PATRIOT ACT AND INTERNATIONAL BUSINESS

PATRIOT ACT AND INTERNATIONAL BUSINESS

The Uniting and Strengthening America By Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 also known as USA PATRIOT Act or the Patriot Act (Public Law 107-56) is a law coming out of the U.S. which was signed into law by the President Bush on October 26, 2001 right after September 11 attacks. The Patriot act was passed with an overwhelming majority it is still a very controversial federal legislation.

The Patriot Act was passed in a bid to respond to the carnage the U.S. had seen on September 11. This law has enormously expanded the authority of law enforcement agencies of the U.S. to help it fight terrorism in the U.S. and outside the country also. This law is also used to find out and prosecute other potential crimes like giving out wrong information on terrorism.

Federal courts felt that some of the sections of the Patriot Law contravened civil liberties and that is why they declared those sections unconstitutional. As such the law was renewed on March 2, 2006 in the Senate and March 7 in the House. President Bush signed it on March 9, 2006.

This Act has so many features that are worth studying but one should surely have a look at anti-money laundering provisions in the Act. There are so many provisions which have been incorporated for the first time. So, now all the U.S. financial institutions including banks, securities firms, insurance agencies and businesses transferring funds have to be over diligent before letting a non U.S. financial institution to open a correspondent account with them and allowing entry to them into the American financial system.

Besides all the financial institutions in the U.S. are have to have anti-money laundering programs that must include proper verification of the identity of the customer. Also, no U.S. bank or securities firm can open accounts for non U.S. shell banks that don't have any physical presence anywhere and which don't have affiliations with other banks. But the most important part is the authority vested with the U.S. Secretary of the Treasury and the U.S. Attorney General. They can demand and obtain information from U.S. financial institutions that is related to correspondent accoutnts maintained for non U. S. banks and persons.

Patriot Act also amends the U.S. Federal Rules of Criminal Procedure. It now gives the authority to government prosecutors to share information that are confidential in nature that are produced to federal grand juries relating to non U. S. governments, businesses or persons with a any U. S. law enforcement agency for purposes of law enforcement and that too without advance notice to the courts or for that matter to anyone else. It also allows them to seize and forfeit assets held in U.S. accounts by non U. S. persons.