The Financial Crimes Enforcement Network today issued a final rule that severs Al-Huda Bank, designated as a financial institution of primary money laundering concern under Section 311, from the U.S. financial system, and imposes a special measure prohibiting domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of the Iraqi bank, which the agency said serves as a conduit for terrorist financing.
Pursuant to the final rule, covered financial institutions are prohibited from opening or maintaining correspondent accounts for or on behalf of Al-Huda Bank, and are required to take reasonable steps not to process transactions for the correspondent account of a foreign banking institution in the U.S. if the transaction involves the bank, according to FinCEN. The final rule also requires covered financial institutions to apply special due diligence to their foreign correspondent accounts that is reasonably designed to guard against their use to process transactions involving Al-Huda Bank.
