Lapas attēli


tackle a new Title 18 crime.

As you are aware, Mr Chairman, a number of proposals repeal the procedural safeguards found in The Right to Financial Privacy Act.

We are

not convinced that the procedural protections in the RFPA severely hamper

law enforcement activities. Therefore, we do not believe it should be

amended in any fashion.

H.R. 1367 as introduced by Representative McCollum (R-FL) contains many of the recommendations made in the Inter im Report of the President's

Commission on Organized Crime.

Included in H.R. 1357 are a new crime of

money laundering, changes in the Federal wiretap statute, and changes in

the Right to Financial Privacy Act.

H.R. 1367 would also expand the authority of the Secretary of the Treasury under the Bank Secrecy Act (BSA). The Secretary would be given the authority to examine any data or records of a domestic financial

institution required by the recordkeeping requirements of BSA.


addition, the Secretary could summon an officer or employee of a financial

institution to appear before the Secretary or his delegate and produce such records, data, or sworn testimony as may be relevant or material.

The bill proposes making judicial orders authorizing wiretaps for the interception of telephone calls, telexes, and other forms of wire or oral

communications available for investigations of possible violations of the

criminal provisions of the Bank Secrecy Act (i.e. willful violations of the

reporting requirements) and of the proposed crime of money laundering.

H.R. 1474 as introduced by Representative Hughes (D-NJ) creates a new crime of money laundering and requires individuals to file directly with the Secretary of the Treasury for exemption from the BSA reporting


H.R. 1945, as introduced by Representative Hubbard, contains two

titles. First, The Drug Money Seizure Act which would increase the

penalties for a willful violation of the Bank Secrecy Act.

As proposed,

the current civil penalty of $10,000 would be increased to the amount of

the transaction where the violation involved a transaction reporting


This provision introduces the concept of forfeiture as a


Mr. Hubbard's bill also grants the Secretary of the Treasury

summons authority. This is a response to the assertion by the Department of the Treasury that it lacks subpoena power sufficient to enforce the Bank

Secrecy Act.

If the Congress finds the current means of obtaining a

subpoena available to the Secretary of the Treasury are inadequate to

enforce the Act, we would support the expansion of the Treasury's subpoena

authority as proposed. Second, H.R. 1945 creates a crime of money


H.R. 2785 ("the Administration bill"), as introduced by

Representatives St Germain and Wylie at the request of the Administration,

creates among other things a new crime of money laundering, amends the

Federal Rules of Criminal procedure, and establishes criminal and civil

forfeiture under Title 18.

H.R. 2785 also gives the Secretary of the Treasury authority to

examine records, papers, and other data of the financial institution

relevant to the reporting requirements of the Bank Secrecy Act.


financial institution could be required through a summons to produce at its

own expense such documents and records at any location within 500 miles of

the institution's place of business.

H.R. 3892, as introduced by Representative Wortley, would require the

Secretary of the Treasury to review all exemption lists on an annual basis


and, in a case of a change in bank control or management, the Secretary

would be required to review the exemption list within 30 days.

Additionally, H.R. 3892 would amend the Federal Deposit Insurance Act and

the National Housing Act by extending the time frame within which

supervisory agencies could review change of bank control applications for

compliance with the Bank Secrecy Act.

Finally, H.R. 3892 would recycle the proceeds of seizures and

for feitures from any unlawful act back into the enforcement of the Bank

Secrecy Act.

H.R. 4280, as introduced by Representative Torres, would increase the recordkeeping of financial institutions by requiring extensive records on

all currency transactions of $3,000 or more to be kept for 5 years. This is an attempt to increase information available for investigations. This proposal will obviously increase the amount of records a financial

institution will be required to keep, however, the utility of the proposal

is unclear.

H.R. 4573, as introduced by Representative Pickle, would deal with the

problem of structured transactions or "smur fing" by making it a crime to cause or attempt to cause a financial institution to fail to properly file a Currency Transaction Report on a transaction. Proceeds or property

interests directly traceable to the failure to file would be subject to

seizure or forfeiture. We believe H.R. 4573 is a cogent attempt to stem

the evasive tactics of money launderers.

It focuses everyone's attention

on the motivation of the drug trafficker.

As mentioned above, "structuring" or "smurfing," allows criminals to exchange illegally der ived monies for cashiers checks, travelers checks,

Mr. Pickle's approach would subject persons to civil and criminal


[ocr errors]
[ocr errors]

liability for causing or attempting to cause a domestic financial institution to "fail to file a (currency transaction) report", or to file the report with "a material omission or misstatement of fact" or structuring or assisting in structuring a transaction "for the purpose of evading the reporting requirements." This language will address the structured transaction problem which has forced the courts to dismiss

charges against individuals who may have been involved in deliberate evasion of the Bank Secrecy Act reporting requirements. 1

While there have been several cases that have found "structured

transactions" violative of 31 U.S.C. 5313(a) 2, the confusion over the statute and its implementing regulations needs to be solved once and for all; otherwise dismissals of charges such as that in the recent United States v. Dela Espr iella3 will continue.

ABA would like to suggest to this Committee another proposal, already

offered in the Senate by Senator De Concini and very similar to Mr.

Wortley's proposal in H.R. 3892, which would complement this Committee's response to tightening the Bank Secrecy Act. Senator De Concini introduced s. 1385, the "Money Launder ing Crimes and Disclosure Act" which deals in

part with the reporting problem associated with currency transaction report

exemptions. S. 1385 would amend 31 U.S.C. 5318, which gives the Secretary

of the Treasury authority to "prescribe for revoke) an appropriate exemption" by requiring the financial institution to provide to the Secretary of the Treasury (or his delegate) "a list of customers of the

financial institution whose transactions have been exempted" and by further

requiring the Secretary to "review and approve or revoke the list of

exemptions within 90 days after the date of receipt." If the Secretary

failed to notify the financial institution within the time provided, the


exemption list would be deemed approved. These proposed changes would encourage frequent review of the CTR exemption lists and provide financial institutions with an incentive to internally review and update their lists. These reviews would guarantee that the lists are used only for their intended purposes: to exclude from the reporting requirements only those customers clearly intended to qualify under the regulations.

Additionally, we would like to suggest some new language relating to an internal audit of the financial institution. Specifically, a section such as the following should be added :

"No liability for a civil penalty shall be imposed upon a
financial institution for a violation of this subchapter or a
regulation prescribed under this subchapter if such violation is
first discovered by such financial institution and is promptly
disclosed by such financial institution to the Secretary or in
accordance with regulations prescribed by the Secretary."

This amendment provides that liability for a civil nalty will not be imposed upon financial institution for violations of the Bank Secrecy Act or regulations thereunder if the financial institution discovers such violations and promptly discloses them to the Treasury Department. The

purpose of this amendment is to encourage financial institutions to audit

for Bank Secrecy Act compliance and to disclose and report negligent failures to comply with the Act. Absent such a provision, the consequences to the institution would be the same whether violations were discovered in

the course of an internal audit or an external examination. Since the

amendment will induce financial institutions to ensure full compl iance, it will further the general purposes of the Bank Secrecy Act.

There have been numerous proposed solutions aimed at curbing drug trafficking. Our Association supports the Chairman's goal of immediate, effective action. This goal can only be met by putting aside the all

« iepriekšējāTurpināt »