The Financial Action Task Force (FATF), formed by the G-7 Economic Summit in 1989, is dedicated to promoting anti-money laundering controls around the world. France, Germany and the United States are, among others, founding members who are major proponent of this effort. All members of the Financial Action Task Force have now criminalized money laundering and are working toward implementing a full range of international anti-money laundering standards known as the “40 Recommendations.” The Financial Action Task Force has also established a list of 25 criteria against which countries’ anti-money laundering regimes can be measured.
Efforts to build effective international cooperation encompass two major areas of activity:
- establishing or strengthening countries’ financial intelligence unit counterparts, and
- facilitating the exchange of information among these institutions in support of anti-money laundering investigations.
Several countries have been working with the Egmont Group (which includes countries from Europe, Asia, and the Western Hemisphere) to develop Financial Intelligence Units, which receive, analyze, and, where appropriate, refer for prosecution suspicious transactions reported by financial institutions.
U.S. Role on International Money Laundering and Asset Forfeiture
The United States engages in international and domestic efforts to disrupt the flow of illicit capital, track criminal sources of funds, forfeit ill-gained assets, and prosecute offenders. Money laundering plays an integral role in the illicit narcotics industry, in that it enables the organizations that supply drugs to finance their ongoing operations and conceal their enormous profits from the reach of law enforcement.
Jurisdiction to enforce the money laundering laws of the United States, to include the laundering of narcotics proceeds, has been delegated to the U.S. Drug Enforcement Administration (DEA), The Federal Bureau of Investigation (FBI), U.S. Immigration and Customs Enforcement (ICE), the Internal Revenue Service-Criminal Investigation (IRS-CI), and the U.S. Postal Inspection Service (USPIS). Additionally, the Securities and Exchange Commission (SEC), the Federal Reserve, The Office of the Comptroller of the Currency (OCC), The Federal Deposit Insurance Corporation (FDIC), and the Internal Revenue Service (IRS), all serve regulatory functions over portions of the financial services industry in monitoring compliance with reporting and record keeping requirements related to currency and suspicious activity reporting.
U.S. International Anti-Money Laundering Efforts
In FY 2010, DEA maintained 21 money laundering investigative groups to support its Financial Attack Strategy. Through several national initiatives focused on targeting the bulk cash derived from drug proceeds, DEA seized $736.7 million in FY 2010. Further, DEA denied total revenue of nearly $3 billion from drug trafficking and money laundering organizations through asset and drug seizures in FY 2010.
The Department of Homeland Security has also intensified its efforts to combat the flow of illicit proceeds across the border with Mexico. In March 2009, U.S. Customs and Border Protection (CBP) reestablished an Outbound Enforcement Program in order to increase outbound enforcement activities and obstruct illegal currency and weapons being smuggled from the United States into Mexico. Results include a dramatic increase in outbound currency and inbound drug seizures. For FY 2010, the CBP Office of Field Operations seized a total of $28.9 million in currency at land border ports of entry at the Southern border. In addition, the U.S. Border Patrol seized $7.9 million in currency at the Southern border.
With regard to financial investigations, the U.S. Immigration and Customs Enforcement’s Cornerstone Initiative focuses on coordination and cooperation with other domestic and foreign law enforcement agencies and the private sector to eliminate vulnerabilities in U.S. financial systems and disrupt and dismantle alternative illicit financing mechanisms. The U.S. Immigration and Customs Enforcement’s Trade Transparency Unit (TTU) and Money Laundering Coordination Center (MLCC) provide the analytical infrastructure to support financial and trade investigations. The Trade Transparency Unit has the unique ability to not only analyze domestic trade and financial data, but also trade and financial data of foreign cooperating partners. The U.S. Immigration and Customs Enforcement also conducts specialized investigative training focused on bulk cash smuggling for state and local police officers and Assistant U.S. Attorneys.
The Foreign Narcotic Kingpin Designation Act provides a statutory framework for the President to institute economic sanctions against foreign drug kingpins in order to deny their front organizations access to the U.S. financial system and benefits from U.S. trade. Once locked out of American trade, criminal organizations have difficulty participating in open commerce. The Treasury Department’s Office of Foreign Assets Control (OFAC) blocks all assets and payments belonging to these kingpins and their associated entities.