U.S. Department of the Treasury

“We are telling the world clearly that these jurisdictions are bad for business and that their financial controls cannot be trusted.  We are serious about ensuring that the international financial system not be abused by money launderers, terrorist financiers, and other criminals.

 

Our use of Section 311 today to designate two jurisdictions as primary money laundering concerns is yet another tool that we are using to ensure the international financial system is not abused by criminals.  The world stands on notice:  these jurisdictions do not take the fight against money laundering and financial crime seriously. 

 

      -Deputy Treasury Secretary Ken Dam

USA PATRIOT Act Section 311

 

Section 311 (31 U.S.C. 5318A) authorizes Treasury to designate a foreign jurisdiction, financial institution, class of transactions, or type of account as being of “primary money laundering concern,” and to impose one or more of five “special measures.”

 

Four of the special measures impose information-gathering and record-keeping requirements upon those U.S. financial institutions dealing either directly with the jurisdiction designated as one of primary money laundering concern, or dealing with those having direct dealings with the designated jurisdiction.  Under the fifth special measure, a U.S. financial institution may be prohibited from opening or maintaining in the U.S. a correspondent account or a payable-through account for a foreign financial institution if the account involves the designee. 

 

This is the first time this authority has been invoked.

 

Countries Designated:  Ukraine and Nauru

 

Ukraine

 

Treasury, in consultation with other U.S. agencies, designated Ukraine as being of “primary money laundering concern” on December 20, 2002.

 

Treasury intends to impose requirements on U.S. financial institutions based on Special Measures 1 – 4.

 

Treasury is soliciting comments from U.S. financial institutions regarding the parameters of the proposed special measure.

 

Nauru

 

Treasury, in consultation with other U.S. agencies, designated Nauru as being of “primary money laundering concern” on December 20, 2002.

The Treasury intends to impose Special Measure 5, which will prohibit U.S. financial institutions from opening or maintaining correspondent accounts with Nauru-licensed financial institutions.

 

Financial Action Task Force (FATF)

 

FATF is the premier multilateral body in the international fight against money laundering and terrorist financing.  For more information on FATF consult its website at www.fatf-gafi.org.

 

Through its Non-Cooperative Countries and Territories (NCCT) process, FATF seeks to identify and take action with respect to jurisdictions that fail to meet international anti-money laundering standards.

 

As a result of their failure to put into place sufficient anti-money laundering frameworks, FATF – through the NCCT process – has called upon its members to impose countermeasures with respect to Ukraine and Nauru.