USA Patriot Act

Question 1

Section 311 - 5 Special Measures US banks might need to follow in respect to a primary ML concern

Answer 1

1. Keep records and/or file reports on certain transactions (incl. description of txn, identities and bene owners
2. Obtain info on bene owner of any account in the US by a foreign person
3. Identify customers who are using PTAs
4. Identify customers permitted to use a foreign bank’s USD correspondent account
5. Close PTAs or Correspondent accts.

Question 2

Section 312 - general requirement

Answer 2

S312 requires due dilligence and EDD for foreign correpsondent accounts and PB for non US people

Question 3

Section 312 - requirements of the due dilligence program

Answer 3

1. Determine whether EDD is neccessary
2. Assess the ML risk presented by a corresp bkg account
3. Apply risk based procedures / controls reasonably designed to detect and reposrt suspected ML

Question 4

Section 312 - to which banks does EDD apply?

Answer 4

• Banks operating under offshore license
• Banks operating under a foreign country designated as non- cooperative
• Banks operating under a license issues by a foreign country designated as warranting special measures under section 311

Question 5

Section 312 - what does EDD need to include?

Answer 5

• Ontaining information re the banks AML program
• Monitoring transactions
• Ontaining info on account being used as PTA
• Determine DCB
• determine owners with more than 10% voting rights (if bank is not publiclybtraded)

Question 6

Section 312 - What is a PB account

Answer 6

1. Min deposit USD 1m
2. Non US person
3. assigned to a bank employee acting as liaison with the non Us person

Question 7

Section 312 - What does US bank need to do with regards to covered PB accounts?

Answer 7

• Ascertain identity of bene owners
• Ascertain if anyone is a senior political figure
• Ascertain source and intended use of funds
• Monitor account to ensure the activity is consistent

Question 8

Section 313 - General requirement

Answer 8

Prohibtion on correspondent account for shell banks

Question 9

Section 313 - how to comply?

Answer 9

Foreign banks must certify at least every 3 years that they are not shell banks and that they don’t allow shell banks access to CB account

Question 10

Section 314(a)

Answer 10

Enables law enforcement agencies through FinCen to access 43,000 points of contact at 22,000 FIs to locate accounts and transactions

Question 11

Section 314(b)

Answer 11

Allows information sharing between FIs

Question 12

Section 319(a)

Answer 12

Allows US gvnmt to seize equivalent funds in a USD CB account

Question 13

Section 319(b) - 3 items

Answer 13

• Enables law enforcement to request within 5 days info on AML compliance or a custoemr of an FI
• Secretary of Treasury or Attorney General can subpoena records of a foreign bank that maintains a CB account (incl. records held offshore), if non compliant, AG can order CB account to be closed
• Foreign FIs must designate a registered agent to receive subpoenas