Say good-bye to your Cayman Islands bank account and the days when a firm handshake, a well-tailored suit, and a driver's license were all it took to deposit money in a bank.

A new U.S. law to combat terrorism, drafted after the deadly Sept. 11 attacks, will limit Americans' access to shell overseas banks. It will make it especially hard for foreigners to have accounts here without scrutiny, all in an effort to keep out criminal funds.

Brokerage houses that previously were not required to follow the same rules as banks to avoid sheltering customers' illegal profits now also will have to impose tighter checks for would-be money launderers, under the so-called Patriot Act.

"For banks, it's not an easy task they face under this new law," said Charlie Intriago, a former U.S. prosecutor who publishes the Money Laundering Alert newsletter. "Banks have to exercise due diligence now on foreign correspondent accounts. They have to exercise due diligence for private banking accounts for foreigners. And they have to do enhanced due diligence from both of these types of customers in certain circumstances."

The United States ramped up the fight to stop criminals from pushing ill-gotten funds through a string of bank accounts to make them look legal after learning the hijackers who slammed planes into the World Trade Center and the Pentagon used U.S. banks to store money.

Under the Patriot Act, U.S. banks by the end of December must break ties with shell banks with no full-time employees or records, such as those that gave the Caribbean a reputation for being a haven for money launderers and tax evaders.

Banks also will have to take additional steps to verify the identity of a person opening a U.S. account, keep records of customers' addresses and other information and cross-check names with U.S. government lists of known terrorists.

"There will be higher requirements at some institutions. Some already have implemented them," said Betty Santangelo, a money laundering expert and partner at law firm Schulte, Roth & Zabel.

"The Patriot Act is particularly focused on foreign individuals and entities. Eventually, U.S. citizens will have to give additional information because of the verification provision of the act," she said.

Account information deemed to be suspicious will be shared with U.S. intelligence agencies, not just with law enforcement divisions like the Federal Bureau of Investigation.

Foreigners in particular could face more red tape and rules. If the government wants to seize assets at a shell bank that is part of a foreign bank, it can seize the amount it wants from a U.S. bank with a correspondent account with the foreign bank, experts said.

Embassies will not give U.S. visas to people listed as money launderers or those even suspected of money laundering.

"Now there will be a big red Stop sign at every point of U.S. border crossings and at consular offices overseas," Intriago said.

The bulk of the burden will fall to securities firms and insurers since U.S. banks already have tightened anti-money laundering monitors under existing laws that require them to report unusual account activity and know the source of their customers' money, experts said.

The government has instructed the securities industry to publish, by Jan. 1, anti-laundering guidelines about reporting suspicious activity. Those are expected as soon as this week, Intriago said.

"It's not going to have any negative effect on anyone who has been paying attention over the last few years," said John Byrne, senior counsel at bank industry group the American Bankers Association. "Our industry already was being told we needed to do a better job making sure John Byrne was who he said he was... The real story is, 'How are the financial services companies going to deal with it?"'

The Internet banking arm of online broker E+Trade Group Inc. (ET.N), for example, already makes extra checks to make sure "they know their customers — especially because they don't see them in person," said Gregory Benson, head of compliance and security for E+Trade Bank.