Publications

Summary of Final Rule Regarding Due Diligence for Foreign Accounts Under §312 of the PATRIOT Act and Proposed Rule Re: Enhanced Due Diligence for Correspondent Accounts

July/August 2006
Futures & Derivatives Law

On December 21, 2005, the United States Treasury Department (Treasury) and the Financial Crimes Enforcement Network (FinCEN) issued a Final Rule regarding § 312 of the USA PATRIOT Act of 2001, which sets forth the requirements regarding due diligence and special due diligence programs (often referred to as “enhanced due diligence” or EDD) for private banking accounts and due diligence for correspondent accounts for non-United States persons and entities. At the same time, having identified significant issues with respect to the requirements for enhanced due diligence for correspondent accounts set forth in its previously issued Proposed Rule (Initial Proposed Rule), it issued a new Proposed Rule (EDD Proposed Rule) regarding these EDD requirements.3 The Final Rule took effect on July 5, 2006 for new accounts established on or after July 5, 2006, and will take effect for existing accounts on October 2, 2006. Subsequent to issuance of the Final Rule, FinCEN issued additional guidance with respect to implementation of the Final Rule.