good
4.
Mr Knapp confirmed that, as reported in my minute to Tom Harris of 24 December, any action relating to the extraterritorial provisions
of the Act would require prior authorisation by the Criminal Division of the DOJ. This requirement would shortly be incorporated in an amendment to the US Attorneys Manual which would read: due to the potential international sensitivities as well as possible problems involved in utilisation of the extraterritorial provisions of these sections no Grand Jury investigation may be commenced or indictment returned or complaint filed without the prior written approval of the Assistant Attorney General in charge of Criminimal Division when jurisdiction to prosecute this offence exists only because of this extraterritorial provision. If you anticipate a possible "extraterritorial case" please consult the Criminal Division contact listed above.
5. Finally, in response to a suggestion by Tom Harris, Mr Knapp said that he would be happy to provide us with a comfort letter similar to that sent to the Swiss Embassy on 12 September (see page 7 of the memorandum forwarded to you under cover of Tom's letter of 12 January), incorporating the assurances he had given us at the meeting.
6. At the Department of State we saw David Small, the Assistant Legal Adviser who deals with extraterritoriality. He too expressed sympathy with our concerns about the extraterritorial provisions of the Act and noted with interest the DOJ's offer to provide a letter of comfort. He confirmed that State had now received the EC demarche on the Act.
7. At the Treasury Department we were received by Selig Merber, the Assistant General Counsel for Enforcement. He and his colleagues listened carefully but offered few comments. They handed over the attached proposed amendments to the Treasury regulations implementing the Bank Secrecy Act which include changes in the definition of a "financial institution" as referred to in Section 1956 (b) of the Act (see my note to Tom Harris of 24 December). Although the Federal Register notice gives
24 November as the final date for comment, Mr Merber assured us that our comments, if we wished to make any, could still be taken into account. I have spoken to the local firm of lawyers who have advised the Institute of Foreign Bankers on the implications for them of the proposed amendments and prepared the attached comments. These do not specifically address extraterritorial concerns but Thomas Crocker (the lawyer to whom I spoke) thought that the amendments did not give rise to serious extraterritorial concerns. You may nevertheless wish to examine the proposed amendments and consult appropriate copy recipients just in case comments from HMG are called for, though on a quick reading I have not been able to identify and specific problems we should wish to draw attention to. The Treasury Department are holding open for us the deadline for comments and we should aim to let them have a response if possible by the end of next week.
/8.
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