US Clarifies Bank Policies for Foreign Governments, Embassies
Access to appropriate banking services remains intact, Treasury says
WASHINGTON, DC - 06/22/04 - The Department of the Treasury and several other government agencies have reaffirmed its decision that US banks can continue to serve foreign governments, embassies and consulates and their staffs, despite the adoption of stricter US rules for monitoring the financial services industry.
In a recent statement, the Treasury Department said that amendments to the Bank Secrecy Act adopted after the September 11, 2001 terrorist attacks are "not in conflict" with its longstanding policy that persons living or working in the US should have access to US banking services.
"Financial institutions can provide appropriate banking services to the embassies and interests sections of foreign governments and their staffs in a manner that fulfills the needs of those foreign governments while satisfying the provisions of the Bank Secrecy Act," the agency said.
There are well over a?hundred foreign consulates general, consulates, honorary consulates, and trade and investment offices in California that are?impacted by the decision.
The Treasury also released the text of an interagency memorandum clarifying US policy.
In the memorandum, regulators from several US agencies said that recent money-laundering investigations involving a US bank and diplomats from Saudi Arabia had prompted inquiries as to whether financial institutions should do business with embassies and their staffs.
The regulators said that government agencies "will not, absent extraordinary circumstances, direct or encourage any institution to open, close or refuse a particular account or relationship," but also asserted that the institutions are responsible for ensuring their full compliance the Bank Secrecy Act, as amended by the 2001 USA Patriot Act.
The Patriot Act imposed reforms designed to limit money laundering by terrorist groups and other financial crimes.
According to the interagency memorandum, "longstanding policy of the United States Department of the Treasury that persons residing or working in the United States should have access to US banking services. This policy certainly encompasses the embassies and interests sections of foreign governments and their staffs."
It is also the policy of the Treasury Department that financial institutions comply with the Bank Secrecy Act, as amended by the USA PATRIOT Act, and its implementing regulations, it said, adding that "compliance with those provisions helps to safeguard our financial system from the abuses of money laundering and illicit finance, including terrorist activity financing."
These two policies are not in conflict, said the document, as "financial institutions can provide appropriate banking services to the embassies and interests sections of foreign governments and their staffs in a manner that fulfills the needs of those foreign governments while satisfying the provisions of the Bank Secrecy Act."
The memorandum was circulated to the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.
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