Section 311 of the USA PATRIOT Act (Section 311) grants the Secretary of the Treasury the authority, upon finding that reasonable grounds exist for concluding that a foreign jurisdiction, foreign financial institution, class of transaction, or type of account is of “primary money laundering concern,” to require domestic financial institutions and financial agencies (e.g., banks) to take certain “special measures” against the entity identified as a primary money laundering concern.
Background
The USA PATRIOT Act was signed into law on October 26, 2001. Taken as a whole, Section 311 of the USA PATRIOT Act provides the Secretary with a range of options that can be adapted to target specific money laundering and terrorist financing risks. These options provide the Treasury Department with a powerful and flexible regulatory tool to take actions to protect the U.S. financial system from specific threats.
Implementation
Once the Secretary determines that a foreign financial institution is of “primary money laundering concern,” the Secretary has the authority to require domestic financial institutions and financial agencies to take certain special measures against the entity determined to be a primary money laundering concern.
These special measures, which may be proposed and implemented by Treasury’s Financial Crimes Enforcement Network (FinCEN), range from requiring additional due diligence and special attention concerning particular account transactions among U.S. financial institutions to prohibiting the opening or maintenance of any correspondent or payable-through accounts. The following special measures can be imposed individually, jointly, in any combination and in any sequence:
- Recordkeeping on and reporting of certain transactions;
- Collection of information relating to beneficial ownership;
- Collection of information relating to certain payable-through accounts;
- Collection of information relating to certain correspondent accounts; and
- Prohibition or conditions on the opening or maintaining of correspondent or payable-through accounts
Deatiled press release from U.S. Department of the treasury : click here
For more information on actions taken under Section 311: click here