[13065]
January 19, 2001
TO: BANK AND TRUST ADVISORY COMMITTEE No. 1-01
BROKER/DEALER ASSOCIATE MEMBERS No. 1-01
COMPLIANCE ADVISORY COMMITTEE No. 5-01
INTERNATIONAL MEMBERS No. 5-01
SEC RULES MEMBERS No. 7-01
TRANSFER AGENT ADVISORY COMMITTEE No. 6-01
RE: ANTI-MONEY LAUNDERING GUIDANCE ISSUED
On January 16, 2001, the Department of the Treasury, Department of State, and the
federal banking regulators issued anti-money laundering guidance intended to enhance the
scrutiny of financial transactions that may involve the proceeds of foreign official corruption.
The Securities and Exchange Commission has requested that the Institute make this release
available to its members, and a copy is attached.1
The release focuses on transactions by senior foreign political figures and their family
members and close associates (“Covered Persons”), particularly in connection with high dollar-
value accounts or transactions.2 Financial institutions are encouraged to develop and maintain
“enhanced scrutiny” practices and procedures designed to detect and deter transactions that
may involve the proceeds of official corruption by Covered Persons. When, during its normal
account opening, maintenance or compliance procedures, a financial institution learns of
information indicating that a particular person may be a Covered Person, the release states that
the financial institution should exercise reasonable diligence in seeking to determine whether
the person is, in fact, a Covered Person. If so, then the financial institution should take
significant additional steps to understand the Covered Person’s source of wealth and
anticipated account activity and apply additional oversight to the account. The release lists a
number of questionable or suspicious activities that would warrant enhanced scrutiny with
respect to this type of account.
1 The release also is available on Treasury’s website at http://www.treas.gov/press/releases/guidance.htm.
2 “Senior foreign political figure” is defined as a senior official in the executive, legislative, administrative, military or
judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party,
or a senior executive of a foreign government-owned corporation. In addition, a “senior foreign political figure”
includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign
political figure. “Family members” and “close associates” also are defined terms in the release.
2The release states that the guidance it contains is not a rule or regulation and should not
be interpreted as such. Nevertheless, Institute members may wish to consider the applicability
of this guidance in the context of their anti-money laundering compliance programs. In doing
so, Institute members may want to refer to the Institute’s compliance paper “Money Laundering
Compliance for Mutual Funds.”3
Robert C. Grohowski
Associate Counsel
Attachment
Note: Not all recipients receive the attachment. To obtain a copy of the attachment to which this memo refers, please
call the ICI Library at (202) 326-8304 and request the attachment for memo 13065. ICI Members may retrieve this
memo and its attachment from ICINet (http://members.ici.org).
Attachment (in .pdf format)
3 Investment Company Institute, Money Laundering Compliance for Mutual Funds (May 1999). This paper is
available on the Institute’s members’ website at http://members.ici.org. The members' website is password-
protected; staff at Institute member firms may request access codes by filling out the enrollment form on the website.