Editing Patriot Act (section)

=== Title III: Anti-money-laundering to prevent terrorism ===
{{Main|Title III of the Patriot Act}}
Title III of the Act, titled "International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001," is intended to facilitate the prevention, detection, and prosecution of international [[money laundering]] and the financing of [[terrorism]]. It primarily amends portions of the ''[[Money Laundering Control Act of 1986]]'' (MLCA) and the ''[[Bank Secrecy Act of 1970]]'' (BSA). It was divided into three subtitles. The first subtitle deals primarily with strengthening banking rules against money laundering, especially on the international stage. The second subtitle attempts to improve communication between law enforcement agencies and financial institutions, as well as expanding recordkeeping and reporting requirements. The third subtitle deals with currency smuggling and counterfeiting, including quadrupling the maximum penalty for counterfeiting foreign currency.

The first subtitle also tightened the recordkeeping requirements for financial institutions, making them record the aggregate amounts of transactions processed from areas of the world where money laundering is a concern to the U.S. government. It even made institutions put into place reasonable steps to identify [[beneficial owner]]s of bank accounts and those who are authorized to use or route funds through [[payable-through account]]s.<ref>USA PATRIOT Act, Title III, Subtitle A, Sec. 311.</ref>
The U.S. Department of Treasury was charged with formulating regulations intended to foster information sharing between financial institutions to prevent money-laundering.<ref>USA PATRIOT Act, Title III, Subtitle A, Sec. 314.</ref>
Along with expanding record keeping requirements, it put new regulations into place to make it easier for authorities to identify money laundering activities and to make it harder for money launderers to mask their identities.<ref>USA PATRIOT Act, Title III, Subtitle A, Sec. 317.</ref>
If money laundering was uncovered, the subtitle legislated for the [[asset forfeiture|forfeiture of assets]] of those suspected of doing the money laundering.<ref>USA PATRIOT Act, Title III, Subtitle A, Sec. 312, 313, 319 & 325.</ref>
In an effort to encourage institutions to take steps that would reduce money laundering, the Treasury was given authority to block mergers of [[bank holding company|bank holding companies]] and [[bank]]s with other banks and bank holding companies that had a bad history of preventing money laundering. Similarly, mergers between insured depository institutions and non-insured depository institutions that have a bad track record in combating money-laundering could be blocked.<ref>USA PATRIOT Act, Title III, Subtitle A, Sec. 327.</ref>

Restrictions were placed on accounts and foreign banks. It prohibited [[shell bank]]s that are not an affiliate of a bank that has a physical presence in the U.S. or that are not subject to supervision by a banking authority in a non-U.S. country. It also prohibits or restricts the use of certain accounts held at financial institutions.<ref>USA PATRIOT Act, Title III, Subtitle A, Sec. 313.</ref>
Financial institutions must now undertake steps to identify the owners of any privately owned bank outside the U.S. who have a [[correspondent account]] with them, along with the interests of each of the owners in the bank. It is expected that additional scrutiny will be applied by the U.S. institution to such banks to make sure they are not engaging in money laundering. Banks must identify all the nominal and beneficial owners of any private bank account opened and maintained in the U.S. by non-U.S. citizens. There is also an expectation that they must undertake enhanced scrutiny of the account if it is owned by, or is being maintained on behalf of, any senior [[politician|political figure]] where there is reasonable suspicion of [[political corruption|corruption]].<ref>USA PATRIOT Act, Title III, Subtitle A, Sec. 312.</ref>
Any deposits made from within the U.S. into foreign banks are now deemed to have been deposited into any [[interbank network|interbank account]] the foreign bank may have in the U.S. Thus any [[injunction|restraining order]], seizure warrant or [[arrest warrant]] may be made against the funds in the interbank account held at a U.S. financial institution, up to the amount deposited in the account at the foreign bank.<ref name="Section319">USA PATRIOT Act, Title III, Subtitle A, Sec. 319. Amended {{usc-clause|31|5318|(k)(3)(C)(iii)}}</ref>
Restrictions were placed on the use of internal bank [[concentration account]]s because such accounts do not provide an effective [[audit trail]] for transactions, and this may be used to facilitate money laundering. Financial institutions are prohibited from allowing clients to specifically direct them to move funds into, out of, or through a concentration account, and they are also prohibited from informing their clients about the existence of such accounts. Financial institutions are not allowed to provide any information to clients that may identify such internal accounts.<ref>USA PATRIOT Act, Title III, Subtitle A, Sec. 325.</ref>
Financial institutions are required to document and follow methods of identifying where the funds are for each customer in a concentration account that co-mingles funds belonging to one or more customers.

The definition of money laundering was expanded to include making a financial transaction in the U.S. in order to commit a violent crime;<ref>Amendment made to {{usc-clause|18|1956|(c)(7)(B)(ii)}}—for some reason an extra parenthesis was inserted into {{usc-clause|18|1956|(c)(7)(B)(iii)}}, according to [https://www.law.cornell.edu/uscode/text/18/1956-#FN-1 Cornell University], this was probably mistakenly added by law makers</ref> the bribery of public officials and fraudulent dealing with public funds; the smuggling or illegal export of controlled munition<ref>Illegal export of controlled munitions is defined in the United States Munitions List, which is part of the ''[[Arms Export Control Act]]'' ({{usc|22|2778}})</ref> and the importation or bringing in of any firearm or ammunition not authorized by the U.S. Attorney General<ref>See {{usc-clause|18|922|(l)}} and {{usc-clause|18|925|(d)}}</ref> and the smuggling of any item controlled under the Export Administration Regulations.<ref>Defined in 15 [[Code of Federal Regulations|CFR]] 730–774</ref><ref name="Section315">USA PATRIOT Act, Title III, Subtitle A, Sec. 315.</ref>
It also includes any offense where the U.S. would be obligated under a [[mutual treaty]] with a foreign nation to [[extradition|extradite]] a person, or where the U.S. would need to submit a case against a person for prosecution because of the treaty; the import of falsely classified goods;<ref>Defined in {{usc|18|541}}</ref> [[computer crime]];<ref>Defined in {{usc|18|1030}}</ref> and any [[felony]] violation of the ''[[Foreign Agents Registration Act|Foreign Agents Registration Act of 1938]]''.<ref name="Section315" />
It also allows the forfeiture of any property within the jurisdiction of the United States that was gained as the result of an offense against a foreign nation that involves the manufacture, importation, sale, or distribution of a controlled substance.<ref>USA PATRIOT Act, Title III, Subtitle A, Sec. 320. Amended {{usc-clause|18|981|(A)(1)(B)}}</ref>
Foreign nations may now seek to have a forfeiture or judgment notification enforced by a district court of the United States.<ref name="Section323">USA PATRIOT Act, Title III, Subtitle A, Sec. 323. Amended {{usc|28|2467}}</ref>
This is done through new legislation that specifies how the U.S. government may apply for a restraining order<ref>Pursuant to {{usc-clause|18|983|(j)}}</ref> to preserve the availability of property which is subject to a foreign forfeiture or confiscation judgement.<ref>{{usc-clause|28|2467|(d)(3)(A)}}</ref>
In taking into consideration such an application, emphasis is placed on the ability of a foreign court to follow [[due process]].<ref name="Section323" /> The Act also requires the Secretary of Treasury to take all reasonable steps to encourage foreign governments make it a requirement to include the name of the originator in [[wire transfer]] instructions sent to the United States and other countries, with the information to remain with the transfer from its origination until the point of disbursement.<ref>USA PATRIOT Act, Title III, Subtitle A, Sec. 328.</ref>
The Secretary was also ordered to encourage international cooperation in investigations of money laundering, [[financial crimes]], and the finances of terrorist groups.<ref>USA PATRIOT Act, Title III, Subtitle A, Sec. 330.</ref>

The Act also introduced criminal penalties for corrupt officialdom. An official or employee of the government who acts corruptly—as well as the person who induces the corrupt act—in the carrying out of their official duties will be fined by an amount that is not more than three times the monetary equivalent of the bribe in question. Alternatively they may be imprisoned for not more than 15 years, or they may be fined and imprisoned. Penalties apply to financial institutions who do not comply with an order to terminate any corresponding accounts within 10 days of being so ordered by the Attorney General or the Secretary of Treasury. The financial institution can be fined [[United States dollar|$US]]10,000 for each day the account remains open after the 10-day limit has expired.<ref name="Section319" />

The second annotation made a number of modifications to the BSA in an attempt to make it harder for money launderers to operate and easier for law enforcement and regulatory agencies to police money laundering operations. One amendment made to the BSA was to allow the designated officer or agency who receives [[suspicious activity report]]s to notify U.S. intelligence agencies.<ref>USA PATRIOT Act, Title III, Subtitle B, Sec. 356.</ref>
A number of amendments were made to address issues related to record keeping and financial reporting. One measure was a new requirement that anyone who does business file a report for any coin and foreign currency receipts that are over US$10,000 and made it illegal to structure transactions in a manner that evades the BSA's reporting requirements.<ref>USA PATRIOT Act, Title III, Subtitle B, Sec. 365.</ref>
To make it easier for authorities to regulate and investigate anti-money laundering operations Money Services Businesses (MSBs)—those who operate [[informal value transfer system]]s outside of the mainstream financial system—were included in the definition of a financial institution.<ref>USA PATRIOT Act, Title III, Subtitle B, Sec. 359.</ref> The BSA was amended to make it mandatory to report suspicious transactions and an attempt was made to make such reporting easier for financial institutions.<ref>USA PATRIOT Act, Title III, Subtitle B, Sec. 352, 354 & 365.</ref>
[[Financial Crimes Enforcement Network|FinCEN]] was made a [[government agency|bureau]] of the [[United States Department of Treasury]]<ref>USA PATRIOT Act, Title III, Subtitle B, Sec. 361.</ref> and the creation of a secure [[computer network|network]] to be used by financial institutions to report suspicious transactions and to provide alerts of relevant suspicious activities was ordered.<ref>USA PATRIOT Act, Title III, Subtitle B, Sec. 362.</ref> Along with these reporting requirements, a considerable number of provisions relate to the prevention and prosecution of money-laundering.<ref>USA PATRIOT Act, Title III, Subtitle B, Sec. 352.</ref> Financial institutions were ordered to establish anti-money laundering programs and the BSA was amended to better define anti-money laundering strategy.<ref>USA PATRIOT Act, Title III, Subtitle B, Sec. 354.</ref> Also increased were civil and criminal penalties for money laundering and the introduction of penalties for violations of [[geographic targeting order]]s and certain record-keeping requirements.<ref>USA PATRIOT Act, Title III, Subtitle B, Sec. 353.</ref> A number of other amendments to the BSA were made through subtitle B, including granting the [[Board of Governors of the Federal Reserve System]] power to authorize personnel to act as law enforcement officers to protect the premises, grounds, property and personnel of any U.S. National reserve bank and allowing the Board to delegate this authority to U.S. Federal reserve bank.<ref>USA PATRIOT Act, Title III, Subtitle B, Sec. 364.</ref> Another measure instructed United States Executive Directors of international financial institutions to use their voice and vote to support any country that has taken action to support the U.S.'s War on Terrorism. Executive Directors are now required to provide ongoing auditing of disbursements made from their institutions to ensure that no funds are paid to persons who commit, threaten to commit, or support terrorism.<ref>USA PATRIOT Act, Title III, Subtitle B, Sec. 360.</ref>

The third subtitle deals with currency crimes. Largely because of the effectiveness of the BSA, money launders had been avoiding traditional financial institutions to launder money and were using cash-based businesses to avoid them. A new effort was made to stop the laundering of money through bulk currency movements, mainly focusing on the confiscation of criminal proceeds and the increase in penalties for money laundering. Congress found that a criminal offense of merely evading the reporting of money transfers was insufficient and decided that it would be better if the smuggling of the bulk currency itself was the offense. Therefore, the BSA was amended to make it a criminal offense to evade currency reporting by concealing more than US$10,000 on any person or through any luggage, merchandise or other container that moves into or out of the U.S. The penalty for such an offense is up to 5 years' imprisonment and the forfeiture of any property up to the amount that was being smuggled.<ref>USA PATRIOT Act, Title III, Subtitle C, Sec. 371.</ref> It also made the civil and criminal penalty violations of currency reporting cases<ref>So defined in {{usc|31|5313}}, {{usc|31|5316}} and {{usc|31|5324}}</ref> be the forfeiture of all a defendant's property that was involved in the offense, and any property traceable to the defendant.<ref>USA PATRIOT Act, Title III, Subtitle C, Sec. 372. Amended {{usc-clause|31|5317|(c)}}</ref> The Act prohibits and penalizes those who run unlicensed money transmitting businesses.<ref>USA PATRIOT Act, Title III, Subtitle C, Sec. 371. Amended {{usc|18|1960}}</ref> In 2005, this provision of the USA PATRIOT Act was used to prosecute Yehuda Abraham for helping to arrange money transfers for British arms dealer [[Hemant Lakhani]], who was arrested in August 2003 after being caught in a government sting. Lakhani had tried to sell a missile to an FBI agent posing as a [[Somalia|Somali]] militant.<ref>{{cite news|url=https://www.npr.org/templates/story/story.php?storyId=4756706|title=The Patriot Act: Justice Department Claims Success|date=July 20, 2005|publisher=[[National Public Radio]]}}</ref> The definition of counterfeiting was expanded to encompass analog, digital or electronic image reproductions, and it was made an offense to own such a reproduction device. Penalties were increased to 20 years' imprisonment.<ref>USA PATRIOT Act, Title III, Subtitle C, Sec. 374. Amended {{usc|18|1960}}</ref> Money laundering "unlawful activities" was expanded to include the [[provision of material support or resources to designated foreign terrorist organizations]].<ref>USA PATRIOT Act, Title III, Subtitle C, Sec. 376. Amended {{usc-clause|18|1956|(c)(7)(D)}}</ref> The Act specifies that anyone who commits or conspires to undertake a fraudulent activity [[extraterritorial jurisdiction|outside the jurisdiction]] of the United States, and which would be an offense in the U.S., will be prosecuted under {{usc|18|1029}}, which deals with fraud and related activity in connection with access devices.<ref>USA PATRIOT Act, Title III, Subtitle C, Sec. 377.</ref>