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Govt radar on money transfers

US government wants to require US banks to report all electronic money transfers into and out of the country, a dramatic expansion in efforts to counter terrorist financing and money laundering.

world Updated: Sep 27, 2010 23:52 IST

US government wants to require US banks to report all electronic money transfers into and out of the country, a dramatic expansion in efforts to counter terrorist financing and money laundering.

Officials say the information will help them spot the sort of transfers that helped finance the Al-Qaeda hijackers who carried out the 9/11 attacks. They say the expanded financial data will allow anti-terrorist agencies to better understand normal money-flow patterns so they can spot abnormal activity.

Financial institutions are now required to report to the treasury department transactions in excess of $10,000 and others they deem suspicious. The rule will require banks to disclose even the smallest transfers.

Treasury officials plan to post the proposed regulation on their Web site on Monday.

The proposal is a long-delayed response to the 2004 Intelligence Reform and Terrorism Prevention Act, which specified reforms to better organise the intelligence community and to avoid a repeat of the attacks.

“By establishing a centralised database, this regulatory plan will greatly assist law enforcement in detecting and ferreting out transnational organised crime, multinational drug cartels, terrorist financing and international tax evasion,” said James H. Freis Jr., director of Treasury’s Financial Crimes Enforcement Network.

But critics have called it part of a disturbing trend by security agencies to seek more access to personal data without adequately demonstrating its utility. Financial institutions say that they already feel burdened by anti-terrorism rules requiring them to provide data, and that they object to new ones.

“These new banking surveillance programs are testing the boundaries of privacy,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center. “Many consumers both in US and outside are likely to object.”

( In exclusive partnership with The Washington Post. For additional content, visit www.washingtonpost.com )

First Published: Sep 27, 2010 23:51 IST