United States Department of the Treasury . Financial Crimes Enforcement Network

2000 - 2005

StrategicPlan

United States Department of the Treasury . Financial Crimes Enforcement Network

FINCEN 2000

2005

Message from the Director 1

Introduction 2

Mission Statement ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 7

Strategic Goal ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 8

Strategic Objectives ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 9

Objective 1: Providing Investigative Case Support ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 10

Objective 2: Identifying Financial Crime Trends and Patterns ○ ○ ○ ○ ○ ○ 12

Objective 3: Administering the Bank Secrecy Act ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 14

Objective 4: Fostering International Cooperation ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 16

Objective 5: Strengthening Management Support ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 18

Key External Factors ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 20

APPENDICES

Appendix A: FinCEN�s Strategic Management Process 22Appendix B: Linkage of Treasury�s Strategic Goals and Objectives

to FinCEN�s Strategic Goal and Objectives 24Appendix C: Coordination on Cross-Cutting Issues 25Appendix D: Use of Program Evaluations in Updating Strategic Plan 26Appendix E: Data Capacity 27Appendix F: Management Challenges and High Risk Areas 28Appendix G: Consultations and Stakeholders 29

Table of Contents

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FINCEN 2000

2005

he year 2000 marks theFinancial Crimes Enforcement

Network�s (FinCEN) first decade since itsformation in 1990 to serve as the nation�scentral clearinghouse for broad-basedintelligence and information-sharing onmoney laundering. As Deputy Secretaryof the Treasury Stuart Eizenstat statedwhen introducing the National MoneyLaundering Strategy for 2000, �MoneyLaundering �undermines confidence inthe integrity of our financial systems,facilitates crime and corruption, andallows criminals to savor the rewards oftheir illegal actions.�

To combat this growing threat, theFinCEN network links the lawenforcement, financial and regulatorycommunities together for the commonpurpose of preventing, detecting andprosecuting money laundering andother financial crimes. As FinCENmoves into its second decade, itsnetwork is expanding in response tothe growing needs of law enforcementin combating the increasingly complexdimensions of money laundering. TheStrategic Plan for 2000-2005 buildson the 1997-2002 Plan, and articulatesthe goals we will work towardsachieving over the next five years inorder to provide our law enforcement,regulatory and private sector partnerswith the services they require toeffectively combat financial crime.

This plan outlines objectives andstrategies in our agency�s four

Director�s Message

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programmatic areas: providinginvestigative case support, identifyingtrends and patterns, administering theBank Secrecy Act (BSA), and fosteringinternational cooperation; as well asmaintaining efficient and effectivemanagement processes. The strategicplanning process enables the agency toexamine its programs and refine andadjust its objectives and strategies aschanging realities require. This effortprovides a basis for developingFinCEN�s operational plan and helpsdirect the more efficient allocation oflimited resources.

This plan has been developed inconsultation with our many stakehold-ers in Treasury and other law enforce-ment and regulatory agencies, in theprivate sector and in Congress. Thesepartnerships are essential to our abilityto successfully meet the needs of ourcustomers. We will continue tostrengthen our network by building onthese invaluable relationships in themonths and years to come. Finally, atthe core of all of FinCEN�s efforts is anunequivocal commitment to maintainthe integrity and privacy of theinformation collected and to ensure theproper use of this data.

James F. Sloan, DirectorFinancial Crimes Enforcement Network

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Introduction

reated in 1990, the U.S.Department of the Treasury�s

Financial Crimes EnforcementNetwork (FinCEN) supports lawenforcement investigations to preventand detect money laundering andother financial crimes (such as fraudand embezzlement).

Money laundering is the process bywhich criminals or criminalorganizations seek to disguise theillicit nature of their proceeds byintroducing them into the stream oflegitimate commerce and finance.Money can be laundered through awide variety of enterprises, frombanks and money transmitters tostock brokerage houses and casinos.The illicit proceeds provide the fuel fordrug dealers, terrorists, arms dealers,and other criminals to operate andexpand their enterprises.

Within the Department of the Treasury,FinCEN establishes, oversees andimplements policies to prevent anddetect money laundering. FinCENlinks law enforcement, financial andregulatory communities into a singleinformation-sharing network. UsingBank Secrecy Act (BSA) informationreported by banks and other types offinancial institutions, such as casinosand money services businesses,FinCEN serves as the nation�s centralclearinghouse for broad-based

intelligence and information sharingon money laundering. In addition,FinCEN also has a key role in safe-guarding the information and ensuringthe integrity of its use. This informa-tion helps illuminate the financial trailfor investigators to follow as theytrack criminals and their assets.

FinCEN also participates in multi-agency efforts to develop and implementcomprehensive, integrated approachesto combating money laundering. Suchefforts include the National MoneyLaundering Strategy reports (mandatedby the Money Laundering and FinancialCrimes Strategy Act of 1998) releasedin September 1999 and March 2000.These reports provide detailed plans forgovernment action�including many ofFinCEN�s highest priority initiatives.

FinCEN accomplishes its strategicgoal: �Providing law enforcementsupport through informationanalysis and the creation of infor-mation resources for the prevention,detection, and prosecution of moneylaundering and other financialcrimes,� by:

n providing investigative casesupport,

n identifying financial crime trendsand patterns,

n administering the BSA, andn fostering international cooperation.

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Providing Investigative Case Support

FinCEN seeks to add value to theinformation its regulatory programcollects from financial institutions anddeliver it in the most effective waypossible to investigators. FinCEN�sanalysts use the BSA data, along withlaw enforcement information andcommercially available data, to provideanalytical support to law enforcement.Since 1990, FinCEN has providedalmost 50,000 analytical case reportsinvolving over 200,000 subjects tofederal, state, and local law enforcementand regulatory agencies. These casereports were prepared for about 150federal agencies and state and local lawenforcement investigators in all 50states plus the District of Columbia andPuerto Rico. This effort has beenaccomplished by using FinCEN�s state-of-the-art technology, in-house analysts,and countless data sources to linktogether various elements of a case touncover potential criminal relationships.

FinCEN also provides specially tailoredforms of assistance that permit otheragencies� staff to have direct access to itsresources�an approach that enablesFinCEN to accommodate the increasingdemand for its services. Two ofFinCEN�s most successful programsinclude the Platform access programand the Gateway program.

The Platform access program enablesfederal agencies to send theirrepresentatives to FinCEN to use its

databases and receive technical assis-tance, when requested, for their pend-ing cases. This program has expandedfrom 49 participants in FY 1997 toover 70 participants in FY 1999.

The Gateway program allows lawenforcement agencies in all 50 states,the District of Columbia, and theCommonwealth of Puerto Rico tohave direct access to all BSA reportsunder a carefully monitored systemthat FinCEN controls and audits. TheBSA inquiries from the Gatewayprogram continue to grow at a rate ofabout 20 percent per year.

In addition, the Gateway program has aunique feature�a �query alert� mecha-nism that automatically signals FinCENwhen two or more agencies have aninterest in the same subject. In this way,FinCEN assists participating agencies incoordinating their investigations. Thesealerts are matched with federal investi-gative data, providing another level ofnetworking. The number of Gatewayalerts increased over 70 percent betweenFY 1997 and FY 1999.

Identifying Financial Crime Trends &Patterns

Another significant role of FinCEN isproviding strategic analytical supportto the law enforcement and regulatorycommunities. FinCEN�s strategicanalytical products focus on �macro-

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related to narcotics trafficking. TheGeneral Counterdrug Intelligence Plan(GCIP), released in February 2000and mandated in the Treasury

and

General Government AppropriationsAct of 1998 and the 1998 IntelligenceAuthorization Act, calls forstrengthening FinCEN as one of fournational coordination centers with afocus on providing strategic analysis ofnarcotics-related financial crimes andinvestigative support to law enforcementconcerning financial crimes.

Administering the Bank Secrecy Act

At the heart of FinCEN�s regulatoryactivities is the administration of theBSA. The BSA, originally enactedin 1970, authorizes Treasury torequire financial institutions to filecertain reports and keep certainrecords of financial transactions (e.g.,suspicious activity reports, currencytransaction reports, reports of cross-border currency transportation, andreports relating to foreign bank andsecurities accounts).

Over the years, certain BSA provisionshave been extended to cover not onlytraditional depository institutions suchas banks, thrifts, and credit unions, butalso nonbank financial institutionssuch as money services businesses(e.g., money transmitters; issuers,redeemers and sellers of money ordersand traveler�s checks; check cashers

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level� issues regarding money launder-ing and other financial crimes. Theseproducts include in-depth analyses ofparticular areas or issues based onindicators extracted from BSA dataand other sources. Examples of theareas or segments analyzed couldinclude: (1) geographic area, (2) threatvulnerability, (3) industry analysis suchas electronic funds transfer systems, or(4) analysis of particular moneylaundering methods.

To identify trends, patterns, and issuesassociated with money laundering andother financial crimes, FinCEN utilizesadvanced analytical tools. These toolsallow FinCEN to �mine� literallybillions of data elements of subjects,property, and financial transactions touncover potential criminal relation-ships that would otherwise be virtuallyimpossible to detect with standard linkanalysis. To further enhance its effortsin this area, FinCEN has been workingwith data mining experts to designsoftware that is tailored to meet thespecialized needs of law enforcement.Data mining is not a static, off-the-shelf technique but instead requiresthe testing of complex sets ofalgorithms to determine which willmost creatively search and combinerandom pieces of data to reveal hiddenlinks to criminals and their moneylaundering schemes.

In addition, FinCEN�s strategicanalyses emphasize money launderingand other illicit business transactions

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casinos and money services businesses,for compliance with the BSA; the lawenforcement community, which reliesheavily on financial information inorder to identify and prosecute moneylaundering and other financial crimes;and the Internal Revenue Service�sDetroit Computing Center, whichhandles all aspects of the processing ofover 13 million BSA reports filed annually.

Fostering International Cooperation

Because money laundering does notstop at the U.S. borders, FinCEN hasbeen active in encouraging othergovernments around the world todevelop and implement effective anti-money laundering controls. Thepromotion of international cooperationremains an essential part of FinCEN�snetworking efforts.

Foremost among these efforts is thecontinued development of aninternational partnership amongFinancial Intelligence Units (FIUs)�centralized analytical agencies similarto FinCEN. FinCEN relies on itscounterparts in the global network ofFIUs to provide information in supportof U.S. law enforcement investigations.Often, this information can only beobtained with difficulty, or not at all,through other channels. FinCENreciprocally provides its counterpartswith anti-money laundering informa-tion they need to conduct their ownnational investigations.

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and currency retail exchanges), casinos,and brokers and dealers in securities.More than 220,000 financial serviceproviders are currently subject to manyof the BSA requirements.

Currently, suspicious activityreporting is required only by deposi-tory institutions. The National MoneyLaundering Strategy for 2000 lays outan implementation blueprint for theextension of the Suspicious ActivityReporting System (SARS) to otherinstitutions vulnerable to money laun-dering, including casinos and cardclubs, and brokers and dealers insecurities. FinCEN will also examinethe money laundering vulnerabilities offinancial services providers, such as theinsurance industry, travel agencies, andpawn brokers for possible applicationof BSA requirements.

FinCEN benefits substantially from thecooperation of many groups andorganizations in implementing itsregulatory authorities. To foster thatcooperation, FinCEN�s regulatoryprogram must reflect the concerns ofthese groups and organizations, whichinclude the financial institutionssubject to BSA information collectionand reporting requirements; thefinancial regulatory agencies thatsupervise such institutions and alsosupport FinCEN in administering theBSA; the Internal Revenue Service�sExamination Division, which examinesnonbank financial institutions, such as

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A core group of FIUs�known as theEgmont Group�has come together tofind ways to cooperate, especially inthe areas of information exchange, thesharing of expertise, and assistingnewer FIUs. One of the most significantcontributions of the Egmont Group hasbeen the creation of a secure communica-tion network�developed by FinCEN.This network, based on secure Internetaccess, permits members of the EgmontGroup to communicate with one anothervia secure e-mail and to post and accessinformation on FIUs, money laundering

trends, financial analysis tools, and techno-logical developments.

FinCEN also supports implementationof Treasury�s money laundering initia-tives and policies. This includesworking to support Treasury�s effortswith intergovernmental bodies, suchas the Financial Action Task Force(FATF) and its regional spin-offs in theCaribbean and Asia, to reinforce theneed for international cooperation, andto provide training and technicalassistance to other countries.

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he mission of the Financial Crimes EnforcementNetwork is to support law enforcement

investigative efforts and foster interagency and globalcooperation against domestic and internationalfinancial crimes; and to provide U.S. policymakerswith strategic analyses of domestic and worldwidemoney laundering developments, trends, andpatterns. FinCEN works toward those ends throughinformation collection, analysis and sharing, as well astechnological assistance and innovative, cost-effectiveimplementation of the Bank Secrecy Act and otherTreasury authorities.

Mission Statement

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roviding law enforcement support throughinformation analysis and the creation of

information resources for the prevention, detection,and prosecution of money laundering and otherfinancial crimes.

Strategic Goal

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To provide quality and timely investigativesupport and networking to FinCEN�s customers.

To provide useful information to law enforcementand regulatory partners about trends, patterns, andissues associated with money laundering and otherfinancial crimes.

To administer effectively the Bank Secrecy Act inorder to support the prevention, detection, andprosecution of money laundering and otherfinancial crimes.

To establish and strengthen mechanisms for theexchange of information globally, and engage,encourage, and support international partners intaking necessary steps to combat money launderingand other financial crimes.

To build efficient and effective management processesand administrative support to accomplish FinCEN�smission.

Strategic Objectives

1.

2.

3.

4.

5.

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inCEN�s in-house analysts provide direct case support to

U.S. law enforcement at the local,state, federal and international levels bypreparing reports based on datacollected under the Bank Secrecy Act(BSA), and other commercial and lawenforcement information. Thesereports link together associates, bankaccounts, property records, and otherinformation to assist law enforcementin forming a more complete financialinvestigation. Investigationssupported by FinCEN appear to havebecome more complex, as evidenced inpart by the increase in the number ofsubjects per investigative case reportbetween FY 1997 and FY 1999. Theincreased complexity of investigationsreflects a number of trends, includingthe globalization of crime, the in-creased targeting of large criminalnetworks, and the growing volume ofBSA data from which to developinvestigative leads.

FinCEN develops innovative programsdesigned to provide specially tailoredassistance to law enforcement (e.g., theGateway and Platform programsdiscussed in the Introduction).Another example of FinCEN�s uniquelaw enforcement support is theAnalytical System for Investigative

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Objective 1: Providing Investigative Case Support

Support (ASIS). This portable casemanagement database allows lawenforcement investigators to record,store, and manipulate their increasinglycomplex investigative information in amore organized manner. Uponcompletion of all data entry, fieldinvestigators forward the database toFinCEN for financial queries andsubsequent in-depth analysis for addedvalue. FinCEN conducts theseanalyses using various analyticalapplications and processes, such asthose contained in the ArtificialIntelligence System, including speciallydesigned graphical presentation andinterface tools. Increased usage ofASIS allows FinCEN to provide morecomprehensive support to highlysophisticated investigations.

FinCEN continues to work towardsexpanding its capability to share andnetwork investigative information withlaw enforcement. Over the past twoyears, FinCEN has been working todevelop a secure communicationsnetwork�Secure Outreach�that usessecure Internet access to provideinvestigative information quickly andsecurely. One feature of the network isthat it will provide agencies with thecapability of communicating amongthemselves through a secure e-mailsystem. Secure Outreach is a key toachieving FinCEN�s objective ofproviding quality and timelyinvestigative support because thenetwork will allow applications thatfacilitate the electronic transmission of

Objective: To provide quality and timelyinvestigative support and networking toFinCEN�s customers.

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sensitive investigative information,improve and secure access to BSAinformation from remote customers, andprovide secure communication amongour law enforcement customers.

The National Money LaunderingStrategy (NMLS) for 2000 sets forthan expanded role for FinCEN incombating money laundering andother financial crimes. The NMLScalls for FinCEN to enhance itssupport of High Intensity MoneyLaundering and Related FinancialCrime Areas (HIFCAs), to expandinvestigative support to multi-agencyand high profile efforts, and topromote the use of the GatewayProgram as a vehicle for two-wayinformation exchange and joint state-federal financial analysis projects.

Strategies:

n Use Secure Outreach and other technical enhancements to expand customer access to BSA data and other network opportunities.

n Enhance support provided tomulti-agency investigations,HIFCA teams, and other highprofile investigative efforts.

n Expand networking opportunitiesamong our partners by enhancing

the collection and sharing of information to target money laundering and other financial crime activities.

n Respond to evolving lawenforcement needs by identify-ing emerging issues, suspiciousactivities, and targets forinvestigation.

--- Develop new automatedtechniques that enhancedetection and disseminationof alerts regarding possiblemoney laundering activities.1

n Expand networking capabilitieswithin the law enforcement andintelligence communities tofacilitate coordination of financialinformation among themselves

and discern new ways to supportU.S. law enforcement.

How Progress Will Be Measured:

Progress on this objective will bemeasured by customer satisfactionwith investigative support servicesrendered. FinCEN will also continueto monitor the results of expandednetworking opportunities among itspartners, as well as other workloadstatistics.

1 Significant information technology initiatives, such as this one, have been included under theappropriate strategies.

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front line of defense againstorganized and international

crime, drug trafficking and moneylaundering is to monitor the flow offunds that support these activities andidentify methods and patterns used tocommit these crimes. FinCENprovides a unique capability to identifytrends, patterns, and national-levelissues associated with moneylaundering and other financial crimes.It serves as a catalyst for research,analysis and dissemination ofinformation on money launderingmethodologies through joint caseanalysis with law enforcement,integration of all-source informationand the application of state-of-the-artdata processing techniques.

FinCEN continues to expand the useof techniques, such as data mining,and leading edge analytical tools.These tools will enhance the analysisand manipulation of BSA data byidentifying and linking together relatedsubjects for improved investigativelead information. They will alsocontribute to the identification oftrends and patterns. These tools willpermit a comprehensive linking ofBSA data with other information toidentify suspicious activity tied to

Objective 2: Identifying Financial Crime Trends and Patterns

Objective: To provide useful information to lawenforcement and regulatory partners abouttrends, patterns, and issues associated withmoney laundering and other financial crimes.

A

organized crime groups and otherinterstate criminal activity.

The National Money LaunderingStrategy (NMLS) for 2000 calls forFinCEN to undertake or continueseveral analytical efforts. These effortsinclude analytical support to theHIFCAs and other multi-agencyinvestigative efforts, and the ongoingidentification and targeting of majormoney laundering schemes.Additionally, FinCEN is co-chairingwith the American Bankers Associationa public-private working group that hasbeen established to identify issuesrelated to the use of Suspicious ActivityReport (SAR) information. Theworking group will focus on improvingcollaborative feedback to the financial,regulatory and law enforcementcommunities, primarily through aperiodic SAR Activity Reviewproviding current information on SARtrends and patterns, law enforcementuse, tips on improving reporting, andan industry forum. FinCEN will alsobe providing strategic analytical supportfor the General CounterdrugIntelligence Plan.

As highlighted in the NMLS, FinCENcontinues its work on estimating themagnitude of money laundering,drawing domestic and internationalfocus on the issue by chairing federalinteragency Economic Policy and LawEnforcement Committees anddeveloping linkages with international

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partners. FinCEN awarded a majorcontract in August 2000 to develop amethodology for estimating themagnitude of money laundering.

Strategies:

n Work closely with law enforcementto identify and disseminatecurrent trend and pattern infor-mation through collaborativeanalysis of active money launder-ing investigations.

n Continue to develop analyticalmethodologies, models and othertechnical tools that provide addi-tional insights into suspiciousactivities and transaction patternsassociated with money launderingschemes.

n Continue long term analyticalefforts to estimate the domestic andinternational magnitude of moneylaundering.

n Enhance efforts to assist lawenforcement in tracking the utilityof SAR and other BSA data andprovide feedback to the regulatoryand financial communities.

n Enhance FinCEN�s capability toframe and support counter-money

laundering policies associated withNational Money LaunderingStrategy objectives and other multi-agency task force initiatives.

n Enhance FinCEN�s unique expertiseand specialized informationsystems to provide financial leadinformation for U.S. law enforce-ment in multi-jurisdictionalfinancial crimes and other specialinvestigations.

--- Improve FinCEN�s ability todetect the flow of illicit fundsand its associated transactionsthrough enhanced informationtechnology.

How Progress Will Be Measured:

Progress on this objective will be mea-sured by customer satisfaction withFinCEN�s analytical products. FinCENwill continue to monitor the volumeand type of analyses it produces for itscustomers. As noted previously,FinCEN has awarded a contract that willdevelop a methodology for estimatingthe magnitude of money laundering.This measure will allow FinCEN andother law enforcement agencies toevaluate their efforts in the context ofoverall money laundering trends.

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orking in partnership withthe financial services industry,

the financial regulatory agencies,various divisions of the InternalRevenue Service, and the lawenforcement community, FinCENestablishes policies to administer theBSA effectively, while balancing theassociated burden imposed on theregulated financial institutions. Forexample, final regulations have beenpublished which revise and simplifythe manner in which depositoryinstitutions may be exempted fromthe obligation of filing CurrencyTransaction Reports on many of theircustomers, such as department storeand supermarket chains, whoserecurring transactions are generally oflittle interest to law enforcement.

FinCEN relies heavily on the federalfinancial regulatory agencies and theInternal Revenue Service�sExamination Division to examinefinancial institutions for BSAcompliance. These partners referappropriate cases of non-compliancewith the BSA to FinCEN forenforcement action, such as civil

Objective 3: Administering the Bank Secrecy Act

Objective: To administer effectively theBank Secrecy Act in order to support theprevention, detection, and prosecution ofmoney laundering and other financial crimes.

money penalties. Throughenhancements to its internal processesand increased coordination with itsregulatory partners, FinCEN�senforcement program is in the processof becoming significantly moreeffective. For example, FinCEN hasenhanced its communication withregulated institutions by postingenforcement actions on its website.

The National Money LaunderingStrategy (NMLS) provides renewedemphasis on FinCEN�s regulatoryefforts. In accordance with theStrategy, rules have been published torequire registration and suspiciousactivity reporting for the moneyservices business industry, that is, formoney transmitters; issuers, redeemersand sellers of money orders andtraveler�s checks; check cashers andcurrency retail exchanges. FinCEN hasissued the final regulations and hasimplemented an extensive outreach andeducation program to this industry onBSA requirements.

As described in the NMLS, FinCEN�sregulatory efforts over the next severalyears will continue to focus onsignificant enhancements to the BSAregulatory programs, the extension ofBSA requirements to additionalindustries, and enhanced support forits regulatory partners in theadministration of the BSA.

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Strategies:

n Assure that all types of financialservices providers are subject toBSA and anti-money launderingprogram requirements.

n Assure the most effective andefficient use of resources by focusingregulatory program initiatives in theareas of highest risk for moneylaundering and other financial

crimes.

n Improve and facilitate BSA andanti-money laundering complianceby enhancing support for regulatoryefforts by financial institutions,regulatory partners, and lawenforcement.

--- Implement electronic filingoptions for BSA reportingrequirements.

n Assure regulatory efforts areresponsive to evolving technologies,industry developments, and global-ization of financial products andservices.

How Progress Will Be Measured:

Progress on this objective will bemeasured by customer satisfaction withFinCEN�s regulatory outreach efforts.FinCEN will also assess progresstowards this objective by measuringthe timely completion of BSA enforce-ment matters and tracking its progresson other regulatory programs.

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inCEN works closely with other components of the U.S.

government and its global partnersaround the world to counter thegrowing threat of transnational crimeto financial institutions and govern-ments. To accomplish this objective,FinCEN continues to provide supportfor its Financial Intelligence Unit(FIU) counterparts and help facilitatethe exchange of information amongthese institutions in support of anti-money laundering investigations.Additionally, FinCEN, in coordinationwith other U.S. government agencies,continues to assist foreigngovernments and institutions fightingtransnational crime by assessing andevaluating money laundering controlsin particular countries and providingtraining and technical assistance.

FinCEN supports the Treasuryinitiatives highlighted in the NationalMoney Laundering Strategy for 2000,which include providing training andassistance to nations implementingcounter-money laundering measures,supporting expanded FIU member-ship in the Egmont Group, and

Objective 4: Fostering International Cooperation

Objective: To establish and strengthenmechanisms for the exchange of informationglobally, and engage, encourage, andsupport international partners in takingnecessary steps to combat moneylaundering and other financial crimes.

providing country-specific expertise forpolicy development. FinCEN willexpand its efforts to identify thoseinternational jurisdictions that pose amoney laundering threat to the UnitedStates, and expand its expertise andanalysis related to correspondentbanking and offshore financial services.

Over the past five years, FinCEN�sefforts have contributed to the dra-matic growth in the number of FIUs�from 14 in 1995 to 53 in 2000. Overthe next five years, FinCEN will focusits efforts on strengthening thecapabilities and efficacy of currentFIUs through increased training andtechnical assistance in such programsas personnel exchanges, regionalworkshops, and financial andinvestigative seminars and classes.

FinCEN also fosters effectiveinternational cooperation byfacilitating investigative informationexchanges. It encourages moreeffective communication channels insupport of U.S. and foreign lawenforcement. This role has increaseddramatically�with support for U.S.law enforcement increasing three-foldduring the past year.

Finally, FinCEN continues to maintainin-depth, country-specific expertiseconcerning financial crimes and moneylaundering activities around the globe.This expertise provides the basis forFinCEN�s contributions to interagencystudies and Congressionally-mandated

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annual reports, such as the Departmentof State�s annual InternationalNarcotics Strategy Report. This reportis used by financial institutions, variouspolicy experts, and the internationalcommunity to frame a variety ofpolicy and operational decisions.

Strategies:

n Promote increased cooperation withand among foreign law enforce-ment authorities to exchangeinformation about investigationsand significant money launderingsystems.

--- Promote the networking of FIUsthrough the Egmont SecureWeb to enhance the timelysharing of investigativeinformation.

n Provide evaluations of nations�efforts to combat money launderingusing FinCEN�s extensive knowl-edge base.

n Provide training and technicalassistance to cooperating countriesin the development and operation ofFIUs and the formulation andimplementation of counter-moneylaundering strategies.

n Support Treasury�s efforts to highlight the importance of globalcounter-money laundering effortsbilaterally, multilaterally, andwithin intergovernmental bodiesand multilateral organizations,and to promote adoption of interna-tional anti-money launderingstandards such as those of theFinancial Action Task Force.

How Progress Will Be Measured:

FinCEN will measure progress onthis objective by looking at keyinternational workload measures thatindicate the response to FinCEN�sefforts to support FIU development,and promote policies and the exchangeof investigative information, globally,to combat money laundering hereand abroad.

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he Management Supportobjective has been added to this

plan to recognize the role of bothFinCEN�s overall management teamand its administrative support functions(e.g., human resources, informationtechnology, financial management andprocurement) in the achievement ofFinCEN�s mission. These functions areimportant to, and cut across all theoperational functions of the organiza-tion. The management team and theadministrative support areas will needto work together to promote theintegration of FinCEN�s functions, thusenhancing the efficiency and effective-ness of the organization.

The Management Support objectiveincludes strategies for providingFinCEN�s employees with high quality,cost-effective administrative supportservices, using in-house expertise andthe best cross-servicing arrangementsavailable to FinCEN. The ManagementSupport objective also provides strategiesthat address Treasury-wide managementinitiatives in the areas of customer andemployee satisfaction. These initiativesare structured to implement a �balancedmeasures� approach to evaluatingprogram success.

Objective 5: Strengthening Management Support

Objective: To build efficient and effectivemanagement processes and administrativesupport to accomplish FinCEN�s mission.

Management and administrativeaccomplishments over the last severalyears include: establishment of afull-time Equal EmploymentOpportunity (EEO) Program Officerto foster an environment of equalopportunity; expanded outreachprograms to colleges and universitiesto ensure that FinCEN continues tohave the expertise required tosupport its mission; continuedpursuit of new and innovativetechnology to ensure employees havestate-of-the-art tools and equipment;and enhanced resource accountabilityby strengthening internal reportingand senior management�scommitment to team building.

Strategies:

n Improve capacities to recruit,develop, and retain high-caliberemployees.

--- Provide training that willenhance employee expertiseand aid FinCEN�s successionplanning efforts.

n Foster an environment of equalopportunity.

n Improve customer service throughthe integrated, seamless deliveryof FinCEN�s products.

T

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n Regularly measure employeesatisfaction and make improvementsin key areas identified by employees.

n Develop information technologycapabilities to enhance abilities toanalyze data and expand secureaccess to law enforcement andregulatory users.

n Enhance processes that promotewise capital investment and effectivemanagement of FinCEN�s assets.

How Progress Will Be Measured:

FinCEN will assess progress towardsthis objective, in part throughperformance measures of employeesatisfaction (through employeesatisfaction surveys). FinCEN willalso have customer satisfaction measuresfor many of its major program areas. Aninternal set of workload indicators willbe used to monitor success in the humanresources, financial, and informationtechnology areas.

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Resource Levels. The National Money Laundering Strategy

(NMLS) significantly increasesFinCEN�s responsibilities. Theagency will need additional resourcesto implement the actions called for inthe strategy, and included in this plan.A realignment of resources betweenprogram areas to fund the NMLSinitiatives would severely impactFinCEN�s ability to meet its overallgoals due to the close linkage betweenlaw enforcement, regulatory, andinternational efforts.

Internal Revenue Service�s (IRS)Support to BSA Functions.FinCEN�s ability to accomplish theobjectives and strategies outlined inthis plan substantially depends uponIRS resources and implementation ofTitle 31 program objectives. IRS hashad a longstanding and vital role in thefight against money launderingthrough various IRS components,including the Criminal InvestigationDivision, the Examination Division,and the Detroit Computing Center(DCC). IRS� support of Treasury�santi-money laundering programs rangefrom data system development anddata storage at DCC; to examination of

Key External Factors

recordkeeping, reporting requirements,and compliance program provisions ofthe BSA; and to jurisdiction to investi-gate criminal violations of the BSA. Aspart of its restructuring and moderniza-tion efforts, IRS management, includingthe Commissioner, has committed tocontinue IRS� BSA compliance effortsand its support of Treasury�s anti-moneylaundering programs.

New Legislation. Any new orunforeseen legislative developments orlegal challenges could impact theeffective use of BSA authorities.

Advanced Technologies. Advancedtechnologies represent both a challengeand an opportunity for FinCEN. Thedevelopment of new technologies�such as electronic cash, electronicpurses, Internet- or smart-card-basedelectronic payment systems, and Internetbanking�is increasing the ability ofindividuals to rapidly transfer largesums of money, and could pose achallenge for FinCEN and other lawenforcement agencies combating moneylaundering. On the other hand, newtechnologies have the potential togreatly expand FinCEN�s capability toanalyze data, identify trends and pat-terns, and discover money launderingmethods or schemes. However, theopportunity to use state-of-the-arttechnologies is contingent on havingsufficient resources to acquire andimplement them.

Key external factors affectingachievement of FinCEN�s strategic goaland objectives include:

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Rapid Expansion of FinancialServices and Products. TheGramm-Leach-Bliley Act, enacted inNovember 1999, effectively repealedthe long-standing prohibitions on themixing of banking with the securitiesor insurance businesses. This legisla-tion, along with the unprecedentedgrowth observed in the financial servicescommunity, may affect the scope andnature of the industries subject to theBSA. If so, FinCEN would evaluatethe need for additional anti-moneylaundering safeguards.

Importance of Global Anti-MoneyLaundering Measures. Meaningfuldialogue with other countries to stress

the importance of developing andimplementing effective and consistentglobal anti-money laundering measuresmust continue. Breakdown in theseefforts could adversely impact the globaltrading and financial systems. Effectiveanti-money laundering programs mustcontinue to be encouraged and aggres-sively implemented worldwide. Theborderless world of international financialsystems increases the appeal to criminalelements of non-cooperative countriesor jurisdictions with no or few safeguardsagainst money laundering. Politicalcommitment must be generated at thehighest levels to ensure the cooperationand participation of other countries inimplementing anti-money laundering laws.

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s part of the TreasuryDepartment, FinCEN has

implemented an integrated strategicmanagement process consistent withguidelines established by theDepartment. This process bothcomplies with The GovernmentPerformance and Results Act of 1993and assists FinCEN in evaluating theeffectiveness of its efforts. The processaccomplishes this by:

n setting strategic goals and prioritiesfor the long-term,

n setting annual performance targets,n managing and budgeting to

achieve those targets, andn systematically reporting on annual

performance.

Setting strategic goals and priorities forthe long term. FinCEN�s strategicplan sets objectives and strategies foraccomplishing its strategic goal.FinCEN�s plan builds on the directionprovided in the Treasury-wide strategicplan. FinCEN�s operational plan,updated annually, provides detailed�means� for accomplishing the objec-tives and strategies in the strategicplan, and the performance measures.

FinCEN�s strategic planning processinvolves all of its offices. Seniormanagement sets the general directionand priorities. Working groupsconsisting of the Deputy AssistantDirectors and representatives from eachoffice meet weekly during the process to

Appendix A: FinCEN�s Strategic Management Process

A review and comment on the sectionsprepared by each office, as well as anycrosscutting issues. A Strategic PlanReview Board, made up of the AssistantDirectors, reviews the draft plan, andthe Director gives the final approval.The plan also reflects the findings fromFinCEN�s on-going consultations withits customers and stakeholders.

Setting annual performance targets.FinCEN�s budget submission isformatted to serve as both a budgetrequest and as the Results Actperformance plan. The performancegoals included in the budget sub-mission serve to justify the resourcesrequested. The performance goalspresented in the budget justificationare the same as the strategic objectivespresented in FinCEN�s strategic plan.The performance measures and targetsstem from the performance goals.

Managing and budgeting to achievethose targets. FinCEN�s annualbudget submission is based on theobjectives and strategies of its strate-gic plan. FinCEN�s budget request iseffectively its annual implementationplan for the strategic plan. Its manag-ers will be guided by the strategiesoutlined in this plan, as well as theTreasury-wide strategic plan. FinCENtracks progress in implementingstrategies and achieving performancetargets during the year and makesadjustments as needed to maximizeperformance.

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Systematically reporting on annualperformance. FinCEN�s annualbudget submission also includes theannual performance report requiredby the Results Act. Each year, actual

performance is compared to thetargets published at the start of theyear and explanations are provided toexplain differences between plannedand actual levels.

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Treasury Strategic Goal:Combat Money Laundering and Other Financial Crimes

Treasury Strategic Objective:Dismantle Domestic and International Money Laundering Networks

FinCEN Strategic Goal:Provide Law Enforcement Support Through Information Analysis and theCreation of Information Resources for the Prevention, Detection, andProsecution of Money Laundering and Other Financial Crimes

Appendix B: Linkage of Treasury�s Strategic Goals & Objectives to FinCEN�s Strategic Goal & Objectives

FinCEN�S FY 2000-2005 Strategic Plan Objectives=FY 2002 Performance Goals

Providing Investigative Case Support: To provide quality and timelyinvestigative support and networking to FinCEN�s customers.

Identifying Financial Crime Trends and Patterns: To provide usefulinformation to law enforcement and regulatory partners about trends,patterns, and issues associated with money laundering and other financial crimes.

Administering the Bank Secrecy Act: To administer effectively the BSAin order to support the prevention, detection, and prosecution of moneylaundering and other financial crimes.

Fostering International Cooperation: To establish and strengthenmechanisms for the exchange of information globally, and engage, encourage,and support international partners in taking necessary steps to combat moneylaundering and other financial crimes.

Strengthening Management Support: To build efficient and effective managementprocesses and administrative support to accomplish FinCEN�s mission.

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X

FinCEN coordinates with its stakeholders primarily through its participation in the BSA AdvisoryGroup (BSAAG), the Money Laundering Working Group and various intergovernmental groups.The BSAAG, a Treasury-sponsored group, is composed of representatives from the institutionssubject to the BSA, such as banks, broker-dealers, and MSBs, as well as state and federal lawenforcement and financial regulators. The BSAAG discusses ways to enhance money launderingdeterrence and detection through the financial community. The Money Laundering WorkingGroup, a wholly-governmental group, is composed of representatives from federal crime investi-gative agencies, financial institution regulatory agencies and state criminal investigators withjurisdiction over money laundering related offenses. It helps to formulate policy, evaluate emergingtrends and explore potential regulatory and other legal solutions.

InvestigativeCase Support

FinancialTrends

& Patterns

Admin.BSA

Regulations

InternationalCooperation

ManagementSupport

X X X X X

Appendix C: Coordination on Cross-Cutting Issues

Department of Treasury,Departmental OfficesBSA Advisory GroupDept. of Treasury, IRSDept. of Treasury,Law Enforcement BureausDept. of JusticeOther Federal, State, &Local Law EnforcementFederal and StateRegulatorsLaw Enforcement andIntelligence CommunityCoordination GroupsU.S. Postal ServiceDept. of StateEgmont GroupFATF & OtherInter-governmental GroupsOffice of Natl. DrugControl PolicyDepartment of Defense

X X X

X X X X X

X X X X X

X X X X X

X X X X

X X X X X

X X X X

X X X XX X X XX X X X

X X

X X

This table highlights agencies and groups thatFinCEN must coordinate with in order toachieve its strategic objectives.

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Additionally, FinCEN is planning to expand its efforts in FY 2001 and FY 2002 to get customer feedback on thevalue of its investigative case support, long-term analytical products, and regulatory outreach efforts. The agency iscurrently examining the best methods for obtaining and reporting on customer feedback. FinCEN will also initiatean employee satisfaction survey in the FY2001-2 timeframe.

Appendix D: Use of Program Evaluations in Updating Strategic Plan

Specific program evaluations that were usedto develop and update this strategic planinclude the following:

Review of Treasury�s Implementation of theNational Money Laundering Strategy

Program Evaluation/Audit

Assessment of FinCEN�s Strategic Plan forFY 1997-2002 (OIG-00-CA-005)

Includes suggestion that FinCEN should build onthe base that it established in its first strategic planby enhancing the process with information from itsperformance report.

FinCEN�s Office of Compliance andRegulatory Enforcement (OCRE) (Office ofInspector General, November 1999)

The recommendations encourage the continuationof the initiatives that resulted in improvedoperations and reduced the backlogof enforcement matters.

Examples of future program evaluations andaudits currently proposed to assess the effects onFinCEN�s strategic goal include the following:

Program Evaluation/Audit Purpose/Status

Magnitude of Money Laundering (MML) Study In early August 2000, FinCEN awarded a contractto develop a methodology for estimating themagnitude of money laundering.

Using Artificial Intelligence to CombatMoney Laundering

OIG audit effort (in progress)

Treasury Bureaus� Controls and Securityover Law Enforcement Data

OIG audit effort (in progress) to ensure Treasuryand its bureaus have provided for adequate security,integrity, and control over sensitive computerizedlaw enforcement data.

Planned OIG audit to determine if the Depart-ment is meeting its performance goals, outlinedin the NMLS for 2000, in an effective manner.

FinCEN�s Project Gateway Planned OIG audit to determine whether state andlocal law enforcement are using Gateway effectively.

Results

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or every performance measure presented in FinCEN�s Annual

Performance Plans, a definition, andverification and validation informationare provided. The data quality can beassessed as having �ReasonableAccuracy� (judged to be sufficientlyaccurate for program management andperformance reporting purposes) or�Questionable or Unknown Accuracy.�In the case of measures where statisticalconfidence intervals are available, thesecan be provided instead of the ratingstatements. In FinCEN�s FY 2000 Final

Appendix E: Data Capacity

F Performance Plan, all measures werejudged to be of �Reasonable Accuracy.�

Each program and its accompanyingperformance measures are evaluated, atleast annually, by the Assistant Directorresponsible for the program ordesignee, to discern if the dataprovided is reasonably accurate.FinCEN will use automation-basedlogging and tracking systems,whenever possible, for its measures toimprove the quality and timeliness ofthe data collected.

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n its annual letter to the Congress, dated December 13, 1999, theTreasury�s Office of the Inspector General identified money laundering as a

serious management challenge. Money laundering is important in two respects.First, it is a critical adjunct to underlying criminal activity. Second, if unchecked,it can taint a country�s financial institutions. To address these concerns, theTreasury and Justice Departments jointly issued the National Money LaunderingStrategy (NMLS) for 1999 in March 1999 and the NMLS for 2000 in March2000. The Strategies reflect a national commitment to a coordinated, effectivefight against money laundering, and set forth an ambitious agenda of actionsthat will significantly affect FinCEN�s programs and resources.

Appendix F: Management Challenges and High-Risk Areas

Management Challenge or High Risk Area:Money Laundering/Bank Secrecy

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s part of the process ofrevising and finalizing this

strategic plan, FinCEN requested inputfrom stakeholders who potentiallymight be affected by or interested inthe plan. Copies of FinCEN�s draftStrategic Plan were sent togovernmental stakeholders forcomment�primarily members of theMoney Laundering Working Group(including representatives from theInternal Revenue Service, the CustomsService, the Secret Service, the FederalLaw Enforcement Training Center, theDepartment of Justice, the FederalBureau of Investigation, the DrugEnforcement Agency, the United StatesPostal Inspection Service, the Office ofthe Comptroller of the Currency, theFederal Deposit InsuranceCorporation, the National CreditUnion Administration, the FederalReserve, the Securities and ExchangeCommission, and the CommodityFutures Trading Commission.)Additionally, copies were sent to theBureau of Alcohol, Tobacco and Fire-arms, the Office of National DrugControl Policy and the NationalSecurity Agency.

FinCEN also distributed copies ofthe draft Plan to private-sectorrepresentatives on the BSA Advisory

Appendix G: Consultations and Stakeholders

A Group (the government agencies orgroups represented on the BSAAGare basically the same as those on theNational Money LaunderingWorking Group).

Comments were received from theDepartment of Justice, the DrugEnforcement Administration, theDepartment of State, the FederalDeposit Insurance Corporation, theSecurities and Exchange Commission,the Commodity Futures TradingCommission, and the IRS(Examination and CriminalInvestigation), as well as severalprivate-sector representatives on theBSAAG. The comments primarilyreflected technical corrections andclarifications. In some instances, ourstakeholders suggested the plan shouldplace greater emphasis on, or providemore detail about a particular role orfunction. However, none of thecomments took issue with the basicgoals, objectives or strategies laid outin the strategic plan.

Finally, consultations with House andSenate congressional staff, which wereled by FinCEN�s Director, providedFinCEN with valuable commentsand observations.

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Comments or questions regardingFinCEN�s Strategic Plan should be sent to:

Deputy Chief Financial OfficerFinancial Crimes Enforcement Network2070 Chain Bridge RoadSuite 200Vienna, VA 22182

Comments can also be e-mailed to:

webmaster@fincen.treas.gov

Where to Send Comments or Questions