Alerts

Summary of Final Rule Regarding Enhanced Due Diligence for Correspondent Accounts Under Section 312 of the PATRIOT Act

September 26, 2007

On August 8, 2007, the U.S. Treasury Department (“Treasury”) and the Financial Crimes Enforcement Network (“FinCEN”) issued a final rule ("EDD Final Rule") regarding section 312 of the USA PATRIOT Act of 2001 (the "PATRIOT Act" or "Act"), which addresses the requirements for special or enhanced due diligence programs ("EDD") for correspondent accounts for certain non-United States banks. The issuance of the final rule resolved the only open item remaining in the implementation of the Final 312 Rule issued by Treasury and FinCEN on December 21, 2005. The Final 312 Rule had set forth the requirements regarding due diligence and enhanced due diligence programs for private banking accounts and due diligence for correspondent accounts for non-United States persons and entities. At that time, having identified significant issues with respect to the requirements for enhanced due diligence for correspondent accounts which it previously issued ("Initial Proposed Rule"), Treasury issued a new Proposed Rule ("EDD Proposed Rule") regarding these EDD requirements. The August 8, 2007 EDD Final Rule finalized the provisions of the EDD Proposed Rule.