New money laundering laws affect foreign correspondent banking

The enactment of the USA Patriot Act (‘the Act’) last October 26 has ushered in a new anti-money laundering regime that significantly affects the financial services industry. In particular, foreign banks that do business in the US may be required to implement anti-money laundering measures that go far beyond those in their home jurisdictions. The stakes are high, as any involvement in money laundering, however unwitting, could subject a foreign bank to closure of its US correspondent accounts, forfeiture of its assets in the US and even felony prosecution.