Lapas attēli
PDF
ePub

11

to Congress that they would not favor lowering the $10,000 limit for filing CTRS, citing the already monumental task facing the IRS in processing the forms they now receive.15/

Instead, the solution is to ensure compliance with existing laws and regulations and to encourage coordination and communication both among the government agencies and between those agencies and financial institutions. The interest of the banking industry in working to stamp out money laundering is not motivated merely by a fear of being fined or avoiding negative publicity. Banks in this country, as you well know, cannot survive without the trust of their customers. No bank wishes to tarnish its reputation and jeopardize the trust of its customers by accepting illegally derived funds. Thus, a coordinated joint effort between government and industry, could result in the type of law enforcement advances which Congress and all parties involved are interested in achieving.

Just one example of how coordination between government and industry could prove beneficial was recently suggested to Congress by Treasury Assistant Secretary Francis A. Keating, 11.167 Presently, currency transaction reports must be submitted on official IRS forms. If, instead, the agencies and the financial institutions could work together to permit bank generated computerized forms, which would contribute to speed and efficiency, everyone would benefit. Such coordination might even result in the establishment of a computer network where the information could be fed into IRS data systems directly from the banks. (At present the IRS has some 310 employees processing the CTR forms so that they can be fed into the Treasury Enforcement Communications System (TEC) of the

U.S. Customs Service.) 17/ The information could be entered by the banks more quickly and accurately and at less cost, the data could be received and filed with expedition, and law enforcement officials would have easier and earlier access to the data for whatever value it may have.

and

Thus, rather than inundating both financial institutions the agencies that regulate them with increased administrative requirements, cooperation on the best methods to apply already existing administrative requirements will provide better results and at less cost to government and industry. It is simply unfair and imprudent to impose an adversarial atmosphere through such proposed amendments as a $10,000 fine for the mere negligent failure to file a single CTR. An automatic $10,000 fine for the mere negligent failure to file a few CTRS is totally out of proportion to the conduct being punished.

CONCLUSION

12

If Congress enacts a statute making money laundering a crime, it should be limited to and directed at the real targets, namely individuals who knowingly and intentionally participate in the laundering of illegally derived funds. Otherwise, what is required is not further regulation or new laws, but rather further cooperation between government and industry to make the Act and other available enforcement tools useful instruments in the war on drugs. Instead of acting to gut the privacy protections Congress has afforded to individuals, or to greatly increase the administrative burdens of both the industry and the agencies, all concerned should continue to open up channels towards cooperation and take time to assess what the improvements over the last year have done to combat the money laundering problem.

The proposed amendments to Titles 12 and 31 are not only counterproductive to the goal of abating money laundering but are also imprudent. In this time of fiscal austerity under Gramm-Rudman-Hollings, the proposed bills threaten to appropriate funds and manpower in the least productive manner and further lessen our ability to require that the law enforcement community concentrate on the real targets. This would be particularly wasteful and improvident at a time when the banking agencies must devote so many of their resources to the supervision of failed and failing financial institutions. Much more productive use of funds could be made, for instance, by reinstating the low cost yet highly successful Treasury/IRS Narcotics Trafficker Tax Program (NTTP) which resulted in the indictment, conviction and fining of large numbers of drug dealers and disruption of their operations. The NTTP concentrated on the ill-gotten gains of drug traffickers but did so in an administratively workable manner utilizing bank records retained under the Act.

Congress should continue its oversight activities which have greatly contributed in the last year to strengthening the emphasis and utilization of the Act. Time should be taken to allow the increased attention paid to the Act and increased enforcement activities to be evaluated. At that time Congress will be in a better position to evaluate the cost effectiveness of the program and to properly balance the need for additional legislative requirements against the increased administrative burden such requirements will place on the agencies and the financial industry as well as the increased government intrusion into the privacy rights of our citizens.

Congress should give priority to oversight activities on the programs and operations of the various Federal enforcement

13

agencies with the aim of

determining the best methods of combatting organized crime, with particular emphasis on drug trafficking, since that overall effort has been patently unsuccessful. The priorities of federal drug enforcement should be re-examined. The federal organizational arrangement and interrelationship should be reviewed. For instance, the Customs Service -- the agency with anti-smuggling experts and a worldwide network of sister customs agencies is presently not authorized to investigate and handle drug smuggling cases. Congressional review should examine the best way to get at the illegal profits of drug traffickers. For instance, should the government put scarce resources into reviving the Treasury/IRS NTTP or into additional personnel for processing CTR's? Such a review should also examine the federal, state and local drug enforcement relationship, responsibilities and priorities.

-

These are some of the important issues that must be addressed if we are to improve our enforcement efforts against drug traffickers. While the banking industry must be prepared to do its part to combat money laundering, Congress should not allow the federal law enforcement community to divert its attention and reorder its priorities away from drug traffickers and towards bank tellers, other bank officials or banks themselves on weakened or no standards of knowledge and intent to give the impression we are succeeding in drug enforcement.

Thank you, Mr. Chairman.

1/

2/

FOOTNOTES

Remarks of William Nickerson before the 21st Annual
Banking Law Institute, May 1, 1986, as reported in BNA,
Daily Report for Executives, May 2, 1986, p. A-17.

Comptroller
Secrecy Act
Expectations,
1981, p. iv.

General's Report to the Congress, "Bank
Reporting Requirements Have Not Yet Met
Suggesting Need for Amendment," July 23,

[blocks in formation]

5/

6/

7/

8/

Testimony of W. J. Anderson, Director, General Government
Division, GAO, before the Permanent Subcommittee on
Investigations, Senate Committee on Governmental Affairs,
Oct. 24, 1985, pp. 5-6.

Testimony of Richard C. Wassenaar, Assistant Commissioner
(Criminal Investigation), IRS, before the Subcommittee on
Financial Institutions of the Committee on Banking,
Finance and Urban Affairs, United States House of
Representatives, April 16, 1986.

Id.

Testimony of Stephen Trott, Assistant Attorney General (Criminal Division) of the U.S. Department of Justice before the Financial Institutions Subcommittee of the Banking

Committee,

United

Representatives, April 23, 1986.

States

IRS Memorandum of Understanding, IR 85-125.

House

of

9/

10/

Houston Post, p. 22, December 12, 1985.

11/

12/

U.S.

Testimony of Assistant Secretary for Enforcement,
Dept. of the Treasury, Francis A. Keating, II, before the
Subcommittee on Financial Institutions of the Committee
on Banking, Finance and Urban Affairs, United States
House of Representatives, April 17, 1986.

House Report No. 95-1383, p. 33, U.S.C.A.N. p. 9305, id. at 246, U.S.C.A.N. p. 9375.

13/

124 Cong. Rec. 33311 (October 3, 1978).

14/

15/

BNA Report No. 92, p. A-5 (May 13, 1986).

Testimony of John W. Walker, former Assistant
for Enforcement, U.S. Dept. of the Treasury,
Joint Subcommittee, March 5, 1985. Keating

supra.

16/

17/

Id. at 4.

t

Secretary before the testimony,

Testimony of Brian Bruh, Director of the Office of
Investigations (Criminal), IRS, before the Senate
Committee on Banking, Housing and Urban Affairs, May 1,
1986 and subsequent telephone discussion.

« iepriekšējāTurpināt »