USA PATRIOT Act, Section 314(a) and 314(b) Information Sharing: Beneficial and Detrimental Effects of the Act

Monika Wilejto-Rieken

The enactment of the USA PATRIOT Act, Section 314(a) and 314(b) was a reaction of the US Congress and the President following the tragic event at the World Trade Center that hit the country on September 11, 2001. The two sections have a similar objective of detection and prevention of terrorism and money laundering in aid of funding terrorism. The goal is achieved through enhanced investigative tools and information sharing about any suspicious transactions and accounts. The full act even encompassed immigration laws, better surveillance process, and stringent measures to curb money laundering.

The two sections have helped to forge a strong and effective relationship not only between financial institutions and law enforcement agencies but also between the former themselves. In order to improve the effectiveness of information sharing, the section was divided into 314(a) and 314(b). Section 314(a) involves the allotment of information sharing between institutions of finance and the federal agencies tasked with enforcing law. On the other hand, the latter deals with the sharing of information amongst financial entities only. While there are no restrictions on the application of the shared information under Section 314(a), there is a limitation regarding the purposes of the information in Section 314(b). The nature of regulations and requirements of the two sections also varies as FinCEN stipulates differing standards and rules that must be adhered to by the financial institutions.

Download PDF