-cooperative countries and territories (NCCT) list. In February, however, the FATF withdrew additional countermeasures as to Ukraine and indicated that the country would be removed from the NCCT list if it implemented its counter-money laundering legislation (see

As to Nauru, Treasury and FinCEN have announced a notice of proposed rulemaking, to appear later this week in the Federal Register, that would require U.S. financial institutions to terminate correspondent accounts involving Nauru financial institutions. Treasury had solicited comments on such a measure in its December release. U.S. financial institutions will be prohibited from maintaining correspondent accounts maintained for Nauru financial institutions, as well as correspondent accounts maintained for other foreign banks used to provide banking services directly to Nauru financial institutions. The release states: "With respect to services provided to Nauru financial institutions indirectly, the proposed rule does not impose additional due diligence requirements on U.S. financial institutions. Instead, the proposed rule relies on existing due diligence obligations and requires termination of such correspondent accounts only if the U.S. institution has actual knowledge that the accounts are being used to provide services to Nauru financial institutions indirectly. U.S. financial institutions affected by this proposed rule include depository institutions, securities broker-dealers, mutual funds, and futures commission merchants."


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