How does the US Patriot Act affect international finance/business?

I know the Patriot Act has most international banks jumping through hoops trying to prove the who/what of wire transfers, but are there other effects of the Act on international business and finance?

-Tcat

Good question. If anyone has the answer I’d like to know. ;j

As a Canadian government bureaucrat, I can tell you that it is causing us no end of concern and headaches.

The Patriot Act, among other things, mandates that American companies must make information that they hold (whether it belongs to them or their clients) available to the FBI, CIA and other alphabet soup agencies. We are trying at this time to see if this extends to Canadian “subsidiaries” of US companies, such as IBM Canada.

If it does, this will mean that there is a fundamental conflict between Canadian laws that protect personal privacy and the Patriot Act which jeopardizes that protection. It may eventually require some sort of decision by international courts to determine whose laws have precedence where.

In the meanwhile, we are certainly concerned about things like outsourcing of IT operations, transmission and backup of data at US-based companies, and even consulting services where the consultants may have access to personal data that would normally be protected by Canadian privacy legislation (e.g. health care data, welfare information).

Because of the Patriot Act, Canadian governments and businesses may have to avoid using the services of subsidiaries/branch offices/affiliates of American companies, at least until such time as there is a ruling on whose laws prevail over the records of Canadian citizens. This may be beneficial to smaller Canadian companies that can take on this business. However, I am afraid that there will also be some NAFTA complaints of “restraint of trade” if American firms start losing business because we are trying to prevent disclosure of our information due to the Patriot Act.

In short, it’s a can of worms. :frowning:

Follow-up: I just received an e-mail from our Dept. of Justice lawyer, which states in part: “This whole issue of the impact of the Patriot Act is very much on the government agenda at the moment and an investigation process is underway, the end result being a report to the Attorney General likely sometime in January.”