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l l★K Federal Reserve Bank of Dallas DALLAS, TEXAS 75265-5906 December 6, 2002 Notice 02-64 TO: The Chief Executive Officer of each financial institution and others concerned in the Eleventh Federal Reserve District SUBJECT Joint Agency Notice Concerning Moratorium on Section 314(a) Information Requests DETAILS The Board of Governors of the Federal Reserve System, along with other federal financial institutions supervisory agencies, has issued a joint notice that addresses two matters associated with section 314(a) of the USA PATRIOT Act. The first matter involves a moratorium on new information requests and compliance with existing requests. The second matter involves an effort to eliminate multiple lists of terrorist financing suspects. ATTACHMENTS Copies of the Board’s SR Letter 02-21 and the joint agency notice, both dated November 26, 2002, are attached. MORE INFORMATION For more information, please contact Tom Atkins, Banking Supervision Department, (214) 922-6238. Paper copies of this notice or previous Federal Reserve Bank notices can be printed from our web site at http://www.dallasfed.org/banking/notices/index.html. For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas: Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 DIVISION OF BANKING SUPERVISION AND REGULATION SR 02-21 November 26, 2002 TO THE OFFICER IN CHARGE OF SUPERVISION AND APPROPRIATE SUPERVISORY AND EXAMINATION STAFF AT EACH FEDERAL RESERVE BANK AND TO EACH DOMESTIC AND FOREIGN BANKING ORGANIZATION SUPERVISED BY THE FEDERAL RESERVE SUBJECT: The U.S. Treasury Issues Moratorium on Section 314(a) Information Requests The Board of Governors of the Federal Reserve System and the other federal financial institutions supervisory agencies today issued the attached Joint Agency Notice that addresses two matters associated with section 314(a) of the USA PATRIOT Act. This provision of the law authorizes law enforcement authorities to communicate with banking organizations and others about suspected money launderers and terrorists. As described in the attached notice, the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) started using the authority granted by section 314(a) on November 4, 2002 by soliciting information on suspected money laundering and individuals and entities possibly associated with terrorist financing activities from financial institutions throughout the United States. FinCEN has since sent several other requests. There have been some problems associated with the mass distribution of information requests, and FinCEN is now working to address them in coordination with law enforcement authorities, banking organizations, their trade associations, the Federal Reserve, and the other agencies. Until the logistical problems can be resolved, FinCEN has called a moratorium on new information requests and compliance with existing requests. The second matter involves an effort to eliminate multiple lists of terrorist financing suspects. FinCEN has advised the agencies that the FBI will discontinue the use of the "Control List" and instead will use the section 314(a) information request process to communicate with banking organizations and others about individuals and entities who are suspected of engaging in terrorist financing activities. In order to ensure the most effective distribution of information requests about matters related to money laundering and terrorist funding activities, banking organizations are requested to ensure that FinCEN has the most complete and up-to-date contact information possible. The attached notice lists the points of contact that can be used by banking organizations to provide new or updated information. Reserve Banks are asked to send a copy of this SR letter to the domestic and foreign banking organizations supervised by the Federal Reserve in their districts and to appropriate supervisory staff. Any questions with respect to this letter should be directed to Pamela J. Johnson, Senior Anti-Money Laundering Coordinator, at (202) 728-5829; or Laurie A. Bender, Senior Special Anti-Money Laundering Examiner, at (202) 452-3794. Richard Spillenkothen Director Board of Governors of the Federal Reserve System Federal Deposit Insurance Corporation Office of the Comptroller of the Currency Office of Thrift Supervision National Credit Union Administration November 26, 2002 Joint Agency Notice Treasury Issues Moratorium on Section 314(a) Information Requests To All Banks, Savings Associations, and Credit Unions: This Notice addresses two matters associated with section 314 of the USA PATRIOT Act as described below. Generally, section 314 authorizes law enforcement authorities to communicate with banking organizations and others about suspected money launderers and terrorists, and banking organizations to communicate amongst themselves about such matters. Moratorium on Section 314(a) Information Requests On September 18, 2002, the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a Final Rule implementing section 314 of the USA PATRIOT Act. The Final Rule became effective on September 26, 2002 and is now part of Treasury’s Bank Secrecy Act regulations, which are found at 31 CFR Part 103. The Final Rule, among other things, established a mechanism for law enforcement authorities to communicate names of suspected terrorists and money launderers to financial institutions in order to promptly locate accounts and transactions involving the suspects. On November 4, 2002, FinCEN, based on the authority in section 314(a) and the Final Rule, sent its first request for information to financial institutions throughout the United States. FinCEN has since sent several other requests. Significant and useful information has been provided to law enforcement in response to its requests. This has included information about various types of transactions and accounts involving persons suspected of involvement in terrorist financing and money laundering, including those who used multiple institutions in several different geographic locations. 1 Financial institutions and their trade associations have notified the federal supervisory agencies and FinCEN about a number of logistical issues and questions with regard to the information request process instituted by FinCEN. In order to address these concerns and to ensure the most effective government-financial industry coordination possible, FinCEN, in coordination with relevant law enforcement agencies, has put into place a brief moratorium on new information requests and compliance with existing requests. During the moratorium, FinCEN, in consultation with the federal financial institution supervisory agencies, will develop additional guidance concerning section 314(a) information requests. You will be advised once this brief moratorium is lifted. At that time, you will also receive further guidance about the 314(a) information request process. Notwithstanding the moratorium, FinCEN has advised the federal financial institutions supervisory agencies that it reserves the right to take such steps as are necessary, including the reinstatement of the section 314(a) information request process, in the event of an immediate threat to national security or other emergency. The “Control List” and Section 314(a) Information Requests FinCEN has advised the federal financial supervisory agencies that the FBI will discontinue the use of the “Control List” and instead will use the section 314(a) process to communicate with banking organizations and others about individuals and entities who are suspected of engaging in terrorist financing activities. It is imperative that your bank, savings association or credit union be included in the contact list that FinCEN uses to communicate about suspected money launderers and terrorists. In developing its contact list, FinCEN decided to use the information that was provided in order to distribute the “Control List” and this information may have to be updated or enhanced. Accordingly, if your financial institution has not received any requests from FinCEN via e-mail or facsimile since November 4, 2002 (when FinCEN distributed its first section 314(a) information request), you should contact your primary federal supervisory agency to be added to FinCEN’s contact list. The following information must be provided: financial institution name and charter number or other identifier; point of contact name and title, mailing (street number, P.O. box, city, state and zip code) and e-mail addresses; and telephone and facsimile numbers. You may contact the following representatives from the federal financial institutions supervisory agencies and FinCEN to provide section 314(a) contact information or if you have any questions: 2 Board of Governors of the Federal Reserve System Contact information: e-mail: patriotact@frb.gov fax: (202) 736-5641 Questions: telephone: Laurie A. Bender, Senior Special Anti-Money Laundering Examiner at (202) 452-3794, or Pamela J. Johnson, Senior Anti-Money Laundering Coordinator at (202) 728-5829 Federal Deposit Insurance Corporation Contact information: e-mail: fdicadvisory@fdic.gov fax: (202) 898-3627 Questions: telephone: Special Activities Section at (202) 898-6750 Office of the Comptroller of the Currency Contact information: e-mail: nationalbankinfo@occ.treas.gov fax: (202) 874-5301 Questions: telephone: Brian C. McCormally, Director, or Robert S. Pasley, Assistant Director, Enforcement and Compliance Division at (202) 874-4800 Office of Thrift Supervision Contact information: e-mail: usap.contact@ots.treas.gov fax: (202) 906-6326 Questions: telephone: John J. Davidson, Senior Project Manager at (202) 906-6012 National Credit Union Administration Contact information: e-mail: www.ncua.gov/cuaddress fax: (703) 518-6569 Questions: telephone: John K. Ianno, Senior Trial Attorney at (703) 518-6540 Financial Crimes Enforcement Network (FinCEN) Contact information: e-mail: sys314a@fincen.treas.gov fax: (703) 905-3660 Questions: telephone: FinCEN Regulatory Helpline at 1-800-949-2732 3
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