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Although there are additional provisions concerning the Right to Financial Privacy Act that I can discuss, I think that it might be appropriate to conclude my remarks at this point. I will be happy to answer any questions that the Subcommittee

members may have.

APPENDIX A

ARIZONA MONEY LAUNDERING STATUTE

13-2317. Money laundering; classifications; definitions

A.

A person who acquires or maintains an interest in, transfers,

transports, receives or conceals the existence or nature of racketeering proceeds

knowing or having reason to know that they are the proceeds of an offense is

guilty of money laundering in the second degree.

B.

A person who knowingly initiates, organizes, plans, finances, directs,

manages, supervises or is la the business of money laundering is guilty of money

laundering in the first degree.

C. Money laundering in the second degree is a Class 3 felony. Money laun

dering in the first degree is a Class 2 felony.

D.

In this section, "acquire" and "proceeds" have the same meaning as pre

scribed in section 13-2314.

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BEFORE THE
COMMITTEE ON BANK ING, FINANCE AND URBAN AFFAIRS
SUBCOMMITTEE ON PINANCIAL INSTITUTIONS SUPERVISION,

REGULATION AND INSURANCE
UNITED STATES HOUSE OF REPRESENTATIVES

CONCERNING
MONEY LAUNDER ING LEGISLATION

MAY 14, 1986

My name is Samuel J. Buffone.

I am a practicing criminal

defense attorney and offer this testimony on behalf of the

American Bar Association.

in December of 1984 the white collar Crime Committee of the

ABA set up a subcommittee to study the problem of noney

laundering and proposed legislation designed to combat it. The Committee consists of 58 members of the ABA'S Section of Criminal Justice, including defense lawyers, prosecutors, law professors and judges, at both state and federal levels. The

Subcommittee was chaired by Bernard Bailor, a partner in the

Washington, D.C. firm of Caplin & Drysdale.

Following an extensive study a report was prepared and

adopted by the Council of the Criminal Justice Section on

December 7, 1985.

The report and recommendations included with

my testimony were presented to the ABA'S House of Delegates in

February 1986.

The House of Delegates adopted the

recommendations.

The report of the Criminal Justice Section

was not adopted by the House of Delegates but is provided to

the Committee as background.

I have also included with my

testimony comments of the ABA section on Corporation Banking

and Business Law on portions of the recommendations and report.

The American Bar Association recognizes the pervasive

nature of money laundering activities and the importance of combatting them. Our recommendations support the enactment of federal legislation which will assist federal law enforcenent agencies in combatting money laundering. While we believe that it is important to provide effective tools to combat noney laundering. our review of proposed legislation has led us to

the conclusion that the proposals go much farther than is

necessary to provide an effective means to combat this

problem. The breadth of many provisions of the proposed legislation create significant problems and do not in our view

provide the most effective means for combatting money

laundering activities.

The ABA believes that the most effective way to combat money laundering is to enact legislation that facilitates its detection. The available studies including the interim report of the President's Commission on Organized crime, ent tled The

Cash Connection:

Organized Crime Financial Institutions and

Money Laundering, reveals that detection of money laundering is

a far more significant problem than prosecuting the responsible

We

parties after it is discovered. This follows from the inherently clandestine nature of money laundering. cecommend that legislation be geared to facilitating detection of such transactions and be specifically aimed at the following steps which appear in virtually every major money laundering

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2.

Failure to comply with the Bank Secrecy Act Reporting
Requirements

3.

Use of multiple transactions to avoid reporting

4.

conducting transactions with individuals in
institutions not subject to the Bank Secrecy Act's
reporting requirements

We recommend the following specific steps be taken:
First, the Bank Secrecy Act should be amended to provide

or

ter notification to law enforcement agencies of possible

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