From the U.S. Code Online via GPO Access
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[Laws in effect as of January 7, 2003]
[Document not affected by Public Laws enacted between
January 7, 2003 and February 12, 2003]
[CITE: 31USC5318A]
TITLE 31--MONEY AND FINANCE
SUBTITLE IV--MONEY
CHAPTER 53--MONETARY TRANSACTIONS
SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS
Sec. 5318A. Special measures for jurisdictions, financial
institutions, or international transactions of primary money
laundering concern
(a) International Counter-Money Laundering Requirements.--
(1) In general.--The Secretary of the Treasury may require
domestic financial institutions and domestic financial agencies to
take 1 or more of the special measures described in subsection (b)
if the Secretary finds that reasonable grounds exist for concluding
that a jurisdiction outside of the United States, 1 or more
financial institutions operating outside of the United States, 1 or
more classes of transactions within, or involving, a jurisdiction
outside of the United States, or 1 or more types of accounts is of
primary money laundering concern, in accordance with subsection (c).
(2) Form of requirement.--The special measures described in--
(A) subsection (b) may be imposed in such sequence or
combination as the Secretary shall determine;
(B) paragraphs (1) through (4) of subsection (b) may be
imposed by regulation, order, or otherwise as permitted by law;
and
(C) subsection (b)(5) may be imposed only by regulation.
(3) Duration of orders; rulemaking.--Any order by which a
special measure described in paragraphs (1) through (4) of
subsection (b) is imposed (other than an order described in section
5326)--
(A) shall be issued together with a notice of proposed
rulemaking relating to the imposition of such special measure;
and
(B) may not remain in effect for more than 120 days, except
pursuant to a rule promulgated on or before the end of the 120-
day period beginning on the date of issuance of such order.
(4) Process for selecting special measures.--In selecting which
special measure or measures to take under this subsection, the
Secretary of the Treasury--
(A) shall consult with the Chairman of the Board of
Governors of the Federal Reserve System, any other appropriate
Federal banking agency, as defined in section 3 of the Federal
Deposit Insurance Act, the Secretary of State, the Securities
and Exchange Commission, the Commodity Futures Trading
Commission, the National Credit Union Administration Board, and
in the sole discretion of the Secretary, such other agencies and
interested parties as the Secretary may find to be appropriate;
and
(B) shall consider--
(i) whether similar action has been or is being taken by
other nations or multilateral groups;
(ii) whether the imposition of any particular special
measure would create a significant competitive disadvantage,
including any undue cost or burden associated with
compliance, for financial institutions organized or licensed
in the United States;
(iii) the extent to which the action or the timing of
the action would have a significant adverse systemic impact
on the international payment, clearance, and settlement
system, or on legitimate business activities involving the
particular jurisdiction, institution, or class of
transactions; and
(iv) the effect of the action on United States national
security and foreign policy.
(5) No limitation on other authority.--This section shall not be
construed as superseding or otherwise restricting any other
authority granted to the Secretary, or to any other agency, by this
subchapter or otherwise.
(b) Special Measures.--The special measures referred to in
subsection (a), with respect to a jurisdiction outside of the United
States, financial institution operating outside of the United States,
class of transaction within, or involving, a jurisdiction outside of the
United States, or 1 or more types of accounts are as follows:
(1) Recordkeeping and reporting of certain financial
transactions.--
(A) In general.--The Secretary of the Treasury may require
any domestic financial institution or domestic financial agency
to maintain records, file reports, or both, concerning the
aggregate amount of transactions, or concerning each
transaction, with respect to a jurisdiction outside of the
United States, 1 or more financial institutions operating
outside of the United States, 1 or more classes of transactions
within, or involving, a jurisdiction outside of the United
States, or 1 or more types of accounts if the Secretary finds
any such jurisdiction, institution, or class of transactions to
be of primary money laundering concern.
(B) Form of records and reports.--Such records and reports
shall be made and retained at such time, in such manner, and for
such period of time, as the Secretary shall determine, and shall
include such information as the Secretary may determine,
including--
(i) the identity and address of the participants in a
transaction or relationship, including the identity of the
originator of any funds transfer;
(ii) the legal capacity in which a participant in any
transaction is acting;
(iii) the identity of the beneficial owner of the funds
involved in any transaction, in accordance with such
procedures as the Secretary determines to be reasonable and
practicable to obtain and retain the information; and
(iv) a description of any transaction.
(2) Information relating to beneficial ownership.--In addition
to any other requirement under any other provision of law, the
Secretary may require any domestic financial institution or domestic
financial agency to take such steps as the Secretary may determine
to be reasonable and practicable to obtain and retain information
concerning the beneficial ownership of any account opened or
maintained in the United States by a foreign person (other than a
foreign entity whose shares are subject to public reporting
requirements or are listed and traded on a regulated exchange or
trading market), or a representative of such a foreign person, that
involves a jurisdiction outside of the United States, 1 or more
financial institutions operating outside of the United States, 1 or
more classes of transactions within, or involving, a jurisdiction
outside of the United States, or 1 or more types of accounts if the
Secretary finds any such jurisdiction, institution, or transaction
or type of account to be of primary money laundering concern.
(3) Information relating to certain payable-through accounts.--
If the Secretary finds a jurisdiction outside of the United States,
1 or more financial institutions operating outside of the United
States, or 1 or more classes of transactions within, or involving, a
jurisdiction outside of the United States to be of primary money
laundering concern, the Secretary may require any domestic financial
institution or domestic financial agency that opens or maintains a
payable-through account in the United States for a foreign financial
institution involving any such jurisdiction or any such financial
institution operating outside of the United States, or a payable
through account through which any such transaction may be conducted,
as a condition of opening or maintaining such account--
(A) to identify each customer (and representative of such
customer) of such financial institution who is permitted to use,
or whose transactions are routed through, such payable-through
account; and
(B) to obtain, with respect to each such customer (and each
such representative), information that is substantially
comparable to that which the depository institution obtains in
the ordinary course of business with respect to its customers
residing in the United States.
(4) Information relating to certain correspondent accounts.--If
the Secretary finds a jurisdiction outside of the United States, 1
or more financial institutions operating outside of the United
States, or 1 or more classes of transactions within, or involving, a
jurisdiction outside of the United States to be of primary money
laundering concern, the Secretary may require any domestic financial
institution or domestic financial agency that opens or maintains a
correspondent account in the United States for a foreign financial
institution involving any such jurisdiction or any such financial
institution operating outside of the United States, or a
correspondent account through which any such transaction may be
conducted, as a condition of opening or maintaining such account--
(A) to identify each customer (and representative of such
customer) of any such financial institution who is permitted to
use, or whose transactions are routed through, such
correspondent account; and
(B) to obtain, with respect to each such customer (and each
such representative), information that is substantially
comparable to that which the depository institution obtains in
the ordinary course of business with respect to its customers
residing in the United States.
(5) Prohibitions or conditions on opening or maintaining certain
correspondent or payable-through accounts.--If the Secretary finds a
jurisdiction outside of the United States, 1 or more financial
institutions operating outside of the United States, or 1 or more
classes of transactions within, or involving, a jurisdiction outside
of the United States to be of primary money laundering concern, the
Secretary, in consultation with the Secretary of State, the Attorney
General, and the Chairman of the Board of Governors of the Federal
Reserve System, may prohibit, or impose conditions upon, the opening
or maintaining in the United States of a correspondent account or
payable-through account by any domestic financial institution or
domestic financial agency for or on behalf of a foreign banking
institution, if such correspondent account or payable-through
account involves any such jurisdiction or institution, or if any
such transaction may be conducted through such correspondent account
or payable-through account.
(c) Consultations and Information To Be Considered in Finding
Jurisdictions, Institutions, Types of Accounts, or Transactions To Be of
Primary Money Laundering Concern.--
(1) In general.--In making a finding that reasonable grounds
exist for concluding that a jurisdiction outside of the United
States, 1 or more financial institutions operating outside of the
United States, 1 or more classes of transactions within, or
involving, a jurisdiction outside of the United States, or 1 or more
types of accounts is of primary money laundering concern so as to
authorize the Secretary of the Treasury to take 1 or more of the
special measures described in subsection (b), the Secretary shall
consult with the Secretary of State and the Attorney General.
(2) Additional considerations.--In making a finding described in
paragraph (1), the Secretary shall consider in addition such
information as the Secretary determines to be relevant, including
the following potentially relevant factors:
(A) Jurisdictional factors.--In the case of a particular
jurisdiction--
(i) evidence that organized criminal groups,
international terrorists, or both, have transacted business
in that jurisdiction;
(ii) the extent to which that jurisdiction or financial
institutions operating in that jurisdiction offer bank
secrecy or special regulatory advantages to nonresidents or
nondomiciliaries of that jurisdiction;
(iii) the substance and quality of administration of the
bank supervisory and counter-money laundering laws of that
jurisdiction;
(iv) the relationship between the volume of financial
transactions occurring in that jurisdiction and the size of
the economy of the jurisdiction;
(v) the extent to which that jurisdiction is
characterized as an offshore banking or secrecy haven by
credible international organizations or multilateral expert
groups;
(vi) whether the United States has a mutual legal
assistance treaty with that jurisdiction, and the experience
of United States law enforcement officials and regulatory
officials in obtaining information about transactions
originating in or routed through or to such jurisdiction;
and
(vii) the extent to which that jurisdiction is
characterized by high levels of official or institutional
corruption.
(B) Institutional factors.--In the case of a decision to
apply 1 or more of the special measures described in subsection
(b) only to a financial institution or institutions, or to a
transaction or class of transactions, or to a type of account,
or to all 3, within or involving a particular jurisdiction--
(i) the extent to which such financial institutions,
transactions, or types of accounts are used to facilitate or
promote money laundering in or through the jurisdiction;
(ii) the extent to which such institutions,
transactions, or types of accounts are used for legitimate
business purposes in the jurisdiction; and
(iii) the extent to which such action is sufficient to
ensure, with respect to transactions involving the
jurisdiction and institutions operating in the jurisdiction,
that the purposes of this subchapter continue to be
fulfilled, and to guard against international money
laundering and other financial crimes.
(d) Notification of Special Measures Invoked by the Secretary.--Not
later than 10 days after the date of any action taken by the Secretary
of the Treasury under subsection (a)(1), the Secretary shall notify, in
writing, the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban Affairs
of the Senate of any such action.
(e) Definitions.--Notwithstanding any other provision of this
subchapter, for purposes of this section and subsections (i) and (j) of
section 5318, the following definitions shall apply:
(1) Bank definitions.--The following definitions shall apply
with respect to a bank:
(A) Account.--The term ``account''--
(i) means a formal banking or business relationship
established to provide regular services, dealings, and other
financial transactions; and
(ii) includes a demand deposit, savings deposit, or
other transaction or asset account and a credit account or
other extension of credit.
(B) Correspondent account.--The term ``correspondent
account'' means an account established to receive deposits from,
make payments on behalf of a foreign financial institution, or
handle other financial transactions related to such institution.
(C) Payable-through account.--The term ``payable-through
account'' means an account, including a transaction account (as
defined in section 19(b)(1)(C) of the Federal Reserve Act),
opened at a depository institution by a foreign financial
institution by means of which the foreign financial institution
permits its customers to engage, either directly or through a
subaccount, in banking activities usual in connection with the
business of banking in the United States.
(2) Definitions applicable to institutions other than banks.--
With respect to any financial institution other than a bank, the
Secretary shall, after consultation with the appropriate Federal
functional regulators (as defined in section 509 of the Gramm-Leach-
Bliley Act), define by regulation the term ``account'', and shall
include within the meaning of that term, to the extent, if any, that
the Secretary deems appropriate, arrangements similar to payable-
through and correspondent accounts.
(3) Regulatory definition of beneficial ownership.--The
Secretary shall promulgate regulations defining beneficial ownership
of an account for purposes of this section and subsections (i) and
(j) of section 5318. Such regulations shall address issues related
to an individual's authority to fund, direct, or manage the account
(including, without limitation, the power to direct payments into or
out of the account), and an individual's material interest in the
income or corpus of the account, and shall ensure that the
identification of individuals under this section does not extend to
any individual whose beneficial interest in the income or corpus of
the account is immaterial.
(4) Other terms.--The Secretary may, by regulation, further
define the terms in paragraphs (1), (2), and (3), and define other
terms for the purposes of this section, as the Secretary deems
appropriate.
(Added Pub. L. 107-56, title III, Sec. 311(a), Oct. 26, 2001, 115 Stat.
298.)
References in Text
Section 3 of the Federal Deposit Insurance Act, referred to in
subsec. (a)(4)(A), is classified to section 1813 of Title 12, Banks and
Banking.
Section 19(b)(1)(C) of the Federal Reserve Act, referred to in
subsec. (e)(1)(C), is classified to section 461(b)(1)(C) of Title 12,
Banks and Banking.
Section 509 of the Gramm-Leach-Bliley Act, referred to in subsec.
(e)(2), is classified to section 6809 of Title 15, Commerce and Trade.
Termination Date
Amendments by title III of Pub. L. 107-56 to terminate effective on
and after the first day of fiscal year 2005 if Congress enacts a joint
resolution that such amendments no longer have the force of law, see
section 303 of Pub. L. 107-56, set out as a Four-Year Congressional
Review; Expedited Consideration note under section 5311 of this title.
``Federal Functional Regulator'' Includes Commodity Futures Trading
Commission
For purposes of Pub. L. 107-56 and any amendment by Pub. L. 107-56,
the term ``Federal functional regulator'' includes the Commodity Futures
Trading Commission, see section 321(c) of Pub. L. 107-56, set out as a
note under section 5318 of this title.
Section Referred to in Other Sections
This section is referred to in sections 5318, 5321, 5322 of this
title.