USA Patriot Act.

The USA Patriot Act, enacted following the 9/11 terrorist attacks, requires a wide variety of businesses to establish antimoney-laundering programs to fully document and identify the parties to a number of financial transactions. While the law restricts these requirements to "financial institutions," the definition is expansive and includes banks; credit unions and thrifts; brokers and dealers; investment bankers; insurance and loan companies; dealers of precious metals and jewels; businesses that sell cars, planes and boats; travel agencies and casinos.

While most institutions have a code of ethics that addresses these types of issues, many still need to make sure they are in compliance with specific provisions of the USA Patriot Act as they are phased in over time by regulations issued by the Treasury Department. The government is being vigilant about antiterrorism measures and will expect businesses to be equally vigilant. In April 2003, the U.S. Treasury Department also announced that banks and other institutions will be required to develop customer identification programs that include procedures to:

* Collect identifying information about customers opening accounts.

* Verify that customers are who they say they are.

* Maintain records of information used to verify customer identities.

* Determine whether customers appear on any list of suspected terrorist or terrorist organizations.

Institutions subject to regulations requiring that they undertake these types of programs should consult with legal counsel and accountants who are experienced in forensic accounting and with the prohibitions contained in federal and state law concerning money laundering. Financial penalties to businesses for violation of federal statutes are becoming substantial, but they can be reduced if companies put into effect and properly monitor an effective compliance program to prevent criminal and unethical acts by employees as part of their overall code of ethics.

Sam Damren is an attorney with the Detroit office of Dykema Gossett PLLC, a Silver-level member of the Detroit Regional Chamber.