Information Sharing Mechanisms

Section 314(a) vs 314(b): Know the Difference Cold

The distinction between Section 314(a) and Section 314(b) of the USA PATRIOT Act is one of the most reliably tested items on CAMS. Confusing them is a classic trap.

Section 314(a) is government-to-institution and mandatory. FinCEN, acting on behalf of law enforcement, sends financial institutions a list of names of subjects suspected of money laundering or terrorist financing. Receiving institutions must search their records for accounts and transactions matching the named subjects (generally covering the prior 12 months of accounts and 6 months of transactions) and report positive matches to FinCEN. Institutions may not disclose the request to anyone except as needed to respond, and the data may be used only to respond - not for other purposes.

Section 314(b) is institution-to-institution and voluntary. It lets financial institutions share information with one another to identify and report activities that may involve money laundering or terrorist financing, and it provides a safe harbor from civil liability for sharing in good faith for that purpose. To use it, an institution must file an annual notice to FinCEN (effective for one year, then renewed) and verify the counterparty is also registered.

International Channels: FIUs, Egmont, and Mutual Legal Assistance

Beyond US statutes, CAMS tests the global plumbing of information sharing. FATF Recommendation 29 requires every country to establish a financial intelligence unit (FIU) as the national center for receiving and analyzing SARs/STRs and disseminating financial intelligence. In the United States, the FIU is FinCEN. FATF Recommendation 40 addresses the widest forms of international cooperation between competent authorities, including spontaneous and requested information exchange.

FIUs exchange intelligence with each other primarily through the Egmont Group of Financial Intelligence Units, a global network of roughly 180 member FIUs (about 181-182 as of the 2025 plenary). Egmont provides a secure channel (the Egmont Secure Web) and a Statement of Principles for information exchange. A key exam point: Egmont enables FIU-to-FIU intelligence sharing, which is administrative, fast, and distinct from formal evidence-gathering.

When authorities need admissible evidence across borders - not just intelligence - they use a Mutual Legal Assistance Treaty (MLAT), a formal government-to-government process that is slower but produces court-usable material. Distinguish the two:

• Egmont / FIU channel: intelligence, administrative, fast, not court-admissible by itself.
• MLAT: formal evidence, treaty-based, slower, admissible in court.
• Letters rogatory: a formal court-to-court request, used where no MLAT applies.

Worked scenario: A US bank's investigator believes a customer's funds originated abroad and wants to share findings with another US bank that holds a related account. The CAMS-correct mechanism is Section 314(b) - voluntary institution-to-institution sharing with safe harbor - provided both banks have filed their annual FinCEN notices. If instead law enforcement needs the foreign bank's records as evidence for prosecution, the answer is an MLAT, not 314(b) and not the Egmont channel.

Match the mechanism to the need: mandatory government search (314(a)), voluntary firm-to-firm sharing (314(b)), FIU intelligence exchange (Egmont), or admissible cross-border evidence (MLAT).

Intra-Group Sharing, 314(b) Scope, and Common Misreadings

A third sharing channel the exam tests is intra-group information sharing - moving customer and risk data among affiliates of the same financial group across borders. FATF Recommendation 18 expects financial groups to implement group-wide programs, including policies for sharing information for AML/CFT purposes among the parent and its branches and subsidiaries. The practical tension is data-protection and bank-secrecy law in the host country; the CAMS-correct stance is that group sharing is expected but must be reconciled with local legal limits, not ignored.

Clarify what Section 314(b) does and does not allow, because the exam plants subtle errors here:

That fourth row is the highest-yield trap: 314(b) lets institutions share underlying information that may indicate ML/TF, but it never lets them disclose that a SAR was filed. SAR confidentiality and the tipping-off rule sit above 314(b).

Worked scenario: A US broker-dealer wants intelligence on a counterparty and asks a foreign affiliate for the customer's account history. The applicable channel is intra-group sharing under the group program, subject to the foreign jurisdiction's secrecy and data-protection law - not 314(b), which is for sharing between separate US institutions. If instead the broker-dealer wants to share concern about ML with an unaffiliated US bank, 314(b) (with annual notice on both sides) is correct. And if prosecutors need the foreign affiliate's records as evidence, the answer escalates to an MLAT.

Reading the parties and the purpose precisely is how you pick the right mechanism under exam time pressure.