Sec. 313. Prohibition On United States Correspondent Accounts With Foreign Shell Banks
31 U.S.C. ยง 5318 was amended to prohibit U.S. financial institutions from establishing, maintaining, administering, or managing a correspondent account in the U.S. for, or on behalf of, a foreign bank that does not have a physical presence in any country (otherwise known as a shell bank). U.S. financial institutions must also take steps to prevent the indirect servicing of a foreign shell bank by allowing a correspondent account to be established and maintained by another foreign bank who acts on behalf of that foreign shell bank. However, exceptions are made if the shell bank is an affiliate (under the control) of a bank that has a physical presence in the U.S. or if the foreign shell bank is subject to supervision by a banking authority in the non-U.S. country regulating the affiliated depository institution, credit union, or foreign bank.
Read more about this topic: USA PATRIOT Act, Title III, Subtitle A
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