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.
But you don't understand. How can the IRS really enforce all the new taxes on capital gains if it can't fully document your original purchase price? Even more, how can they prosecute you for violating an arcane and confusing government law when you purchased an item, if they don't enact such government laws in the first place?
It's really very simple.
But the observation is based on a false premise...you are misunderstanding the definition of "public"...perhaps intentionally to make your point.
I am saying PUBLIC...like Public...ie customers in the marketplace....You are saying PUBLIC like government.
We can never discuss this rationally using different definitions.
v. intr.
To conduct a thorough investigation; seek: were searching for clues.
n.
An act of searching.
Law. The exercise of right of search.
Idiom
How is it NOT a search? Are they not looking for something, in this case, evidence of a cash transaction in excess of $10K?
You are locking the barn door after the horse is out. This has been the law for years. They have only added merchants to the list of enterprises who already report cash transactions over $10,000. That tells me the criminals have adjusted to the prior system. They used to buy cars to launder the cash. Now they are buying other stuff. I know you know this stuff and I know you know the argument about locks on the trunks of cars is a red herring. And I think you just like to argue....so you really must be a lawyer...:) Although we do not agree on the "reasonableness" of this law, thanks for sharing your opinions. You have given me things to think about.
I pointed out what FR is about because it did not seem you knew this was a conservative forum.
I do like to argue. With FR, I get all the arguing I need or want.
This particular rule is not my biggest concern with the Patriot Act anyhow. There are some other search provisions that do truly offend the 4th Amendment. But I do think this starts getting close to the line. Here is my thinking:
If we all agree that it is reasonable for the Government to seek information on all cash purchases in excess of $10,000. What if they want to make it $1,000, do you have a problem with that? What about ALL cash transactions? What if they say all cash transactions over $10,000 require the seller to obtain a photo of the purchasor? Where does it stop? I am 100% for fighting terrorism and criminal behavior. What I see is solution which is not going to stop terrorism, but opens the door to futher monitoring of non-criminal tranactions by citizens. Also, in addition to those with an ulterior motive in spending cash there are many people who just plain like their privacy.
Fair enough. I was stunned by your answer. So I won't ask you anything else...:)
I pointed out what FR is about because it did not seem you knew this was a conservative forum.
I lurked for over a year before I posted anything so I knew it was a conservative forum. Also, I have had lots of responses from other posters who consider themselves conservative who have agreed with some of my ideas. You are the first person in my life who has ever considered me a liberal...
that's why I don't like labels....if you are to the right of me, I am a liberal to you and I don't like being defined by your position, whatever it is.
Thanks for the humor break. Some of these posters are downright serious. I'll admit I may not have specified the Patriot Act in the response you read....
since I was answering what seemed like hundreds of them...:) but in my defense...that is the subject of this thread. Thanks again for the levity.
That is none of your or the governments business.
"This is the law, maybe it shouldn't be the law....that is not the question."
Yes it is.
Really, Sir? Then tell us all about yourself. All the intimate details. Please leave nothing out.
What? We're not entitled to know? But gosh, we're just people here, and the people ARE the government. We really want to know. Especially if you spend more money on something than we think your income would "reasonably allow." You may have been stuffing a matress or a coffee-can for several years, but while you're probably a decent, honest person, we can't quite trust you, so come clean, pcl, right here, right now. Don't make us interrogate your family. This will be a very quick and clean process.
You wouldn't have anything to hide, would you? Then you have nothing to fear.
It's about the Children/Terrorists don't you know. You wouldn't want to be anti-child, or anti-terrorist, would you? Cough it up.
We mean you no harm. We have your best interests at heart. Always.
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