WASHINGTON-The Departments of Treasury and Justice recently unveiled the Clinton Administration's National Money Laundering Strategy for 2000, a broad approach to reverse and control what they posit as a growing menace to the country's financial system. The plan is a layered comprehensive plan to combat and prevent the huge profits generated by the illegal drug trade and other criminal activities from entering the monetary mainstream and bypassing tax responsibility. It designates, for the first time, what are termed four "High Intensity Financial Crime Areas" for the United States- New York/New Jersey, Los Angeles, San Juan, P.R. and the Southwest Border. It also brings other financial service providers into the regulatory and oversight picture. A final rule issued by FINCEN, the Financial Crimes Enforcement Network, a unit of the Treasury Dept., would require money services businesses, such as check cashers, money wiring services and currency dealers to submit suspicious activity reports (SARs). Later this year, it is expected that casinos and card clubs will be included, and the Securities and Exchange Commission will act to add broker/dealers to the list of those commercial operations that must report activities that generate suspicion. This isn't a replay of the failed "Know Your Customer" proposal that was so strongly bashed last year, promised Treasury Secretary Lawrence Summers. "It takes both cops and bankers to stop money laundering," stated Summers in an interview with U.S. Banker. A big concession there was to craft the way financial institutions oversee the accounts of bank customers together with trade groups and considering the admonishments of privacy advocates. By including all comers to the planning and strategy, the administration hopes to garner wider participation and cooperation. Having the force of suggested guidelines together with some rules, a more comprehensive approach may prove successful. "Money laundering is a growing threat to the United States," said Deputy Treasury Secretary Stuart Eizenstat. "It undermines confidence in the integrity of our financial systems, facilitates crime and corruption, and allows criminals to savor the rewards of their illegal actions." "The legislation we are proposing today would fill a crucial gap in our authorities, and significantly enhance our ability to take calibrated, targeted action with respect to money laundering threats posed by foreign jurisdictions, institutions, or transactions," said Eizenstat in testimony before the House Banking Committee. The threat posed by those jurisdictions includes some that have a loose regulatory approach to "offshore" oversight (see related story on page one). Summers stated that most of those operations are entirely legitimate, but may be abused by money launderers. The ability to narrowly focus on areas of abuse is key to the success of the 2000 strategy, he said, if jurisdictions that "construct their regimes in defiance of international money laundering norms, thereby attracting dirty money" are to be stopped. -
caburger@cutimes.com
