1 USA PATRIOT ACT 9 th Annual Factoring Conference Grand America Hotel – Salt Lake City, UT Brian J. Peretti, Esq. US Department of the Treasury Office of Critical Infrastructure Protection and Compliance Policy Friday April 4, 2003

2 Office of Critical Infrastructure Protection and Compliance Policy (OCIPCP) Protect Critical Infrastructure for Domestic Financial Institutions –Identify the critical infrastructure –Identify physical and cyber security vulnerabilities –Ameliorate these vulnerabilities –Evaluate the results of our efforts Money Laundering and Terrorist Financing –USA PATRIOT Act –Other applicable laws and regulations Personal Information Security –Identity theft –Privacy Issues Creation of Public/Private Partnership

3 USA PATRIOT ACT Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism New Anti-Money Laundering Procedures Title III – International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001, amends Bank Secrecy Act Inspired by tragedy of September 11

4 Sections of Emphasis Section 326 – Verification of Identification Section 352 – Anti-Money Laundering Programs

5 Financial Institution Loan or finance company Factoring is included in the definition that is referenced in 4(k) of the Bank Holding Company Act of 1956

6 4 Elements 1.Anti-Money Laundering Program 2.Compliance Officer 3.Training 4.Independent Testing

7 Anti-Money Laundering Program Designed to prevent money laundering Must develop internal –Policies –Procedures –Controls Risk based system Tailor it to your shop

8 Compliance Officer Must be someone that can answer questions from employees regarding the Anti-Money Laundering Program Is the contact point for the government Does not have to be a full time position

9 Training Must be effective training Where the risk is If they are responsible for the transaction, they must have the training

10 Independent Testing Used to make sure the Anti-Money Laundering Program works Doesn’t have to be an outside person Must be independent of the Compliance Officer

11 Who do you apply the AMLP to? All parties to the transaction –Client –Debtor Your source of funds or investor

12 Timeframe Regulation is currently being drafted Will be released sooner rather than later Will provide ample opportunity to comply with it

13 What do we need from you? Review the regulation when it is released. Provide comments to International Factoring Association If questions, call either myself or Charles Klingman

14 US Department of the Treasury Contacts Office of Critical Infrastructure Protection and Compliance Policy (OCIPCP) Charles Klingman, OCIPCP Phone: ; Brian Peretti, OCIPCP Phone: ;