Business Client Alert: Federal Legislation Update: The USA PATRIOT Act and Applicability of Anti-Money Laudering Rules to Private Investment Companies/Funds
3/1/2002
The "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001" (USA PATRIOT Act) was signed into law by President Bush on October 26, 2001. Title III of the USA PATRIOT Act is the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001 (the "2001 Money Laundering Act"), which is intended to strengthen the anti-money laundering provisions of earlier legislation, particularly with respect to crimes by foreign nationals and foreign financial institutions, by imposing new and more stringent anti-money laundering laws. The 2001 Money Laundering Act amends certain provisions of, and adds new provisions to, the Bank Secrecy Act of 1970 (the BSA). These amended and new provisions impose significant new anti-money laundering requirements on all "financial institutions," including investment companies, which may be applied to private investment funds in regulations forthcoming under the 2001 Money Laundering Act.
