t4 b2 fincen matters 1 of 2 fdr- entire contents- government and press reports- us code- press...

8/14/2019 T4 B2 FinCEN Matters 1 of 2 Fdr- Entire Contents- Government and Press Reports- US Code- Press Releases- 1st P

1/11

U.S. Department of the TreasuryFinanical Crimes Enforcement Network

newsFincen's web site is located at: http://www.fincen.govFor Imm ediate ReleaseFebruary 6,2003

Contact FinCEN :703-905-3770

FinCEN to Reinstate USA PATRIOT Act Section 314(a) Information Requests

The Financial Crimes Enforcement Network (FinCEN) willbe reinstating informationrequests associated with section314(a) of the USA PATRIOT Ac t during the week o f

February17, 2003, as described b elow. Gene rally, section 314 authorizes lawenforcemen t authorit ies to comm unicate withfinancialinstitutions about suspectedm oney launderers and terrorists, and financial institutions to comm unicate am ongstthemselves about such m atters.

On N ovember 26, 2002, FinC EN and the pr imaryfederal regulators issued a JointAgency N otice to put into place a brief m oratorium on new section 314(a) informa tionrequests and com pliance with existing requests. During the m oratorium , FinC EN ,afterdiscussions w ith relevantfederal law enforcem ent and regulatory agencies, revised the314(a) information requestprocess to address a n um ber of logistical issues and todevelop additional guidance on theinformationrequest process.Significantchangesincludeth e following:

314(a) reque stsfrom FinCENwill be batchedand issued everytwo weeks, unlessotherwise indicated in the request.

After receivinga 314(a) request,financial institutions w ill havetwo weeks, ratherthan one week, to complete their searches and respond with any matches.

Searches willbe limitedto specific records and, unless o therwise noted, willbe aone-time search.

If a financial institutionidentifiesa match for a named subject,the institutionneed o nly respond to FinCE N that i t has a match and provide point-of-contactinformation for therequestingla w enforcement agencyto follow-up directly withthe institution.

##


2/11

Federal Register /Vol . 67, No. 4 2 / M o n d a y,March 4, 2002/Proposed Rules 9879

DEPARTMENT OF THE TREASURY

31 CFR Part 103R I N 1506-AA26,1506-AA27

Financial Crimes EnforcementNetwork; Special Information SharingProcedures To Deter Money

Laundering and Terrorist ActivityA G E N C Y:Financial Crimes EnforcementNetwork (FinCEN), Treasury.ACTION:Notice of proposed rulemaking.

S U M M A R Y :FinCEN, a bureau of theTreasury Department, is proposingregulations to implement provisions ofthe Uniting and Strengthening Americaby Providing Appropriate ToolsRequired to Intercept and ObstructTerrorism (USA PATRIOT) Act of 2001that encourage information sharingamong financial institutions and federalgovernment law enforcement agenciesto identify, prevent, and deter money

laundering and terrorist activity.DATES:Written comments on all aspectsof the proposed rule must be receivedon or before April 3, 2002.ADDRESSES:Written comments shouldbe submitted to: Special InformationSharingSection 314 Comments, POBo x 1618, Vienna, VA 22183-1618.Comments may also be submitted byelectronic mail to the following Internetaddress: [email protected] the caption in the body of the text,"Attention: Proposed RuleSpecialInformation SharingSection 314." Foradditional instructions on thesubmission of comments, seeSUPPLEMENTARY INFORMATIONUnder th eheading "Submission of Comments."Comments may be inspected at FinCENbetween 10 a.m. and 4 p.m., in theFinCEN Reading Room in Washington,D C .Persons wishing to inspect thecomments submitted must request anappointment by telephoning (202) 354-6400 (not a toll-free call).F O RFURTHER INFORMATIONC O N TA C T:Judith R. Starr, Chief Counsel (FinCEN),(703) 905-3590; William Langford,Senior Counsel for Financial Crimes,Office of the Assistant General Counsel(Enforcement), (202) 622-1932; or GaryW . Sutton, Senior Banking Counsel,Office of the Assistant General Counsel(Banking & Finance), (202) 622-1976(not toll-free numbers). Financialinstitutions with questions about theircoverage or compliance obligationsunder this rule should contact theirappropriate federal regulator.SUPPLEMENTARY INFORMATION:

I. BackgroundOn October 26, 2001, the President

signed into law the USA PATRIOT Act

of 2001 (Public Law 107-56) (the Act).O f the Act's many goals, the facilitationof information sharing amonggovernmental entities and financialinstitutions for the purpose ofcombating terrorism and moneylaundering is of paramount importance.Section 314 of the Act furthers this goal

by providing for the sharing ofinformation between the governmentand financial institutions, and amongfinancial institutions themselves. Aswith many other provisions of the Act,Congress has charged Treasury withdeveloping regulations to implementthese information-sharing provisions.

Section 314(a) of the Act requiresregulations encouraging cooperationbetween financial institutions and thefederal government through theexchange of information regardingindividuals, entities, and organizationsengaged in or reasonably suspected ofengaging in terrorist acts or moneylaundering activities. Section 314(b), onthe other hand, permits f inanc ia linstitutions, upon providing notice toTreasury, to share information with oneanother in order to better identify andreport to the federalgovernmentconcerning activities that may involvemoney laundering or terrorist activities.

First, utilizing me existing and futurecommunication resources of theFinancial Crimes Enforcement Network( F i n C E N ) ,this proposed rule seeks tocreate a communication network linkingfederal law enforcement with thefinancial industry so that vitalinformation relating to suspectedterrorists and money launderers can beexchanged quickly and withoutcompromising pending investigations.FinCEN, a bureau of Treasury, alreadymaintains a government-wide dataaccess service to assist federa l ,state,and local law enforcement agencies inthe detection, prevention, andprosecution of terrorism, organizedcrime, money laundering, and otherfinancial crimes. Under the proposedrule, federal law enforcement will havethe ability to locate accounts of, andtransactions conducted by, suspectedterrorists or money launderers byproviding their names and identifyingin fo rmat ionto FinCEN, which will thencommunicate that information tofinancial institutions so that a check ofaccounts and transactions can be made.If matches are f o u n d , law enforcementcan then fol low up with the financialinstitution directly. The rule is intendedto formalize and streamline theinformation sharing and reportingprocess that the federal governmentundertook fo l lowingthe attacks ofSeptember 11, 2001, by permittingFinCEN to serve as a conduit for

information sharing between federal lawenforcement agencies and financialinstitutions.

FinCEN is uniquely positioned toserve as the communication gatewayunder section 314(a). Indeed, it alreadyprovides considerable informationrelating to financial crimes to thefinancial community in a variety ofways. It issues Suspicious ActivityReport (SAR) Bulletins, which digestinformation drawn from SARs toillustrate indicia of suspicious activity,and SAR Activity Reviews, whichpresent trends, tips and issues insuspicious activity reporting. FinCENissues advisories to alert the financialcommunity to specific activities andareas that merit enhanced scrutiny,including countries with lax anti-moneylaundering controls. In addition,FinCEN provides industry guidance onits website. The financial servicesindustry also makes substantial use ofFinCEN's regulatory helpline.

Second, Congress authorized thesharing of information among financialinstitutions relating to suspectedterrorists and money launderers onlyafter providing notice to Treasury, forthe purpose of identifying and reportingto the federal government suchactivities. The notice provision outlinedbelowa yearly certification to FinCENthat information will be shared andprotected f rom inappropriatedisclosurecombined with therequirement that any money launderingor terrorist activities uncovered bereported to FinCEN or other lawenforcement, will allow for the sharingof information while protecting theprivacy interests of customers offinancial institutions. Given theimportance of this information sharingprovision, Treasury is issuingsimultaneously an interim ruleimplementing section 314(b), which ispublished elsewhere in this issue of theFederal Register. The regulatory text ofthe interim rule and this proposed ruleare identical with respect to section314(b).

Nothing in this proposed rule affects

the existing authority of federal agenciesto obtain information directly f romfinancial institutions, as authorized bylaw or regulation, pursuant to their ownestablished and approved procedures.Moreover, nothing in the proposed ruleaffects a financial institution'sobligation to file a SAR, or its duty tocontact directly a federal agencyconcerning individuals or entitiessuspected of engaging in terrorist acts ormoney laundering activities.


3/11

U.S. Department of the TreasuryFinancial Crimes Enforcement Network

newsFinCEN's web site is located at: http://www.fincen.govFOR IMMEDIATE RELEASENovem ber 17, 2003

(703) 905-3770

Information Sharing Provides Valuable Leads for Law Enforcement

A system allowing law enforcementofficials investigating terroristfinancing and major moneylaundering cases to relay targets of investigationto thousandsof financial institutions hasresulted in a large number offinancial leads for investigators, reports the F inancial C rimesEnforcement Network (FinCEN)in its most recent SAR A ctivityReview -Trends, Tips an d Issues,released today.

FinCEN, under section314(a) of the USA Patriot Act,has transmitted 167 cases involving 962subjects of interest to financial institutions on behalf of law enforcementfrom February throughOctober 20, 2003. Financial institutions provided 6,987 responses that were forwardedto thelaw enforcemen t requestors by FinC EN . Out of theseresponses, 6,397 were positive and 338were inconclusive.

"Financial institutions are providing lawenforcement with invaluable information," saidWilliam F. Baity, acting Director of FinCEN. "Without the assistance of these financialinstitutions, many of these leads m ight have taken law enforcem ent months o r even years touncover, assuming they could have been uncoveredat all."

Th e Review is a product of ongoing dialogueand collaboration betweenthe nation's financialinstitutions, law enforcementofficials, and regulatory agencies to provide informationabout thepreparation, use and value of suspicious activity reports (SAR s)filed by financial institutions.

In addition to information on the 314(a) system, this sixth issueof the Reviewprovides on-goinganalysis of SA Rs relating to terrorist financing andinformal value transfer systems. TheReview

also provides an in-depth description of coupon redemptionfraud, along with instructions onhow financial institutions canidentify and report this activity, and discusses suspicious mon etaryinstrument transactions that have beenidentified by clearing banks in the course of theinternationalcash letter process.

- more -


4/11

U.S. Department of the TreasuryFinancial Crimes Enforcement Network

newsFinCEN's web site is located at: http://www.fincen.gov

For Immediate ReleaseMay 28, 2002

Contact FinCEN at (703) 905-3770

FinCEN Launches E-Filing SystemWill Allow for BSA Filing over Secure Internet

The Financial Crimes Enfo rcement Netw ork (FinC EN ) announced today that it has begun itspilot testing of the P atriot A ct Com mun ications System(PACS). PACS is designed to allowparticipating financial institutionsto quicklyand securelyfile Bank SecrecyAct (BSA) reportsover theInternet. Phaseone of thesystem will allowfor the filing of the bank SuspiciousActivity Report (Form TD F 90-22.47 or"SAR") and the Currency Transaction Report (Form4789 or "CTR").

The electronicfiling of BS A reports will expedite the reporting process and, thus, make theinformationavailable to law enforcement more rapidly. It is also designed to reduce a financialinstitution'scosts in complying withthe filing of BSAreports. More than13 million BSAreportsare filed with FinCEN each year throughthe IRSDetroit Computing Center, whichprocesses the reportsfo r FinCEN. Priorto the developmentof PACS, financial institutions could

file their reports eitheron magnetic tapeor on paper. The PACS system w ill providethe thirdoptionof electronic filing.

Approximately30 financialinstitutions, rangingfrom large national banksto small credit unions,will pilot test the system over the next two month s. All BSA inform ation submitted to PA CS isencryptedfor protection.

"We are optimistic thatfinancial institutionswill employ the PACS system as theirfiling tool ofchoice," said James F. Sloan, Director of FinCE N. "Use of PAC S will allow for BSAinformationto be processed and made availableto law enforcemen t investigatorson anexpedited basis. Itwill also save the governm ent considerable taxpayer dollars in processingcosts associated w ith paper and m agnetic filing."

Once the pilot-test phase is complete, FinCE N will evaluate the need to make adjustme nts to thesystem an d identify opportunitiesfo r enhancement. Whenthe system is deployed, financialinstitution personnel will be able to access PACS onlyafter they have applied for and received adigital certificatefrom a Government-approvedcertificateauthority. Financial institutions arenot mandatedto use PACS.


5/11

"WAIS Document Retrieval Page 1 of 3

[Code of Federal Regulations][Title 31, Volume 1][Revised as of July 1, 2003]From the U.S. Gover nment Pr i nting Off ice vi a GPO Access[CITE: 31CFR103.100]

[Page 399-401]

TITLE 31--MONEY AND FINANCE: TREASURY


PART 103--FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGNTRANSACTIONS--Table of Contents

Subpar t H--Specia l Informa tion Shar ing Procedures To Deter MoneyLaunderi ng and Terr orist Activ i ty

Sec. 103.100 Informa tion shari ng between Federa l law enforcement agenciesand financial inst i tut ions.

(a ) Definit ions. For purposes of this section:

(1) The defi niti ons in Sec. 103.90 a pply.(2) Financial insti tution means a ny financial inst i tution descri bed

i n 31 U.S.C. 5312(a)(2).(3) Transmittal of funds has the same mea ning a s provided i n

Sec. 103.11(jj).(b) Information requests based on credible evidence concerning

terr ori st act iv i ty or money la underi ng.--(1) In general. A Federa l la wenforcement agency inv estiga ting terr ori st act iv i ty or money launderingmay r equest that Fi nCEN sol i ci t, on the i nvestiga ting agency's beha l f ,cer ta i n i nformat ion f rom a f i nancia l ins ti tu tion or a group of f inancia linstitutions. When submitting such a r equest to FinCEN, the Federa l la wenforcement agency sha l l p rovide

[[Page 400] ]

FinCEN with a writ ten cert if icat ion, in such form and manner as FinCENmay prescri be. At a minimum, such certi fi cati on must: state tha t eachi n d i v i d u a l , enti ty, or orga nization about which the Feder al l awenforcement agency i s seeking information i s engaged in, or isreasonably suspected based on credibl e evi dence of engagi ng in,terrorist act ivi ty or money laundering; include enough specificidentif iers , such as date of bi r th, addr ess, and social securi ty number ,that would permi t a f ina ncia l i nsti tuti on to differ entia te betweencommon or si mil a r na mes; and i dentif y one person a t the agency who canbe contacted wi th any questions r ela ting to its request. Upon receiv ingthe requisi te cer t i f ica t ion fr om the requesting Federa l la w enforcementagency, FinCEN may require any financia l institution to search its

records to determine whether the f i nancia l inst i tut ion mai ntai ns or hasmai ntai ned a ccounts for, or has engaged in tra nsactions wi th, anyspecifi ed indiv i dual , enti ty, or organization.

(2) Obl i ga t ions of a f inancia l ins ti tu tion rece iv ing an i nformat ionrequest.--(i) Record search. Upon receiving an information request fromFinCEN under this section, a f ina ncia l i nst i tution shal l expedit iouslysearch i ts records to determi ne whether i t ma intai ns or has mai ntai nedany account for , or has engaged i n any tra nsaction wi th, eachindiv idual , enti ty, or orga nization named in FinCEN's request. Afina ncia l i nstitution may conta ct the Federa l la w enforcement agencynamed in the information request provided to the institution by FinCEN

http://frwebgate.access.gpo.gov/cgi-bin/get-cfr.cgi 12/3/2003


6/11

(BILLING CODE: 4810-02-P)


31 CFR Part 103

RIN 1506-AA27

Financial Crimes Enforcement Network; Special Information Sharing Procedures

To Deter Money Laundering and Terrorist Activity

AG EN CY : Financial Crimes Enforcement Network (FinCEN ),Treasury.

ACTION: Final rule.

SUMMARY: FinCENis issuing this final rule to encourage inform ation sharing

among financial institutions and federal government law enforcement agencies for the

purpose of identifying, preventing,and deterring money laundering and terrorist

activity.

DATE: This final rule is effective [INSERT DATEOF PUBLICATION IN THE

FEDERAL REGISTER].

FOR FURTHER INFORMATION CONTACT: Office of Chief Counsel, FinCEN,

(703) 905-3590; Officeof the Assistant General Counsel (Enforcement), (202) 622-

1927; or the Office of the Assistant General Counsel (Bankingand Finance), (202) 622 -

0480 (not toll-freenumbers).

SUPPLEMENTARY INFORMATION:

I. Statutory Provisions

On October 26, 2001, the President signed into law the Uniting and

Strengthening Am ericaby Providing A ppropriate Tools Requiredto Intercept an d


7/11

BANK SECRECY ACT:Implementation of the Report of International

Transportation of Currency or MonetaryInstruments (CMIR)

OIG-03-062 March 4, 2003

Office of Inspector General

*******

The Department of the Treasury


8/11

FinCEN's COMPLIANCE WITH THEMONEY LAUNDERING SUPPRESSION ACT

RELATING TONON-BANK FINANCIAL INSTITUTIONS

OIG-97-098 JUNE 12,1997

Office of Inspector General

United States Department of the Treasury


9/11

"MorePrivacy.com - Government Surveillance, Part One Page 1 of4

What's New

PrivacyNews andCommentary

Current Editorial

Editorial Archjve

FAQ

Who Is Michael S.Hyatt_?

th s 5 / t e

Books

Computer and InternetSecurity

Financial Services

Other Privacy Links

GOVERNMENTSURVEILLANCE, PART ONE

Howthe

FinCEN system monitors yourfinancial activity

by Michael S. Hyatt

September 3, 2001

When people unde rstand what is happeningto their privacy, th ey often clamor for thegovernment to do something about i t.However, government is not the solution. Infact, it's the problem. There is no organizationmore committed to the concept of totalsurveillance than the U.S. governmen t. In thenext three weeks we will examine the threeprimary systems it employs. The first of theseis th e FinCEN system.

The front page of FinCEN's Web site reads: "The mission ofthe Financial Crimes Enforcement Network [FinCEN] is tosupport law enforcement investigative efforts and fosterinteragency and global cooperation against domestic andinternational financial crimes; and to provide U.S. policymakers with strategic analyses of domestic and worldwide

money-laundering developments, trends and patterns.FinCEN works towards those ends through informationcollection, analysis, and sharing, technological assistance,and innovative and cost-effective implementation ofTreasury authorities."

Translation: The government uses FinCEN to spy on us, inorder to know everything about how we spend our money.

Actually, this isn't quite true. Really, our banks do the

Subscribe to our weeklyeNewsletter:

Subscribe

more info

Invasion of PrivacyMichael S. Hyatt

Bea_d sample chapters

M y Top Ten FavoritePrivacy Books

identity, _Pnvacy andPersonal FreedomSheldon Charrett

iide YojJLAssets_andDisappear

Edmund J. Pankau

H ow to_Be InvisibleJ. J. Luna

http://www.moreprivacy.com/editorials/government-1 .htm 11/12/2003


10/11

Statement of James F. SloanDirector

Financial C rimes Enforcement NetworkU.S. Department of the Treasury

before theSubcomm ittee on Oversight an d Investigations

Committee on Financial Services

March 11, 2003

Madam Chairwoman, and members of the Subcommittee, thank you for thisopportunity to appear before you today to discuss the Financial C rimes EnforcementNetw ork's (FinCEN ) role in combating money laundering and thefight against terroristfinancing.

FinCEN'srole in this effort was significantly expanded in the eighteen m onthsfollowing the terrorist attacks on the World Trade Center because of its mission-orientedfocus on facilitatinginformation-sharingand networking amongst the law enforcement,regulatory and financial communitiesand with similar units worldwide.The recentformation of the newExecutive Office for Terrorist Financingand Financial Crimes(EOTF/FC) within the D epartment of The Treasuryfurther underscores the value ofFinCEN'ssupport to law enforcement inidentifying and tracking the financial aspects ofterrorist and other criminal activity. FinC EN welcom es the establishmen t of thisimportant office, which willbe responsible for providing policy guidanceto our bureauas we execute our responsibilities as Adm inistrator of the Bank S ecrecy Act (BSA ). Itwill be headed by Juan Zarate, Deputy Assistant Secretaryfor Terrorist Financingand

Financial Crimes. Mr. Zarate work ed closelywith our bureau in hisformer capacity asDepu ty Assistant Secretary for Terrorism and V io lent Crimes, w ithin theOffice ofEnforcement, and welook forward to a continuanceof that excellent workingrelationship.

My statement today will updatethe committee on FinCEN 's programs,as well asthe significant progresswe have made in meetingour obligations under TitleIII of theUSA Patriot Act.

Mission

FinCENwas

established,in

April 1990,by the

Departmentof the

Treasury(Treasury O rder Num ber 105-08)to provide a government-wide, multi-sourceintelligence and analytical network. This network was designed to support the detection,investigation, and prosecution of domestic and international money laundering and otherfinancial crimes. In May 1994, FinCE N's operation was broadened to include regulatoryresponsibilities and, in O ctober 2001, the USA PAT RIO T Act elevated FinCE N tobureau status.


11/11

THE FINANCIAL CRIMES ENFORCEMENTNETWORK SUSPICIOUS ACTIVITY

REPORTING SYSTEM

OIG-99-032 JANUARY 25,1999

Office ofInspector General

UnitedStates Departmentof theTreasury

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