Industry Letters

Guidance on President Bush's Executive Order Freezing Assets That Support Terrorism

September 27, 2001

TO THE CHIEF EXECUTIVE OR OPERATING OFFICER OF THE BANKING INSTITUTION ADDRESSED:

Effective September 24, 2001, President Bush issued an Executive Order freezing assets of individuals and organizations that support terrorism. This action represents an important first strike on the financial front in our nation's new war on terrorism. By issuing this Executive Order, the President targets the very heart of terrorism by cutting off its financial resources and limiting the ability of terrorist supporters and organizations to move money across international borders. Banking institutions in New York State will play a critical role in this aspect of the war on terrorism, and the cooperation of the financial industry will be critical in the months to come.

A copy of the Order is attached to this letter, and it also may be obtained from the Banking Department's website (www.banking.state.ny.us/legal/industry/il01092c.htm), as well as the website of the Office of Foreign Assets Control ("OFAC") (www.treas.gov/ofac/). Institutions should review the OFAC site frequently, since the list of entities whose assets were frozen by the Order is expected to expand quickly.

It is important that all institutions understand that immediate compliance with the President's Order is required. Compliance means that any accounts of any entity listed in the Order must immediately be frozen. In addition, assets of such entities coming into the possession of institutions also should be blocked.

It is also important that all institutions understand that there are very severe penalties under federal law for violations of the President's Order.

The Banking Department also expects the full cooperation of all banking institutions with the Order. The Department will take all actions, and employ all powers available to it, to ensure that all institutions operating in this State are, at all times, in full compliance with the President's Order. Specifically, the Department will use all examination and enforcement powers available under the Banking Law and Department Regulations to effectuate such compliance, including without limitation, the provisions of Sections 36 and 39 of the Banking Law. The Department also will cooperate with all appropriate law enforcement agencies in this regard on a state, federal and international level, as may be appropriate.

Should your institution have any questions regarding OFAC, they should contact the OFAC hotline at (202) 622-2490. Institutions having questions regarding the Department's enforcement of the Order or any related questions should contact their Department liaisons or the Deputy Superintendent responsible for their institution.

Very truly yours,

Elizabeth McCaul
Superintendent of Banks