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Special Due Diligence Programs for Certain Foreign Accounts
Financial Crimes Enforcement Network
Financial Crimes Enforcement Network
Special Due Diligence Programs
for Certain Foreign Accounts
An Assessment of the Final Rule
Implementing Enhanced Due Diligence Provisions for
Accounts of Certain Foreign Banks
Issued August 9, 2007
March 2009
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Special Due Diligence Programs for Certain Foreign Accounts
Financial Crimes Enforcement Network
PURPOSE
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EXECUTIVE SUMMARY
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BACKGROUND
3
METHODOLOGY
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RESEARCH AND ANALYSIS
7
SIGNIFICANT FINDINGS
9
CONCLUSIONS
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APPENDIX A
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Table of Contents
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Special Due Diligence Programs for Certain Foreign Accounts
Financial Crimes Enforcement Network
Purpose
The Financial Crimes Enforcement Network (FinCEN) has committed to providing
affected industries with written feedback within 18 months from the effective date
of a new regulation or significant change to an existing regulation. This report looks
at the impact of final rules concerning Special Due Diligence Programs for Certain
Foreign Accounts, which implement Section 312 of Title III of the USA PATRIOT Act:
the International Money Laundering Abatement and Financial Anti-Terrorism Act of
2001 (“Title III”).
On August 9, 2007, FinCEN issued a Final Rule (herein referred to as the 2007 Rule)
implementing the enhanced due diligence provisions of Section 312, requiring that
covered financial institutions apply risk-based procedures to the accounts of three
categories of foreign banks.1 The 2007 Rule supplemented the Special Due Diligence
Final Rule published on January 4, 2006 (herein referred to as the 2006 Rule), which
implemented due diligence requirements for correspondent accounts for foreign
financial institutions.2 Because the 2007 Rule requirements are dependent on the
2006 Rule requirements, we have included information relative to some of the cor-
respondent provisions of the 2006 Rule in this study. This study does not, however,
address the broader beneficial ownership provisions