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US plays Patriot game over money laundering

Lenders are counting the potential costs of the war against terrorism after it helped inspire a new set of tougher money-laundering regulations, writes Harriet Williams.

Under new legislation against criminal gains, banks and building societies face penalties if they fail to report their suspicions “where there are reasonable grounds to know or suspect a person is engaged in money laundering”.

But the concerns of UK lenders are dwarfed by the battle their US counterparts are waging on tougher legislation following the September 11 attacks.

Drafts of the US Patriot Act would require lenders and brokers to report suspicions over any transaction.

Three of the biggest US mortgage industry trade bodies are making their opposition known.

In a joint letter to the US Treasury, the trade groups say: “Lenders should not be expected to scrutinise payment systems issues such as who is making a routine payment.”

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