The United States Treasury Department has finally proposed a regulation to implement Section 312 of the USA PATRIOT Act (Act), the statutory provision requiring due diligence programs for certain correspondent and private banking accounts held by "covered financial institutions." The proposed specifications for such due diligence programs vary little from the statutory requirements and must be incorporated into the anti-money-laundering (AML) compliance programs also required by the Act.

The real significance of this proposal is the Treasury Department’s signal that few, if any, of the wide range of entities covered by the Bank Secrecy Act are likely to avoid extensive AML regulation in the future. With this proposal, the Treasury Department is leaving no doubt that it will attempt to use its newly enhanced AML authorities as broadly as possible.