31 U.S.C. § 5318A : US Code - Section 5318A: Special measures for jurisdictions, financial institutions, international transactions, or types of accounts of primary money laundering concern

Search 31 U.S.C. § 5318A : US Code - Section 5318A: Special measures for jurisdictions, financial institutions, international transactions, or types of accounts 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) (!1) 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, class of transactions, or type of
account; 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, class of transactions, or
type of account 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 or subsection (i) or (j) of section 5318 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.
(f) Classified Information. - In any judicial review of a finding
of the existence of a primary money laundering concern, or of the
requirement for 1 or more special measures with respect to a
primary money laundering concern, made under this section, if the
designation or imposition, or both, were based on classified
information (as defined in section 1(a) of the Classified
Information Procedures Act (18 U.S.C. App.),(!2) such information
may be submitted by the Secretary to the reviewing court ex parte
and in camera. This subsection does not confer or imply any right
to judicial review of any finding made or any requirement imposed
under this section.