The Obama administration wants to let non-U.S. law enforcement agencies ask financial services companies to check to see whether they may have done business with suspected terrorists or money launderers.
The Obama administration also wants to let state and local U.S. law enforcement agencies ask for record checks, and to make it clear that the Financial Crimes Enforcement Network — the Treasury Department agency in charge of overseeing efforts to shut down the financial networks of terrorists and money launderers — has a right to initiate record checks.
The Treasury Department has asked for the expansion of record check authority in a notice of proposed rulemaking that appears today in the Federal Register.
The proposed expansion would affect 17 life insurers, as well as about 20,000 banks, savings associations, credit unions, securities brokers and futures commission merchants, officials say in a preamble to the proposed rule.
The FinCEN and the rest of the Treasury Department developed “special information sharing procedures” for financial institutions in 2002, in the wake of the Sept. 11, 2001, attacks.
Law enforcement officials are supposed to ask affected financial institutions to check their records only in cases of suspected terrorist activity or “significant” money laundering. A law enforcement agency also is supposed to show that it tried to locate the information sought through traditional methods before making a “314(a)” query.
The 314(a) program has turned out to work well, and it seems as if financial institutions have come up with procedures for complying with 314(a) record checks efficiently, FinCEN officials write.