*USA PATRIOT Act of 2001 (P.L. 107-56)*
The title of the USA PATRIOT Act is an acronym for "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001." The Act was passed in response to the terrorist attacks of September 11, 2001 with the purpose of deterring and punishing terrorist acts in the United States and around the world.
The USA PATRIOT Act (the Act) originated as H.R. 2975 in the House and S. 1510 in the Senate and was signed by the President on October 26, 2001. The original Act contained 16 provisions that were to expire on December 31, 2005. Prior to expiration, all but two of these provisions were made permanent and two were extended until December 31, 2009. Opposition to this law largely centers on these two provisions, commonly referred to as the "roving wiretap" provision (allows one wiretap authorization to cover multiple points and devices) and the "library" provision (expands the authority to obtain orders compelling records and other tangible things). A third controversial provision added in 2004 and also encumbered with a sunset date, is commonly referred to as the "lone wolf" provision (allows surveillance of an individual thought to be making terrorist plans even though the person has no ties to a terrorist group). The expiration dates of these three sections have been periodically extended and the authorizations currently will expire on June 1, 2015.
- gives federal officials greater authority to track and intercept communications, both for law enforcement and foreign intelligence gathering purposes
- facilitates the federal government's collection of more information from a great number of sources
- vests the Secretary of the Treasury with regulatory powers to combat corruption of U.S. financial institutions for foreign money laundering purposes
- seeks to further close U.S. borders to foreign terrorists and to detain and remove those within U.S. borders
- creates new crimes, new penalties, and new procedural efficiencies for use against domestic and international terrorists
Of particular interest to financial institutions:
- strengthens U.S. measures to prevent, detect and prosecute international money laundering and financing of terrorism
- subjects to special scrutiny foreign jurisdictions, foreign financial institutions, and classes of international trasnactions or types of accounts that are susceptible to criminal abuse
- requires all appropriate elements of the financial services industry to report potential money laundering
- strengthens measures to prevent use of the U.S. financial system for personal gain by corrupt foreign officials and facilitates repatriation of stolen assets to the citizens of countries to whom such assets belong
Why is it relevant?
Most of the Act doesn't impact banks specifically, but Title III of the Act contains the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001 which amended the Bank Secrecy Act of 1970 (BSA) to tighten certain financial institution recordkeeping requirements.
In general, the BSA requires U.S. financial institutions to assist U.S. government agencies in detesting and preventing money laundering. (The BSA is sometimes referred to as an "anti-money laundering" law ("AML") or jointly as "BSA/AML".) Specifically, the BSA requires financial institutions to keep records of cash purchases of negotiable instruments, file reports of cash transactions exceeding $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities.
Congressional Research Service - Amendments to the Foreign Intelligence Surveillance Act (FISA) Extended Until June 15, 2015 (http://www.fas.org/sgp/crs/intel/R40138.pdf)
Congressional Research Service Reports on Intelligence and Related Topics (http://www.fas.org/sgp/crs/intel/index.html)
Financial Crimes Enforcement Network: Summary of sections that may affect financial institutions (http://www.fincen.gov/statutes_regs/patriot/index.html); Bank Secrecy Act (http://www.fincen.gov/statutes_regs/bsa/)
Justice Department informational website on the USA PATRIOT Act (http://www.justice.gov/archive/11/highlights.htm)
A. Kaylene Ray
Texas Department of Banking