The USA Patriot Act of 2001 instituted a handful of provisions and compliance requirements to help hinder terrorist activity in the United States. A component of these efforts included regulations to help identify money laundering and terrorist funding in US financial institutions. The Financial Crimes Enforcement Network (FinCEN) was created to help law enforcement locate financial assets and recent transactions by subjects of criminal investigations.
WHO IS FINCEN AND WHAT DO THEY DO?
Section 314(a) of the USA Patriot Act enables federal, state, local, and foreign (European Union) law enforcement agencies, through FinCEN, to reach out to over 22,000 financial institutions to locate accounts and transactions made by people or entities that may be involved in terrorism or money laundering.
FinCEN receives requests from law enforcement and upon review, sends notifications to financial institutions across the country informing them when new information has been made available. Financial institutions must then query their records for data matches. Financial institutions have two weeks from the posting date of the request to respond with any positive matches.
CONFIDENTIALITY AND INFORMATION USAGE
If a financial institution identifies any account or transaction as a match, it must respond to FinCEN. When the institution responds, member details are not provided to FinCEN, just the fact that they have a match. It is important to note that the information obtained from financial institutions through Section 314(a) provides lead information only and is not a substitute for a subpoena or legal process. To obtain documents from a financial institution that has reported a match, the law enforcement agency still has to meet the legal standards to obtain them. To ensure that Section 314(a) inquiries are being used only for appropriate cases, FinCEN requires all requesters to submit a form certifying that the investigation is based on credible evidence of terrorist financing or money laundering. And unlike the Office of Foreign Assets Control (OFAC) lists, these lists are not permanent “watch lists”– so if a member name is identified, that does not always mean that they have been convicted or indicted.
HAS THE PROGRAM MADE AN IMPACT?
To date the program has processed 2,576 requests pertinent to the following significant criminal investigations: Terrorism/Terrorist Financing: 486 cases, Money Laundering: 2,090 cases.
If you have questions about FinCEN or Section 314(a) of the USA Patriot Act, please contact Emily Borowski, our BSA Officer at [email protected], or by mail at our California Street address.