Fraud


The Financial Crimes Enforcement Network (FinCEN) released guidance intended to help financial institutions file more precise suspicious activity reports (SARs) as the agency sets it sights on foreign corruption and related money laundering. Fin-CEN says a more effective use of SARs will help law enforcement better detect and analyze trends and patterns. It will also enable the agency to provide better feedback and subsequent guidance to the financial industry.

The guidance in FIN-2008-G005 defines the terms “senior foreign political figure” and “proceeds of foreign corruption.” It also requests that financial institutions include the term “foreign corruption” in the narrative portions of all SARs filed in connection with such activity. This ensures law enforcement identifies the activity as early as possible.

The guidance is available at www.fincen.gov/fin-2008-g005.pdf.

FinCEN proposed an amendment to a Bank Secrecy Act (BSA) regulation that would broaden exemptions from requirements to report currency transactions in excess of $10,000. The notice of proposed rulemaking was issued in accordance with recent recommendations by the Government Accountability Office and FinCEN’s own research.

Current regulations on Currency Transaction Reports (CTRs) allow depository institutions to grant exemptions under the following circumstances:

1. Phase I exemptions. Transactions made by other depository institutions, governmental departments or agencies, those acting with governmental authority, or public companies and their subsidiaries that are listed on one of three major exchanges referenced in FinCEN’s regulations.

2. Phase II exemptions. Reportable transactions in currency by eligible nonlisted business or payroll customers.

Under the proposal, depository institutions would no longer be required to:

1. File exemption forms for, or to annually review, customers that are depository institutions, government agencies, or entities acting with governmental authority.

2. Renew every two years a designation of exempt person filing for otherwise eligible Phase II customers.

3. Wait 12 months before designating otherwise eligible Phase II customers for exemption.

The notice of proposed rulemaking is available at http://edocket.access.gpo.gov/2008/pdf/E8-8955.pdf. Comments must be received by June 23, 2008. 

 
 
 

 

 

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