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The Treasury Department today announced a new bank reporting rule designed to both significantly reduce unnecessary paperwork for America's banks and improve the quality of information routinely provided to law enforcement.
The new rule will go into effect May 1, 1996, changing the previous requirement for banks to file forms reporting every currency transaction in excess of $10,000. Such transactions will no longer need to be reported if they involve the following:
The Financial Action Task Force (FATF), a 26-nation organization created by the G-7 to address the global problem of money laundering, today issued revised standards for countries to follow in combating the laundering of criminal proceeds. The revisions to the standards, known as the 40 Recommendations, were made to adjust to changing global money laundering trends as well as technological advances in the financial services industry. This is the first update to the recommendations since they were issued in 1990.
The United States has held the Presidency of the FATF since July 1995 under the leadership of former Treasury Under Secretary for Enforcement Ronald K. Noble. The 40 Recommendations were revised as part of the 1995-1996 round of discussions that concluded with a meeting this week in Washington, D.C. Following the session, Secretary of the Treasury Robert E. Rubin stressed the importance of FATF's work:
"For all countries to succeed and enjoy the benefits of a global economy, strong alliances must be built to combat money laundering. Drug traffickers and terrorists depend on money laundering for cash. The 40 Recommendations released by the FATF will go hand-in-hand with the work being done in Lyon, France today in developing ways to fight crime and terrorism around the world."
The major changes to the 40 Recommendations relate to the following issues:
- the extension of money laundering predicate offenses to serious crimes beyond drug trafficking (Recommendation 4);
- the mandatory reporting of suspicious transactions by financial institutions (Recommendation 15);
- the inclusion of non-financial businesses as part of counter money laundering measures (Recommendation 9);
- the focusing of attention on the money laundering implications of emerging cyberpayment technologies (Recommendation 13); and
- a new statement of support for more effective investigative techniques in following the illicit proceeds from the street to the kingpin of the criminal organization (Recommendation 36).
The annual report highlights the efforts of FATF during the U.S. Presidency. In addition to updating the recommendations, FATF conducted the first-ever meeting of the Financial Services Forum. At this meeting, international financial industry experts discussed ways to promote better cooperation between law enforcement agencies and the financial sector. Representatives at the Forum also suggested changes to the 40 recommendations which in part have been included in the revisions.
"In 1990, when the original 40 Recommendations were issued, the FATF established itself firmly in the forefront of the battle against money laundering. Today, it remains in the forefront by adapting to ever-changing money laundering methods," said FATF President Noble. "This ability to look beyond immediate problems and assess future contingencies in the fast-paced world of global finance would not be possible without the cooperation and insight of all the FATF members. I appreciate their support of the U.S. FATF Presidency and wish them continued success."
In addition to the revised 40 Recommendations released as part of its annual report, FATF also disseminated the results of a "typologies exercise" which highlights new money laundering methods and patterns of activities used by criminals. This is the first time the typologies report has been made public.
Copies of FATF's annual and typologies reports are available from the Treasury's Financial Crimes Enforcement Network (FinCEN) which has coordinated the U.S. role within the FATF this year. FinCEN's Office of Communications can be reached at (703) 905-3770.
Updated November 21, 1996