MISSISSIPPI LEGISLATURE
2013 Regular Session
To: Banking and Financial Services
By: Representative Watson
AN ACT TO REQUIRE FINANCIAL INSTITUTIONS CHARTERED IN THIS STATE THAT MAINTAIN CERTAIN ACCOUNTS WITH FOREIGN FINANCIAL INSTITUTIONS TO ESTABLISH DUE DILIGENCE POLICIES, PROCEDURES AND CONTROLS REASONABLY DESIGNED TO DETECT WHETHER THE UNITED STATES SECRETARY OF THE TREASURY HAS FOUND THAT THE FOREIGN FINANCIAL INSTITUTION KNOWINGLY FACILITATES THE EFFORTS OF THE GOVERNMENT OF IRAN TO ACQUIRE OR DEVELOP WEAPONS OF MASS DESTRUCTION OR THEIR DELIVERY SYSTEMS, OR PROVIDES SUPPORT FOR AN ORGANIZATION DESIGNATED BY THE UNITED STATES AS A FOREIGN TERRORIST ORGANIZATION; TO DIRECT THE COMMISSIONER OF BANKING TO ADOPT RULES ESTABLISHING MINIMUM STANDARDS FOR DUE DILIGENCE POLICIES, PROCEDURES AND CONTROLS REQUIRED BY THIS ACT; TO REQUIRE EACH FINANCIAL INSTITUTION CHARTERED IN THIS STATE TO CERTIFY ANNUALLY TO THE DEPARTMENT OF BANKING THAT THE FINANCIAL INSTITUTION HAS ADOPTED AND SUBSTANTIALLY COMPLIES WITH THE DUE DILIGENCE POLICIES, PROCEDURES AND CONTROLS REQUIRED BY THIS ACT AND THE RULES ADOPTED UNDER THIS ACT, AND THAT THE FINANCIAL INSTITUTION DOES NOT MAINTAIN CERTAIN TYPES OF ACCOUNTS WITH A FOREIGN FINANCIAL INSTITUTION THAT KNOWINGLY ENGAGES IN ANY ACTIVITY DESCRIBED IN THIS ACT; TO AUTHORIZE THE COMMISSIONER TO IMPOSE AN ADMINISTRATIVE FINE AGAINST A FINANCIAL INSTITUTION THAT FAILS TO MAKE THE ANNUAL CERTIFICATION REQUIRED BY THIS ACT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) As used in this section, the term:
(a) "Commissioner" means the Commissioner of Banking and Consumer Finance.
(b) "Correspondent account" means an account established to receive deposits from, make payments on behalf of a foreign financial institution, or handle other financial transactions related to that institution.
(d) "Department" means the Department of Banking and Consumer Finance.
(e) "Financial institution" means a state or federal savings or thrift association, bank, savings bank, trust company, international bank agency, international banking corporation, international branch, international representative office, international administrative office, international trust company representative office, credit union, or an agreement corporation operating under Section 25 of the Federal Reserve Act, 12 USCS Section 601 et seq. or Edge Act corporation organized under Section 25(a) of the Federal Reserve Act, 12 USCS Section 611 et seq.
(f) "Payable-through account" means an account, including a transaction account (as defined in Section 19(b)(1)(C) of the Federal Reserve Act), opened at a depository institution by a foreign financial institution by means of which the foreign financial institution permits its customers to engage, either directly or through a subaccount, in banking activities usually in connection with the business of banking in the United States.
(2) A financial institution chartered in this state that maintains a correspondent account or a payable-through account with a foreign financial institution must establish due diligence policies, procedures, and controls reasonably designed to detect whether the United States Secretary of the Treasury has found that the foreign financial institution knowingly:
(a) Facilitates the efforts of the Government of Iran, including efforts of Iran's Revolutionary Guard Corps, to acquire or develop weapons of mass destruction or their delivery systems;
(b) Provides support for an organization designated by the United States as a foreign terrorist organization;
(c) Facilitates the activities of a person who is subject to financial sanctions pursuant to a resolution of the United Nations Security Council imposing sanctions on Iran;
(d) Engages in money laundering to carry out any activity listed in this subsection;
(e) Facilitates efforts by the Central Bank of Iran or any other Iranian financial institution to carry out an activity listed in this subsection; or
(f) Facilitates a significant transaction or provides significant financial services for Iran's Revolutionary Guard Corps or its agents or affiliates, or any financial institution, whose property or interests in property are blocked under federal law in connection with Iran's proliferation of weapons of mass destruction, or delivery systems for those weapons, or Iran's support for international terrorism.
(3) By July 1, 2014, the commissioner shall adopt rules establishing minimum standards for due diligence policies, procedures, and controls required by this section.
(4) By January 1, 2015, and each January 1 thereafter, each financial institution chartered in this state must certify to the department that the financial institution has adopted and substantially complies with the due diligence policies, procedures, and controls required by this section and the rules adopted under this section, and that to the best knowledge of the financial institution, the financial institution does not maintain a correspondent account or a payable-through account with a foreign financial institution that knowingly engages in any act described in subsection (2).
(5) By January 31, 2015, and each January 31 thereafter, the department shall submit a report to the Governor, the President of the Senate, the Speaker of the House of Representatives and the Attorney General that contains a copy of the rules required under subsection (3) and the status of the certifications of compliance received from the financial institutions chartered in this state.
(6) The department shall make its annual compliance report under this section available on its website.
(7) The commissioner may impose an administrative fine, not to exceed One Hundred Thousand Dollars ($100,000.00) per occurrence, against a financial institution that fails to make the annual certification required under subsection (4) of this section.
SECTION 2. This act shall take effect and be in force from and after July 1, 2013.