PracticeConsultingUS banks face laundering controls

US banks face laundering controls

American banks face new legislation aimed at preventing money laundering as part of the government's efforts to target financial networks that may have supported last month's terror attacks

Under the new legislation US banks will be barred from dealing with shadowy foreign ‘shell’ banks. They will have to keep better records on foreign account holders, and will be required to undertake a closer review of correspondent accounts – those accounts which give foreign banks access to US banking services, such as wire transfers and cheque clearing.

These new detailed records will help the US Treasury track foreign countries or banks deemed to present a major money-laundering threat.

In addition, the US has established its own proceeds of foreign crimes laws aimed at preventing laundering. Under the UK’s own Proceeds of Crime Bill a Criminal Assets Recovery Agency will have the power to confiscate goods and money thought to be the proceeds of laundering.

Other legislation introduced across the pond includes a requirement by the Treasury to issue rules within nine months forcing securities broker-dealers to begin filing reports with regulators on large, suspicious currency transactions as banks already do.

A similar anti-money laundering bill also cleared the house of representatives Financial Services Committee on Thursday and could see a vote in the full House as soon as Friday. The Bush administration has said it supports the efforts.

Senate Banking Committee chairman Paul Sarbanes told Reuters: ‘Money laundering is the transmission belt that gives terrorists the resources to carry out their campaigns of carnage.’

He said these measures were aimed at ending this.

Links

Minister outlines financial war on terror

FATF to hold terror finance egm

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