Anti-money laundering guidelines came into prominence globally after the September 11, 2001 attacks and the subsequent enactment of the USA Patriot Act.
While aimed at giving the government new powers in the war on terrorism, the Patriot Act imposes significant requirements on broker-dealers and other financial institutions well beyond traditional notions of anti-money laundering compliance. The rules implementing the Patriot Act are numerous. The long lasting implication for broker-dealers, banks and other financial institutions is that they will be required to devote more resources than ever before to anti-money laundering efforts.
The Patriot Act requires anti-money laundering compliance programs, suspicious activity reporting, verification of new accounts, certain recordkeeping for “correspondent accounts” with foreign banks, special due diligence for correspondent and private banking accounts, and prohibits correspondent accounts with foreign shell banks.
Today, most financial institutions globally, and many non-financial institutions, are required to identify and report transactions of a suspicious nature to the financial intelligence unit in the respective country. The Patriot Act provisions are far reaching and will require new levels of compliance by all financial institutions. The securities industry has had a long history of working with U.S. officials to counter money laundering, and is committed to continuing that effort.
