On September 17th, the Financial Crimes Enforcement Network issued an administrative ruling on the definition of "association of financial institutions" for purposes of voluntary participation in the information sharing program implemented under Section 314(b) of the USA PATRIOT Act. Section 314(b) provides a safe harbor from liability for the voluntary sharing of information by financial institutions for the purposes of identifying terrorist activity or money laundering. FinCEN found that the company at issue met the technical requirements to be considered an association of financial institutions for purposes of Section 314(b), and therefore was eligible to avail itself of the statutory safe harbor from liability when sharing information under the 314(b) program. Also, the financial institution members that participate in the company's service will be able to avail themselves of the statutory safe harbor for their sharing of information under the 314(b) program. However, some of the services that the company intends to offer may fall outside the scope of the statutory safe harbor as the service focuses on sharing information on specified unlawful activity and not necessarily money laundering and terrorist financing. It is important for the company to consider seriously potential disclosure requirements if information is shared that would not be covered by the safe harbor and the possibility that the limitations on sharing information may negatively impact the open sharing of information envisioned by the statute. FIN-2012-R006.
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Fincen ruling on financial institution participation in USA PATRIOT Act information sharing
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