European banks seek to bind long arm of U.S. laundering laws

An association of European banks has asked the European Commission to adopt
counter-measures to the USA Patriot Act to protect banks from the long arm
of U.S. money laundering laws.

The revelation came during a panel discussion on "The Extra-Territorial
Reach of U.S. Money Laundering Laws" during Money Laundering Alert's First
Annual Money Laundering Conference, held September 29 - October 1 in Vienna,
Austria. Thomas Spies, anti-money laundering officer with Deutsche Bank
Group in Germany, read from a letter sent on behalf of European banks to the
European Commission asking it to adopt measures to protect banks from
aggressive USA Patriot Act provisions. Section 319 of the USA Patriot Act,
for instance, allows U.S. authorities to seize foreign "interbank" accounts
in the United States.

Michael McDonald, a consultant and retired IRS Criminal Investigation
Division agent, also explained during the panel that the Patriot Act extends
U.S. money laundering laws to any transaction that "touches" the United
States, such as a check clearing in a U.S account or a wire transfer routed
through a U.S.-based bank to a foreign country. Spies said that European
banks are afraid that U.S. authorities could seize U.S. accounts of foreign
banks for violations of U.S. Office of Foreign Assets Control sanctions
programs. OFAC sanctions prohibit U.S. businesses from dealing with Cuba,
but European banks still carry out transactions with the country.

Barry Sabin, Chief of the Counterterrorism Section of Criminal Division of
the U.S. Justice Department, said during the panel that the United States
would enforce the Patriot Act with "respect for international treaties" and
the "sovereignty" of other nations. Sabin suggested that "a too-aggressive
approach could be a roadblock."