This bulletin transmits a notice of proposed rulemaking published by the U.S. Treasury Department and the Financial Crimes Enforcement Network (FinCEN) on May 30, to implement a provision of the USA PATRIOT Act. Title III of the act authorized new measures to combat money laundering and terrorist financing. Section 312 of the act furthers this goal by requiring U.S. financial institutions to establish due-diligence policies, procedures, and controls reasonably designed to detect and report money laundering through correspondent accounts and private banking accounts of non-U.S. persons. Private banking accounts involve accounts of $1 million or more for individuals that are administered by an officer, employee, or agent of a financial institution acting as a liaison between the financial institution and the direct or beneficial owner of the account.

Comments may be submitted to FinCEN on or before July 1. The statute takes effect on July 23 and applies to all correspondent accounts maintained for foreign financial institutions and all private banking accounts of non-U.S. persons, subject to the requirement, regardless of when they were opened.

The proposed rule requires financial institutions to:

• Maintain a due-diligence program that includes policies, procedures, and controls that are reasonably designed to enable financial institutions to detect and report any known or suspected money laundering conducted through correspondent accounts of foreign financial institutions;
• Take additional due-diligence measures for correspondent accounts maintained for a foreign bank operating under an offshore license or a license granted by a jurisdiction designated as "being of concern" for money laundering. Such measures include identifying the owners, conducting enhanced scrutiny of such accounts, and ascertaining whether the foreign bank provides correspondent accounts to other foreign banks, and if so, conducting appropriate related due diligence;
• Maintain a due-diligence program that includes policies, procedures, and controls that are reasonably designed to enable financial institutions to detect and report any known or suspected money laundering conducted through private banking accounts of non-U.S. persons. This would include identifying the nominal and beneficial owners of, and the source of funds deposited into, such private banking accounts; and
• Conduct enhanced scrutiny of private banking accounts of senior foreign political figures (current and former), ensuring that the methods are reasonably designed to detect and report transactions that may involve the proceeds of foreign corruption.

A link to the proposed regulation can be found on the FinCEN Web site, http://www.treas.gov/fincen/federalregister05302002.pdf.

Questions about the proposed regulation may be directed to your OCC supervisory office or the Compliance Division at (202) 874-4428.

David G. Hammaker
Deputy Comptroller for Compliance

Related Links

• 67-FR-37736