Financial Accounting I

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Patriot Act

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Financial Accounting I

Definition

The Patriot Act is a U.S. legislation enacted in 2001 to enhance national security measures, particularly in the areas of surveillance and intelligence gathering. It has significant implications for financial institutions regarding anti-money laundering and combating the financing of terrorism (AML/CFT).

5 Must Know Facts For Your Next Test

  1. The Patriot Act requires financial institutions to establish anti-money laundering programs.
  2. It mandates enhanced due diligence procedures for foreign bank accounts and correspondent accounts.
  3. Section 326 of the Act requires financial institutions to verify the identity of individuals opening accounts.
  4. The Act includes provisions that allow for greater information sharing between financial institutions and government agencies.
  5. Non-compliance with Patriot Act regulations can result in severe penalties, including fines and legal repercussions.

Review Questions

  • What are the key requirements imposed on financial institutions by the Patriot Act?
  • How does Section 326 of the Patriot Act affect account-opening procedures?
  • What are the potential consequences for a financial institution's non-compliance with the Patriot Act?
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