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.
Well, if you want to change it, you have two options. Try to get it overturned or modified through Congress
or challenge it in Court on constitutional grounds. Good Luck to you.
Amazingly, you became a member on my birthday! Even more amazing is you are in/around Lexington, KY.....an area I love. I drove back to Ohio in '96 and coming back west, I dropped down into KY and came in on the Paris Turnpike.....fabulous horse country. Spent the evening and the next morning, while drizzly, foggy, made a loop of some of the biggies out on Winchester and then went to the KY Horse Park. I could have spent a week there...also took the driving tour of many of the farms....Mare's Haven, Lane's End, etc....and headed to Keeneland.....WOW....beautiful country.
My brother took basic at Ft. Ord in CA, and then went to Ft. Campbell for his paratrooper and Ranger training.
BUT.....isn't there always one....you shudda picked a more highly esteemed profession, in my view. :)
you shudda picked a more highly esteemed profession, in my view. :)
As for my profession, we have to have some of the good guys able to speak legalese...:) I take my oath to defend the Constitution very seriously.
And I put in ten years as an Army wife before going to law school so I am firmly in the protect and defend mode.
Actually, a sequence of cash transactions that add up to $10k can trigger a report. My Quicken bookeeping has me spending that much cash in less than a year, mostly on small items -- does that make me reportable?
You are, of course, correct in your assessment of needing some 'good guys' (and gals :) ... just angers me that it is attorneys that are writing all the legalese crapola--sort of like a permanent job guarantee! Oh well.....that's the way the mop flops.
That's supposed to be a secret...:)
The President and Congress are elected to represent 'We the People." Once elected into office the President and Congress take an oath to protect and defend the consitution. This Act is a perfect example of government working for government and not for 'We the People"
This law should not have be challenged. Had Congress and the President upheld their oath of office and not passed and signed into law something no one looked at and is uncontitutional it would not have to be.
Welcome to the real world.
Deal with reality. You still have two choices. Do something about it. Or continue whining.
Are you sure you aren't a liberal? There is alot of woe is me in your posts.
You should join me.
Correct question: Now that we know the national government has passed a law that violates the Constitution of the United States of America, do we obey or disobey the law?
I've never claimed to be any of that. However if you are indeed a counselor at law and believe that the objections of 'mulletheads' 'pips' and keyboard constitutionalists somehow turns a valid law into something unconstitutional then I suspect you need remedial courses.
They don't want to hear it and they don't want to understand it. These keyboard constitutionalist are like kids playing post office. However, there are a few of us rational, intelligent, thoughtful folks here. Chalk the rest up to playthings and background noise.
Well, I am just a backwoods country lawyer but I always advise people to obey the law.
And although you have an opinion about the constituionality of this particular law, as a legal matter,
the law is not unconstitutional until it is reviewed by the Courts and so adjudged.
And your basis for this unconstitutional feeling is? Have you by chance hear of Article 16 of that document?
"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
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