New Regs Would Increase Reporting of International Money Transfers

Lora Bentley

According to The Washington Post, the U.S. Department of the Treasury is proposing new regulations that would require banks to report all electronic funds transfers coming into or leaving the United States, regardless of the amount. The regulation results from a 2004 terrorism-prevention act that required intelligence agency reform. The act called on the Treasury to require banks to report cross-border transfers, if "necessary to combat terrorist financing."


Currently, banks must report international transfers totaling $10,000 or more, as well as any tranfers they decide are suspicious. But as James Freis Jr., the director of the Department of the Treasury's Financial Crimes Enforcement Network, told reporters:

[E]stablishing a centralized database... will greatly assist law enforcement in detecting and ferreting out transnational organized crime, multinational drug cartels, terrorist financing and international tax evasion.

And though protecting the country from terrorist activity is certainly important, human rights advocates and banking institutions alike say the new regulations are "outrageous." Advocacy groups argue the government should have some evidence of criminal activity before it can access the financial information of someone who does business overseas. For their part, bank representatives say they're already overregulated and additional requirements aren't going to add anything to the equation.


Financial institutions have managed "know your customer" requirements since the early days following the 2001 attacks.

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