FinCEN published two administrative rulings regarding special measures adopted by FinCEN pursuant to Section 311 of the USA Patriot Act. In both rulings, FinCEN considered the application of special measures prohibiting U.S. financial institutions from opening or maintaining a correspondent for the sanctioned non-U.S. bank. In the first ruling, FinCEN determined that a U.S. bank may make a one-time transfer of funds to a non-U.S. bank subject to special measures when the transfer is made to satisfy the U.S. bank’s obligations under a standby letter of credit on behalf of a U.S. company. In the second ruling, FinCEN concluded that a U.S. bank was not prohibited from cashing redemption and dividend checks issued by the U.S. bank on behalf of a U.S. customer to a bank subject to Section 311 special measures that is a shareholder of the U.S. customer.
Alert June 29, 2010