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The USA Patriot Act, 2001, commonly known as "The Patriot Act", was enacted during the administration of George Bush immediately following the attacks on the twin towers of the World Trade Centre in New York in September 2001. Its title is an acronym, standing for - Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
In particular, the Patriot Act:
- increased the ability of law enforcement agencies to search telephone, e-mail communications, medical, financial, and other records. This was a considerable change to earlier laws and significantly increased access to such information, including "sneak and peek" warrants and wiretaps;
- eased restrictions on foreign intelligence gathering within the United States;
- expanded the Secretary of the Treasury's authority to regulate financial transactions, particularly those involving foreign individuals and entities; and
- enhanced the discretion of law enforcement and immigration authorities in detaining and deporting immigrants suspected of terrorism-related acts.
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The Patriot Act also expanded the definition of terrorism to include domestic terrorism, thus enlarging the number of activities to which the USA PATRIOT Act's expanded law enforcement powers can be applied. The Act established a fund for counter-terrorist activities and increased funding for the FBI's Technical Support Center. |
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The military was authorized to provide assistance in some situations that involved weapons of mass destruction when so requested by the Attorney General. The National Electronic Crime Task Force was expanded, along with the President's authority and abilities in cases of terrorism.
There is probably nothing which can damage the reputation of a financial institution more than the suggestion that it has been used as a conduit to provide funds which have been used to finance a terrorist act. Even if the institution is an innocent participant, the very link of its name to death and carnage can be damaging. So the institution needs as much help as possible to identify and exclude known terrorists from their business but also to stand some chance of identifying the criminals who are already inside. In addition, Anti Terrorism laws in most jurisdictions make it an offence to provide financial services to someone for the purposes of terrorism. Though most institutions would not do so deliberately, to have failed to check customers or transactions against known lists of criminals could be construed to be negligent or wilful blindness.
There are two aspects in which a financial institution can protect itself from both risks – strong Know Your Customer processes and strong transaction checking processes.
Know Your customer describes the means by which the identity, background and other aspects of potential customers can be checked, so that known and suspected terrorists can be excluded and the background of all clients checked out fully. Legislation and regulation require firms to obtain evidence of identity of a customer at take-on and to keep a record of that evidence for as long as there is a relationship with a customer. Legislation and regulation also require a firm to keep up to date its knowledge of a customer throughout the life of the relationship, so that changes in the customer’s activity can be assessed and dealt with – all with the principal aim of preventing Money Laundering and Terrorist Financing. Having robust processes is all the more important when a business is looking for new clients in emerging markets, where legislation and regulation may not yet be as strong as in more developed financial markets.
Similarly, during the life of a customer relationship, the firm wants to be able to carry out checks on a customer's transactions to make sure that they are genuine and to be able to research any which may appear unusual. In particular with transactions, a firm must be able to complete due diligence very quickly where there are concerns, to be sure that transactions are checked against known lists of terrorists and other criminals so that suspicious items are blocked. In addition, a firm wants to ensure that settlement or delivery is completed on or by the planned value date – a firm does not want to have to be paying back-value for delaying a transaction when speedier due diligence could have avoided it. Good quality Know Your Customer work will allow a firm to be efficient and compliant in this area, report suspicions and not waste time or hard earned money.
USPatriotAct.org gives you access to a wide range of advice, systems and materials which ensure that you can develop a robust Anti Terrorism framework in your business and a culture of crime prevention across the organisation. In particular, USPatriotAct.org gives you access to comprehensive lists to enable you to screen potential customers and transactions in order to exclude known criminals and terrorists. You will then be able to comply with stringent legal and regulatory requirements, keep the criminals away from your doors and protect your reputation.
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