--- begin forwarded text Delivered-To: rah@shipwright.com Delivered-To: clips@philodox.com Date: Sat, 24 Jun 2006 23:34:16 -0400 To: Philodox Clips List <clips@philodox.com> From: "R.A. Hettinga" <rah@shipwright.com> Subject: [Clips] U.S. Is Moving on Several Fronts To Police Financial Transactions Reply-To: clips-chat@philodox.com Sender: clips-bounces@philodox.com <http://online.wsj.com/article_print/SB115107967824388905.html> The Wall Street Journal U.S. Is Moving on Several Fronts To Police Financial Transactions By GLENN R. SIMPSON June 24, 2006 The Treasury Department's newly disclosed program to track suspected terrorists by examining records of international financial transactions is just one component of an expanding effort by American security officials to more closely monitor suspect financial dealings. U.S. officials also are privately asking the banking industry to change the ways that banks record international transactions so the data are more complete and more accurate, several executives and industry officials said. Regulators are concerned that banks in some cases aren't producing records that disclose all information about senders and recipients of wire transfers, prompting regulators from the Federal Reserve and other agencies to raise questions about record-keeping practices in recent examinations. Officials are also weighing new regulations to make U.S. banks disclose details of all cross-border transfers to law-enforcement agencies. At the moment, American banks aren't required to report when they make financial transfers less than $3,000 between the U.S. and other countries. These new steps come on the heels of a variety of new reporting requirements put into place by U.S. regulators shortly after the Sept. 11, 2001, terrorist attacks. While many are aimed at thwarting terrorists and their supporters, U.S. officials also have other goals. They aim to use cross-border transaction data to enforce U.S. economic sanctions and to apply U.S. tax laws to American citizens who move money offshore. The initiatives rely on a patchwork of existing laws that allow the government to take these steps, and their legality generally isn't disputed. Still, the government's financial-surveillance activities may face new scrutiny following the disclosure this past week of the Treasury Department's secret Terrorist Finance Tracking Program. Using it on behalf of American intelligence and law-enforcement officials, the Treasury seeks information from a database of international wire transactions maintained by a Belgian firm known as Swift, an industry cooperative that serves as a clearinghouse for the majority of overseas transactions on behalf of banks and financial institutions. The Treasury program's existence was acknowledged on the record by U.S. officials for the first time on Thursday. "I am particularly proud of our Terrorist Finance Tracking Program which, based on intelligence leads, carefully targets financial transactions of suspected foreign terrorists," Treasury Secretary John Snow said at a news conference Friday. Some congressional Democrats and some civil-liberties activists criticized the program as a privacy threat, but most law-enforcement and banking-industry officials, and many political leaders, joined the Bush administration in defending it as appropriate. "Financial institutions are seeking to cooperate with law enforcement in this very critical fight against terrorist financing," said Lawrence Uhlick of the Institute for International Bankers. "I think this is a pretty clear case of the right kind of cooperation within the legal process." David Caruso, a former Secret Service agent and banking consultant, called the program "an aggressive but pretty wise use of power." Swift, which stands for the Society for Worldwide Interbank Financial Telecommunication, processes the millions of electronic messages sent daily by banks and brokerages to coordinate international transactions. While law-enforcement officials have traditionally subpoenaed individual banks when seeking information, the newly disclosed program involves broad government subpoenas to Swift for data on specific terrorists. While the reaction to disclosure of the program was generally muted, some banking executives say they still are concerned that the government's broader campaign to scoop up wire-transfer data from Swift and others could trigger a backlash. That might even weaken the dollar if institutions decide transactions made in dollars are more likely to attract the attention of American investigators. For now, U.S. officials remain interested in extracting more detail on international transactions that could involve criminal activity or suspect individuals. Most cross-border wire transfers contain sets of instructions in one of two standard Swift formats, and officials are concerned that in some cases people and groups are using a format that allows them to improperly hide their identities, several people with direct knowledge of the matter said. The issue arose after Treasury discovered that ABN Amro of the Netherlands improperly used a Swift form designed for large bank-to-bank transfers to deliberately hide transactions with Iran, a longtime target of U.S. economic sanctions. -- ----------------- R. A. Hettinga <mailto: rah@ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire' _______________________________________________ Clips mailing list Clips@philodox.com http://www.philodox.com/mailman/listinfo/clips --- end forwarded text -- ----------------- R. A. Hettinga <mailto: rah@ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'