A raft of amendments to the 2001 USA Patriot Act mark another chapter in the US government’s current legislative assault on money laundering...

A raft of amendments to the 2001 USA Patriot Act mark another chapter in the US government’s current legislative assault on money laundering. Private banks seem to have been earmarked for special attention.

The US Treasury Department’s Financial Crimes Enforcement Network issued definitive new rules last Friday requiring banks, securities dealers and other financial institutions to set in place procedures to detect money laundering or other dubious transactions in accounts they maintain for foreign customers.

The US government is particularly keen to use the anti-money laundering provisions to counter terrorist and drug-related crime.

The Patriot Act required rules governing correspondent accounts and private banking. These now require US-based financial institutions to conduct due diligence on these accounts and as a minimum they must assess the money laundering risks posed by these accounts, put procedures in place to detect money laundering and periodically review activity in these accounts.

Accounts held by foreign senior political officials have been singled out by the regulations as requiring close scrutiny. Family members and close associates of senior political figures must also be closely monitored under the regulations.

The new rules go into effect 90 days after they are published in the federal register.

US financial institutions had previously been operating under interim regulations.