Posted on 11/23/2001 2:58:00 PM PST by Smogger
Nov. 18--Ordinary businesses, from bicycle shops to bookstores to bowling alleys, are being pressed into service on the home front in the war on terrorism.
Under the USA Patriot Act, signed into law by President Bush late last month, they soon will be required to monitor their customers and report "suspicious transactions" to the Treasury Department -- though most businesses may not be aware of this.
Buried in the more than 300 pages of the new law is a provision that "any person engaged in a trade or business" has to file a government report if a customer spends $10,000 or more in cash. The threshold is cumulative and applies to multiple purchases if they're somehow related -- three $4,000 pieces of furniture, for example, might trigger a filing.
Until now, only banks, thrifts, and credit unions have been required to report cash transactions to the Treasury Department's Financial Crimes Enforcement Network, under the Bank Secrecy Act of 1970. A handful of other businesses, including car dealers and pawnbrokers, have to file similar reports with the Internal Revenue Service.
"This is a big deal, and a big change, for the vast majority of American businesses," said Joe Rubin, chief lobbyist for the US Chamber of Commerce. "But I don't think anybody realizes it's happened."
The impact is less clear for consumers, although privacy advocates are uncomfortable with the thought of a massive database that could bring government scrutiny on innocent people. Immigrants and the working poor are the most likely to find themselves in the database, since they tend to use the traditional banking system the least.
"The scope of this thing is huge," said Bert Ely, a financial services consultant in Alexandria, Va. "It's going to affect literally millions of people."
The filing of so-called suspicious activity reports, though, is only the latest in a series of law enforcement moves the government has made in response to the Sept. 11 terrorist attacks on New York and Washington. And so far, the filing requirement has been overshadowed by debate over the other changes.
The Patriot Act signed into law Oct. 26, for example, gives the government a vast arsenal of surveillance tools, easier access to personal information, and increased authority to detain and deport noncitizens. House and Senate negotiators came to terms Thursday on a bill that would add 28,000 employees to the federal payroll in an effort to bolster airport security, and Attorney General John Ashcroft has said he is reorganizing the Justice Department and the FBI to focus on counterterrorism efforts.
As for the business-filing requirement, specifics about what companies have to do and when they have to do it still need to be worked out. The Treasury Department has until March 25 -- the date the Patriot Act becomes law -- to issue regulations about how to put the new rules into practice.
"The law itself doesn't go into any detail, because you'd presume that's what the Treasury regulations are for," said Victoria Fimea, senior counsel at the American Council of Life Insurers. "And the devil, of course, is in the details."
When he signed the legislation, President Bush said the new rules were designed to "put an end to financial counterfeiting, smuggling, and money laundering." The problem, he and others have said, was keeping tabs on the billions of dollars that flow outside the traditional banking system and across national borders each year.
Money launderers often disguise the source of their money by using cash to buy pricey things. Later, they can resell the products and move the money into a bank account -- at which point it has been laundered, or made to look legitimate, by the aboveboard sale.
Making a series of transactions just below the $10,000 filing threshold is also illegal under the new law if it's done to keep a business from contacting the government.
Financial services companies such as banks, insurers, and stock brokerages face a higher standard under the new law than other businesses. In addition to the filing requirements, they have to take steps such as naming a compliance officer and implementing a comprehensive program to train employees about how to spot money laundering.
Unlike other businesses, though, most financial services companies already have a process in place to deal with government regulation.
"Certainly for the bigger [insurance] companies, they most likely are already tooled up for this," said Fimea. "For other companies, this creates a whole new landscape."
James Rockett, a San Francisco lawyer who represents banks and insurance companies in disputes with regulators, said he's skeptical the authorities will get any useful information from reports filed by nonfinancial companies.
"You're trying to turn an untrained populace into the monitors of money laundering activity," Rockett said. "If you want to stop this, it's got to be done with police work, not tracking consumers' buying habits."
Voices opposing any of the new law-enforcement measures appear to be in the minority, however. For now, at least, few people and few companies want to be perceived as being terrorist sympathizers.
"In a political sense, it would have been very hard for us to go to Congress in this case and loudly argue that the legislation shouldn't include nonfinancial-services guys," said Rubin, of the US Chamber of Commerce. "Everybody wants to help and to stop money laundering right now."
Scott Bernard Nelson can be reached by e-mail at nelson@globe.com.
I am being forced to give over MY PAPERS.
Once they were stopped their rights as a citizens did not end!
The government knew or should have know these men were citizens long before the lab tests came back. They were treated as GUILTY till proven innocent and all the while NON citizen illegals are free to run the streets with more rights than these citizens.
These men knew they did nothing wrong and to this day they are still not cleared. Does the color of their skin and the fact 1 of them came from another country 40 years ago take away your rights as a citizen?
Yep. Just like you're required to file a tax return or pay social security tax on your employees. Have you been in America long?
To say it doesn't make it a fact. I doubt you find any legal support for your position. How do you feel about filing a tax return every year?
I do not agree that reporting all cash transactions in excess of $10,000 in the name of WOT is reasonable.
Well, I must admit that is the most polite way anyone has ever told me I wasn't welcome somewhere....and I am stunned. You are the first person to question my right to comment...or to paint me as a liberal. Fortunately, your opinion of me is nondispositive. Since I have spent the last twenty years of my life working "to root out political fraud and corruption", including but not limited to, prosecuting multiple cases against the government and its various agencies, I would say my service to the country qualifies me to comment here. Thank you for sharing your opinion.
But very few cars, boats, motorcycles are purchased from a "clerk." If I'm buying a car, boat, motorcycle, I'm WELL aware of titling requirements and wouldn't be as likely to pay in cash. No, let me be more clear: I wouldn't pay in cash, period.
With my original comment, I was thinking in terms of jewelry, gold, silver, etc. Not cars or boats or motorcycles . . . . or trains or planes, either. ;-)
That means a beef between CITIZENS and the government.
"Until its determined you're a clear and present danger or are accused of a crime, you dont get to cry 4th amendment."
That sounds you are trying to say that a person is GUILTY till proven innocent and rights dont matter unless one has been accused of a crime. Is that what you are saying?
" To hold otherwise would be a follow. You enter into these transactions on a volunteer basis."
LOL your liberal side is showing.
An important element of rational debate is to seperate 'what should be' from 'what is'. Most of the mullet heads don't do this. There are very few here that do. I appreciate meeting one. Keep up the good work!
You give me too much credit, I am not that clever. And I think you mean to "insure against, not insure" searches and seizures...:)
However, I can read the law and I can read the 4th Amendment and there is no correlation. This is not a new law.
This is not a SEARCH and this is not a SEIZURE.
To borrow a phrase from another poster...if you are that paranoid, write a check or quit selling drugs.
I don't have to....it is not a search!!! it is not a seizure!!!!
While true that the constitution only protects citizens against state action, and not private action, when a retailer is required by the government to collect information and report upon its customers, that IS state action.
But the arguements here have come from the perspective of the customers, not the retailers. Unless you own a business subject to this act, you have no standing to argue as a business owner. If you are and do, I will point out that you file a tax return every year. If you don't, I will tell you to shush and go find a better arguement. Unless, of course, you're saying we all own part of the businesses that we patronize. In that case I will ask you who is really the liberal here?
You are free to disagree, it doesn't mean you are right. As a business owner, I deal with the "public" every day and I abide by the laws.
That does not make me the government.
those like you, who refuse to recognize the Bill of Rights as absolute, facilitate that change.
and I have noticed when people run out of arguments, or cannot defend their positions, they resort to name calling...
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