I. INTRODUCTION
To promote voluntary sharing of information regarding possible money laundering and terrorist financing activities, the Department of the Treasury, Financial Crimes Enforcement Network (FinCEN) recently issued a new Fact Sheet that expand prior information-sharing guidance under Section 314(b) of the USA PATRIOT Act (“Section 314(b)”) providing a safe harbor from liability.
Financial institutions that have anti-money laundering programs pursuant to FinCEN rules, and associations of such financial institutions, are eligible to share information about suspected money laundering or terrorist financing in reliance on Section 314(b). Although sharing this type of information is voluntary, FinCEN strongly encourages the sharing of information under Section 3l4(b), viewing this information sharing as preventing crime and illicit conduct.
II. FACT SHEET - SAFE HARBOR
The new FinCEN Fact Sheet offers important clarifications designed to enhance financial institutions’ ability to comply with their anti-money laundering and counter-terrorism obligations and help protect U.S. national security:
A. Broader Information Sharing: Financial institutions and associations of financial institutions may share information about suspected money laundering or terrorist financing under Section 314(b) without having made a conclusive determination that the activity is suspicious and without having specific information that the activity directly relates to the proceeds of specified unlawful activity (“SUA”). A reasonable basis to believe that the shared information relates to money laundering or terrorist activity is sufficient. Financial institutions and associations of financial institutions may share this information even if the activities do not constitute a transaction but rather constitute an attempted transaction or an attempt to induce a transaction, such as sharing information involving possible cybercrime, fraud, and other predicate offenses when financial institutions suspect those offenses may involve money laundering or terrorist acts.
B. Personally Identifiable Information: The new FinCEN Fact Sheet does not impose limits on sharing personally identifiable information that is shared consistent with Section 3l4(b), or on the medium that financial institutions or associations of financial institutions may use to share information, such as electronically or verbally and through video surveillance and cyber-related data (e.g., IP addresses). Financial institutions and associations of financial institutions must protect the security and confidentiality of all information shared under Section 314(b).
C. Associations of Financial Institutions: The new FinCEN Fact Sheet expands the types of entities that are eligible for the Section 314(b) safe harbor. Specifically, an entity that is not itself a financial institution may form and operate an association of financial institutions whose members can share information under Section 314(b), and an unincorporated association of financial institutions that is governed by a contract between its financial institution members may also share information under Section 314(b).