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.
Nope, just a backwoods country lawyer who believes in obeying the law.
It has been my experience it is easier to stay out of holes than to get out of holes.
Filing a tax return listing your income is different than being forced to compile a dossier on your best customers. Putting aside the constitutional arguments, people have objections to being tracked, catalogued, and monitored. Such things are inconsistent with a free society. Your mocking portrayal of those who disagree with you as "mulletheads," "pips," and "constitution warriors," is unflattering to you, and makes you seem less like a learned counselor and student of the law, and more like the obstreperous ninnies at DU. At least that's what THIS counselor at law thinks.
See #211 for my reply to your #207
It is more invasive than him filing his quarterly tax returns which make no mention of me? YES.
As you are well aware, there is no requirement for him to show how he spends his money on his tax return, unless he is looking for a tax deduction..so you are mixing apples and oranges.
But I would still say this is an acceptable request because the patron has other options, he can write a check..or pay by credit card. Like it or not...admit it or not...most people who pay more than $10,000 in cash have an alterior motive, they are hiding cash from the tax man, their wife, someone....
and lots of people on this thread are protesting too much.
I did not question your right to comment. It is best to know if one is conversing with a liberal or a conservative on this forum.
I did not paint you as a liberal, you had the brush in your hand and I was just noticing the color you were using.
Thanks, you said it better than I did. They are attacking me like I wrote the law....I am just telling them what it says...
and more importantly, what it doesn't say.
ps...To state that equating buisness with "public" action facilitates the change to fascism (ie public ownership of all industry) is hardly name-calling, but an observation.
FReegards...
Okay, you keep saying that...how is it a search?
Just a few days ago, listening to a bunch of the talking heads/pundits/idiots, on the discussion topic of a new government in Afghanistan....the first thing out on the table was central banking.
I know, and I am trying to respond in kind. The person I was answering called me a fascist because I disagreed with her/him.
I feel the income tax is un-Constitutional. Fedgov has grown beyond the restrictions placed on it by the Founders.
The acquiescence of persons like yourself to an all-powerful Fedgov is simply too much to battle against. It is clear that the people have lost the will to police themselves and govt has decided they must be policed. The ensuing police-state may be safe, but it will never be free.
FReegards...
You asked if it was more intrusive. I think it is. While a tax return is required, this is an additional set of information that is not needed to complete taxes. Of course, the transaction should and always would be reported as part of the business financials. The question is this extra information of reporting the name and other details of the individual who paid in cash. That is the disclosure that is prohibited without more.
As you are well aware, there is no requirement for him to show how he spends his money on his tax return, unless he is looking for a tax deduction..so you are mixing apples and oranges.
Huh?
Like it or not...admit it or not...most people who pay more than $10,000 in cash have an alterior motive, they are hiding cash from the tax man, their wife, someone.... and lots of people on this thread are protesting too much.
Many people have ulterior motives for having locks on their car trucks too right? Some use it to hide illegal substances. Does that mean all of us should have our trunks searched? Again, do I think this will affect me or many people, no. Does that make it less of a constitutional violation, no.
Surely a lawyer like yourself can understand the difference between "calling you a fascist" and saying that you are "facilitating" the gradual transformation of America to a fascist state.
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