InfoBytes Blog
FinCEN Prohibits U.S. Financial Institutions from Holding Correspondent Accounts for FBME Bank Ltd.
On March 31, FinCEN published a final rule imposing the fifth special measure against FBME Bank Ltd. (FBME). Pursuant Section 311 of the USA PATRIOT Act, the fifth special measure prohibits U.S. financial institutions from opening or maintaining a correspondent account for, or on behalf of, FBME. As previously covered in InfoBytes, on July 29, 2015, FinCEN published a similar final rule, which did not take effect as, one day before its effective date, a U.S. district court granted FBME’s motion for a preliminary injunction to stop the rule from taking effect. In November 2015, FinCEN subsequently re-opened its comment period for the final rule, soliciting additional comments “particularly with respect to the unclassified, non-protected documents that support the rulemaking and whether any alternatives to the prohibition of the opening or maintaining of correspondent accounts with FBME would effectively mitigate the risk to domestic financial institutions.” According to FinCEN, its recently issued final rule will “guard against the international money laundering and terrorist financing risks that FBME poses to the U.S. financial system.” The Final Rule is effective July 29, 2016.