NCJ Number
138014
Journal
Indiana Law Journal Volume: 67 Issue: 2 Dated: (Winter 1992) Pages: 283-330
Date Published
1992
Length
48 pages
Annotation
This article identifies the problems posed by Federal attempts to regulate international funds transfers, a favorite mechanism for drug money laundering, and proposes an alternative approach.
Abstract
Part I explains the regulatory and investigatory problems posed by funds transfers. These include the high volume of daily transfers, the array of methods used in wire transfers, the lack of standard formats used by the financial institutions, the various communications systems involved in the transfers, and the effect of foreign bank secrecy laws on the collection of information about the account and the originator or beneficiary who resides outside the United States. Part II reviews existing Bank Secrecy Act requirements that pertain to international funds transfers and evaluates the Treasury's fund transfer proposal in the context of the likely costs involved and the law enforcement benefits it could generate. Part III describes alternative sources of useful information, including the requirements of Article 4A, Regulation J, and other developments in the funds transfer industry. The National Conference of Commissioners on Uniform State Laws and the American Law Institute approved Uniform Commercial Code Article 4A, which is the first attempt to standardize the relationships between banks and customers that use wholesale wire transfers as payment mechanisms both in the United States and abroad. Against this background, Part IV discourages the adoption of new regulations for funds transfers and recommends reliance on the transfer of contracts and records already maintained or likely to exist under Article 4A. The author also argues for increased reliance on existing methods for the detection of money laundering and on international cooperation in combatting drug trafficking and money laundering. 100 footnotes