From the U.S. Code Online via GPO Access
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[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 31USC5318]
TITLE 31--MONEY AND FINANCE
SUBTITLE IV--MONEY
CHAPTER 53--MONETARY TRANSACTIONS
SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS
Sec. 5318. Compliance, exemptions, and summons authority
(a) General Powers of Secretary.--The Secretary of the Treasury may
(except under section 5315 of this title and regulations prescribed
under section 5315)--
(1) except as provided in subsection (b)(2), delegate duties and
powers under this subchapter to an appropriate supervising agency
and the United States Postal Service;
(2) require a class of domestic financial institutions or
nonfinancial trades or businesses to maintain appropriate procedures
to ensure compliance with this subchapter and regulations prescribed
under this subchapter or to guard against money laundering;
(3) examine any books, papers, records, or other data of
domestic financial institutions or nonfinancial trades or businesses
relevant to the recordkeeping or reporting requirements of this
subchapter;
(4) summon a financial institution or nonfinancial trade or
business, an officer or employee of a financial institution or
nonfinancial trade or business (including a former officer or
employee), or any person having possession, custody, or care of the
reports and records required under this subchapter, to appear before
the Secretary of the Treasury or his delegate at a time and place
named in the summons and to produce such books, papers, records, or
other data, and to give testimony, under oath, as may be relevant or
material to an investigation described in subsection (b);
(5) exempt from the requirements of this subchapter any class of
transactions within any State if the Secretary determines that--
(A) under the laws of such State, that class of transactions
is subject to requirements substantially similar to those
imposed under this subchapter; and
(B) there is adequate provision for the enforcement of such
requirements; and
(6) prescribe an appropriate exemption from a requirement under
this subchapter and regulations prescribed under this subchapter.
The Secretary may revoke an exemption under this paragraph or
paragraph (5) by actually or constructively notifying the parties
affected. A revocation is effective during judicial review.
(b) Limitations on Summons Power.--
(1) Scope of power.--The Secretary of the Treasury may take any
action described in paragraph (3) or (4) of subsection (a) only in
connection with investigations for the purpose of civil enforcement
of violations of this subchapter, section 21 of the Federal Deposit
Insurance Act, section 411 \1\ of the National Housing Act, or
chapter 2 of Public Law 91-508 (12 U.S.C. 1951 et seq.) or any
regulation under any such provision.
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\1\ See References in Text note below.
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(2) Authority to issue.--A summons may be issued under
subsection (a)(4) only by, or with the approval of, the Secretary of
the Treasury or a supervisory level delegate of the Secretary of the
Treasury.
(c) Administrative Aspects of Summons.--
(1) Production at designated site.--A summons issued pursuant to
this section may require that books, papers, records, or other data
stored or maintained at any place be produced at any designated
location in any State or in any territory or other place subject to
the jurisdiction of the United States not more than 500 miles
distant from any place where the financial institution or
nonfinancial trade or business operates or conducts business in the
United States.
(2) Fees and travel expenses.--Persons summoned under this
section shall be paid the same fees and mileage for travel in the
United States that are paid witnesses in the courts of the United
States.
(3) No liability for expenses.--The United States shall not be
liable for any expense, other than an expense described in paragraph
(2), incurred in connection with the production of books, papers,
records, or other data under this section.
(d) Service of Summons.--Service of a summons issued under this
section may be by registered mail or in such other manner calculated to
give actual notice as the Secretary may prescribe by regulation.
(e) Contumacy or Refusal.--
(1) Referral to attorney general.--In case of contumacy by a
person issued a summons under paragraph (3) or (4) of subsection (a)
or a refusal by such person to obey such summons, the Secretary of
the Treasury shall refer the matter to the Attorney General.
(2) Jurisdiction of court.--The Attorney General may invoke the
aid of any court of the United States within the jurisdiction of
which--
(A) the investigation which gave rise to the summons is
being or has been carried on;
(B) the person summoned is an inhabitant; or
(C) the person summoned carries on business or may be found,
to compel compliance with the summons.
(3) Court order.--The court may issue an order requiring the
person summoned to appear before the Secretary or his delegate to
produce books, papers, records, and other data, to give testimony as
may be necessary to explain how such material was compiled and
maintained, and to pay the costs of the proceeding.
(4) Failure to comply with order.--Any failure to obey the order
of the court may be punished by the court as a contempt thereof.
(5) Service of process.--All process in any case under this
subsection may be served in any judicial district in which such
person may be found.
(f) Written and Signed Statement Required.--No person shall qualify
for an exemption under subsection (a)(5) \2\ unless the relevant
financial institution or nonfinancial trade or business prepares and
maintains a statement which--
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\2\ See References in Text note below.
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(1) describes in detail the reasons why such person is qualified
for such exemption; and
(2) contains the signature of such person.
(g) Reporting of Suspicious Transactions.--
(1) In general.--The Secretary may require any financial
institution, and any director, officer, employee, or agent of any
financial institution, to report any suspicious transaction relevant
to a possible violation of law or regulation.
(2) Notification prohibited.--
(A) In general.--If a financial institution or any director,
officer, employee, or agent of any financial institution,
voluntarily or pursuant to this section or any other authority,
reports a suspicious transaction to a government agency--
(i) the financial institution, director, officer,
employee, or agent may not notify any person involved in the
transaction that the transaction has been reported; and
(ii) no officer or employee of the Federal Government or
of any State, local, tribal, or territorial government
within the United States, who has any knowledge that such
report was made may disclose to any person involved in the
transaction that the transaction has been reported, other
than as necessary to fulfill the official duties of such
officer or employee.
(B) Disclosures in certain employment references.--
(i) Rule of construction.--Notwithstanding the
application of subparagraph (A) in any other context,
subparagraph (A) shall not be construed as prohibiting any
financial institution, or any director, officer, employee,
or agent of such institution, from including information
that was included in a report to which subparagraph (A)
applies--
(I) in a written employment reference that is
provided in accordance with section 18(w) of the Federal
Deposit Insurance Act in response to a request from
another financial institution; or
(II) in a written termination notice or employment
reference that is provided in accordance with the rules
of a self-regulatory organization registered with the
Securities and Exchange Commission or the Commodity
Futures Trading Commission,
except that such written reference or notice may not disclose
that such information was also included in any such report,
or that such report was made.
(ii) Information not required.--Clause (i) shall not be
construed, by itself, to create any affirmative duty to
include any information described in clause (i) in any
employment reference or termination notice referred to in
clause (i).
(3) Liability for disclosures.--
(A) In general.--Any financial institution that makes a
voluntary disclosure of any possible violation of law or
regulation to a government agency or makes a disclosure pursuant
to this subsection or any other authority, and any director,
officer, employee, or agent of such institution who makes, or
requires another to make any such disclosure, shall not be
liable to any person under any law or regulation of the United
States, any constitution, law, or regulation of any State or
political subdivision of any State, or under any contract or
other legally enforceable agreement (including any arbitration
agreement), for such disclosure or for any failure to provide
notice of such disclosure to the person who is the subject of
such disclosure or any other person identified in the
disclosure.
(B) Rule of construction.--Subparagraph (A) shall not be
construed as creating--
(i) any inference that the term ``person'', as used in
such subparagraph, may be construed more broadly than its
ordinary usage so as to include any government or agency of
government; or
(ii) any immunity against, or otherwise affecting, any
civil or criminal action brought by any government or agency
of government to enforce any constitution, law, or
regulation of such government or agency.
(4) Single designee for reporting suspicious transactions.--
(A) In general.--In requiring reports under paragraph (1) of
suspicious transactions, the Secretary of the Treasury shall
designate, to the extent practicable and appropriate, a single
officer or agency of the United States to whom such reports
shall be made.
(B) Duty of designee.--The officer or agency of the United
States designated by the Secretary of the Treasury pursuant to
subparagraph (A) shall refer any report of a suspicious
transaction to any appropriate law enforcement, supervisory
agency, or United States intelligence agency for use in the
conduct of intelligence or counterintelligence activities,
including analysis, to protect against international terrorism.
(C) Coordination with other reporting requirements.--
Subparagraph (A) shall not be construed as precluding any
supervisory agency for any financial institution from requiring
the financial institution to submit any information or report to
the agency or another agency pursuant to any other applicable
provision of law.
(h) Anti-Money Laundering Programs.--
(1) In general.--In order to guard against money laundering
through financial institutions, each financial institution shall
establish anti-money laundering programs, including, at a minimum--
(A) the development of internal policies, procedures, and
controls;
(B) the designation of a compliance officer;
(C) an ongoing employee training program; and
(D) an independent audit function to test programs.
(2) Regulations.--The Secretary of the Treasury, after
consultation with the appropriate Federal functional regulator (as
defined in section 509 of the Gramm-Leach-Bliley Act), may prescribe
minimum standards for programs established under paragraph (1), and
may exempt from the application of those standards any financial
institution that is not subject to the provisions of the rules
contained in part 103 of title 31, of the Code of Federal
Regulations, or any successor rule thereto, for so long as such
financial institution is not subject to the provisions of such
rules.
(3) Concentration accounts.--The Secretary may prescribe
regulations under this subsection that govern maintenance of
concentration accounts by financial institutions, in order to ensure
that such accounts are not used to prevent association of the
identity of an individual customer with the movement of funds of
which the customer is the direct or beneficial owner, which
regulations shall, at a minimum--
(A) prohibit financial institutions from allowing clients to
direct transactions that move their funds into, out of, or
through the concentration accounts of the financial institution;
(B) prohibit financial institutions and their employees from
informing customers of the existence of, or the means of
identifying, the concentration accounts of the institution; and
(C) require each financial institution to establish written
procedures governing the documentation of all transactions
involving a concentration account, which procedures shall ensure
that, any time a transaction involving a concentration account
commingles funds belonging to 1 or more customers, the identity
of, and specific amount belonging to, each customer is
documented.
(i) Due Diligence for United States Private Banking and
Correspondent Bank Accounts Involving Foreign Persons.--
(1) In general.--Each financial institution that establishes,
maintains, administers, or manages a private banking account or a
correspondent account in the United States for a non-United States
person, including a foreign individual visiting the United States,
or a representative of a non-United States person shall establish
appropriate, specific, and, where necessary, enhanced, due diligence
policies, procedures, and controls that are reasonably designed to
detect and report instances of money laundering through those
accounts.
(2) Additional standards for certain correspondent accounts.--
(A) In general.--Subparagraph (B) shall apply if a
correspondent account is requested or maintained by, or on
behalf of, a foreign bank operating--
(i) under an offshore banking license; or
(ii) under a banking license issued by a foreign country
that has been designated--
(I) as noncooperative with international anti-money
laundering principles or procedures by an
intergovernmental group or organization of which the
United States is a member, with which designation the
United States representative to the group or
organization concurs; or
(II) by the Secretary of the Treasury as warranting
special measures due to money laundering concerns.
(B) Policies, procedures, and controls.--The enhanced due
diligence policies, procedures, and controls required under
paragraph (1) shall, at a minimum, ensure that the financial
institution in the United States takes reasonable steps--
(i) to ascertain for any such foreign bank, the shares
of which are not publicly traded, the identity of each of
the owners of the foreign bank, and the nature and extent of
the ownership interest of each such owner;
(ii) to conduct enhanced scrutiny of such account to
guard against money laundering and report any suspicious
transactions under subsection (g); and
(iii) to ascertain whether such foreign bank provides
correspondent accounts to other foreign banks and, if so,
the identity of those foreign banks and related due
diligence information, as appropriate under paragraph (1).
(3) Minimum standards for private banking accounts.--If a
private banking account is requested or maintained by, or on behalf
of, a non-United States person, then the due diligence policies,
procedures, and controls required under paragraph (1) shall, at a
minimum, ensure that the financial institution takes reasonable
steps--
(A) to ascertain the identity of the nominal and beneficial
owners of, and the source of funds deposited into, such account
as needed to guard against money laundering and report any
suspicious transactions under subsection (g); and
(B) to conduct enhanced scrutiny of any such account that is
requested or maintained by, or on behalf of, a senior foreign
political figure, or any immediate family member or close
associate of a senior foreign political figure that is
reasonably designed to detect and report transactions that may
involve the proceeds of foreign corruption.
(4) Definition.--For purposes of this subsection, the following
definitions shall apply:
(A) Offshore banking license.--The term ``offshore banking
license'' means a license to conduct banking activities which,
as a condition of the license, prohibits the licensed entity
from conducting banking activities with the citizens of, or with
the local currency of, the country which issued the license.
(B) Private banking account.--The term ``private banking
account'' means an account (or any combination of accounts)
that--
(i) requires a minimum aggregate deposits of funds or
other assets of not less than $1,000,000;
(ii) is established on behalf of 1 or more individuals
who have a direct or beneficial ownership interest in the
account; and
(iii) is assigned to, or is administered or managed by,
in whole or in part, an officer, employee, or agent of a
financial institution acting as a liaison between the
financial institution and the direct or beneficial owner of
the account.
(j) Prohibition on United States Correspondent Accounts With Foreign
Shell Banks.--
(1) In general.--A financial institution described in
subparagraphs (A) through (G) of section 5312(a)(2) (in this
subsection referred to as a ``covered financial institution'') shall
not establish, maintain, administer, or manage a correspondent
account in the United States for, or on behalf of, a foreign bank
that does not have a physical presence in any country.
(2) Prevention of indirect service to foreign shell banks.--A
covered financial institution shall take reasonable steps to ensure
that any correspondent account established, maintained,
administered, or managed by that covered financial institution in
the United States for a foreign bank is not being used by that
foreign bank to indirectly provide banking services to another
foreign bank that does not have a physical presence in any country.
The Secretary of the Treasury shall, by regulation, delineate the
reasonable steps necessary to comply with this paragraph.
(3) Exception.--Paragraphs (1) and (2) do not prohibit a covered
financial institution from providing a correspondent account to a
foreign bank, if the foreign bank--
(A) is an affiliate of a depository institution, credit
union, or foreign bank that maintains a physical presence in the
United States or a foreign country, as applicable; and
(B) is subject to supervision by a banking authority in the
country regulating the affiliated depository institution, credit
union, or foreign bank described in subparagraph (A), as
applicable.
(4) Definitions.--For purposes of this subsection--
(A) the term ``affiliate'' means a foreign bank that is
controlled by or is under common control with a depository
institution, credit union, or foreign bank; and
(B) the term ``physical presence'' means a place of business
that--
(i) is maintained by a foreign bank;
(ii) is located at a fixed address (other than solely an
electronic address) in a country in which the foreign bank
is authorized to conduct banking activities, at which
location the foreign bank--
(I) employs 1 or more individuals on a full-time
basis; and
(II) maintains operating records related to its
banking activities; and
(iii) is subject to inspection by the banking authority
which licensed the foreign bank to conduct banking
activities.
(k) Bank Records Related to Anti-Money Laundering Programs.--
(1) Definitions.--For purposes of this subsection, the following
definitions shall apply:
(A) Appropriate federal banking agency.--The term
``appropriate Federal banking agency'' has the same meaning as
in section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813).
(B) Incorporated term.--The term ``correspondent account''
has the same meaning as in section 5318A(f)(1)(B).
(2) 120-hour rule.--Not later than 120 hours after receiving a
request by an appropriate Federal banking agency for information
related to anti-money laundering compliance by a covered financial
institution or a customer of such institution, a covered financial
institution shall provide to the appropriate Federal banking agency,
or make available at a location specified by the representative of
the appropriate Federal banking agency, information and account
documentation for any account opened, maintained, administered or
managed in the United States by the covered financial institution.
(3) Foreign bank records.--
(A) Summons or subpoena of records.--
(i) In general.--The Secretary of the Treasury or the
Attorney General may issue a summons or subpoena to any
foreign bank that maintains a correspondent account in the
United States and request records related to such
correspondent account, including records maintained outside
of the United States relating to the deposit of funds into
the foreign bank.
(ii) Service of summons or subpoena.--A summons or
subpoena referred to in clause (i) may be served on the
foreign bank in the United States if the foreign bank has a
representative in the United States, or in a foreign country
pursuant to any mutual legal assistance treaty, multilateral
agreement, or other request for international law
enforcement assistance.
(B) Acceptance of service.--
(i) Maintaining records in the united states.--Any
covered financial institution which maintains a
correspondent account in the United States for a foreign
bank shall maintain records in the United States identifying
the owners of such foreign bank and the name and address of
a person who resides in the United States and is authorized
to accept service of legal process for records regarding the
correspondent account.
(ii) Law enforcement request.--Upon receipt of a written
request from a Federal law enforcement officer for
information required to be maintained under this paragraph,
the covered financial institution shall provide the
information to the requesting officer not later than 7 days
after receipt of the request.
(C) Termination of correspondent relationship.--
(i) Termination upon receipt of notice.--A covered
financial institution shall terminate any correspondent
relationship with a foreign bank not later than 10 business
days after receipt of written notice from the Secretary or
the Attorney General (in each case, after consultation with
the other) that the foreign bank has failed--
(I) to comply with a summons or subpoena issued
under subparagraph (A); or
(II) to initiate proceedings in a United States
court contesting such summons or subpoena.
(ii) Limitation on liability.--A covered financial
institution shall not be liable to any person in any court
or arbitration proceeding for terminating a correspondent
relationship in accordance with this subsection.
(iii) Failure to terminate relationship.--Failure to
terminate a correspondent relationship in accordance with
this subsection shall render the covered financial
institution liable for a civil penalty of up to $10,000 per
day until the correspondent relationship is so terminated.
(l) \3\ Identification and Verification of Accountholders.--
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\3\ So in original. Two subsecs. (l) have been enacted.
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(1) In general.--Subject to the requirements of this subsection,
the Secretary of the Treasury shall prescribe regulations setting
forth the minimum standards for financial institutions and their
customers regarding the identity of the customer that shall apply in
connection with the opening of an account at a financial
institution.
(2) Minimum requirements.--The regulations shall, at a minimum,
require financial institutions to implement, and customers (after
being given adequate notice) to comply with, reasonable procedures
for--
(A) verifying the identity of any person seeking to open an
account to the extent reasonable and practicable;
(B) maintaining records of the information used to verify a
person's identity, including name, address, and other
identifying information; and
(C) consulting lists of known or suspected terrorists or
terrorist organizations provided to the financial institution by
any government agency to determine whether a person seeking to
open an account appears on any such list.
(3) Factors to be considered.--In prescribing regulations under
this subsection, the Secretary shall take into consideration the
various types of accounts maintained by various types of financial
institutions, the various methods of opening accounts, and the
various types of identifying information available.
(4) Certain financial institutions.--In the case of any
financial institution the business of which is engaging in financial
activities described in section 4(k) of the Bank Holding Company Act
of 1956 (including financial activities subject to the jurisdiction
of the Commodity Futures Trading Commission), the regulations
prescribed by the Secretary under paragraph (1) shall be prescribed
jointly with each Federal functional regulator (as defined in
section 509 of the Gramm-Leach-Bliley Act, including the Commodity
Futures Trading Commission) appropriate for such financial
institution.
(5) Exemptions.--The Secretary (and, in the case of any
financial institution described in paragraph (4), any Federal agency
described in such paragraph) may, by regulation or order, exempt any
financial institution or type of account from the requirements of
any regulation prescribed under this subsection in accordance with
such standards and procedures as the Secretary may prescribe.
(6) Effective date.--Final regulations prescribed under this
subsection shall take effect before the end of the 1-year period
beginning on the date of enactment of the International Money
Laundering Abatement and Financial Anti-Terrorism Act of 2001.
(l) \3\ Applicability of Rules.--Any rules promulgated pursuant to
the authority contained in section 21 of the Federal Deposit Insurance
Act (12 U.S.C. 1829b) shall apply, in addition to any other financial
institution to which such rules apply, to any person that engages as a
business in the transmission of funds, including any person who engages
as a business in an informal money transfer system or any network of
people who engage as a business in facilitating the transfer of money
domestically or internationally outside of the conventional financial
institutions system.
(Pub. L. 97-258, Sept. 13, 1982, 96 Stat. 999; Pub. L. 99-570, title I,
Sec. 1356(a), (b), (c)(2), Oct. 27, 1986, 100 Stat. 3207-23, 3207-24;
Pub. L. 100-690, title VI, Secs. 6185(e), 6469(c), Nov. 18, 1988, 102
Stat. 4357, 4377; Pub. L. 102-550, title XV, Secs. 1504(d)(1), 1513,
1517(b), Oct. 28, 1992, 106 Stat. 4055, 4058, 4059; Pub. L. 103-322,
title XXXIII, Sec. 330017(b)(1), Sept. 13, 1994, 108 Stat. 2149; Pub. L.
103-325, title IV, Secs. 403(a), 410, 413(b)(1), Sept. 23, 1994, 108
Stat. 2245, 2252, 2254; Pub. L. 107-56, title III, Secs. 312(a), 313(a),
319(b), 325, 326(a), 351, 352(a), 358(b), 359(c), 365(c)(2)(B), Oct. 26,
2001, 115 Stat. 304, 306, 312, 317, 320, 322, 326, 328, 335.)
Historical and Revision Notes
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Revised Section Source (U.S. Code) Source (Statutes at Large)
----------------------------------------------------------------------------------------------------------------
5318................................. 31:1054(a), (b)(1st sentence). Oct. 26, 1970, Pub. L. 91-508, Secs.
205(a), (b)(1st sentence), 206, 84 Stat.
1120.
31:1055.
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In the section, before clause (1), the words ``have the
responsibility to assure compliance with the requirements of this
chapter'' in 31:1054(a) are omitted as unnecessary because of section
321 of the revised title. The words ``(except under section 5315 of this
title and regulations prescribed under section 5315)'' are added because
31:1141-1143 was not enacted as a part of the Currency and Foreign
Transactions Reporting Act that is restated in this subchapter. In
clause (1), the words ``duties and powers'' are substituted for
``responsibilities'' for consistency in the revised title and with other
titles of the United States Code. The words ``bank supervisory agency,
or other'' are omitted as surplus. In clause (2), the words ``by
regulation'' and ``as he may deem'' are omitted as surplus. The words
``and regulations prescribed under this subchapter'' are added because
of the restatement. In clause (3), the word ``prescribe'' is substituted
for ``make'' in 31:1055 for consistency in the revised title and with
other titles of the Code. The words ``otherwise imposed'', 31:1055(1st
sentence), and the words ``in his discretion'' are omitted as surplus.
References in Text
Section 21 of the Federal Deposit Insurance Act, referred to in
subsecs. (b)(1) and (l), is classified to section 1829b of Title 12,
Banks and Banking.
Section 411 of the National Housing Act, referred to in subsec.
(b)(1), which was classified to section 1730d of Title 12, was repealed
by Pub. L. 101-73, title IV, Sec. 407, Aug. 9, 1989, 103 Stat. 363.
Chapter 2 of Public Law 91-508 (12 U.S.C. 1951 et seq.), referred to
in subsec. (b)(1), probably means chapter 2 (Secs. 121 to 129) of title
I of Pub. L. 91-508, Oct. 26, 1970, 84 Stat. 1116, which is classified
generally to chapter 21 (Sec. 1951 et seq.) of Title 12. For complete
classification of chapter 2 to the Code, see Tables.
Subsection (a)(5), referred to in subsec. (f), was redesignated
subsection (a)(6) by section 410(a)(2) of Pub. L. 103-325.
Section 18(w) of the Federal Deposit Insurance Act, referred to in
subsec. (g)(2)(B)(i)(I), is classified to section 1828(w) of Title 12,
Banks and Banking.
Section 509 of the Gramm-Leach-Bliley Act, referred to in subsecs.
(h)(2) and (l)(4), is classified to section 6809 of Title 15, Commerce
and Trade.
Section 4(k) of the Bank Holding Company Act of 1956, referred to in
subsec. (l)(4), is classified to section 1843(k) of Title 12, Banks and
Banking.
The date of enactment of the International Money Laundering
Abatement and Financial Anti-Terrorism Act of 2001, referred to in
subsec. (l)(6), is the date of enactment of title III of Pub. L. 107-56,
which was approved Oct. 26, 2001.
Codification
Another section 365(c) of Pub. L. 107-56 amended the table of
sections at the beginning of this chapter.
Amendments
2001--Subsec. (a)(2), (3). Pub. L. 107-56, Sec. 365(c)(2)(B)(ii),
inserted ``or nonfinancial trades or businesses'' after ``financial
institutions''.
Subsec. (a)(4). Pub. L. 107-56, Sec. 365(c)(2)(B)(i), inserted ``or
nonfinancial trade or business'' after ``financial institution'' in two
places.
Subsec. (c)(1). Pub. L. 107-56, Sec. 365(c)(2)(B)(i), inserted ``or
nonfinancial trade or business'' after ``financial institution''.
Subsec. (f). Pub. L. 107-56, Sec. 365(c)(2)(B)(i), inserted ``or
nonfinancial trade or business'' after ``financial institution'' in
introductory provisions.
Subsec. (g)(2). Pub. L. 107-56, Sec. 351(b), reenacted heading
without change and amended text generally. Prior to amendment, text read
as follows: ``A financial institution, and a director, officer,
employee, or agent of any financial institution, who voluntarily reports
a suspicious transaction, or that reports a suspicious transaction
pursuant to this section or any other authority, may not notify any
person involved in the transaction that the transaction has been
reported.''
Subsec. (g)(3). Pub. L. 107-56, Sec. 351(a), reenacted heading
without change and amended text generally. Prior to amendment, text read
as follows: ``Any financial institution that makes a disclosure of any
possible violation of law or regulation or a disclosure pursuant to this
subsection or any other authority, and any director, officer, employee,
or agent of such institution, shall not be liable to any person under
any law or regulation of the United States or any constitution, law, or
regulation of any State or political subdivision thereof, for such
disclosure or for any failure to notify the person involved in the
transaction or any other person of such disclosure.''
Subsec. (g)(4)(B). Pub. L. 107-56, Sec. 358(b), substituted ``,
supervisory agency, or United States intelligence agency for use in the
conduct of intelligence or counterintelligence activities, including
analysis, to protect against international terrorism'' for ``or
supervisory agency''.
Subsec. (h). Pub. L. 107-56, Sec. 352(a), reenacted heading without
change and amended text of subsec. (h) generally. Prior to amendment,
text read as follows:
``(1) In general.--In order to guard against money laundering
through financial institutions, the Secretary may require financial
institutions to carry out anti-money laundering programs, including at a
minimum
``(A) the development of internal policies, procedures, and
controls,
``(B) the designation of a compliance officer,
``(C) an ongoing employee training program, and
``(D) an independent audit function to test programs.
``(2) Regulations.--The Secretary may prescribe minimum standards
for programs established under paragraph (1).''
Subsec. (h)(3). Pub. L. 107-56, Sec. 325, which directed amendment
of subsec. (h) of this section, ``as amended by section 202 of this
title'', by adding par. (3), was executed by adding par. (3) to subsec.
(h) of this section, as amended by section 352 of title III of Pub. L.
107-56, to reflect the probable intent of Congress.
Subsec. (i). Pub. L. 107-56, Sec. 312(a), added subsec. (i).
Subsec. (j). Pub. L. 107-56, Sec. 313(a), added subsec. (j).
Subsec. (k). Pub. L. 107-56, Sec. 319(b), added subsec. (k).
Subsec. (l). Pub. L. 107-56, Sec. 359(c), added subsec. (l) relating
to applicability of rules.
Pub. L. 107-56, Sec. 326(a), added subsec. (l) relating to
identification and verification of accountholders.
1994--Subsec. (a)(5). Pub. L. 103-325, Sec. 410(a), added par. (5).
Former par. (5) redesignated (6).
Subsec. (a)(6). Pub. L. 103-325, Sec. 410(b), inserted ``under this
paragraph or paragraph (5)'' after ``revoke an exemption'' in
penultimate sentence.
Pub. L. 103-325, Sec. 410(a)(2), redesignated par. (5) as (6).
Subsec. (g). Pub. L. 103-322, Sec. 330017(b)(1), and Pub. L. 103-
325, Sec. 413(b)(1), amended directory language of Pub. L. 102-550,
Sec. 1517(b), identically. See 1992 Amendment note below.
Subsec. (g)(4). Pub. L. 103-325, Sec. 403(a), added par. (4).
Subsec. (h). Pub. L. 103-322, Sec. 330017(b)(1), and Pub. L. 103-
325, Sec. 413(b)(1), amended directory language of Pub. L. 102-550,
Sec. 1517(b), identically. See 1992 Amendment note below.
1992--Subsec. (a)(1). Pub. L. 102-550, Sec. 1504(d)(1), substituted
``supervising agency and the United States Postal Service'' for
``supervising agency or the Postal Inspection Service and the Postal
Service''.
Subsec. (a)(2). Pub. L. 102-550, Sec. 1513, inserted before
semicolon ``or to guard against money laundering''.
Subsecs. (g), (h). Pub. L. 102-550, Sec. 1517(b), as amended by Pub.
L. 103-322, Sec. 330017(b)(1), and Pub. L. 103-325, Sec. 413(b)(1),
added subsecs. (g) and (h).
1988--Subsec. (a)(1). Pub. L. 100-690, Sec. 6469(c), inserted ``or
the Postal Inspection Service'' after ``appropriate supervising
agency''.
Pub. L. 100-690, Sec. 6185(e), inserted ``and the Postal Service''
after ``appropriate supervising agency''.
1986--Pub. L. 99-570, Sec. 1356(c)(2), substituted ``Compliance,
exemptions, and summons authority'' for ``Compliance and exemptions'' in
section catchline.
Subsec. (a). Pub. L. 99-570, Sec. 1356(a)(1)-(5), designated
existing provisions as subsec. (a), added subsec. heading, inserted
``except as provided in subsection (b)(2),'' in par. (1), added pars.
(3) and (4), and redesignated former par. (3) as (5).
Subsecs. (b) to (e). Pub. L. 99-570, Sec. 1356(a)(6), added subsecs.
(b) to (e).
Subsec. (f). Pub. L. 99-570, Sec. 1356(b), added subsec. (f).
Effective and Termination Dates of 2001 Amendment
Amendments by title III of Pub. L. 107-56 to terminate effective on
and after the first day of fiscal year 2005 if Congress enacts a joint
resolution that such amendments no longer have the force of law, see
section 303 of Pub. L. 107-56, set out as a Four-Year Congressional
Review; Expedited Consideration note under section 5311 of this title.
Pub. L. 107-56, title III, Sec. 312(b)(2), Oct. 26, 2001, 115 Stat.
306, provided that: ``Section 5318(i) of title 31, United States Code,
as added by this section, shall take effect 270 days after the date of
enactment of this Act [Oct. 26, 2001], whether or not final regulations
are issued under paragraph (1) [set out below], and the failure to issue
such regulations shall in no way affect the enforceability of this
section [amending this section and enacting provisions set out as a note
below] or the amendments made by this section. Section 5318(i) of title
31, United States Code, as added by this section, shall apply with
respect to accounts covered by that section 5318(i), that are opened
before, on, or after the date of enactment of this Act.''
Pub. L. 107-56, title III, Sec. 313(b), Oct. 26, 2001, 115 Stat.
307, provided that: ``The amendment made by subsection (a) [amending
this section] shall take effect at the end of the 60-day period
beginning on the date of enactment of this Act [Oct. 26, 2001].''
Pub. L. 107-56, title III, Sec. 352(b), Oct. 26, 2001, 115 Stat.
322, provided that: ``The amendment made by subsection (a) [amending
this section] shall take effect at the end of the 180-day period
beginning on the date of enactment of this Act [Oct. 26, 2001].''
Amendment by section 358(b) of Pub. L. 107-56 applicable with
respect to reports filed or records maintained on, before, or after Oct.
26, 2001, see section 358(h) of Pub. L. 107-56, set out as a note under
section 1829b of Title 12, Banks and Banking.
Effective Date of 1994 Amendment
Section 330017(b)(1) of Pub. L. 103-322 and section 413(b)(1) of
Pub. L. 103-325 provided that the identical amendments made by those
sections are effective Oct. 28, 1992.
Regulations
Pub. L. 107-56, title III, Sec. 312(b)(1), Oct. 26, 2001, 115 Stat.
305, provided that: ``Not later than 180 days after the date of
enactment of this Act [Oct. 26, 2001], the Secretary [of the Treasury],
in consultation with the appropriate Federal functional regulators (as
defined in section 509 of the Gramm-Leach-Bliley Act [15 U.S.C. 6809])
of the affected financial institutions, shall further delineate, by
regulation, the due diligence policies, procedures, and controls
required under section 5318(i)(1) of title 31, United States Code, as
added by this section.''
Pub. L. 107-56, title III, Sec. 352(c), Oct. 26, 2001, 115 Stat.
322, provided that: ``Before the end of the 180-day period beginning on
the date of enactment of this Act [Oct. 26, 2001], the Secretary [of the
Treasury] shall prescribe regulations that consider the extent to which
the requirements imposed under this section [amending this section and
enacting provisions set out as a note above] are commensurate with the
size, location, and activities of the financial institutions to which
such regulations apply.''
Grace Period
Pub. L. 107-56, title III, Sec. 319(c), Oct. 26, 2001, 115 Stat.
314, provided that: ``Financial institutions shall have 60 days from the
date of enactment of this Act [Oct. 26, 2001] to comply with the
provisions of section 5318(k) of title 31, United States Code, as added
by this section.''
``Federal Functional Regulator'' Includes Commodity Futures Trading
Commission
Pub. L. 107-56, title III, Sec. 321(c), Oct. 26, 2001, 115 Stat.
315, provided that: ``For purposes of this Act [probably should be
``title'', see Short Title of 2001 Amendment note set out under section
5301 of this title] and any amendment made by this Act to any other
provision of law, the term `Federal functional regulator' includes the
Commodity Futures Trading Commission.''
Reporting of Suspicious Activities by Securities Brokers and Dealers;
Investment Company Study
Pub. L. 107-56, title III, Sec. 356(a), (b), Oct. 26, 2001, 115
Stat. 324, provided that:
``(a) Deadline for Suspicious Activity Reporting Requirements for
Registered Brokers and Dealers.--The Secretary [of the Treasury], after
consultation with the Securities and Exchange Commission and the Board
of Governors of the Federal Reserve System, shall publish proposed
regulations in the Federal Register before January 1, 2002, requiring
brokers and dealers registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 [15 U.S.C. 78a et
seq.] to submit suspicious activity reports under section 5318(g) of
title 31, United States Code. Such regulations shall be published in
final form not later than July 1, 2002.
``(b) Suspicious Activity Reporting Requirements For Futures
Commission Merchants, Commodity Trading Advisors, and Commodity Pool
Operators.--The Secretary, in consultation with the Commodity Futures
Trading Commission, may prescribe regulations requiring futures
commission merchants, commodity trading advisors, and commodity pool
operators registered under the Commodity Exchange Act [7 U.S.C. 1 et
seq.] to submit suspicious activity reports under section 5318(g) of
title 31, United States Code.''
Reports
Section 403(b) of Pub. L. 103-325 provided that:
``(1) Reports required.--The Secretary of the Treasury shall submit
an annual report to the Congress at the times required under paragraph
(2) on the number of suspicious transactions reported to the officer or
agency designated under section 5318(g)(4)(A) of title 31, United States
Code, during the period covered by the report and the disposition of
such reports.
``(2) Time for submitting reports.--The 1st report required under
paragraph (1) shall be filed before the end of the 1-year period
beginning on the date of enactment of the Money Laundering Suppression
Act of 1994 [Sept. 23, 1994] and each subsequent report shall be filed
within 90 days after the end of each of the 5 calendar years which begin
after such date of enactment.''
Designation Required To Be Made Expeditiously
Section 403(c) of Pub. L. 103-325 provided that: ``The initial
designation of an officer or agency of the United States pursuant to the
amendment made by subsection (a) [amending this section] shall be made
before the end of the 180-day period beginning on the date of enactment
of this Act [Sept. 23, 1994].''
Improvement of Identification of Money Laundering Schemes
Section 404 of Pub. L. 103-325 provided that:
``(a) Enhanced Training, Examinations, and Referrals by Banking
Agencies.--Before the end of the 6-month period beginning on the date of
enactment of this Act [Sept. 23, 1994], each appropriate Federal banking
agency shall, in consultation with the Secretary of the Treasury and
other appropriate law enforcement agencies--
``(1) review and enhance training and examination procedures to
improve the identification of money laundering schemes involving
depository institutions; and
``(2) review and enhance procedures for referring cases to any
appropriate law enforcement agency.
``(b) Improved Reporting of Criminal Schemes by Law Enforcement
Agencies.--The Secretary of the Treasury and each appropriate law
enforcement agency shall provide, on a regular basis, information
regarding money laundering schemes and activities involving depository
institutions to each appropriate Federal banking agency in order to
enhance each agency's ability to examine for and identify money
laundering activity.
``(c) Report to Congress.--The Financial Institutions Examination
Council shall submit a report on the progress made in carrying out
subsection (a) and the usefulness of information received pursuant to
subsection (b) to the Congress by the end of the 1-year period beginning
on the date of enactment of this Act.
``(d) Definition.--For purposes of this section, the term
`appropriate Federal banking agency' has the same meaning as in section
3 of the Federal Deposit Insurance Act [12 U.S.C. 1813].''
Section Referred to in Other Sections
This section is referred to in sections 5313, 5318A, 5321, 5322 of
this title; title 18 section 981.