A post by Pat

It isn’t exactly a naked machine but the government wants to see any and all of our overseas electronic money transfers. The result will be, like airport security against terrorists, a change in tactics for money launderers while the innocent are subjected to more intrusion into their privacy. The question is, how much are we willing to give up?

FinCEN (Financial Crime Enforcement Network) wants new rules on reporting cross-border electronic transfer funds (CBFT). FinCEN is charged with the responsibility of monitoring money transfers to spot money laundering, terrorism funding and tax fraud. Currently bank-to-bank transfers of $3,000 or more require data collection which is available to the government upon request. The proposed rules would require data reporting on all bank-to-bank CBFTs regardless of amount. For example, if you send a small amount of money to a relative overseas for Christmas, your name, your bank account number, your taxpayer ID number your relative’s name, bank account number and taxpayer ID number will automatically be reported to the government. The mandatory reporting applies to amounts of $1,000 or more for money transmitters, i.e., Western Union, Pay Pal.

Sending Money Overseas for the Holidays? The Government Wants to Know

Essentially, under the proposed rules, anytime you electronically transfer money into or out of the country, the government wants to know. The proposed rules require banks and money transmitters, like PayPal or Western Union, to submit reports documenting the amount of money sent or received, where that money came from, and where it is going. Depending on the type of transfer, a variety of information would be included in the reports, including the name, address, bank account number, and taxpayer ID number of the sender; the amount and currency of the funds transfer; and the name and address of the recipient. Passport numbers or alien ID numbers could also be required for some transfers.

The new rules are based on the Intelligence Reform and Terrorism Prevention Act of 2004. FinCEN recognizes the privacy issues involved but don’t worry, FinCEN’s IT modernization is state-of-the-art and data access would be limited to those who need to know. Feel better?

Implications and Benefits of Cross-Border Funds Transmittal Reporting

Security and Privacy Protection of CBFT Data

If the reporting requirement is implemented, FinCEN recognizes that CBFT data represents a large volume of information being reported to FinCEN and then made accessible to certain law enforcement and regulatory agencies. FinCEN also recognizes that there is a high degree of sensitivity regarding the security and privacy of this data.

FinCEN’s overall IT modernization effort was developed with a potential CBFT reporting
requirement in mind, and this effort incorporates state-of-the-art and government best practices for information security and privacy. FinCEN’s CBFT data collection, warehousing and dissemination architecture would make full use of these key security and privacy controls practices (e.g., role based security access to data). In addition, FinCEN would limit access to the data to those with a need to know, specifically, financial specialists within law enforcement and regulatory agencies.

The new rules will put a crimp in the lives of money launderers but it won’t stop them. The government will have all the information about your wire transfers in the name of security while the money launderers are likely to turn to other means.

FinCEN Targets Cross-Border Funds

[David Gilles of Deloitte Financial Advisory Services] says the government realizes that when it pushes regulations in like this, it is like pushing a balloon — it will move the money launderers to another area. Between now and the end of the 90-day comment period, Ken Rijock, Financial Crime Consultant for World-Check, an international anti money laundering intelligence firm, says banks should be on look out for money launderers trying to move millions before the new rule goes into effect.

A financial crime consultant believes bulk cash smuggling will increase.

Where that money laundering balloon will be pushed to isn’t entirely clear, but Rijock says he also expects that the move to lower threshold to $1,000 will make bulk cash smuggling “worse than it already is, as bulk cash smuggling is up,” he says.

The 90-day comment period for the proposed new rules ends Dec. 29.

Financial Crimes Enforcement Network; Cross-Border Electronic Transmittals of Funds

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2 Comments | Leave a comment
  1. Maynard says:

    This is broadly related to my previous post, The Tyranny of the Dollar. The government wants to have its fingers in every private transaction. And it’s doing a pretty good job of getting what it wants, and damn the Constitution.

    I take it the rule Pat has highlighted here isn’t a law passed by Congress, but is a regulation created by an unelected bureaucrat. That’s another problem. Government of the people is gone. Power is exercised by a Congress that ignores the people, and then the bureaucrats ignore Congress, and judges ignore the bureaucrats. Who holds power these days? Nobody really knows, but it’s certainly not us. Democracy has morphed into oligarchy. That’s progress.

    This isn’t just about foreign transactions. We’ve discussed, for example, the enhanced 1099 reporting requirements that were tacked into Obamacare. Everybody must file papers on everything. Except illegal aliens, whose “undocumented” status is for some crazy reason enshrined. Why have American citizens lost their rights, but those rights are fervently protected for the benefit of lawbreakers? Crazy, sick world!

    Don’t get me started.

  2. […] This post was mentioned on Twitter by Tammy Bruce, Margaret . Margaret said: RT @JiangxiDad: RT @heytammybruce: Financial Pat Downs " govt wants 2 C any & all of R overseas electronic $$ transfers" http://is.gd/jFOLR […]

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