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 News from Around the Americas | January 2006 
US Vows Diligence on New Money Laundering Threats
 Laura MacInnis - Reuters
| | Bundles of U.S. bank notes are seen in Seoul, January 4, 2006. Internet banking, online payment systems and stored value cards not requiring identification give criminals new opportunities to filter money through the United States, U.S. regulators said on Wednesday. (You Sung-Ho/Reuters) |
Internet banking, online payment systems and stored value cards not requiring identification give criminals new opportunities to filter money through the United States, U.S. regulators said on Wednesday.
Representatives of the Treasury Department, Federal Reserve, Justice Department and other government enforcement agencies urged in a Money Laundering Threat Assessment report more cooperation to squeeze money launderers and narrow potential avenues for tainted funds.
"The volume of dirty money circulating through the United States is undeniably vast and criminals are enjoying new advantages with globalization and the advent of new financial services," they said in the report, a precursor to the government's annual Anti-Money Laundering Strategy.
The regulators and law enforcement officials said it was "currently not possible" to accurately estimate the total amount of money laundering in the United States, or how much is being cut off by government enforcement.
Citing a need for a common definition of what constitutes money laundering, regulators said they needed more cooperation to patch vulnerabilities from money orders, stored value cards, check cashing, electronic payments, remittances and other financial transfers.
"Moving away from face-to-face customer interaction, particularly for (bank) account openings, challenges the traditional process of customer due diligence," they said.
The report concluded stored value cards or gift cards were compact, potentially anonymous alternatives for those seeking to smuggle physical cash linked to crime. Cards and other tools to facilitate migrant remittances could also be misused, regulators added.
"These programs can also be used to launder money if effective anti-money laundering policies, procedures and controls are not in place," the report said.
Federal Reserve Governor Susan Bies said the 72-page Money Laundering Threat Assessment "begins to give banks a better idea of what types of threats are out there."
Others said it was difficult for banks to detect fraudulent or laundered funds because money increasingly enters the U.S. financial system in indirect ways.
Stuart Levey, treasury undersecretary for terrorism and financial intelligence, said agencies like the Federal Bureau of Investigation, Drug Enforcement Administration and Postal Inspection Service were working with the Treasury and Federal Reserve to respond to new vulnerabilities.
"We now have to adjust our actions on all levels ... to stay one step ahead," Levey said.
He said it was "quite difficult to predict" when the 2005 annual strategy report would be completed but stressed inter-agency cooperation would occur before the study's official release. |
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