The Financial Crimes Enforcement Network (“FinCEN”) issued interpretive guidance (the “Guidance”) concerning the application of Section 314(b) (“Section 314(b)”) of the USA PATRIOT Act (the “PATRIOT Act”). Section 314(b) permits financial institutions (“FIs” and each an “FI”) and associations of FIs to share information concerning individuals, entities, organizations and countries suspected of possible terrorist or money laundering activities. To take advantage of the information sharing safe harbor under Section 314(b), an FI must comply with all of the conditions to usage of the safe harbor, including: (1) providing notice to FinCEN; (2) taking reasonable steps to verify that the other sharing FI has submitted the required notice to FinCEN; (3) imposing restrictions on the usage of shared information; and (4) taking steps to ensure the security of information shared (the “Safe Harbor Conditions”). The Guidance states that, to the extent FIs share information related to possible money laundering activities (including those associated with use of proceeds derived from specified criminal activities) or related to possible terrorist activity, such information sharing is protected by the Section 314(b) safe harbor, provided that the Safe Harbor Conditions have been satisfied. The Guidance stresses, however, that when an FI shares information under the 314(b) safe harbor, it may not disclose the filing or existence of a Suspicious Activity Report (“SAR”), but may disclose the facts underlying the SAR.
Alert June 30, 2009