"Reaching overseas: U.S. AML reform expands foreign bank subpoena power" by Daniel R. Alonso and Benjamin W. Hutten (American Bar Association Section of International Law Newsletter)
American Bar AssociationDaniel R. Alonso, Benjamin W. Hutten
In one of its first acts of 2021, the United States Congress enacted the Anti-Money Laundering Act of 2020 (AMLA), which significantly expands the U.S. government’s ability to subpoena records of foreign banks held outside the United States.
Before the enactment of AMLA, the USA PATRIOT Act provided mechanisms for the Departments of Justice (DOJ) and Treasury to issue subpoenas to foreign banks that maintain foreign correspondent accounts in the United States for records related to those correspondent accounts, including records maintained outside of the United States relating to the deposit of funds into the foreign bank. AMLA expanded this authority to allow DOJ and Treasury to issue subpoenas to the same set of foreign banks, but for records that relate to any account at the foreign bank, including those held overseas, whether or not the records are related to the correspondent account. The only limitation is that the subpoena must relate to one of a wide range of matters, including an investigation of a violation of U.S. criminal laws, an investigation into violations of the Bank Secrecy Act (the primary anti-money laundering law of the United States), an investigation into whether impose “special measures,” against persons and jurisdictions deemed to be foreign threats to global anti-money laundering efforts, or a forfeiture action. Foreign banks and their U.S. correspondents are prohibited from disclosing any subpoena issued under AMLA, and unauthorized disclosures can result in civil penalties of up to $250,000 or up to double the amount of certain funds identified by the investigation as proceeds of crime.
Originally published in the American Bar Association Section of International Law Newsletter; reprinted with permission.