Title III of the antiterrorism law enacted on October 24, 2001, the law dubbed the “Patriot Act”, contains numerous provisions that strengthen the hand of the federal government in preventing the flow of terrorists’ funds through financial institutions, and for the first time, these l aws contain very strong provisions that affect foreign financial institutions . These tough provisions allow the government an array of sanctions ranging from tougher record keeping and disclosures to total shut-down of foreign financial institutions ability to do business in the U.S. The law will be further implemented by regulations to be adopted by the Treasury Department and the bank regulatory agencies.

The basic structure of these new provisions is as follows:

1. The Secretary of the Treasury may make findings, pursuant to criteria summarized below, that a foreign government, financial institution or types of account is of "primary money laundering concern." These findings may be made if the Secretary determines that "reasonable grounds exist." Once such a finding is made, then certain "special measures” are triggered and give the government a broad menu of additional sanctions and remedies.