FROM THE OFFICE OF PUBLIC AFFAIRS August 24, 2004 Treasury Employs USA PATRIOT Act Authorities to Designate Two In another step to protect the integrity of the "We continue to use our authority under Section 311 of the USA PATRIOT Act to protect the In conjunction with this designation, Treasury's Financial Crimes Enforcement Network issued two Notices of Proposed Rulemaking (NPRM) imposing a special measure against the two banks that would prohibit covered financial institutions from establishing, maintaining, administering or managing in the any correspondent account in the First Merchant Bank, which operates out of offices in Lefkosa/Nicosia, "TRNC," is a privately owned commercial bank specializing in the provision of commercial and investment banking services to individual and corporate offshore customers. First Merchant Bank is licensed as an offshore bank in the "TRNC," a jurisdiction with inadequate anti-money laundering controls, particularly those applicable to the jurisdiction's offshore sector. First Merchant Bank is also involved in the marketing and sale of fraudulent financial products and services. The institution has been used as a conduit for the laundering of fraudulently obtained funds. In addition, the individuals who own, control, and operate First Merchant Bank have links with organized crime and apparently have used First Merchant Bank to launder criminal proceeds. Infobank is a privately owned Belarusian bank that is licensed to engage in foreign exchange transactions. Infobank is being designated today for its complicity in laundering funds derived from fraudulent transactions involving Title III of the PATRIOT Act amends the anti-money laundering provisions of the Bank Secrecy Act (BSA) to promote the prevention, detection and prosecution of international money laundering and the financing of terrorism. Section 311 authorizes the Secretary of the Treasury – in consultation with DOJ, the State Department and appropriate Federal financial regulators – to designate a foreign jurisdiction, institution, class of transactions or type of account to be of "primary money laundering concern" and to require U.S. financial institutions to take certain "special measures" against the designee. These special measures range from enhanced recordkeeping or reporting obligations to a requirement to terminate correspondent banking relationships with the designated entity. The measures are meant to provide Treasury with a range of options to most effectively target specific money laundering and terrorist financing Most recently, the Treasury Department used the authority of Section 311 to designate the Commercial Bank of Syria (CBS) and its subsidiary Syrian Lebanese Commercial Bank and issued a notice of proposed rule-making that would prohibit any U.S. bank, broker-dealer, futures commission merchant, introducing broker or mutual fund from opening or maintaining a correspondent account for or on behalf of CBS. Correspondent accounts involving CBS would have to be terminated without exception. Last November Treasury also authorized Section 311 against two Burmese banks, Myanmar Mayflower Bank and Asia Wealth Bank, two banks that within that jurisdiction that are heavily implicated in facilitating the notorious drug trafficking organizations in -30-
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