USA Patriot Act: five years and counting, but still more work to be done

Abstract

PurposeTo summarize three implementing rules issued over the past year under the USA Patriot Act by the US Treasury Department Financial Crimes Enforcement Network (“FinCEN”) and to make some basic recommendations designed to help firms improve their overall anti‐money laundering compliance efforts.Design/methodology/approachSummarizes three rules issued in the past year that are of particular significance to the securities industry: the final 312 rule for foreign correspondent and private banking accounts; the insurance company AML program and Suspicious Activity Reporting (“SAR”) rules; and the mutual fund SAR rule.FindingsMakes the following recommendations for firms to improve their anti‐money laundering efforts: suspicious activity monitoring should fit your firm; information sharing may help fact gathering; anti‐money laundering programs should be applied across the firm; invest in training; and audit is an invaluable tool.Originality/valueThe Patriot Act, in a short amount of time, has had a major impact on the way securities firms and all financial institutions conduct business. Notwithstanding the achievements of the public and private sectors in implementing the USA Patriot Act, more can be done. While the USA Patriot Act provides significant tools to combat illicit activity, to be successful law enforcement and industry must continue to coordinate their efforts, and work hand‐in‐hand.