cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:40_launder
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cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:40_launder [2022/04/20 15:39] char [U.S. Laws and Regulations] |
cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:40_launder [2022/06/17 18:10] (current) terrance |
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| ====== 4.5.4 Money Laundering ====== | ====== 4.5.4 Money Laundering ====== | ||
| - | [[cbdc:private:cbdc_omg:04_doc:15_common:48_natsec:start | Return to National Security Considerations]] | + | |< 100% >| |
| + | | [[cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:start| Return to National Security Considerations]] | <WRAP> | ||
| + | <html><b> | ||
| + | <a href="mailto:[email protected]?Subject=OMG's CBDC WG Response: | ||
| + | 4.5.4 Money Laundering | ||
| + | ">Provide Feedback</a></b> | ||
| + | </html> | ||
| + | </WRAP> | | ||
| ===== Overview ===== | ===== Overview ===== | ||
| - | [[cbdc:private:cbdc_omg:04_doc:15_common:48_natsec:40_launder | Return to Top]] | + | [[cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:40_launder| Return to Top]] |
| The U.S. Treasury, Financial Crimes Enforcement Network provides the following overview of the problem with [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:m:money_laundering | Money Laundering]]: | The U.S. Treasury, Financial Crimes Enforcement Network provides the following overview of the problem with [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:m:money_laundering | Money Laundering]]: | ||
| - | : // Money Laundering is the process of making illegally-gained proceeds (i.e. "dirty money") appear legal (i.e. "clean"). Typically, it involves three steps: placement, layering and integration. First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts. Finally, it is integrated into the financial system through additional transactions until the "dirty money" appears "clean." Money laundering can facilitate crimes such as drug trafficking and terrorism, and can adversely impact the global economy.// | + | : // Money Laundering is the process of making illegally-gained proceeds (i.e. "dirty money") appear legal (i.e. "clean"). Typically, it involves three steps: placement, layering and integration. First, illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts. Finally, it is integrated into the financial system through additional transactions until the "dirty money" appears "clean." Money laundering can facilitate crimes such as drug trafficking and terrorism, and can adversely impact the global economy.// |
| : //In its mission to "safeguard the financial system from the abuses of financial crime, including terrorist financing, money laundering, and other illicit activity," the Financial Crimes Enforcement Network acts as the designated administrator of the Bank Secrecy Act (BSA). The BSA was established in 1970 and has become one of the most important tools in the fight against money laundering. Since then, numerous other laws have enhanced and amended the BSA to provide law enforcement and regulatory agencies with the most effective tools to combat money laundering. An index of anti-money laundering laws since 1970 with their respective requirements and goals is listed below in chronological order.// | : //In its mission to "safeguard the financial system from the abuses of financial crime, including terrorist financing, money laundering, and other illicit activity," the Financial Crimes Enforcement Network acts as the designated administrator of the Bank Secrecy Act (BSA). The BSA was established in 1970 and has become one of the most important tools in the fight against money laundering. Since then, numerous other laws have enhanced and amended the BSA to provide law enforcement and regulatory agencies with the most effective tools to combat money laundering. An index of anti-money laundering laws since 1970 with their respective requirements and goals is listed below in chronological order.// | ||
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| <figure moneyLaunderingScheme> | <figure moneyLaunderingScheme> | ||
| - | {{ :cbdc:private:cbdc_omg:04_doc:15_common:48_natsec:screen_shot_2022-04-07_at_9.12.17_am.png?500 |}} | + | {{ cbdc:04_doc:15_common:48_natsec:screen_shot_2022-04-07_at_9.12.17_am.png?500 |}} |
| <caption>Basic Money Laundering Scheme(( | <caption>Basic Money Laundering Scheme(( | ||
| Virtual Currencies in the Money Laundering Scheme, | Virtual Currencies in the Money Laundering Scheme, | ||
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| ===== U.S. Laws and Regulations ===== | ===== U.S. Laws and Regulations ===== | ||
| - | [[cbdc:private:cbdc_omg:04_doc:15_common:48_natsec:40_launder | Return to Top]] | + | [[cbdc:public:cbdc_omg:04_doc:15_common:48_natsec:40_launder| Return to Top]] |
| There is no single U.S. law or regulation covering **Human Trafficking**, but a whole set of laws. Table {{ref>moneyLaunder}} outlines most of the laws as determined by [[https://www.fincen.gov/history-anti-money-laundering-laws | U.S. Treasury - Financial Crimes Enforcement Network]]. | There is no single U.S. law or regulation covering **Human Trafficking**, but a whole set of laws. Table {{ref>moneyLaunder}} outlines most of the laws as determined by [[https://www.fincen.gov/history-anti-money-laundering-laws | U.S. Treasury - Financial Crimes Enforcement Network]]. | ||
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| |< 100% 35% ->| | |< 100% 35% ->| | ||
| ^ U.S. Federal Laws ^| | ^ U.S. Federal Laws ^| | ||
| - | ^ Law / Regulation | Description | | + | ^ Law / Regulation | ** Description ** | |
| ^ [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:b:bsa | Bank Secrecy Act of 1970 (BSA)]] | <WRAP> | ^ [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:b:bsa | Bank Secrecy Act of 1970 (BSA)]] | <WRAP> | ||
| The BSA is U.S. law requiring financial institutions in the United States to assist U.S. government agencies in detecting and preventing money laundering. | The BSA is U.S. law requiring financial institutions in the United States to assist U.S. government agencies in detecting and preventing money laundering. | ||
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| ^ [[https://www.trade.gov/us-foreign-corrupt-practices-act | U.S. Foreign Corrupt Practices Act (FCPA) of 1977]] | <WRAP> | ^ [[https://www.trade.gov/us-foreign-corrupt-practices-act | U.S. Foreign Corrupt Practices Act (FCPA) of 1977]] | <WRAP> | ||
| - | * Under the Foreign Corrupt Practices Act (FCPA), it is unlawful for a U.S. person or company to offer, pay, or promise to pay money or anything of value to any foreign official for the purpose of obtaining or retaining business. | + | : 1. Under the Foreign Corrupt Practices Act (FCPA), it is unlawful for a U.S. person or company to offer, pay, or promise to pay money or anything of value to any foreign official for the purpose of obtaining or retaining business. |
| - | * A U.S. person or company may also be an officer, director, employee, or agent of a company or any stockholder acting on behalf of the company. And a foreign official may be a foreign political party or candidate for foreign political office. | + | : 2. A U.S. person or company may also be an officer, director, employee, or agent of a company or any stockholder acting on behalf of the company. And a foreign official may be a foreign political party or candidate for foreign political office. |
| - | * Also covered by the FCPA is the authorization of any money, offer a gift, or promise authorizing the giving of anything of value to any person while knowing that all or a portion of it will be offered, given, or promised—directly or indirectly—to any foreign official for the purposes of assisting the U.S. person or company in obtaining or retaining business. | + | : 3. Also covered by the FCPA is the authorization of any money, offer a gift, or promise authorizing the giving of anything of value to any person while knowing that all or a portion of it will be offered, given, or promised—directly or indirectly—to any foreign official for the purposes of assisting the U.S. person or company in obtaining or retaining business. |
| - | * “Knowing” includes the concepts of conscious disregard and willful blindness. | + | : 4. “Knowing” includes the concepts of conscious disregard and willful blindness. |
| - | * The FCPA also covers foreign persons or companies that commit acts in furtherance of such bribery in the territory of the United States, as well as U.S. or foreign public companies listed on stock exchanges in the United States or which are required to file periodic reports with the U.S. Securities and Exchange Commission. | + | : 5. The FCPA also covers foreign persons or companies that commit acts in furtherance of such bribery in the territory of the United States, as well as U.S. or foreign public companies listed on stock exchanges in the United States or which are required to file periodic reports with the U.S. Securities and Exchange Commission. |
| - | * The FCPA accounting provisions require such publicly listed companies to make and keep accurate books and records and to devise and maintain an adequate system of internal accounting controls. The accounting provisions also prohibit individuals and businesses from knowingly falsifying books and records or knowingly circumventing or failing to implement a system of internal controls. U.S. persons or companies, or covered foreign persons or companies, should consult an attorney or use the Department of Justice Opinion Procedure when confronted with FCPA issues. | + | : 6. The FCPA accounting provisions require such publicly listed companies to make and keep accurate books and records and to devise and maintain an adequate system of internal accounting controls. The accounting provisions also prohibit individuals and businesses from knowingly falsifying books and records or knowingly circumventing or failing to implement a system of internal controls. U.S. persons or companies, or covered foreign persons or companies, should consult an attorney or use the Department of Justice Opinion Procedure when confronted with FCPA issues. |
| </WRAP>| | </WRAP>| | ||
| ^ [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:m:mlca | Money Laundering Control Act of 1986 (MCLA)]] | <WRAP> | ^ [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:m:mlca | Money Laundering Control Act of 1986 (MCLA)]] | <WRAP> | ||
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| ^ [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:u:us_patriot_act_-_title_iii | US Patriot Act, Title III: Anti-money-laundering to prevent terrorism of 2001]] | <WRAP> | ^ [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:u:us_patriot_act_-_title_iii | US Patriot Act, Title III: Anti-money-laundering to prevent terrorism of 2001]] | <WRAP> | ||
| US Patriot Act, Title III facilitates the prevention, detection, and prosecution of international money laundering and the financing of terrorism. It primarily amends portions of the Money Laundering Control Act of 1986 (MLCA) and the Bank Secrecy Act of 1970 (BSA). It was divided into three subtitles: | US Patriot Act, Title III facilitates the prevention, detection, and prosecution of international money laundering and the financing of terrorism. It primarily amends portions of the Money Laundering Control Act of 1986 (MLCA) and the Bank Secrecy Act of 1970 (BSA). It was divided into three subtitles: | ||
| - | * The [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:u:us_patriot_act_-_title_iii#first_subtitle | First Subtitle]] deals primarily with strengthening banking rules against money laundering, especially on the international stage | + | : 1. The [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:u:us_patriot_act_-_title_iii#first_subtitle | First Subtitle]] deals primarily with strengthening banking rules against money laundering, especially on the international stage |
| - | * The [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:u:us_patriot_act_-_title_iii#second_subtitle | Second Subtitle]] attempts to improve communication between law enforcement agencies and financial institutions, as well as expanding record-keeping and reporting requirements | + | : 2. The [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:u:us_patriot_act_-_title_iii#second_subtitle | Second Subtitle]] attempts to improve communication between law enforcement agencies and financial institutions, as well as expanding record-keeping and reporting requirements |
| - | * The [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:u:us_patriot_act_-_title_iii#third_subsection | Third Subtitle]] deals with currency smuggling and counterfeiting, including quadrupling the maximum penalty for counterfeiting foreign currency. | + | : 3. The [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:u:us_patriot_act_-_title_iii#third_subsection | Third Subtitle]] deals with currency smuggling and counterfeiting, including quadrupling the maximum penalty for counterfeiting foreign currency. |
| </WRAP>| | </WRAP>| | ||
| ^ [[https://www.law.cornell.edu/uscode/text/18/1956 | 18 U.S. Code § 1956 - Laundering of monetary instruments]] | <WRAP> | ^ [[https://www.law.cornell.edu/uscode/text/18/1956 | 18 U.S. Code § 1956 - Laundering of monetary instruments]] | <WRAP> | ||
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| To prove a violation of § 1956(a)(1), the prosecutor must prove, either by direct or circumstantial evidence, that the defendant knew that the property involved was the proceeds of any felony under State, Federal or foreign law. The prosecutor need not show that the defendant knew the specific crime from which the proceeds were derived; the prosecutor must prove only that the defendant knew that the property was illegally derived in some way. See § 1956(c)(1). | To prove a violation of § 1956(a)(1), the prosecutor must prove, either by direct or circumstantial evidence, that the defendant knew that the property involved was the proceeds of any felony under State, Federal or foreign law. The prosecutor need not show that the defendant knew the specific crime from which the proceeds were derived; the prosecutor must prove only that the defendant knew that the property was illegally derived in some way. See § 1956(c)(1). | ||
| - | The prosecutor must also prove that the defendant initiated or concluded, or participated in initiating or concluding, a financial transaction. A "transaction" is defined in § 1956(c)(3) as a purchase, sale, loan, pledge, gift, transfer, delivery, other disposition, and with respect to a financial institution, a deposit, withdrawal, transfer between accounts, loan, exchange of currency, extension of credit, purchase or sale safe-deposit box, or any other payment, transfer or delivery by, through or to a financial institution. | + | The prosecutor must also prove that the defendant initiated or concluded, or participated in initiating or concluding, a financial transaction. A "transaction" is defined in § 1956(c)(3) as a purchase, sale, loan, pledge, gift, transfer, delivery, other disposition, and with respect to a financial institution, a deposit, withdrawal, transfer between accounts, loan, exchange of currency, an extension of credit, purchase or sale safe-deposit box, or any other payment, transfer or delivery by, through or to a financial institution. |
| A "financial transaction" is defined in § 1956(c)(4) as a transaction that affects interstate or foreign commerce and: (1) involves the movement of funds by wire or by other means; (2) involves the use of a monetary instrument; or (3) involves the transfer of title to real property, a vehicle, a vessel or an aircraft; or (4) involves the use of a financial institution which is engaged in, or the activities of which affect, interstate or foreign commerce. | A "financial transaction" is defined in § 1956(c)(4) as a transaction that affects interstate or foreign commerce and: (1) involves the movement of funds by wire or by other means; (2) involves the use of a monetary instrument; or (3) involves the transfer of title to real property, a vehicle, a vessel or an aircraft; or (4) involves the use of a financial institution which is engaged in, or the activities of which affect, interstate or foreign commerce. | ||
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