Module: General Practice
Q87: Which of the following statements correctly describe the key provisions and extraterritorial powers of the USA PATRIOT Act (2001) regarding international money laundering?
Title III of the Act, titled "International Money Laundering Abatement and Anti-Terrorist Financing Act," empowers US authorities to take action against foreign banks that access the US financial system.
Under Section 311, the US Treasury can designate a foreign jurisdiction or institution as a "Primary Money Laundering Concern," allowing it to impose "Special Measures" such as prohibiting US banks from maintaining correspondent accounts for that entity.
Section 313 explicitly prohibits US banks from maintaining correspondent accounts for "Foreign Shell Banks" (banks with no physical presence) and requires them to ensure their foreign partners do not provide access to such shell banks.
Section 319(b) grants the US government the power to seize funds from a foreign bank's correspondent account in the US as a substitute for dirty money held in that foreign bank's accounts overseas.
Under Section 311, the US Treasury can designate a foreign jurisdiction or institution as a "Primary Money Laundering Concern," allowing it to impose "Special Measures" such as prohibiting US banks from maintaining correspondent accounts for that entity.
Section 313 explicitly prohibits US banks from maintaining correspondent accounts for "Foreign Shell Banks" (banks with no physical presence) and requires them to ensure their foreign partners do not provide access to such shell banks.
Section 319(b) grants the US government the power to seize funds from a foreign bank's correspondent account in the US as a substitute for dirty money held in that foreign bank's accounts overseas.
✅ Correct Answer: D
The correct answer is Option D. The PATRIOT Act empowers the US to target foreign banks (Title III), designate concerns (Section 311), ban shell banks (Section 313), and seize correspondent funds (Section 319b). US regulations are relevant for the IIBF AML KYC Exam 2026.