Financial Crime World

Here is the converted article in Markdown format:

FinCEN IT Environment: Providing Security and Privacy Controls

======================================================

In an effort to combat money laundering and terrorist financing, the Financial Crimes Enforcement Network (FinCEN) is studying the feasibility of establishing a limited cross-border funds transmittal reporting requirement for certain financial institutions. This report outlines the implications and benefits of such a requirement.

Background


Section 6302 of the Intelligence Reform and Terrorism Prevention Act of 2004 amended the Bank Secrecy Act (BSA) to require FinCEN to study the feasibility of requiring financial institutions to report certain cross-border electronic transmittals of funds. Currently, financial institutions are required to collect and retain records of specified data regarding funds transfers they process of $3,000 or more under the recordkeeping rule.

Study Scope


The study analyzed the implications of cross-border funds transfer (CBFT) reporting on a portion of the U.S. financial services industry and the benefits to law enforcement of having access to CBFT data. The study team sought answers to several key questions, including:

  • What technical solution would be required to support FinCEN’s collection and use of CBFT data, and what would be the costs to FinCEN of implementing this technology?
  • If certain CBFT data were reported to FinCEN, what would be the known or potential uses of this information?
  • What would be the effects on the affected U.S. financial services industry of a limited CBFT reporting requirement?
  • How would the security and privacy of CBFT data be protected by FinCEN?

Key Activities


To accomplish this study, FinCEN engaged in several key activities:

  • Surveyed 279 financial institutions to identify and assess the effects of a potential CBFT reporting requirement.
  • Conducted follow-up interviews with select survey respondents.
  • Interviewed law enforcement, regulatory agencies, and foreign financial intelligence units to identify examples of how CBFT data could be used.

Findings


The study found that implementing a limited CBFT reporting requirement would require FinCEN to establish a robust IT environment capable of securely collecting, storing, analyzing, protecting, and disseminating the reported data. The report highlights the importance of providing security and privacy controls throughout the entire process.

Conclusion


FinCEN’s study on cross-border funds transmittal reporting provides valuable insights into the implications and benefits of such a requirement. The report will inform Treasury leadership and assist in their decision-making process regarding the implementation of technology to support CBFT reporting.

Appendices