Inactive Financial Institution Letters
Final Regulation Implementing Section 312 of USA PATRIOT Act
December 28, 2005
The Financial Crimes Enforcement
Network (FinCEN) has announced the final regulation implementing the
international correspondent banking provisions and the private banking
provisions of Section 312 of the USA PATRIOT Act. Concurrently, FinCEN has
released a further notice of proposed rulemaking on one key issue regarding
correspondent banking. To view the final and proposed rules, along with a press
release and fact sheet from FinCEN, visit FinCEN's Web site at http://www.fincen.gov/section312.pdf.
- FinCEN released the final regulation implementing Section 312 of the USA
PATRIOT Act on December 21, 2005. Upon its effective date, the final
rule will replace the interim final rule imposed in 2002.
- The final regulation takes effect within 90 days from the date the
regulation is published in the Federal Register (anticipated by
January 4, 2006) for new accounts opened by U.S. financial institutions
and 270 days from that date for existing accounts.
- The final rule requires certain U.S. financial institutions to apply due
diligence to correspondent accounts maintained for certain foreign
financial institutions and private banking accounts maintained for
- With respect to correspondent banking, generally, the rule establishes
the scope of U.S. financial institutions to which the rule applies and
outlines general due-diligence requirements to mitigate exposure to
potential money-laundering activities.
- With respect to private banking accounts, the rule outlines the due
diligence and enhanced due diligence that is required and further
clarifies duties with respect to accounts maintained for senior foreign
- Simultaneously, FinCEN has announced a related notice of proposed
rulemaking involving one key provision of Section 312 that requires
enhanced due diligence for correspondent accounts maintained for certain
- FinCEN has provided a press release, the final regulation, the notice of
proposed rulemaking for enhanced due diligence procedures related to
correspondent banking activities, and an informative fact sheet on its
Web site at http://www.fincen.gov/section312.pdf.
- Please distribute this information to the appropriate personnel in your
FDIC-Supervised Banks (Commercial and Savings)
Chief Executive Officer
BSA Compliance Officer
Secrecy Act/Anti-Money Laundering Programs
Gold, Counsel in the Legal Division, or Kevin J. Hutchison, Review
Examiner in the Division of Supervision and Consumer Protection, at SASFIL@FDIC.gov or (202) 898-3673.
Financial Institution Letters (FILs) may be accessed from the FDIC's Web
site at www.fdic.gov/news/news/financial/2005/index.html.
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies of FDIC FILs may be obtained through the FDIC's Public
Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434
(1-877-275-3342 or (703) 562-2200).