Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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6/26/2007 When Law Enforcement Requests That a Suspicious Account Remain Open

A bank finds highly suspicious activity in an account, files a suspicious activity report, and notes in the report that the account will be closed. Before that can happen, a law enforcement agency asks the bank to keep the account open so that the activities in the accountholder can be monitored. The agency says that if the accountholder has to move the account, it is likely to go offshore to an institution that cannot be monitored. The bank still has the discretion to close the account, but in order to aid the government, agrees to keep the account open. In guidance issued on June 15, FinCEN recommends that the bank take several precautions. It should ask for a written request from the agency, and insist that the request be signed by a supervisory agent or an attorney in the U.S. Attorney’s Office or another office in the Department of Justice. If the request comes from a state or local law enforcement agency, it should be signed by a supervisor or by an attorney in the state prosecutor’s office. The purpose of the request should be stated, such as monitoring. The request should also provide for a limited duration, not to exceed six months, though this period might be extended by a subsequent request. There is no document retention requirement for such a request, but FinCEN recommends the institution retain the request for five years from the date of expiration. FinCEN’s guidance reminds institutions that an account that is kept open as a result of a law enforcement request is still subject to BSA reporting requirements, and suspicious activity reports should be filed as appropriate. This and other developments will be discussed in the August issue of the Monitor.

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