Extraterritorial US banking regulation and international terrorism: The Patriot Act and the international response
- PDF / 186,574 Bytes
- 20 Pages / 609.984 x 779.976 pts Page_size
- 59 Downloads / 192 Views
Volume 3 Number 4
Extraterritorial US banking regulation and international terrorism: The Patriot Act and the international response Kern Alexander Institute of Advanced Legal Studies, University of London, Charles Clore House, 17 Russell Square, London WC1B 5DR, UK tel: +44 (0)207 862 5837; fax: +44 (0)207 580 9613; e-mail: [email protected]
Dr Kern Alexander is Senior Research Fellow in International Financial Regulation and Lecturer in Law at the Institute of Advanced Legal Studies, University of London. He advises a number of US and EUbased companies regarding compliance with US banking and securities regulation and economic sanctions controls. He is the author of ‘The Extraterritorial Legal Framework of United States Financial Sanctions’ (Butterworths, 2002 – Forthcoming).
ABSTRACT This paper addresses the extraterritorial legal controls of recent US legislation and regulations aimed at the financing of international terrorism. Specifically, US Executive Order 13224, issued on 24th September, 2001, imposes extraterritorial jurisdiction on foreign banks, companies and individuals who conduct, facilitate or assist transactions involving US-designated terrorist organisations. Title III of the US Patriot Act contains a comprehensive statutory framework that creates significant new reporting requirements and due diligence standards for US and foreign financial institutions designed to combat international money laundering and to interdict terrorist financing. The Patriot Act also requires increased cooperation with foreign regulators and supervisors and enhances the role of the Financial Action Task Force. Although the primary focus of this paper is to examine
the new US legislation that applies to money laundering and terrorist financing, recent international and European Community efforts to interdict terrorist financing are relevant for understanding the international context in which the US legislation will be interpreted and enforced. Of particular relevance at the international level are the Special Recommendations of the Financial Action Task Force and a recent European Community Regulation that requires Member States to prohibit the financing of terrorism, with special focus on the role of banks and financial service firms. INTRODUCTION The attack on the USA of 11th September has raised the issue of international terrorism and its financial aspects to a level of primary concern for the international community. To this end, the US Government has adopted extraterritorial financial controls on foreign banking and financial institutions that facilitate transactions with, or assist, designated terrorist groups. President Bush issued an Executive Order on 24th September, 2001 that imposed extraterritorial financial sanctions on banks, financial institutions and any person or business entity (US or foreign) that provides material support for designated individuals or groups involved in international terrorism. In addition, the US Congress responded by
Journal of International Banking Regulation, Vol. 3, No. 4, 2002, pp. 3
Data Loading...
