The United Nations estimates that 2%–5% of global gross domestic product (GDP) – equivalent to $800 billion–$2 trillion – is laundered each year. Section 314(b) of the USA PATRIOT Act helps prevent this type of crime by giving businesses a way to legally share information and collaborate to detect suspicious activity.

Although this clause is a powerful tool, it requires businesses to opt in, follow the rules, and use it strategically. In this guide, we’ll explain what Section 314(b) covers, what types of businesses can participate, and how to make the most of it.

What’s in this article?

• What is Section 314(b) and why is it important?
  
• How does Section 314(b) support Anti-Money Laundering (AML) efforts?
  
• What are the requirements for businesses that participate in Section 314(b)?
  
• What industries benefit from Section 314(b)?
  
• How can businesses adopt 314(b) best practices?
  

What is Section 314(b) and why is it important?

Section 314(b) of the USA PATRIOT Act is a rule that lets financial institutions share information with each other to catch money laundering and terrorist financing. Strict privacy laws typically keep banks, credit unions, and fintechs from sharing customer details with one another, but this provision creates a safe zone where they can legally exchange information as long as they follow the guidelines of the Financial Crimes Enforcement Network (FinCEN). To participate, a company must register with FinCEN and set up the right internal policies for sharing information securely.

This rule helps businesses spot financial crimes faster. Criminals rarely use just one bank; instead, they move money across multiple accounts and institutions to avoid detection. Section 314(b) lets financial firms compare notes and flag suspicious behaviour before the problem worsens. Instead of waiting for law enforcement or regulators to complete their own investigation, financial institutions can work together to identify patterns and act quickly.

Although participation in this clause is optional, it’s a useful tool for fraud prevention. It’s also a good way for businesses to show regulatory bodies that they’re taking AML seriously in the event of an audit or regulatory review. For example, if a regulator questions why a financial firm missed certain warning signs, the firm could use its 314(b) participation to demonstrate that it took reasonable steps to investigate.

How does Section 314(b) support Anti-Money Laundering (AML) efforts?

Money launderers typically spread transactions across multiple financial institutions and use a mix of accounts, shell companies, and cryptocurrencies to make their activities harder to trace. Major money laundering operations often rely on networks of accounts and businesses that work together, potentially even including front businesses with legitimate-looking transactions. When a financial institution can see only one way that these funds are moved, it has a lower chance of spotting the fraudulent activity.

Section 314(b) allows banks, credit unions, fintechs, and other financial firms to share information and trace how these funds are moved. This makes it much harder for criminals to stay undetected. For example, one financial institution might notice that a company has unusual transaction patterns, while another might have records that show the same company has ties to a known criminal. Without this rule, those institutions might not have made the connection. But by sharing information, they can map out links that would otherwise go unnoticed.

Beyond helping financial institutions detect fraud, Section 314(b) also enables them to address it more quickly. Normally, financial institutions are required to file a Suspicious Activity Report (SAR) with regulators if they suspect money laundering, but SARs only go to the government and relevant law enforcement agencies, so financial institutions need to wait for law enforcement to step in. With this clause, firms can proactively alert each other to potentially fraudulent activity before it escalates, instead of waiting for law enforcement to act.

Money laundering fuels everything from fraud to drug trafficking and terrorism. Section 314(b) offers financial institutions a legal way to work together and can make the system more resilient.

What are the requirements for businesses that participate in Section 314(b)?

Section 314(b) participation is voluntary. Businesses that choose to share information under this provision must follow specific rules to stay compliant and maintain their legal protections. Here are the requirements.

You must be a “financial institution” under the law

Only certain types of businesses can participate. According to FinCEN, eligible institutions include:

• Banks and credit unions

• Money service businesses such as money transmitters, currency exchanges, and cryptocurrency exchanges

• Casinos and card clubs

• Brokers and dealers in securities

• Mutual funds

• Insurance companies

• Operators of credit card systems

• Loan and finance companies

If your company is subject to AML requirements under FinCEN regulations, it’s probably eligible.

You must register with FinCEN

Before they share any information, businesses must submit a registration form on FinCEN’s website. This officially notifies FinCEN that your company is participating in Section 314(b) and intends to share information in compliance with the law.

Registration must be renewed annually.

You can only share information for AML and counterterrorism purposes

Institutions can only use this rule to share information related to money laundering or terrorist activities. Using Section 314(b) for anything outside these purposes – such as general fraud detection or credit risk analysis – isn’t allowed and could cause legal trouble.

You need to confirm the other institution’s registration

Before you exchange information with another institution, you must first check that it’s also a registered participant. You can do so by using FinCEN’s Secure Information Sharing System or by downloading the full list of participants.

You must protect the shared information

Any data exchanged under Section 314(b) must be kept confidential and used only for AML investigations. This information cannot be shared with third parties (unless they’re also registered participants and directly involved) or used for marketing, business strategy, or other non-AML purposes. Institutions must create internal controls to limit access to shared information and prevent misuse and disclosure to unauthorised parties.

You need policies and procedures in place

Institutions that participate in Section 314(b) should have clear policies on:

• How they request and share information

• Who is authorised to handle 314(b) communications

• How they document shared information

• How they ensure compliance with FinCEN’s requirements

These keep institutions compliant and protect them from liability if any issues arise.

What industries benefit from Section 314(b)?

Section 314(b) helps any industry that handles financial transactions and faces risks of money laundering or illicit financing. If a business handles large transactions, works with high-risk customers, or moves money across borders, it’s vulnerable to financial crime. This rule helps businesses:

• Spot fraudulent actors before they move to another company

• Identify patterns that individual firms might miss

• Strengthen AML efforts

Although traditional financial institutions use this clause the most, other businesses subject to AML policies also benefit from participating. Here’s a closer look at some industries that benefit the most.

Dealers in precious metals, precious stones, or jewels

Money launderers often try to buy big-ticket items such as jewels with illicit cash and resell them to “clean” the money. Dealers that sell these goods benefit from Section 314(b) by exchanging intelligence on suspicious buyers or transactions that seem designed to avoid reporting thresholds.

Casinos and card clubs

Some criminals use illegally obtained funds to buy casino chips and then cash out their winnings as clean money. Section 314(b) allows these gambling businesses to share data on suspicious activity and potential bad actors.

Cryptocurrency and blockchain-based businesses

Crypto exchanges and payments services that process digital assets are vulnerable to illicit finance. Crypto transactions can move across multiple exchanges or wallets. Section 314(b) allows platforms to co-ordinate on suspicious patterns such as swift transfers between accounts, mixing services, and wash trading.

Payment processors and embedded finance providers

Many modern businesses embed financial services into their platforms – for example, marketplaces with their own payment systems or software-as-a-service (SaaS) platforms that process invoices and loans. These companies aren’t banks, but they still move money. Section 314(b) helps them coordinate when they see questionable activity across different platforms.

How can businesses adopt 314(b) best practices?

Section 314(b) is a powerful tool for fighting financial crime. To use it effectively, businesses must be intentional about how they share information, who they share it with, and how they protect that data. Here are some best practices.

Renew registration status

Before it shares any information, a company must register with FinCEN and confirm that any other institution it works with under this rule is registered too. Registration must be renewed annually.

Keep information secure

Since Section 314(b) involves sharing sensitive financial data, businesses need to be extremely careful when they share or receive that information. That means:

• Using encrypted email or a secure platform

• Keeping detailed records of what’s shared and why

• Ensuring only authorised employees have access to shared information

If a company isn’t careful about how it handles data, it could be exposed to legal and reputational risks.

Be selective about who you work with

Not every financial institution operates with the same level of diligence. Before you share anything, assure that the other institution is also registered with FinCEN and has strong AML policies in place.

Train your team on what Section 314(b) allows

Section 314(b) applies only to investigating money laundering or terrorist financing – not to general payment fraud, credit risk, or anything related to business strategy. Set clear policies on:

• Who’s in charge of handling 314(b) requests

• Warning signs that justify using Section 314(b)

• What kinds of information can and can’t be shared

• When to escalate issues or report findings

• How to properly document shared information

Use it only when it matters

Overuse of Section 314(b) can slow investigations and make institutions less likely to take requests seriously. Businesses should be careful and limit their use by:

• Focusing on high-risk cases where sharing info could actually change the outcome

• Tracking requests in a case management system so there’s a clear record of what’s being shared and why

• Avoiding excessive back-and-forth that doesn’t contribute to an investigation

Treat Section 314(b) as part of a bigger AML strategy

Section 314(b) works best when businesses combine it with strong transaction monitoring, SAR filings, and internal AML processes. If an institution relies too heavily on this rule instead of tightening its own controls, it might miss larger issues. Companies that use this clause effectively treat it as one piece of a broader AML strategy.