Combating Money Laundering: Opportunities Exist to Improve the National Strategy
Published: 2003-09-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Money laundering is a serious crime, with hundreds of billions of dollars laundered annually. Congress passed the Money Laundering and Financial Crimes Strategy Act of 1998 to better coordinate the efforts of law enforcement agencies and financial regulators in combating money laundering. This act required the issuance of an annual National Money Laundering Strategy for 5 years, ending with the issuance of the 2003 strategy. To help with deliberations on reauthorization, GAO determined (1) agency perspectives on the benefit of the strategy and factors that affected its development and implementation, (2) whether the strategy has served as a useful mechanism for guiding the coordination of federal law enforcement agencies' efforts, (3) the role of the strategy in influencing the activities of federal financial regulators, and (4) whether the strategy has reflected key critical components.
section_title: What GAO Found
paragraphs: Treasury, Justice, and financial regulatory officials with whom GAO spoke said that the National Money Laundering Strategy was initially beneficial but that, over time, certain factors and events affected its development and implementation. They endorsed the concept of a strategy to coordinate the federal government's efforts to combat money laundering and related financial crimes. They also said that the strategy initially had a positive effect on promoting interagency planning and communication, but different agency views emerged over the scope and commitment required, and other events affected the strategy, such as the September 11 terrorist attacks and the creation of the Department of Homeland Security. The strategy generally has not served as a useful mechanism for guiding the coordination of federal law enforcement agencies' efforts to combat money laundering and terrorist financing. While Treasury and Justice made progress on some strategy initiatives designed to enhance interagency coordination of money laundering investigations, most have not achieved the expectations called for in the annual strategies. Also, the 2002 strategy did not address agency roles in investigating terrorist financing, thus, it did not help resolve potential duplication of efforts and disagreements over which agency should lead investigations. In May 2003, Justice and Homeland Security reached an agreement aimed at resolving these problems. Most financial regulators GAO interviewed said that the strategy had some influence on their anti-money laundering efforts because it provided a forum for enhanced coordination, particularly with law enforcement agencies. However, they said that it has had less influence than other factors. They described several other influences on their efforts, particularly their ongoing oversight responsibilities in ensuring compliance with the Bank Secrecy Act and, more recently, the USA PATRIOT Act, which was passed in October 2001 to fight terrorist financing and increase anti-money laundering efforts. GAO's work reviewing national strategies has identified several critical components needed for development and implementation; however, key components have not been well reflected in the strategy. The first is clearly defined leadership, with the ability to marshal necessary resources. However, the leadership for the strategy has not agreed on the strategy's scope or ensured that target dates for completing initiatives were met. The second is clear priorities, as identified by threat and risk assessments, to help focus resources on the greatest needs. Each strategy contained more priorities than could be realistically achieved and none of the strategies was linked to a threat and risk assessment. The third is that established accountability mechanisms provide a basis for monitoring and assessing program performance. While later strategies contained several initiatives designed to establish performance measures, as of July 2003, none had yet been completed. Officials attributed this to the difficulty in establishing such measures for combating money laundering.

section_title: Letter
paragraphs: Money laundering—the process of disguising or concealing illicit funds to  make them appear legitimate—is a serious issue, with an estimated  $500 billion to $1 trillion laundered worldwide annually, according to the  United Nations Office of Drug Control and Prevention. Money laundering provides the fuel for drug dealers, arms traffickers, terrorists, and other  criminals to operate and expand their activities, which can have devastating social and economic consequences.
Although the U.S. government had been working to combat money  laundering for many years, efforts by law enforcement and regulatory  agencies took on particular urgency, as the operations of large-scale  criminal organizations grew increasingly sophisticated. To better  coordinate the anti-money laundering efforts of federal, state, and local  law enforcement agencies and financial regulators, Congress enacted the Money Laundering and Financial Crimes Strategy Act of 1998 (Strategy  Act). This act called for the annual issuance of a strategy to combat  money laundering—the National Money Laundering Strategy (NMLS). This  requirement will end with the issuance of the 2003 strategy unless  reauthorized by Congress. In anticipation of reauthorization discussions,  Congress is interested in knowing how the strategy has affected  coordination and whether improvements could be made to increase its  benefits.
While money laundering first became a federal crime in 1986 with the  passage of the Money Laundering Control Act, law enforcement and the  federal financial regulators had sought to protect the U.S. financial system  from certain types of criminal activity since the passage of the Bank  Secrecy Act (BSA) in 1970, which instituted currency reporting  requirements. By periodically amending the BSA, Congress has added  anti-money laundering requirements for many types of financial  institutions and transactions. Such amendments and the resulting  regulations have increased the number of federal agencies with  responsibility for ensuring compliance with anti-money laundering  requirements, thereby creating a need to coordinate the efforts of  numerous financial regulatory and law enforcement agencies. Appendix II  describes major anti-money laundering legislation since 1970.
The Strategy Act requires the President—acting through the Secretary of  the Treasury and in consultation with the Attorney General and other  relevant federal, state, and local law enforcement and regulatory  officials—to develop and submit the annual NMLS to Congress by  February 1 of each year from 1999 through 2003. The goal of the Strategy  Act is to increase coordination and cooperation among the various  regulatory and enforcement agencies and to effectively distribute  resources to combat money laundering. The Strategy Act requires the  NMLS to define comprehensive, research-based goals, objectives, and  priorities for reducing money laundering and related financial crime in the  United States. The NMLS has generally included multiple priorities to  combat money laundering to guide federal agencies’ activities.  Additionally, the Strategy Act authorizes the Secretary of the Treasury to  designate High Intensity Money Laundering and Related Financial Crime  Areas (HIFCA), in which federal, state, and local law enforcement would  work cooperatively to develop a focused and comprehensive approach to  targeting money laundering activity.
In the wake of the September 11, 2001, terrorist attacks, Congress passed  the Uniting and Strengthening America by Providing Appropriate Tools  Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT  Act) to, among other things, both fight terrorist financing and increase  anti-money laundering efforts through further expansion of the types of  financial institutions and transactions that are subject to anti-money  laundering record keeping and reporting requirements. The NMLS has  also changed to reflect new federal priorities in the aftermath of  September 11, 2001, including a goal to combat terrorist financing in 2002.
To assist in congressional deliberations on whether there is a continuing  need for an annual NMLS, this report discusses the results of our review of  the development and implementation of the 1999 through 2002 strategies.  Specifically, as agreed with your offices, our objectives were to determine  (1) agency perspectives on the benefit of the NMLS and factors that  affected its development and implementation, (2) whether the strategy has  served as a useful mechanism for guiding the coordination of federal law  enforcement agencies’ efforts to combat money laundering and terrorist  financing, (3) the role of the NMLS in influencing the anti-money  laundering and antiterrorist financing activities of the federal financial  regulators, and (4) whether the NMLS has reflected the critical  components we have found to be necessary for the development and  implementation of such a strategy.
To determine agency perspectives on the benefit of the NMLS, we  interviewed responsible officials at and reviewed relevant documentation  obtained from the principal law enforcement components with anti-money  laundering responsibilities at the Departments of the Treasury, Justice,  and Homeland Security and the federal financial regulatory agencies. In  general, our work reviewing the strategy’s usefulness for guiding the  coordination of law enforcement agencies’ efforts consisted of  (1) examining the structure and operation of HIFCA task forces,  (2) analyzing the implementation of NMLS initiatives to enhance  interagency coordination, and (3) assessing the extent to which the 2002  NMLS addressed agency roles in combating terrorist financing. We did this  by interviewing relevant agency officials, reviewing agency policies for  coordination, evaluating staffing levels and other resources devoted to  NMLS initiatives, and reviewing the NMLS. Our work determining the role  of the NMLS in influencing the efforts of the federal financial regulators  focused primarily on the NMLS goal that sought to coordinate their efforts.  In 2002, the goal was, “Prevent Money Laundering Through Cooperative  Public-Private Efforts and Necessary Regulatory Measures.” This goal had  similar titles in earlier strategies (see table 1). We also examined the role  the financial regulators played in supporting Treasury’s efforts under the  NMLS goal to strengthen international cooperation to fight money  laundering. To do this, we interviewed financial regulatory, Treasury, and  law enforcement agency officials. We also reviewed regulatory  examination guidelines, policies, and training information. To determine  whether the NMLS reflected components we have found necessary for  national strategies, we reviewed drafts of the strategies from 1999 to  2002, interviewed officials that had been involved in the development and  implementation of the strategies, and compared the results from this work  with findings from our past work reviewing national strategies and their  implementation.
We conducted our work from June 2002 to August 2003 in accordance  with generally accepted government auditing standards. Additional  information on our scope and methodology is discussed in appendix I.
subsections: section_title: Background
paragraphs: Money laundering is the process used to transform monetary proceeds  derived from criminal activities into funds and assets that appear to have  come from legitimate sources. Although the magnitude of global money  laundering is unknown, many estimates suggest annual ranges in the  hundreds of billions of dollars. The process of money laundering generally  takes place in three stages: placement, layering, and integration. In the  placement stage, cash is converted into monetary instruments, such as  money orders or traveler’s checks, or deposited into financial institution  accounts. In the layering stage, these funds are transferred or moved into  other accounts or other financial institutions to further obscure their illicit  origin. In the integration stage, the funds are used to purchase assets in the  legitimate economy or to fund further activities. All financial sectors and  certain commercial businesses can be targeted during one or more of  these stages. Many of these entities are required to report transactions  with certain characteristics to law enforcement if they appear to be  potentially suspicious. The transactions would generally fall within either  the placement or layering stage if they proved to be involved in money  laundering. Transaction reporting requirements are discussed further later  in this report. Figure 1 shows the three stages of money laundering.
Terrorist financing is generally characterized by different motives than  money laundering and the funds involved often originate from legitimate  sources. However, the techniques for hiding the movement of funds  intended to be used to finance terrorist activity—techniques to obscure  the origin of funds and the ultimate destination—are often similar to those  used to launder money. Therefore, Treasury, law enforcement agencies,  and the federal financial regulators often employ similar approaches and  techniques in trying to detect and prevent both money laundering and  terrorist financing.
subsections: section_title: Many Agencies Are Responsible for Combating Money Laundering and Terrorist Financing
paragraphs: Agencies under the Departments of the Treasury, Justice, and Homeland  Security are to coordinate with each other and with financial regulators in  combating money laundering. Within Treasury, the Financial Crimes  Enforcement Network (FinCEN) was established in 1990 to support law  enforcement agencies by collecting, analyzing, and coordinating financial  intelligence information to combat money laundering. In addition to  FinCEN, Treasury components actively involved in anti-money laundering  and antiterrorist financing efforts include the Executive Office for  Terrorist Financing and Financial Crimes, the Office of International  Affairs, and the Internal Revenue Service and its Criminal Investigation  unit (IRS-CI).
Department of Justice components involved in efforts to combat money  laundering and terrorist financing include the Criminal Division’s Asset  Forfeiture and Money Laundering Section (AFMLS) and Counterterrorism  Section, the Federal Bureau of Investigation (FBI), the Drug Enforcement  Administration (DEA), and the Executive Office for U.S. Attorneys  (EOUSA) and U.S. Attorneys Offices. With the creation of DHS in March  2003, anti-money laundering activities of the Customs Service were  transferred from Treasury to DHS’s Bureau of Immigration and Customs  Enforcement (ICE).
The financial regulators who oversee financial institutions’ anti-money  laundering efforts include the depository institution financial regulators—  the Federal Reserve Board (FRB), FDIC, Office of the Comptroller of the  Currency (OCC), Office of Thrift Supervision (OTS), and the National  Credit Union Administration (NCUA)—and also the Securities and  Exchange Commission (SEC), which regulates the securities markets, and  the Commodity Futures Trading Commission (CFTC), which regulates  commodity futures and options markets. While OCC and OTS are bureaus  within Treasury, the FRB, FDIC, NCUA, SEC, and CFTC are independent  agencies that are not part of the executive branch. Figure 2 shows the  primary agencies responsible for combating money laundering and  terrorist financing before the creation of DHS.  Figure 3 shows the primary  agencies responsible for combating money laundering and terrorist  financing after the creation of DHS.
section_title: NMLS Was Intended to Coordinate the U.S. Government’s Anti-Money Laundering Efforts
paragraphs: Given law enforcement’s mixed history of both productive partnerships  and turf-protection battles, proponents of the Strategy Act envisioned that  the implementation of an annual NMLS would inaugurate a new level of  coordination and cooperation between law enforcement agencies. The  NMLS also sought to coordinate the efforts of law enforcement agencies  and financial regulators to ensure that financial institutions were  sufficiently vigilant to detect possible money laundering and that they  reported any suspicious activity to law enforcement agencies to assist in  their efforts to investigate money laundering and, more recently, terrorist  financing.
The process for developing the NMLS has varied slightly from year to year,  but it has generally involved Treasury working with other agencies to  develop a draft. Treasury officials said that they have sometimes asked  officials from other agencies to take the lead in drafting certain sections  that pertain particularly to their efforts. In other instances, Treasury has  drafted the sections and asked for participating agencies’ review and  comments on the sections relevant to them. Upon completion of the draft  NMLS, the relevant agencies are given the opportunity to clear the final  document through the Office of Management and Budget’s clearance  process, which requires that the agencies approve the document, that is,  signify their agreement with its contents. Treasury officials told us that by  approving the NMLS through this process, the agencies have agreed to it  and should be held accountable to Congress and the public to complete  their assigned responsibilities.
The drafting process has generally resulted in a document that lists four to  six broad goals, each containing objectives, which in turn contain a list of  priorities. Over time, the goals have changed, sometimes in their wording  or order, and other times to cover new threats. For example, in the wake  of September 11, the 2002 NMLS added the goal, “Focus Law Enforcement  and Regulatory Resources on Identifying, Disrupting, and Dismantling  Terrorist Financing Networks.” As of September 24, the 2003 NMLS had  not yet been issued. Table 1 shows the NMLS goals from 1999 through  2002 and the number of objectives and priorities.
The Strategy Act also created an operating mechanism within which to  enhance interagency coordination of law enforcement investigations—  HIFCAs. In accordance with the Strategy Act and the 1999 NMLS:
HIFCA designations would allow law enforcement to concentrate its  resources in areas where money laundering or related financial crimes  appeared to be occurring at a higher rate than average. An interagency  HIFCA Designation Working Group would review requests for such  designations and provide advice for selections to be made by the Secretary  of the Treasury, in consultation with the Attorney General.
A money laundering action team, where appropriate, would be created  when a HIFCA was designated to spearhead a coordinated federal, state,  and local anti-money laundering effort in the area, or an existing task force  already on the ground would be mobilized.
The 2001 NMLS specified that HIFCAs were to be operational and conduct  investigations designed to result in indictments, convictions, and seizures,  rather than focusing principally on intelligence gathering. Also, the 2001  NMLS reinforced the expectations that HIFCA task forces “will be  composed of, and draw upon, all relevant federal, state, and local  agencies, and will serve as the model of our anti-money laundering efforts”  and that the Departments of the Treasury and Justice were to jointly  oversee the HIFCA task forces.
The Strategy Act mandated that the NMLS be submitted to Congress by  February 1 of each year, 1999 to 2003. The Strategy Act also required  that—at the time each NMLS was transmitted to the Congress (other than  the first transmission of any such strategy)—the Secretary of the Treasury  must submit a report containing an evaluation of the effectiveness of  policies to combat money laundering and related financial crimes.
section_title: Early Benefit of the NMLS Was Affected by Certain Factors and Events
paragraphs: The Treasury, Justice, and regulatory agency officials we interviewed said  that the NMLS was initially beneficial but, over time, certain factors and  events affected its development and implementation. Officials from each  of the agencies endorsed the concept of having a national strategy for  combating money laundering and related financial crimes. Generally, the  officials said that the annual NMLS probably was more beneficial in the  first 2 years (1999 and 2000) than in the subsequent years (2001 and 2002).  As an initial benefit, for example, Treasury officials said that the NMLS  was instrumental in focusing on the need to combat money laundering  systemically and not solely on a case-by-case basis, encouraging multiple  law enforcement agencies to work together, and raising general awareness  of the importance of combating financial crimes. The NMLS enhanced  their planning and communication when it was new because it served to  formalize interagency communication in a way that had not existed before.  Similarly, the officials noted that the early strategies were instrumental in  expanding the perspectives of the regulatory agencies by refocusing them  on the purposes underlying their BSA responsibilities.  The early strategies  renewed attention on the fight against money laundering that supports  particular reporting or record keeping obligations.  That is, due partly to  the strategies, the financial regulators became more focused regarding  ways in which criminals could be using financial institutions for money  laundering activities.
However, after the first couple of years, the benefit of the annual NMLS  was affected by a number of factors and events, according to the Treasury,  Justice, and regulatory agency officials we interviewed. One factor cited  was that the principal agencies had significantly differing views about the  appropriate purpose and structure of the strategy. For instance, Treasury  preferred a document that covered the full breadth and scope of the  federal government’s planned anti-money laundering efforts, while Justice  preferred a more concise document that included only those priorities that  realistically could be addressed during the year. Likewise, the regulatory  agencies generally favored a more concise document. Several officials said  that this fundamental difference in views resulted in less-than-full  commitment or buy-in from some agencies, which lessened the overall  benefit of the recent strategies.
An event that affected the 2001 NMLS was the change in presidential  administrations prior to the strategy’s issuance. Treasury and Justice  officials explained that with the arrival of a new administration, it was  necessary to revise a nearly complete NMLS to match the new  administration’s vision for combating money laundering. This redrafting  process caused the NMLS to be issued very late, leaving little time to  implement any goals or objectives before drafting the 2002 NMLS.
The officials said that the implementation of the recent strategies has been  affected most significantly by external events—particularly September 11,  2001, and its aftermath, which included passage of the USA PATRIOT Act  and the creation of DHS. Treasury and Justice officials said that the 2001  NMLS, which was issued on September 12, 2001, was virtually obsolete at  issuance because the nature of the issues they faced had just changed  dramatically. After September 11, combating terrorist financing became a  major element of the federal government’s anti-money laundering efforts,  but it was not part of the 2001 NMLS.
The passage of the USA PATRIOT Act increased the requirements on many  financial institutions for conducting due diligence, record keeping,  reporting, and sharing information. Because implementing the USA  PATRIOT Act became the main focus for the financial regulators in the  2002 NMLS, financial regulators attributed their efforts to the USA  PATRIOT Act rather than the NMLS. The creation of DHS required the  transfer of most of the law enforcement functions and staff from agencies  formerly under Treasury to the new agency. Justice anti-money laundering  components remained in Justice. Treasury and Justice officials said that  the implementation of some 2002 NMLS priorities was delayed pending  formation of the new department. They also said that issuance of the 2003  NMLS has been delayed by the same disruptions.
section_title: NMLS Generally Has Not Been as Useful as Envisioned for Guiding the Coordination of Law Enforcement Efforts
paragraphs: As a mechanism for guiding the coordination of federal law enforcement  agencies’ efforts to combat money laundering and related financial crimes,  the NMLS has had mixed results and—according to the evidence we  reviewed and the officials we contacted—generally has not been as useful  as envisioned by the Strategy Act. For example, although expected to have  a key role in the federal government’s efforts to disrupt and dismantle  large-scale money laundering organizations, HIFCA task forces generally  were not yet structured and operating as intended and had not reached  their expectations for leveraging investigative resources or creating  investigative synergies. Further, while Treasury and Justice made progress  on some NMLS initiatives designed to enhance interagency coordination of  money laundering investigations, most had not achieved the expectations  called for in the annual strategies. Moreover, the 2002 NMLS did not  address agency roles and interagency coordination procedures for  conducting terrorist financing investigations.
subsections: section_title: HIFCA Task Forces Generally Had Not Yet Been Structured and Operating as Intended
paragraphs: As envisioned by the Strategy Act, HIFCAs represent a major NMLS  initiative and were expected to have a flagship role in the U.S.  government’s efforts to disrupt and dismantle large-scale money  laundering operations. They were intended to improve the coordination  and quality of federal money laundering investigations by concentrating  the investigative expertise of federal, state, and local agencies in unified  task forces, thereby leveraging resources and creating investigative  synergies. While neither the Strategy Act nor the annual NMLS specified a  time frame for when designated HIFCAs were to become fully operational,  we found that the task forces had made some progress but generally had  not yet been structured and operating as intended. As of July 2003,  Treasury and Justice were in the process of reviewing the HIFCA task  forces to remove obstacles to their effective operations. The results of this  review could provide useful input for an evaluation report on the HIFCA  program, which the Strategy Act requires Treasury to submit to the  Congress in 2004.
subsections: section_title: Status of HIFCA Task Forces
paragraphs: In May 2003, we contacted each of the seven designated HIFCAs to obtain  information on the status of their task forces (see table 2). At that time,  two of the seven HIFCAs (the Southwest Border and Miami) had not  started operations. Law enforcement officials in the Southwest Border  area cited several reasons for the HIFCA’s nonoperational status, including  (1) difficulty in coordinating activities in such a large area and (2) lack of  funds to persuade state and local officials to participate. In Miami, federal  law enforcement officials had met but had not reached agreement on how  the HIFCA should be structured or how it should operate. For example,  the officials had not agreed on whether the Miami HIFCA should conduct  investigations or focus principally on intelligence gathering.
In September 2003, in commenting on a draft of this report, Justice said  that while the Southwest Border HIFCA has not worked out as intended,  the participants in Texas and Arizona met on numerous occasions over the  past 4 years in an attempt to find an organizational structure that could  meet the needs of all of the participants. Justice also said that  headquarters officials and participants in the Southwest Border area  recently decided that the dual-state HIFCA was too ambitious and that the  HIFCA should be limited to Texas and relocated to augment an existing  task force.
Although the 2001 NMLS specified that HIFCAs were to conduct  investigations rather than principally gather intelligence, we found that  two of the five operating task forces (Los Angeles and San Francisco)  were primarily focusing on intelligence gathering activities—such as  reviews of Suspicious Activity Reports (SAR) and other information  required by the BSA—and had not established multiagency investigative  units to act on the intelligence. HIFCA officials in Los Angeles told us  they planned to locate task force participants together in the same area in  mid- or late-2003, at which time multiagency investigative units would be  established. In San Francisco, a HIFCA official told us their proposal to  become a HIFCA specified that the task force would focus on intelligence  and that there were no plans to establish multiagency investigative units  within the HIFCA. Treasury and Justice officials responsible for  overseeing the HIFCAs told us that headquarters was reluctant to require  the task forces to establish multiagency investigative units, primarily  because the Strategy Act did not provide additional funds or personnel to  establish such units. The officials noted that even though the 2001 NMLS  specified that HIFCAs were to conduct investigations, task forces that  focus on intelligence gathering activities but do not conduct investigations  do enhance interagency efforts to combat money laundering.
Also, because the investigative activities of the three HIFCAs that had  multiagency investigative units (Chicago, New York/New Jersey, and  Puerto Rico) were based on task force structures already in place before  the HIFCA designation, the overall effect of the NMLS on these task forces  is unclear. For example, the New York/New Jersey HIFCA essentially  represented a renaming of the well-established El Dorado Money  Laundering Task Force, which had existed since 1992. As mentioned  previously, a HIFCA task force could be (1) created when a HIFCA was  designated or (2) based on an existing task force.
Further, in some cases, federal law enforcement agencies had not  provided the levels of commitment and staffing to the HIFCA task forces  called for by the strategy. As shown in table 2, ICE and/or IRS-CI were  designated the lead agency in each of the five operational task forces. We  found that most of the HIFCAs did not have DEA or FBI agents assigned  full-time to the task forces. For example, regarding the three HIFCAs with  multiagency investigative units, DEA and the FBI were not members of the  Chicago HIFCA, DEA was not a member of the New York/New Jersey  HIFCA, and both DEA and the FBI had only part-time representation on  the Puerto Rico HIFCA. As also shown in table 2, four of the five operating  HIFCAs had little or no participation from state and local law enforcement  agencies, with the notable exception being the New York/New Jersey  HIFCA. The NMLS called for each HIFCA to include participation from all  relevant federal, state, and local agencies.
Justice headquarters officials said the main problem with supporting the  HIFCA task forces was the absence of additional funds or personnel to  offer law enforcement agencies in return for their participation. A DEA  official told us that, because of differences in agencies’ guidelines for  conducting undercover money laundering investigations, DEA will not  dedicate staff to HIFCA task force investigative units but will support  intelligence-related activities. FBI officials cited resource constraints as  the primary reason why the bureau does not fully participate. Various task  force officials mentioned lack of funding to compensate or reimburse  participating state and local law enforcement agencies as a barrier to their  participation in HIFCA operations. Further, Treasury and Justice officials  noted that a key to the success of the HIFCA program is the ability to  promote interagency cooperation by locating task force participants  together in the same office space. Accordingly, the 2002 NMLS called for  headquarters to examine how to fund the colocation of HIFCA task force  participants absent funds appropriated specifically for that purpose.
While we recognize that federal law enforcement agencies have resource  constraints and competing priorities, we note that HIFCA task forces were  expected to make more effective use of existing resources or of such  additional resources as may be available. Without commitment and  staffing from relevant federal, state, and local agencies, the task forces  cannot fully leverage resources and create investigative synergies, as  envisioned by the Strategy Act.
section_title: Oversight of HIFCA Task Forces Has Not Met Expectations
paragraphs: Treasury and Justice have not provided the level of oversight of the HIFCA  task forces called for by the NMLS. For example, in response to our initial  inquiries and formal requests for information, Treasury and Justice  officials responsible for overseeing the HIFCA task forces could not  readily provide basic information, such as names of participating agencies  and contact persons or the results of task force operations. Also, as  shown in table 3, Treasury and Justice had not addressed various NMLS  initiatives designed to oversee HIFCA operations, and many of the  initiatives were still ongoing well past expected completion dates. Fully  addressing these initiatives could help ensure accountability within the  HIFCAs, as well as refine the operational mission, structure, and  composition of the task forces.
Treasury and Justice officials told us the primary reasons for not  addressing or not yet completing the HIFCA initiatives were that  headquarters (1) was reluctant to impose a structure or reporting  requirement on the field without offering any new resources and (2) did  not believe that a single structure could fit every HIFCA. The officials also  said that the individual HIFCAs were in the best position to address their  specific needs and problems. Further, the officials told us that, while most  of the HIFCA initiatives had not been addressed or were not yet  completed, the HIFCA structure at headquarters has provided a  framework for regular interagency meetings to discuss money laundering  trends and ways to improve interagency cooperation.
As shown in table 3, although only one of the HIFCA initiatives was  completed by the specified milestone or goal date, many of the initiatives  were still ongoing. For example, the 2002 NMLS called for a review of  HIFCA task forces to remove obstacles to their effective operation.  Specifically, the initiative called for an interagency HIFCA team to  (1) review the accomplishments of the HIFCA task forces to date; (2)  examine structural and operational issues, including how to fund the  colocation of participants in HIFCA task forces absent funds appropriated  for that purpose; and (3) examine existing operations and make  recommendations to ensure that each HIFCA is composed of all relevant  federal, state, and local enforcement authorities, prosecutors, and  financial supervisory agencies as needed. As of July 2003, the HIFCA  review team was still in the process of assessing the HIFCAs. When  completed, the team’s review could provide useful input for an evaluation  report on the effectiveness of and the continued need for HIFCA  designations, which is required by the Strategy Act to be submitted to the  Congress in 2004.
section_title: Money Laundering Training Was Provided to HIFCAs
paragraphs: According to the 2002 NMLS, Treasury and Justice have conducted a  substantial amount of fundamental, advanced, and specialized money  laundering training to task forces, agencies, investigators, and prosecutors.  For example, as included in the 2002 NMLS (see table 3), the Federal Law  Enforcement Training Center, in cooperation with Treasury and Justice,  have provided an advanced money laundering training course in six  HIFCA locations. According to a Federal Law Enforcement Training  Center official, approximately 900 to 1,000 agency representatives have  participated in the 3-day training seminar. The official said that the  training focused on numerous issues, including money laundering statutes,  the impact of the USA PATRIOT Act, basic and international banking,  asset forfeiture issues, and specific money laundering schemes and  organizations.
section_title: NMLS Initiatives to Enhance Coordination of Law Enforcement Investigations Generally Were Not Addressed or Were Still Ongoing
paragraphs: While Treasury and Justice made progress on some NMLS initiatives that  were specifically designed to enhance coordination of federal law  enforcement agencies’ money laundering investigations, most of the  initiatives were not addressed or were still ongoing. In general, the failure  to address or complete the initiatives indicates that interagency  coordination was falling short of expectations.
subsections: section_title: Progress Was Made on Some Law Enforcement Coordination Initiatives
paragraphs: Treasury and Justice made progress in implementing some of the NMLS  law enforcement coordination initiatives. For example, as called for in the  1999 and 2000 strategies, the departments took steps to (1) enhance the  money laundering focus of interagency counter-drug task forces and  (2) collect and analyze information on the money laundering aspects of the  task forces’ investigations. More recently, the 2002 NMLS called for an  interagency team to identify money laundering-related targets for  coordinated enforcement action. The strategy noted that targets could be  particular organizations or systems used or exploited by money  launderers, such as the smuggling of bulk cash and unlicensed money  transmitters. In August 2002, Treasury and Justice created an interagency  team and identified a money laundering-related target and four cities in  which to conduct investigations. In July 2003, Justice officials told us that  U.S. Attorneys Office officials had agreed to participate in the targeting  initiative and that the initiative was ongoing.
section_title: Most Law Enforcement Coordination Initiatives Were Not Addressed or Were Still Ongoing
paragraphs: Most of the annual strategy initiatives designed to enhance interagency  coordination of law enforcement investigations were not addressed or  were still ongoing. Three examples are as follows. First, the Customs  Service created a Money Laundering Coordination Center in 1997 to  (1) serve as the repository for all intelligence information gathered  through undercover money laundering investigations and (2) function as  the coordination and “deconfliction” center for both domestic and  international undercover money laundering investigations. Both the  1999 and the 2000 NMLS contained an initiative to encourage all applicable  federal law enforcement agencies to participate in the Money Laundering  Coordination Center. During our review, Customs Service officials (before  the agency was transferred to DHS) told us that, although Justice agencies  (including DEA and FBI) were invited to use the center, these agencies  were only occasional users and did not contribute information to the  center.
DEA and FBI officials told us that their agencies did not use the Money  Laundering Coordination Center because they could not reach a  satisfactory memorandum of understanding regarding participation,  including controls over the dissemination of information. DEA officials  added that the center does not meet DEA’s needs because it is used for  deconfliction only. In August 2003, the DEA officials said that DEA had  created and was testing a new database that is designed to be a single  source for information on money laundering investigations related to drug  money. The officials added that DEA has briefed Treasury and DHS about  the new database, but as of August 2003, no other agencies were  participating.
Second, federal law enforcement agencies do not have uniform guidelines  applicable to undercover money laundering investigations. According to  the 2002 NMLS and our discussions with law enforcement officials, the  lack of uniform guidelines inhibits some agencies from participating in  investigations that have an international component. For example, a DEA  official told us that DEA guidelines generally are more restrictive than  guidelines used by Customs (as part of ICE) in regard to (1) obtaining  approval to initiate and continue undercover investigations and  (2) coordinating activities with foreign counterparts. Therefore, the  officials noted that DEA generally could not participate in international  undercover money laundering investigations led by Customs. The  2002 NMLS called for Treasury and Justice to develop uniform undercover  guidelines by September 2002 to ensure the full participation of all  applicable federal law enforcement agencies in undercover money  laundering investigations. Treasury officials told us the initiative is still  ongoing but has been put on hold, pending reorganizations associated with  the creation of DHS.
Third, Treasury and Justice have not yet fully implemented NMLS  initiatives designed to establish SAR review teams in federal judicial  districts. The 2001 NMLS contained an initiative that called for the creation  of a SAR review team in each federal judicial district. Generally, each  team—to be comprised of an Assistant U.S. Attorney and representatives  from federal, state, and local law enforcement agencies—was expected to  evaluate all SARs filed in their respective federal judicial district.
The 2001 SAR initiative has been partially implemented. Treasury officials  noted that Justice has primary responsibility for implementation because  Justice provides guidance and direction to EOUSA and the U.S. Attorneys  Offices. According to EOUSA officials, Justice, EOUSA, and the U.S.  Attorneys Offices have actively encouraged the creation of SAR review  teams and these efforts remain ongoing. At our request, in July 2003,  EOUSA conducted an informal survey of U.S. Attorneys Offices and  reported that at least 33 of the 94 federal judicial districts were actively  using interagency SAR review teams.
The 2002 NMLS had a more conservative SAR-related initiative, calling for  the establishment of five additional review teams. Specifically, the 2002  NMLS initiative called for Treasury and Justice—by August 2002—to  (1) identify a priority list of five federal judicial districts that do not have a  SAR review team but could benefit from one and (2) work with EOUSA  and the respective U.S. Attorneys Offices to encourage the creation of  interagency review teams. As of July 2003, this initiative had not yet been  completed, but efforts were still ongoing.
Further, although not called for by the NMLS, the IRS has had a related  initiative to create interagency SAR review teams. Specifically, IRS-CI data  show that IRS has established 41 SAR review teams nationwide—with all  35 IRS field offices having at least one functioning team—and that most of  the review teams had participation from other agencies. According to IRS­ CI officials, collectively, the 41 teams are to review every SAR filed in the  94 federal judicial districts. The officials said that at least 4 of the districts  in which a HIFCA task force is located were using an interagency SAR  review team. The officials noted that IRS review teams are not to duplicate  SAR reviews already performed by existing task forces in federal judicial  districts.
section_title: Reasons for Not Fully Implementing Interagency Coordination Initiatives
paragraphs: Treasury officials told us that resource constraints and competing  priorities were the primary reasons why many of the law enforcement  coordination initiatives were not yet fully implemented. Also, the officials  said that, over the past few years, Treasury has given higher priority to  other parts of the annual strategy—such as international, regulatory, and  terrorism-related initiatives—than to domestic law enforcement initiatives.  Further, the officials said that Treasury generally took the lead in  implementing the annual strategy but could not require other agencies to  focus on specific initiatives or activities. In this regard, the officials said  that other agencies frequently had their own priorities.
Justice officials also said that the annual strategies have contained more  initiatives than realistically could be pursued. The officials added that to  the extent NMLS initiatives were not completed or target dates were  missed, it was because of competing priorities or the lack of resources  available for proper implementation of the strategy. The officials noted  that there are complex issues involved in attempting to coordinate the  resources, practices, and priorities of two (and sometimes more)  departments and several law enforcement agencies, as well as U.S.  Attorneys Offices throughout the country. Further, Justice officials told us  that while NMLS initiatives to institutionalize coordination may not have  been fully implemented, the efforts to do so and regular meetings have  been continuing.
section_title: NMLS Did Not Address Agency Roles and Task Force Coordination in Terrorist Financing Investigations, but a Recent Interagency Agreement May Help Clarify Roles
paragraphs: In developing the 2002 NMLS, Treasury and Justice officials met to discuss  the roles of the various investigative agencies involved in combating  terrorist financing. However, the two departments could not reach  agreement, and the 2002 strategy was published without addressing the  agencies’ roles. In general, Justice’s position was that it had exclusive  statutory authority to lead all terrorist financing investigations, while  Treasury maintained that it also had the authority and the needed  expertise to lead such investigations. In commenting on a draft of the  2002 strategy, the FBI noted the following:
The strategy does not address the various agencies’ duplication of efforts  to combat terrorist financing.
By not specifically addressing and delineating the roles of the respective  agencies, the strategy creates more confusion than it resolves and wastes  limited resources.
Moreover, the strategy section on U.S. government efforts to identify,  disrupt, and dismantle terrorist financing networks did not mention or  clarify roles of the three primary law enforcement task forces involved in  investigating terrorist financing—Customs’ Operation Green Quest (OGQ)  and the FBI’s Terrorist Financing Operations Section (TFOS) and Joint  Terrorism Task Forces (JTTF).
According to Treasury officials, the NMLS drafting process realistically  could not have been expected to resolve the long-standing, highly  challenging issues associated with the interagency jurisdictional dispute.  While we agree that it may have been unrealistic to expect the drafting  process to resolve the long-standing issues, we note that a primary role of  the NMLS is to enhance interagency coordination and help resolve turf- protection battles. Because the issue was not addressed in the 2002 NMLS,  the problem remained, thus leaving unresolved possible duplication of  efforts and disagreements over which agency should lead investigations.  In our view, any way the NMLS could have advanced resolution of the  matter would have been beneficial.
subsections: section_title: Agencies Did Not Fully Coordinate Terrorist Financing Investigations
paragraphs: To help avoid overlapping investigations and duplication of efforts, it is  important that agencies investigating terrorist financing have coordination  mechanisms. At the policy level, a National Security Council policy  coordination committee on terrorist financing is responsible for  coordinating antiterrorist financing activities. This committee is to  consider evidence of terrorist financing networks and coordinate  strategies for targeting terrorists, their financiers, and supporters. At the  operational level, we found that some interagency coordination of terrorist  financing investigations existed between agency headquarters’  components. For example, OGQ and TFOS had assigned one agent to each  other’s headquarters in Washington, D.C. The FBI also was to provide  information on its activities to OGQ through daily downloads from the  FBI’s terrorist financial database. Further, OGQ and FBI officials told us  that local mechanisms existed around the country to deconflict  investigations.
While OGQ and the FBI task forces took steps to inform each other about  the targets of their investigations, we found that the task forces did not  fully coordinate their activities. For example, at the three locations we  visited (Los Angeles, Miami, and New York City), OGQ and JTTF officials  told us they generally were not aware of each other’s financial  investigations and that the task forces generally did not share investigative  information. Several officials indicated that there were problems with  conflicting or competing investigations, including disagreements over  which task force should lead investigations. Officials at all three locations  noted that the government’s antiterrorist financing efforts could be  improved if the task forces worked more closely with each other or were  combined.
Further, at the three locations we visited, IRS-CI officials who had agents  assigned to the local OGQ and JTTF also indicated that the task forces  were not fully operating in a coordinated and integrated manner.  Specifically, in Miami and New York City, IRS-CI officials told us that  having both OGQ and the JTTF doing the same type of antiterrorist  financing work was a duplication of effort. IRS-CI officials in Los Angeles  noted that communication between the two task forces could be better.  Also, in response to our inquiry about interagency coordination, U.S. “With respect to the FBI’s Joint Terrorism Task Force (FBI-JTTF) and Customs’ Operation  Green Quest, we would like to see increased cooperation and coordination between the  agencies. Too often agents of the FBI and Customs are investigating terrorist financing  independent of each other or overlapping in the targets of their investigations. Some of the  barriers to greater interagency participation may be conflicting priorities of each of the  agencies. Ongoing battles as to which agency is the ‘lead’ agency continues to be a  problem…”
In commenting on a draft of this report, Treasury said that it continues to  believe that the dispute over who took the lead in investigating the  financing of terrorism did not necessarily result in duplication of efforts.  Treasury said that the issue was largely definitional, with the FBI leading  terrorist investigations with an ancillary financial component versus  Customs financial investigations that might have a terrorist-related  connection.
section_title: May 2003 Interagency Agreement Defined Agency Roles
paragraphs: On May 13, 2003, the Attorney General and the Secretary of Homeland  Security signed a memorandum of agreement regarding the antiterrorist  financing roles of the respective departments and component agencies. In  general, the agreement gives the FBI the lead role in investigating terrorist  financing and specifies that DHS is to pursue terrorist financing  investigations solely through its participation in FBI-led task forces,  except as expressly approved by the FBI. Some excerpts from the May  2003 agreement are paraphrased substantially as follows:
The FBI is to lead terrorist financing investigations and operations,  utilizing the intergovernmental and intra-agency National JTTF at FBI  headquarters and the JTTFs in the field. Through TFOS, the FBI is to  provide overall operational command to the national JTTF and the field  JTTFs.
After June 30, 2003, DHS is to pursue terrorist financing investigations and  operations solely through its participation in the National JTTF, the field  JTTFs, and TFOS, except as expressly approved by TFOS.
The Secretary of Homeland Security agreed that, no later than June 30,  2003, OGQ was to no longer exist as a program name. The Secretary  agreed to ensure that any future DHS initiative or program to investigate  crimes affecting the integrity and lawful operation of U.S. financial  infrastructures would be performed through the financial crimes division  at ICE.
The May 2003 agreement also contained several provisions designed to  enhance the coordination and integration of FBI and ICE financial  investigations. For example, the agreement calls for the FBI and ICE to  (1) detail appropriate personnel to each other’s task forces, (2) take steps  to ensure that the detailees have full and timely access to data and other  information, and (3) develop procedures to ensure effective operational  coordination of FBI and ICE investigations. Further, the FBI Director and  the Assistant Secretary for ICE were to provide a joint written report on  the implementation status of the agreement 4 months after its effective  date to the Attorney General, the Secretary of Homeland Security, and the  Assistant to the President for Homeland Security. However, as of  September 24, 2003, the report had not yet been issued.
If successful, the May 2003 agreement could prove to be a significant step  toward establishing a coordinated interagency framework for conducting  terrorist financing investigations. At the time of our review, it was too  early to assess the implementation of the agreement.
section_title: NMLS Has Had Some Influence on Financial Regulators’ Efforts, but Other Factors Played a Larger Role
paragraphs: Most financial regulators we interviewed said that the NMLS had some  influence on their anti-money laundering and antiterrorist financing efforts  but that it has had less influence than other factors. Officials said that,  since September 11, a change in government perspective and additional  requirements placed on financial institutions by the USA PATRIOT Act  and its implementing regulations have been the primary influences on  their efforts. Although the financial regulators said that the NMLS had  minimal influence on establishing priorities for their anti-money  laundering and antiterrorist financing activities, they have completed the  tasks for which they were designated as lead agencies over the years, and  most of those for which they were to provide support to Treasury. The  2002 NMLS noted that the financial regulators were responsible for  implementing the parts of the USA PATRIOT Act that applied to the  entities they regulate. Appendix III describes the anti-money laundering  requirements set forth in the USA PATRIOT Act and the rules that have  been implemented thereunder.
subsections: section_title: Financial Regulators Said Factors Other Than the NMLS Exerted a Greater Influence on Their Anti- Money Laundering Efforts
paragraphs: Most financial regulators we interviewed said that the NMLS had some  influence on their anti-money laundering efforts because it has provided a  forum for enhanced coordination, particularly with law enforcement  agencies, but that it has had less influence than other factors. Similarly,  law enforcement agency officials told us that the level of coordination  between the financial regulators and their agencies was good and that they  received the assistance and information they needed from the regulators.  They did not, however, attribute this to the strategy but, rather, to legal  requirements.
Financial regulators said that several other factors influenced their anti- money laundering efforts to a greater extent than the NMLS. These factors  include working groups that had already developed as a result of BSA  implementation, the impact of September 11 on raising awareness of the  importance of fighting money laundering and terrorist financing, and the  passage of the USA PATRIOT Act. The financial regulators said that they  have been working on anti-money laundering issues for many years and  generally initiate their own anti-money laundering activities. Bank  regulators and SEC pointed out that the BSA was passed in 1970 and that  they have been concerned with ensuring banks’ and broker-dealers’  compliance with its requirements ever since. The USA PATRIOT Act  extended responsibility for implementing the BSA to additional financial  regulators as well as increased anti-money laundering requirements for  certain financial institutions. Additionally, most financial regulators  participate in the BSA Advisory Group, in which the financial regulators  coordinate and communicate among themselves and with financial  institutions on enforcing BSA requirements. Other coordinating forums  include the Federal Financial Institutions Examination Council, Financial  Action Task Force, and USA PATRIOT Act working groups established to  develop and implement regulations resulting from the passage of the USA  PATRIOT Act.
Although the NMLS provided a forum in which the financial regulators  could better coordinate with law enforcement agencies, other avenues for  cooperation are prescribed by law, and some existed before passage of the  Strategy Act. For example, depository institutions have been required to  file SARs since 1996. Since December 2002, securities brokers and dealers  have been required to file SARs with FinCEN as a result of the USA  PATRIOT Act and its implementing regulations. (See app. III.) Certain  financial institutions are also required to file Currency Transaction  Reports with FinCEN for transactions that involve $10,000 or more in  currency. Like SARs, these reports are supposed to be analyzed to look for  suspicious activity. Financial regulators said they oversee financial  institutions’ programs for complying with these legal requirements  because it is their statutory responsibility, not because it is included in the  NMLS. They said they would do so with or without the strategy.
Most officials said that September 11 greatly affected how the  administration and Congress thought about money laundering because  some of the techniques used to launder money, illicitly moving funds to  avoid detection, are similar to those used to finance terrorist activity.  Some officials said the new administration was more concerned with the  burden anti-money laundering compliance placed on financial institutions  prior to September 11, but that the events of September 11 changed this,  resulting in more attention being paid to the importance of anti-money  laundering compliance. Congress passed the USA PATRIOT Act, which,  for example, increased the due diligence, reporting, and record keeping  requirements for some financial institutions to guard against their being  used by their customers to launder money or finance terrorist activity.  Some officials noted that USA PATRIOT Act requirements reflected topics  being discussed in the NMLS and other working group meetings that might  still have been in the discussion phase had not September 11 motivated  their inclusion in the USA PATRIOT Act, thus requiring Treasury and other  agencies to issue regulations. Reflecting this change of emphasis, the 2002  NMLS discussed the need to adapt traditional methods of combating  money laundering to unconventional tools used by terrorist organizations  to finance their operations. According to the 2002 NMLS, the primary  responsibility of the financial regulators was to participate in the drafting  and issuance of USA PATRIOT Act regulations and to provide technical  expertise on the operations of depository institutions and other financial  institutions to Treasury. The regulators also worked to educate financial  institutions and their own staff on the new requirements.
section_title: Federal Financial Regulators Have Been Involved in the Implementation of Many Action Items in the NMLS, but Most Have Been Led by Treasury
paragraphs: The federal financial regulators have participated in the implementation of  the NMLS from 1999 to 2002 in a variety of ways, including participation in  working groups established by the NMLS and, in 2002, worked with  Treasury to implement provisions of the USA PATRIOT Act. The federal  financial regulators were expected to participate in NMLS initiatives, but  Treasury, rather than the financial regulators, was usually designated as  the lead agency responsible for implementation. Most federal financial  regulators are independent federal agencies. Therefore, while the financial  regulators have committed to work with Treasury and Justice on NMLS  initiatives, they are not required to do so because, with the exception of  OCC and OTS, they are not part of the executive branch. Previous  strategies have called for the financial regulators to work with Treasury  and Justice on several efforts, such as (1) coordinating on establishing  policies for enhanced information sharing between law enforcement  agencies and the regulatory agencies, (2) working with the financial  services industry to develop guidance for financial institutions to enhance  scrutiny of high-risk money laundering transactions and customers, and  (3) developing a SAR requirement for broker-dealers. However, policies  for enhanced information sharing were not finalized until the USA  PATRIOT Act required that they be developed. For example, section 314 of  the USA PATRIOT Act was designed to enhance cooperation among  certain entities involved in the detection of money laundering.  Section  314(a) encourages regulatory authorities and law enforcement authorities  to share with financial institutions information regarding individuals,  entities, and organizations engaged in or reasonably suspected based on  reliable evidence of engaging in terrorist acts or money laundering  activities. Section 314(b) encourages information sharing among financial  institutions themselves. In addition, rules promulgated by FinCEN under  section 314 allow law enforcement authorities to make requests to  financial institutions through FinCEN of certain account information for  individuals, entities, and organizations that may be engaged in terrorist  acts or money laundering activities. Information is provided to FinCEN,  who gives the law enforcement entities a comprehensive product. SEC  worked with FinCEN on a proposed broker-dealer SAR requirement from  1999 to 2001. However, a final rule was not issued until 2002, when it was  required under the USA PATRIOT Act.
Each NMLS has called for the federal bank regulators as a group or OCC  individually to lead a review of their bank examination procedures  regarding anti-money laundering efforts and to implement the results of  these reviews. While the financial regulators have been involved in a  variety of different tasks and working groups in the NMLS, they served as  leads only in these reviews. Table 4 lists annual NMLS initiatives to  review bank examination procedures, the lead agency or agencies, and the  status of the initiatives.
The financial regulators have also worked with Treasury as the lead  agency for the U.S. government’s international anti-money laundering  efforts. Over time, the NMLS has called for the United States to strengthen  international cooperation and collaboration and to work to strengthen the  anti-money laundering efforts of other countries. Much of Treasury’s effort  in this area has been done as part of multinational bodies, such as the  Financial Action Task Force, and international financial institutions, such  as the World Bank and the International Monetary Fund. Treasury’s  efforts, working with these bodies, have focused on making anti-money  laundering assessments a permanent part of the International Monetary  Fund and World Bank surveillance and oversight of financial sectors and  providing technical assistance and training to jurisdictions willing to make  the necessary changes to their anti-money laundering regimes. Treasury  officials involved in international anti-money laundering efforts said that  the NMLS has served as a useful tool to plan and coordinate their  international efforts that include the financial regulators, which provide  technical assistance and participate in international meetings of these  bodies. Officials from the FRB, OCC, FDIC, OTS, SEC, and CFTC all said  that they had worked with Treasury on international anti-money  laundering efforts, including the preparation for or participation in  meetings of the Financial Action Task Force and of international financial  institutions.
section_title: The Annual NMLS Has Not Reflected Critical Components Identified by GAO as Key to Developing and Implementing National Strategies
paragraphs: In recent years, our work in reviewing national strategies for various  crosscutting issues has identified several critical components needed for  their development and implementation; however, key components have  not been well reflected in the NMLS. These components include clearly  defined leadership, with the ability to marshal necessary resources; setting  clear priorities and focusing resources on the greatest areas of need, as  identified by threat and risk assessments; and established accountability  mechanisms to provide a basis for monitoring and assessing program  performance. We identified a number of ways in which these critical  components could be better reflected in the development and  implementation of the annual NMLS, should it be reauthorized.
subsections: section_title: NMLS Leadership Structure Generally Has Not Resulted in Consensus on the Approach NMLS Should Take
paragraphs: Our past work in reviewing various national strategies has consistently  concluded that having clearly defined leadership, with the ability to  marshal necessary resources, is a critical component of any national  strategy. For instance, our work has noted the importance of establishing  a focal point or executive-level structure to provide overall leadership that  would rise above the interests of any one department or agency. Regarding  the annual NMLS, we found that the joint Treasury-Justice leadership  structure generally has not been able to reach consensus in developing  and implementing the strategies—particularly in recent years when the  structure did not include representatives from the two departments’ top  leadership. This has resulted in an inability to reach agreement on the  appropriate scope of the strategy and ensure that target dates for  completing strategy initiatives were met.
The Strategy Act required the President, acting through the Secretary of  the Treasury and in consultation with the Attorney General, to produce an  annual NMLS. However, Treasury and Justice officials told us that the  Strategy Act did not provide additional funding or otherwise enhance  either department’s ability to develop and implement the annual strategies.  Rather, development and implementation of the annual NMLS has been  dependent largely on consensus-building efforts between Treasury and  Justice—with Treasury having de facto lead responsibility. In this regard,  Treasury officials told us that, while the department could request  participation from other agencies, it had no incentives it could use to  marshal necessary resources or compel participation in implementing  initiatives or action items. The Treasury officials noted, for example, that  the department’s inability to compel action by other agencies was a  contributing factor to delays in producing each annual NMLS. As shown in  table 5, none of the four annual strategies issued to date was submitted to  the Congress by February 1 of each year, as required by the Strategy Act.  As of September 24, the 2003 strategy had yet to be submitted.
The initial NMLS (1999) established a joint leadership structure for  implementing the strategy. Specifically, the strategy noted that overall  implementation of the strategy would be guided by an interagency  Steering Committee chaired by the Deputy Secretary of the Treasury and  the Deputy Attorney General, with participation of relevant departments  and agencies. The Steering Committee was to be responsible for  overseeing action items and timelines and, as appropriate, making specific  assignments. Also, with respect to action items that involved international  aspects of anti-money laundering efforts, the National Security Council  was to have a central role and was to advise the Steering Committee, as  necessary. The 2000 NMLS also called for the Steering Committee to  oversee implementation of initiatives, although the strategy did not  mention a specific role for the National Security Council.
According to Treasury officials, the Steering Committee was not  reconvened to oversee the development and implementation of the 2001  NMLS, in part because of the change in administrations and the timing in  making political appointments. Instead, overall responsibility for  developing and implementing the 2001 NMLS was assumed by two lower- level officials—a Treasury Deputy Assistant Secretary (Money Laundering  and Financial Crimes) and a Justice Criminal Division Section Chief (Asset  Forfeiture and Money Laundering). The 2002 NMLS called for Treasury  and Justice to reconvene the Steering Committee to provide coordination  and cooperation among all the participating departments and agencies.  However, according to Treasury and Justice officials, the Steering  Committee was not reestablished. Treasury and Justice officials with  responsibility for developing the strategy and overseeing its  implementation at those departments said the benefits of the Steering  Committee were that it brought together the officials who were needed to  make decisions when those below them could not agree and that it could  hold those responsible for implementing certain priorities accountable for  getting things done.
Moreover, the role of the National Security Council in overseeing  implementation of the annual NMLS remains somewhat unclear. On the  one hand, the National Security Council does have a designated policy  coordination committee responsible for overseeing antiterrorist financing  activities, including those related to implementation of the 2002 NMLS. On  the other hand, Treasury and Justice officials told us that this policy  coordination committee has no responsibility for addressing other aspects  of the strategy. The officials said that they were unaware of any National  Security Council component responsible for overseeing all aspects of  NMLS implementation.
section_title: NMLS Initiatives Have Not Been Clearly Prioritized
paragraphs: Our past work in reviewing various national strategies has recognized the  importance of identifying and prioritizing issues that require the most  immediate attention. While each NMLS (1999 through 2002) identified  some “top” priorities, each strategy contained more priorities—of  seemingly equal importance—than could be realistically achieved. Our  prior strategy work also has shown that threat and risk assessments can  be useful in establishing priorities; however, none of the money laundering  strategies issued to date was preceded or guided by such an assessment.
subsections: section_title: Annual Strategies Have Contained More Priorities Than Could Realistically Be Accomplished
paragraphs: The Strategy Act called for the NMLS to include comprehensive, research- based goals, objectives, and priorities for reducing money laundering and  related financial crimes in the United States. The 1999 NMLS included a  total of 66 priorities, which laid out actions to be taken by Treasury,  Justice, and the financial regulators; the number decreased to 50 in the  2002 NMLS (see table 1). According to Treasury officials, Treasury’s vision  for the annual strategies was to provide Congress and the public with a  comprehensive document identifying current and planned anti-money  laundering (and in 2002, antiterrorist financing) initiatives. The officials  also said that the strategies did identify some top priorities for each  respective year and that the most important priorities generally were  discussed in the each strategy’s executive summary. Nonetheless, the  officials acknowledged that, in retrospect, each strategy probably  contained more priorities than realistically could have been completed  during the annual strategy year.
Similarly, Justice and regulatory officials told us that the annual strategies  generally have been too long and included too many initiatives and  priorities to deal with in a given year. The officials noted that the strategies  looked good on paper and contained important issues and concepts but  served more as reference documents than strategies. The officials said that  the annual strategies generally did not affect how their agencies set policy  direction or aligned resources. Also, Justice officials told us that the  strategies generally did not affect field offices or how field agents  conducted their work. Justice and regulatory officials told us they would  prefer a broader, more conceptual and focused strategy with fewer  priorities and more realistic goals that could be achieved during the year.
Justice officials noted that target dates for completing strategy priorities  generally were not met, because there were too many priorities and there  was no funding or new resources provided to implement the plan. Justice  officials said that by focusing on too many priorities, the strategy can  divert resources from investigations and other law enforcement activities.
section_title: Threat and Risk Assessments Have Not Been Used to Assist in Establishing Priorities
paragraphs: “… a critical piece of the equation in decisions about establishing and expanding programs  to combat terrorism is an analytically sound threat and risk assessment using valid inputs  from the intelligence community and other agencies. Threat and risk assessments could  help the government make decisions about how to target investments in combating  terrorism and set priorities on the basis of risk; identify program duplication, overlap, and  gaps; and correctly size individual agencies’ levels of efforts.”
However, regarding the annual NMLS, none of the four strategies (1999  through 2002) issued to date was preceded or guided by such an  assessment. Further, in response to our inquiries, Treasury and Justice  officials indicated that the 2003 NMLS would not be based on a formal  assessment of threats and risks.
Law enforcement officials generally had favorable views on the need for  the NMLS to be driven by some consideration of a threat and risk  assessment. Justice officials noted that money laundering investigations  take a lot of expertise, money, and time, and that, in their view, a formal  assessment of threats and risks would help to set NMLS priorities and  assist law enforcement in focusing its limited resources. Justice officials  told us that they drafted a money laundering threat assessment in late  2002 and circulated it to other law enforcement agencies. The officials  planned to use the assessment as a basis for setting 2003 NMLS priorities.  Treasury officials generally agreed with the concept of a money laundering  threat assessment to drive priorities, but told us that the assessment  prepared by Justice was not useful. The officials added that, in their view,  Justice’s threat assessment mostly contained information that was already  widely known and, thus, probably was at least implicitly considered in  setting priorities while drafting the 2003 strategy.
section_title: Accountability Mechanisms Have Recently Been Included in the NMLS, But None Had Yet Been Completed
paragraphs: Our past work in reviewing various national strategies has recognized the  importance of establishing accountability mechanisms to assess resource  utilization and program performance. The 2001 and 2002 strategies  presented various initiatives designed to establish performance measures  related to federal anti-money laundering efforts. As of July 2003, efforts  were ongoing on many of them, while others had not been addressed.  Another potential accountability mechanism required in the Strategy Act  was annual reports to Congress on the effectiveness of anti-money  laundering policies; however, Treasury has not provided such reports.
subsections: section_title: NMLS Initiatives to Establish Performance Measures Have Not Been Addressed or Are Ongoing
paragraphs: Establishing and implementing performance measures for the NMLS  would assist in monitoring and evaluating law enforcement and financial  regulatory agencies’ anti-money laundering and antiterrorist financing  efforts. The 2001 strategy was the first annual strategy to call for the  creation of performance measures and indicators to evaluate results  against stated goals. The 2002 NMLS continued on the work started under  the 2001 strategy. Both strategies designated components of Treasury and  Justice to co-lead the initiatives. As shown in table 6, the 2002 NMLS  contained five initiatives to measure the effectiveness and results of  federal anti-money laundering activities. As of July 2003, Treasury and  Justice had not yet completed any of these initiatives, although efforts  were still ongoing to complete some of them.
Generally, the purpose of the 2002 NMLS measurement initiatives was to  provide Congress and other policymakers a basis for (1) evaluating federal  agencies’ anti-money laundering efforts and results and  (2) deciding how to deploy limited public resources most effectively. For  example, the traffic-light scorecard was intended to provide information  on the overall performance of the federal government’s efforts to combat  money laundering and assess how well the government was executing  each of the six goals described in the 2002 strategy (and future strategies).  Also, the 2002 NMLS notes that the initiative to review law enforcement  and financial regulatory costs and resources devoted to anti-money  laundering activities was designed to permit Congress and other  policymakers to draw informed conclusions about the effectiveness of  those activities.
The 2002 NMLS noted that, while deceptively easy to articulate in the  abstract, the task of developing meaningful performance measures for  federal agencies engaged in combating money laundering has proven to be  quite difficult. Treasury officials also told us that (1) the 2002 strategy was  not published until July 2002, which did not leave much time for either  implementation or evaluation and (2) several measurement initiatives  were put on hold pending the reorganization associated with DHS.  Further, the officials noted that Treasury generally had no plans to report  on performance progress (results and accomplishments) made under the  2002 strategy.
The 2002 strategy did provide, for the first time in an NMLS, some baseline  facts and figures designed to help determine how well the federal  government was succeeding in its efforts to detect, prevent, and deter  money laundering. For example, the strategy published U.S. Sentencing  Commission data for fiscal year 2000 regarding defendants sentenced in  federal court for the principal offense of money laundering. The 2002  strategy noted that the Sentencing Commission data could be tracked over  a period of years and, thereby, serve as one measure for evaluating  progress in combating money laundering.
section_title: Treasury Has Not Met the Requirement for Annual Effectiveness Reports
paragraphs: The Strategy Act required that—at the time each NMLS was transmitted to  the Congress (other than the first transmission of any such strategy)—the  Secretary of the Treasury submit a report containing an evaluation of the  effectiveness of policies to combat money laundering and related financial  crimes. As of July 2003, Treasury had not submitted any effectiveness  reports. Treasury officials said they did not see this as a requirement to  submit a separate report and, in their view, the strategy itself has been  used to report on the effectiveness of the government’s anti-money  laundering efforts. The officials explained that the “accomplishment”  sections that were added to the 2002 strategy were intended to meet the  Strategy Act’s reporting requirement.
We believe that this information does not fully meet the Strategy Act’s  requirement, because the accomplishment sections generally provided  descriptive information about initiatives rather than evaluations of the  effectiveness of policies to combat money laundering and related financial  crimes. For example, an accomplishment section in the 2002 strategy  noted that HIFCA task forces initiated over 100 investigations in 2001, but  the section did not address the effectiveness of the HIFCA concept or the  task forces.
section_title: Ways to Incorporate Critical Strategy Components into the NMLS
paragraphs: We identified a number of ways in which the critical components for  national strategies could be incorporated into the NMLS, should Congress  decide to continue the requirement. To incorporate a more clearly defined  leadership structure that has the ability to marshal resources for a  coordinated effort against money laundering and terrorist financing, a  high-level leadership mechanism could be reestablished or a single official  could be designated to carry out this responsibility. The role of the  leadership structure would be to marshal resources to ensure that the  vision laid out in the strategy is achieved, resolve disputes between  agencies, and ensure accountability for strategy implementation. This  leadership mechanism would also be in a good position to evaluate annual  progress and report such progress to Congress, as is currently required of  Treasury. This is especially critical now that there are three principal  departments with anti-money laundering and antiterrorist financing  responsibilities, in addition to the federal financial regulators.
One way to help set clear priorities and focus resources on the areas of  greatest need would be to require that the strategy be linked to a periodic  threat assessment. Such an assessment would outline what the lead  agencies see as the most significant threats. This would provide a better  basis to draft a strategy to address these threats. Performance could be  measured by the level of progress made in combating these threats.
One way to improve accountability for the agencies and regulators  following the strategy would be for the strategy to set broad policy  objectives that leave it to the principal agencies to develop outcome- oriented performance measures that are linked to the NMLS’s goals and  objectives. These performance measures would be reflected in the  agencies’ annual performance plans. However, our work showed that,  throughout its history, the NMLS has tried to specify detailed priorities for  each objective, many of which were not accomplished or, in the case of  the financial regulators, would have been accomplished for statutory  reasons even without a strategy.
section_title: Conclusions
paragraphs: The annual NMLS has had mixed results in guiding the efforts of law  enforcement and financial regulators in the fight against money laundering  and, more recently, terrorist financing. Through our work in reviewing  other national strategies, we have identified critical components needed  for successful development and implementation; but, to date, these  components have not been well reflected in the annual NMLS. We believe  that incorporating these critical components into the NMLS would  improve its development and implementation. For example, the current  NMLS leadership structure has not reached consensus on the approach  the strategy should take or ensured that goals and objectives are met, and  has failed to issue any of the annual strategies on time. A clearly defined  high-level leadership structure could better ensure that resources are  appropriately marshaled for achieving the strategy’s vision and goals.
Also, without an assessment of threats and risks, it is difficult to determine  what the highest-priority activities should be. Linking the strategy’s  development to a periodic assessment of threats and risks could help set  priorities and ensure that resources are focused on the areas of greatest  need. Moreover, such assessments could be helpful in tracking progress  made in combating money laundering and terrorist financing.
Furthermore, the establishment of accountability mechanisms could help  to provide a basis for monitoring and assessing NMLS implementation.  One possible mechanism would be linking the relevant agencies’  performance plans more closely to NMLS goals and objectives. Another  mechanism would be to ensure that periodic progress reports are  submitted to Congress, as currently required by the Strategy Act.
In sum, if Congress decides to reauthorize the requirement for an annual  NMLS, adoption of these critical components in the agencies’ future  efforts could help to resolve or mitigate the deficiencies we identified.
section_title: Recommendations for Executive Action
paragraphs: If Congress reauthorizes the requirement for an annual NMLS, we  recommend that the Secretary of the Treasury, working with the Attorney  General and the Secretary of Homeland Security, take appropriate steps to strengthen the leadership structure responsible for strategy development  and implementation by establishing a mechanism that would have the  ability to marshal resources to ensure that the strategy’s vision is achieved,  resolve disputes between agencies, and ensure accountability for strategy  implementation;  link the strategy to periodic assessments of threats and risks, which  would provide a basis for ensuring that clear priorities are established and  focused on the areas of greatest need; and establish accountability mechanisms, such as (1) requiring the principal  agencies to develop outcome-oriented performance measures that must be  linked to the NMLS’s goals and objectives and that also must be reflected  in the agencies’ annual performance plans and (2) providing Congress with  periodic reports on the strategy’s results.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report for review and comment to the  Departments of the Treasury, Justice, and Homeland Security; seven  federal financial regulatory agencies (FRB, FDIC, OCC, OTS, NCUA, SEC,  and CFTC); and the National Security Council.
In written comments, Treasury said that our recommendations for  improving the process for creating the NMLS and enhancing accountability  of all agencies with responsibility for combating financial crimes and the  financing of terrorism are important, should Congress reauthorize the  legislation requiring future strategies. Justice did not specifically address  our recommendations but said that our observations and conclusions will  be helpful in assessing the role that the strategy process has played in the  federal government’s efforts to combat money laundering. For example,  Justice concurred with our conclusion that linking the strategy’s  development to a threat assessment could help set priorities and ensure  that limited resources are focused on the areas of greatest need. DHS said  that it would work with the Secretary of the Treasury as recommended  and would do its part to implement necessary actions to address concerns  raised in the report.
Treasury, Justice, and DHS said that the lack of funds to finance NMLS  development and implementation was an impediment and that the success  of the HIFCA program in particular would be enhanced by an independent  funding source. While we did not assess the participating agencies’ funding  decisions regarding the NMLS or the HIFCA program, our report  acknowledges that federal law enforcement agencies have resource  constraints and competing priorities. We also note, however, that a  primary purpose of the NMLS was to improve the coordination and quality  of federal anti-money laundering investigations by concentrating and  leveraging existing resources, including funding. Further, the report notes  that HIFCA task force officials said that the lack of funding to compensate  or reimburse participating state and local law enforcement agencies was a  barrier to their participation. The 2002 NMLS called for an interagency  team to examine how to fund the colocation of participants in HIFCA task  forces absent funds appropriated for that purpose. At the time of our  review, this initiative had not yet been completed.
Treasury also said that it has satisfied the Strategy Act requirement that it  submit a report to Congress—at the time the NMLS is submitted—on the  effectiveness of policies to combat financial crimes. Treasury said that  (1) evaluations of effectiveness have been contained in the NMLS itself  and (2) any evaluation of effectiveness logically forms a part of the NMLS.  While the annual strategies have contained some useful information to  help Congress better understand programs to combat money laundering  and terrorist financing, the strategies generally have provided descriptive  information about NMLS initiatives rather than evaluations of the  effectiveness of policies. As noted in our report, Treasury and Justice have  efforts under way to measure performance that, when completed, could  provide useful input into an overall evaluation of the effectiveness of  policies to combat financial crimes.
DHS highlighted the value of its Money Laundering Coordination Center,  stating that the center has provided information to DEA, FBI, and other  outside agencies on at least 46 occasions and that DEA was the most  active outside agency user of the center, with at least 21 requests for  assistance. While the sharing of relevant information is commendable, as  mentioned in our report, DEA officials told us that the center does not  meet DEA’s needs and that DEA has created a new database for  information on money laundering investigations related to drugs. DHS also  provided additional information on (1) methods used by ICE to coordinate  terrorist financing investigations with other agencies and (2) steps taken  by ICE and the FBI to implement the May 2003 memorandum of agreement  between Justice and DHS regarding roles and responsibilities in  investigating terrorist financing.
The full text of Treasury’s, Justice’s, and DHS’s written comments are  reprinted in appendix IV, V, and VI, respectively. The three departments  also provided technical comments and clarifications, which have been  incorporated in this report where appropriate.
Of the seven federal financial regulatory agencies, four (FRB, FDIC,  NCUA, and SEC) provided technical comments and clarifications, which  have been incorporated in this report where appropriate. The other three  agencies (OCC, OTS, and CFTC) had no comments. FDIC also said that,  should a national money laundering strategy continue, annual goals should  be achievable and roles and responsibilities clearly defined.
The National Security Council did not respond to our request for  comments.
As arranged with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days after its  issue date. At that time, we will send copies of this report to interested  congressional committees and subcommittees. We will also make copies  available to others on request. In addition, the report will be available at  no charge on GAO’s Web site at http://www.gao.gov.
If you or your staffs have any questions about this report or wish to  discuss the matter further, please contact Richard M. Stana at (202) 512- 8777 or by e-mail at stanar@gao.gov or Davi M. D’Agostino at (202) 512- 8678 or by e-mail at dagostinod@gao.gov. GAO contacts and key  contributors to this report are listed in appendix VII.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine agency perspectives on the benefit of the annual National  Money Laundering Strategy (NMLS), we interviewed responsible officials  at and reviewed relevant documentation obtained from the principal law  enforcement components with anti-money laundering responsibilities at  the Departments of the Treasury, Justice, and Homeland Security and the  federal financial regulatory agencies. To determine whether the NMLS has  served as a useful mechanism for guiding law enforcement agencies’  efforts, we (1) compared the structure and operation of High Intensity  Money Laundering and Related Financial Crime Area (HIFCA) task forces  to guidance provided in the strategies, (2) assessed whether the  implementation of NMLS initiatives to enhance interagency coordination  has met strategic goals, and (3) assessed the extent to which the 2002  NMLS addressed agency roles in combating terrorist financing. To do this,  we interviewed responsible officials and reviewed documentation from  the four primary agencies responsible for investigating money laundering  and related financial crimes—Treasury’s Internal Revenue Service- Criminal Investigation (IRS-CI), Justice’s Federal Bureau of Investigation  (FBI) and Drug Enforcement Administration (DEA), and Homeland  Security’s Bureau of Immigration Control and Enforcement (ICE). For  investigations of terrorist financing, we reviewed the roles and activities of  and interviewed officials from ICE’s Operation Green Quest (OGQ) and  two FBI components—Terrorist Financing Operations Section (TFOS) and  Joint Terrorism Task Forces (JTTF). Our work with law enforcement  agencies was conducted at the principal federal agencies’ headquarters in  Washington, D.C., and at field office locations in three major U.S. financial  centers (Los Angeles, Miami, and New York City).
To determine the role of the NMLS in influencing the anti-money  laundering activities of federal financial regulators, we reviewed their  efforts to carry out the NMLS 2002 goal, “Prevent Money Laundering  Through Cooperative Public-Private Efforts and Necessary Regulatory  Measures,” and its earlier iterations. We gathered information on these  agencies’ anti-money laundering and antiterrorist financing efforts—  including efforts to implement provisions of the Uniting and Strengthening  America by Providing Appropriate Tools Required to Intercept and  Obstruct Terrorism Act of 2001 (USA PATRIOT Act)—and determined the  influence of the NMLS on those efforts. We also examined the role the  financial regulators played in supporting Treasury’s efforts under the  NMLS goal to strengthen international cooperation to fight money  laundering. To do this work, we interviewed responsible headquarters  officials and reviewed documentation from the Commodity Futures  Trading Commission (CFTC), Federal Deposit Insurance Corporation  (FDIC), Federal Reserve Board (FRB), National Credit Union  Administration (NCUA), Office of the Comptroller of the Currency (OCC),  Office of Thrift Supervision (OTS), Treasury, and Securities and Exchange  Commission (SEC). We also interviewed officials from the law  enforcement agencies listed above to assess coordination between law  enforcement and the financial regulators.
To compare NMLS efforts to the components we have found are necessary  for a successful strategy, we reviewed drafts of the strategies from 1999 to  2002, interviewed officials who had been involved in the development and  implementation of the strategies, and compared the results from this work  with findings from our past work reviewing national strategies and their  implementation.
We conducted our work from June 2002 to August 2003 in accordance  with generally accepted government auditing standards.
section_title: Appendix II: Legislation Has Expanded the Responsibility to Combat Money Laundering
paragraphs: The U.S. government’s framework for preventing, detecting, and  prosecuting money laundering has been expanded through additional  pieces of legislation since its inception in 1970 with the Bank Secrecy Act  (BSA). The BSA required, for the first time, that financial institutions  maintain records and reports that financial regulators and law  enforcement agencies have determined have a high degree of usefulness in  criminal, tax, and regulatory matters. The BSA authorizes the Secretary of  the Treasury to issue regulations on the reporting of certain currency  transactions. The BSA had three main objectives: create an investigative  audit trail through regulatory reporting standards; impose civil and  criminal penalties for noncompliance; and improve detection of criminal,  tax, and regulatory violations.
The reporting system implemented under the BSA was by itself an  insufficient response to money laundering because, under the BSA,  anybody who satisfied the reporting requirements would not be subject to  money laundering violations. Thus, Congress enacted the Money  Laundering Control Act of 1986 (MLCA), which made money laundering a  criminal offense separate from any BSA reporting violations. It created  criminal liability for individuals or entities that conduct monetary  transactions knowing that the proceeds involved were obtained from  unlawful activity and made it a criminal offense to knowingly structure  transactions to avoid BSA reporting. Penalties under the MLCA include  imprisonment, fines, and forfeiture.
Congress enacted the Money Laundering Prosecution Improvements Act  of 1988 to enhance the provisions of the BSA and the MLCA and amended  provisions in both statutes. The Improvements Act aimed to increase the  cooperation that the government receives from financial institutions by  imposing liability and fines on facilitators, such as negligent bankers. It  also expanded the definition of a financial institution under the BSA and  permitted government agencies to undertake sting operations.
The Annunzio-Wylie Anti-Money Laundering Act of 1992 amended the BSA  in a number of ways. It authorized Treasury to require financial  institutions to report any suspicious transaction relevant to a possible  violation of a law. It also authorized Treasury to require financial  institutions to carry out anti-money laundering programs and create  record-keeping rules relating to fund transfer transactions. Annunzio- Wylie also made the operation of an illegal money transmitting business a  crime.
As authorized by Annunzio-Wylie, in 1996, Treasury issued a rule requiring  that banks and other depository institutions use a Suspicious Activity  Report (SAR) form to report activities involving possible money  laundering. During the same year, bank regulators issued regulations  requiring all depository institutions to report suspected money laundering  as well as other suspicious activities using this form. The bank regulators  also placed SAR requirements on the subsidiaries, including broker-dealer  firms, of the depository institutions and their holding companies under  their jurisdiction.
The Money Laundering and Financial Crimes Strategy Act of 1998  (Strategy Act) amended the BSA to require the President, acting through  the Secretary of the Treasury, in consultation with the Attorney General  and other relevant agencies, including state and local agencies, to  coordinate and implement a national strategy, produced annually for 5  years beginning in 1999, to address money laundering. In addition, it  requires the Secretary of the Treasury to designate certain areas as high- risk areas for money laundering and related financial crimes and to  establish a Financial Crime-Free Communities Support Program. The  purpose of demarcating areas as high risk is to designate the communities  that experience severe problems with money laundering that need more  help. The Strategy Act also authorizes federal funding of efforts by state  and local law enforcement agencies to investigate money laundering  activities. In 1999, Treasury consulted with 18 federal agencies, bureaus,  and offices in developing the NMLS. By 2002, that number had increased  to over 25. The Strategy Act provides that the NMLS should include:  1. 	 Goals for reducing money laundering and related financial crimes in  the United States.  2. 	 Goals for coordinating regulatory efforts to prevent the exploitation of  financial systems in the United States through money laundering.  3. 	 A description of operational initiatives to improve the detection and  prosecution of money laundering and related financial crimes and the  seizure and forfeiture of the proceeds derived from those crimes.  4. 	 The enhancement of partnerships between the private financial sector  and law enforcement agencies with regard to the prevention and  detection of money laundering and related financial crimes.  5. 	 The enhancement of cooperative efforts between the federal  government and state and local officials, including state and local  prosecutors and other law enforcement officials; and cooperative  efforts among the several states and between state and local officials,  including state and local prosecutors and other law enforcement  officials.
In the wake of the September 11 terrorist attacks, Congress enacted the  Uniting and Strengthening America by Providing Appropriate Tools  Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act) on  October 25, 2001. The passage of the USA PATRIOT Act was prompted, in  part, by the enhanced awareness of the importance of combating terrorist  financing as part of the U.S. government’s overall anti-money laundering  efforts, because terrorist financing and money laundering both involve  similar techniques. Title III of the USA PATRIOT Act, among other things,  expands Treasury’s authority to regulate the activities of U.S. financial  institutions; requires the promulgation of regulations; imposes additional  due diligence requirements; establishes new customer identification  requirements; and requires financial institutions to maintain anti-money  laundering programs. In addition, title III adds activities that can be  prosecuted as money laundering crimes and increases penalties for  activities that were money laundering crimes prior to enactment of the  USA PATRIOT Act. Further, title III amends various sections of the BSA,  the MLCA, and other statutes. Appendix III contains a detailed summary of  key provisions in title III of the USA PATRIOT Act.
section_title: Appendix III: Summary of Key Anti-Money Laundering Provisions in Title III of the USA PATRIOT Act and Rules
paragraphs: Due diligence  (Section 312)
Amends 31 U.S.C. § 5318 by requiring U.S. financial institutions to exercise due diligence and, in some cases, enhanced due diligence, when opening  or operating correspondent accounts for foreign financial institutions or private banking accounts for wealthy foreign individuals.  Also requires U.S.  financial institutions to establish due diligence policies, procedures, and controls reasonably designed to detect and report money laundering through  such correspondent and private banking accounts.
Sets forth certain minimum due diligence and enhanced due diligence requirements and otherwise adopts  a risk-based approach, permitting financial institutions to tailor their programs to their own lines of  business, financial products and services offered, size, customer base, and location.
Defers the application of Section 312 requirements and provides interim compliance guidance pending  issuance of a final rule.
Shell bank ban and record keeping  (Sections 313 and 319(b))
Amends 31 U.S.C. § 5318 by prohibiting U.S. banks and securities firms from opening or maintaining accounts for foreign shell banks, meaning banks  that have no physical presence anywhere and no affiliation with another, non-shell bank.  Requires closure of any existing correspondent accounts for  foreign shell banks by December 2001.  Also requires U.S. firms to take reasonable steps to ensure no foreign bank client is allowing a foreign shell  bank to utilize the foreign bank’s U.S. correspondent account. Also requires foreign banks with U.S. correspondent accounts to identify their owners  and designate a U.S. resident to accept legal service of a government subpoena or summons. Allows U.S. to subpoena documents related to the  foreign bank's U.S. account whether the documents are inside or outside the U.S. Allows the Attorney General or Treasury to require closure of a  foreign bank's U.S. account if the foreign bank ignores a government subpoena or summons.
Defines the scope of the application of the shell bank prohibition and record keeping requirement and  provides certification form to aid covered financial institutions in complying with the rule.
Public-private cooperation  (Section 314)
Enables and encourages two forms of information sharing to deter terrorism and money laundering:  (1) among law enforcement, the regulators, and  financial institutions (314(a)); and (2) among financial institutions themselves (314(b)).
Creates a communication network to link federal law enforcement agencies with financial institutions so  that information relating to suspected terrorists and money launderers can be exchanged quickly and  without compromising pending investigations. Federal law enforcement agencies can provide names of  suspected terrorists and money launderers to financial institutions through Treasury’s Financial Crimes  Enforcement Network (FinCEN). After receiving the information, financial institutions are required to check  accounts and transactions involving suspects and report matches. Law enforcement agencies can  then follow up with the financial institution directly. Permits the sharing of information relating to individuals  and entities suspected of money laundering or terrorism among financial institutions so long as financial  institutions provide a yearly notice to FinCEN of their intent to share information under this provision.
subsections: section_title: Commodity firms and credit unions (Section 321)
paragraphs: Clarifies that commodity firms and credit unions are "financial institutions" subject to Title 31's anti-money laundering provisions.
Concentration accounts  (Section 325)
Amends 31 U.S.C. § 5318(h) by authorizing  Treasury regulations to ensure that client funds moving through a financial institution's administrative  accounts do not move anonymously, but are marked with the client’s name.
Customer verification  (Section 326)
Amends 31 U.S.C. § 5318 by requiring all U.S. financial institutions to implement procedures to verify the identity of any person seeking to open an  account and requires all clients to comply with such procedures. Requires Treasury jointly with financial regulators to implement rules requiring  financial institutions to comply.
Requires banks, savings associations, credit unions, private banks, and trust companies to implement  procedures to verify the identity of any person seeking to open an account.
Requires mutual funds to implement procedures to verify the identity of any person seeking to open an  account.
Requires futures commission merchants and introducing brokers to implement procedures to verify the  identity of any person seeking to open an account.
Requires broker-dealers to implement procedures to verify the identity of any person seeking to open an  account.
Requires certain banks lacking a federal functional regulator to implement procedures to verify the identity  of any person seeking to open an account.
Report to Congress on ways to improve the ability of financial institutions to identify foreign nationals.
International cooperation  (Section 330)
Directs the United States to negotiate with other countries to increase anti-money laundering and terrorist financing cooperation, ensure adequate  record keeping of transactions and accounts related to money laundering or terrorism.
Anti-money laundering programs  (Section 352)
Amends 31 U.S.C. § 5318(h) to require all U.S. financial institutions to establish anti-money-laundering programs. Authorizes Treasury, after consulting  with the appropriate federal regulators to prescribe minimum standards for these programs.
Banks, savings associations, credit unions, registered brokers and dealers in securities, futures  commission merchants, and casinos deemed in compliance with Section 352 if they establish and  maintain anti-money laundering programs pursuant to existing BSA rules, or rules adopted by their federal  functional regulator or self-regulatory organization.
Required operators of a credit card system to establish programs reasonably designed to detect and  prevent money laundering and the financing of terrorism.
Required money services businesses to establish programs reasonably designed to prevent money  laundering and the financing of terrorism.
Required mutual funds to establish programs reasonably designed to detect and prevent money  laundering and the financing of terrorism.
Would require certain insurance companies (those offering life or annuity products) to establish programs  reasonably designed to detect and prevent money laundering and the financing of terrorism. Prescribes  minimum anti-money laundering standards applicable to insurance companies.
Would require unregistered investment companies, such as hedge funds, commodity pools, and similar  investment vehicles, to establish programs reasonably designed to detect and prevent money laundering  and the financing of terrorism.
Extends the provision that temporarily defers, for dealers in precious metals, pawnbrokers, loan or finance  companies, private bankers, insurance companies, travel agencies, telegraph companies, sellers of  vehicles, persons engaged in real estate closings, certain investment companies, commodity pool  operators and commodity trading advisers, the requirement to adopt anti-money laundering programs.
Would require dealers in precious metals, stones, or jewels to establish programs reasonably designed to  detect and prevent money laundering and the financing of terrorism.
Solicits comments on whether businesses engaged in vehicle sales should be required to adopt anti- money laundering programs under Section 352.
Solicits comments on how to define travel agency and whether such persons should be required to adopt  anti-money laundering programs under Section 352.
Solicits comments on how to define persons involved in real estate closings and settlements and whether  certain of these persons should be exempt from having anti-money laundering programs under section  352.
Would require certain investment advisers that manage client assets to establish programs reasonably  designed to detect and prevent money laundering and the financing of terrorism. Would delegate authority  to examine certain investment advisers for compliance with such programs to SEC.
Would require certain commodity trading advisors to establish programs reasonably designed to detect  and prevent money laundering and the financing of terrorism. Would delegate the authority to examine  such commodity trading advisers to the CFTC.
section_title: Suspicious activity reporting (Section 356)
paragraphs: Requires all U.S. securities firms to report suspicious financial activity to U.S. law enforcement under regulations to be published by July 1, 2002.  Authorizes Treasury to issue regulations requiring suspicious activity reporting by commodity firms; and requires a report and recommendations by  October 2002 on effective regulations applying anti-money laundering reporting and other requirements to investment companies.
Requires brokers or dealers in securities to report suspicious transactions.
Would require mutual funds to file suspicious activity reports.
Would add futures commission merchants and introducing brokers in commodities to the regulatory  definition of "financial institution'' and would require them to report suspicious transactions.
Would require insurance companies to file suspicious activity reports.
Report to Congress recommending additional regulations applicable to investment companies.
Reporting of suspicious activities by underground banking systems  (Section 359)
Amends the definition of "financial institution" in 31 U.S.C.§ 5312(a)(2)(r) to include a licensed sender of money or any other person who engages as  a business in the transmission of funds. Also directs the Secretary of the Treasury to issue a report to Congress on or before October 26, 2002,  detailing the need for any additional legislation regarding the regulation of informal banking networks.
Report to Congress discussing informal value transfer systems and suggesting methods for minimizing  potential abuse of such systems.
section_title: Reports relating to coins and currency received in nonfinancial trade or business (Section 365)
paragraphs: Adds new section 5331 to title 31 of the U.S. Code and requires any person who is engaged in a trade or business and who, in the course of such  trade or business, receives more than $10,000 in coins or currency in one transaction (or two or more related transactions) to file a report with  FinCEN.
Deems the filing of form 8300 with the Internal Revenue Service to satisfy the requirement to file a  currency report with FinCEN.
section_title: (2) Anti-Money Laundering Investigations, Civil and Criminal Proceedings, and Forfeitures
paragraphs: Money laundering designations  (Section 311)
Amends 31 U.S.C. § 5318 by authorizing Treasury to designate specific foreign financial institutions, jurisdictions, transactions or accounts to be of  "primary money laundering concern." Mandates special measures to restrict or prohibit access to the U.S. market.
Would impose special measures against Nauru, requiring U.S. financial institutions to terminate all  correspondent accounts involving Nauru.
section_title: Foreign corruption (Section 315)
paragraphs: Amends 18 U.S.C. § 1956(c)(7) by expanding the list of crimes that can trigger U.S. money laundering prosecutions to include foreign corruption  crimes such as bribery and misappropriation of funds. Also, expands the list of crimes that can trigger U.S. money laundering prosecutions to include  weapons smuggling, export control violations, certain computer crimes, bribery, and other extraditable offenses.
Antiterrorist forfeiture protection  (Section 316)
Authorizes any person whose property is confiscated as terrorist assets to contest the confiscation through civil proceedings in the United States.
Long arm jurisdiction over foreign money launderers antiterrorist forfeiture protection  (Section 317)
Amends 18 U.S.C. § 1956(b) by giving U.S. courts jurisdiction over persons who commit a money laundering offense through financial transactions  that take place in whole or in part in the United States, over foreign banks with U.S. accounts, and over foreign persons who convert to their personal  use property that is the subject of a forfeiture order. Allows U.S. prosecutors and federal and state regulators to use court-appointed receivers in  criminal and civil money laundering proceedings to locate and take custody of a defendant’s assets wherever located. Requires U.S. banks to respond  within 120 hours to a request by a federal banking agency for money laundering information.
Laundering money through a foreign bank  (Section 318)
Forfeiture of funds in United States interbank accounts  (Section 319(a))
Amends 18 U.S.C. § 981 by closing a forfeiture loophole so that depositors’ funds in a foreign bank housing a U.S. bank account are subject to the  same forfeiture rules as depositors’ funds in other U.S. bank accounts.
Proceeds of foreign crimes  (Section 320)
Amends 18 U.S.C. § 981(a)(1)(B) to authorize the forfeiture of both the proceeds of, and any property used to facilitate, offenses listed in section  1956(c)(7)(B), if the offense would be a felony if committed within the jurisdiction of the United States.
Corporation represented by a fugitive  (Section 322)
Amends 18 U.S.C. § 2466 by applying the fugitive disentitlement doctrine to claims filed by corporations if any majority shareholder, or individual filing  the claim on behalf of the corporation is  disqualified from contesting the forfeiture. It clarifies that a natural person who is a fugitive may not file, or  have another person file, a claim on behalf of a corporation that the fugitive controls.
Enforcement of foreign judgments  (Section 323)
Amends 28 U.S.C. § 2467 by allowing the government to apply for and the court to issue a restraining order to preserve the availability of property  subject to a foreign forfeiture or confiscation judgment.
Consideration of anti-money laundering record  (Section 327)
Amends 12 U.S.C. § 1842(e) by requiring U.S. bank regulators to consider when approving a bank merger or acquisition the anti-money laundering  records of the banks involved.
International cooperation on identification of originators of wire transfers  (Section 328)
Requires Treasury to consult with the U.S. Attorney General and the Secretary of State to take all reasonable steps to encourage foreign governments  to require the inclusion of the name of the originator in wire transfer instructions sent to the United States.
Criminal penalties  (Section 329)
Any person who is an official or employee of any federal agency who, in connection with administration of the anti-money laundering provisions in the  Patriot Act, corruptly receives anything of value in return for being influenced in the performance of any official act will be fined, or imprisoned for 15  years, or both.
Amendments relating to reporting of suspicious activities  (Section 351)
Amends 31 U.S.C. § 5318(g)(3) so that any financial institution that makes a voluntary disclosure of any possible violation of a law or regulation  relating to money laundering is not liable to any other person for such disclosure.
Penalties for violations of geographic targeting orders  (Section 353)
Amends 31 U.S.C. § 5321(a)(1), 5322, 5324(a), 5326(d). Under prior law Treasury has had the authority to issue orders requiring any domestic  financial institution in a geographic area to perform additional record keeping and reporting requirements if reasonable grounds exist for concluding  that additional requirements are necessary to carry out anti-money laundering requirements. These amendments expand civil and criminal penalties  to include violations of geographic targeting orders issued and violations of regulations.
Authorization to include suspicions of illegal activity in written employment references  (Section 355)
Amends 12 U.S.C. § 1828 to authorize certain depository institutions to disclose in a written employment reference information concerning a possible  involvement in potentially unlawful activity.
Banks secrecy provisions and activities of United States intelligence agencies to fight international terrorism  (Section 358)
Amends the Right to Financial Privacy Act of 1978, 12 U.S.C. § 3412(a), to allow law enforcement authorities to obtain financial data related to  intelligence or counterintelligence activities, investigations, or analysis in an effort to protect against international terrorism.
Increase in civil and criminal penalties for money laundering  (Section 363)
Amends 31 U.S.C. § 5321(a) & 5322 by increasing from $100,000 to $1,000,000 the maximum civil and criminal penalties for a violation of provisions  added to the Bank Secrecy Act by sections 311 and 312 of the Patriot Act.
Bulk cash smuggling  (Section 371)
Adds section 5332 to Title 31 of the U.S. Code, which makes smuggling large amounts of cash across U.S., borders a crime.
Forfeiture in currency reporting cases  (Section 372)
Amends 31 U.S.C. § 5317(c), and allows forfeiture of undeclared cash whose source and intended use cannot be established.
Illegal money transmitting businesses  (Section 373)
Amends 18 U.S.C. § 1960 -- which prohibits operation of an unlicensed money transmission business -- to abolish any requirement that the defendant  be aware of the laws requiring money transmitting licenses.
Counterfeiting domestic currency and 0bligations  (Section 374)
Amends 18 U.S.C. § 470, which prohibits the use of electronic images in counterfeiting.
Counterfeiting foreign currency and obligations  (Section 375)
Amends 18 U.S.C. § 478 by providing that the penalties for counterfeiting are increased (generally to allow a maximum term of imprisonment of 20  years).
Laundering the proceeds of terrorism  (Section 376)
Amends 18 U.S.C. § 1956(c)(7)(D) which provides material support to designated foreign terrorist organizations, as a predicate offense for a money  laundering prosecution.
Extraterritorial jurisdiction  (Section 377)
Amends 18 U.S.C. § 1029. Enhances the applicability of computer fraud by covering offenses committed outside the United States that involves an  access device issued by a U.S. entity.
Terrorism  (Sections 801 to 817)
Modernizes anti-terrorism criminal statutes by, among other provisions, making it clear the crime includes bioterrorism, mass transit terrorist acts,  cyberterrorism, harboring of terrorists and support for terrorists; that all terrorist crimes serve as predicate offenses for money laundering  prosecutions; and that anti-money laundering provisions apply to all terrorists assets, including legally obtained funds, if intended for use in planning,  committing or concealing a terrorist act.
Exclusion of aliens  (Section 1006)
Permits the United States to exclude any alien engaged in money laundering from the United States and requires establishment of a money  laundering watch list for officials admitting aliens into the United States. (3) Required Reports by Treasury  Report and recommendation  (Section 324)
Requires Treasury within 30 months of enactment of the Patriot Act to make a report on operations respecting the provisions relating to international  counter-money laundering measures and any recommendations to Congress as to advisable legislative action.
Anti-money laundering strategy  (Section 354)
Amends 31 U.S.C. § 5341(b) by directing the Secretary of the Treasury to consider data regarding the funding of terrorism and efforts directed at the  prevention, detection and prosecution of such funding as topics for the Anti-Money Laundering Strategy.
Special report on administration of bank secrecy provisions  (Section 357)
Treasury must submit a report to Congress relating to the role of the IRS in the administration of the records and reports on monetary instrument  transactions within  6 months of enactment of the Patriot Act. Report submitted on April 26, 2002.
Efficient use of currency transaction report system  (Section 366)
Directs Treasury to review the cash transaction reporting system to make it more efficient, possibly by expanding the use of exemptions to reduce the  volume of reports, and to submit a report by October 25, 2002. Report submitted on October 25, 2002. (4) Miscellaneous Provisions  Use of authority of United States executive directors  (Section 360)
Allows Treasury to instruct the United States Executive Director of each international financial institution to use the voice and vote of the Executive  Director to support loans and use of funds of respective institutions or public and private entities within the country if the President determines that a  foreign country has taken actions supporting the United State's effort to combat terrorism.
Financial crimes enforcement network  (Section 361)
Amends 31 U.S.C. § 310 by specifying the responsibilities of FinCEN's director, expanding the duties of FinCEN, and, giving it statutory authority to  perform its functions.
Establishment of highly secure network  (Section 362)
Directs Treasury to establish within FinCEN a highly secure electronic network through which reports (including SARs) may be filed and information  regarding suspicious activities warranting immediate and enhanced scrutiny may be provided to financial institutions.
Uniform protection authority for Federal Reserve facilities  (Section 364)
Amends 12 U.S.C. § 248 by allowing  law enforcement officers to protect and safeguard Federal Reserve facilities.
section_title: Appendix V: Comments from the Department of Justice
section_title: Appendix VII: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to those named above, Allison Abrams, Thomas Conahan, Eric  Erdman, Barbara Keller, Marc Molino, Jan Montgomery, Robert Rivas,  Barbara Roesmann, and Sindy Udell made key contributions to this report.
section_title: Related GAO Products
paragraphs: Internet Gambling: An Overview of the Issues. GAO-03-89. Washington,  D.C.: December 2, 2002.
Interim Report on Internet Gambling. GAO-02-1101R. Washington, D.C.:  September 23, 2002.
Money Laundering: Extent of Money Laundering through Credit Cards  is Unknown. GAO-02-670. Washington, D.C.: July 22, 2002.
Money Laundering: Oversight of Suspicious Activity Reporting at Bank- Affiliated Broker-Dealers Ceased. GAO-01-474. Washington, D.C.: March  22, 2001.
Suspicious Banking Activities: Possible Money Laundering by U.S.  Corporations Formed for Russian Entities. GAO-01-120. Washington,  D.C.: October 31, 2000.
Money Laundering: Observations on Private Banking and Related  Oversight of Selected Offshore Jurisdictions. GAO/T-GGD-00-32.  Washington, D.C.: November 9, 1999.
Private Banking: Raul Salinas, Citibank, and Alleged Money  Laundering. GAO/T-OSI-00-3. Washington, D.C.: November 9, 1999.
Private Banking: Raul Salinas, Citibank, and Alleged Money Laundering.  GAO/OSI-99-1. Washington, D.C.: October 30, 1998.
Money Laundering: Regulatory Oversight of Offshore Private Banking  Activities.  GAO/GGD-98-154. Washington, D.C.: June 29, 1998.
Money Laundering: FinCEN’s Law Enforcement Support Role Is  Evolving. GAO/GGD-98-117. Washington, D.C.: June 19, 1998.
Money Laundering: FinCEN Needs to Better Manage Bank Secrecy Act  Civil Penalties. GAO/GGD-98-108. Washington, D.C.: June 15, 1998.
Money Laundering: FinCEN’s Law Enforcement Support, Regulatory,  and International Roles. GAO/T-GGD-98-83. Washington, D.C.: April 1,  1998.
Money Laundering: FinCEN Needs to Better Communicate Regulatory  Priorities and Timelines. GAO/GGD-98-18. Washington, D.C.: February 6,  1998.
Private Banking: Information on Private Banking and Its Vulnerability  to Money Laundering. GAO/GGD-98-19R. Washington, D.C.: October 30,  1997.
Money Laundering: A Framework for Understanding U.S. Efforts  Overseas. GAO/GGD-96-105. Washington, D.C.: May 24, 1996.
Money Laundering: U.S. Efforts to Combat Money Laundering Overseas.  GAO/T-GGD-96-84. Washington, D.C.: February 28, 1996.
Money Laundering: Stakeholders View Recordkeeping Requirements for  Cashier’s Checks As Sufficient. GAO/GGD-95-189. Washington, D.C.: July  25, 1995.
Money Laundering:  U.S. Efforts to Fight It Are Threatened by Currency  Smuggling. GAO/GGD-94-73, Washington, D.C.: March 9, 1994.
Money Laundering:  Characteristics of Currency Transaction Reports  Filed in Calendar Year 1992. GAO/GGD-94-45FS. Washington, D.C.:  November 10, 1993.
Money Laundering:  Progress Report on Treasury’s Financial Crimes  Enforcement Network. GAO/GGD-94-30. Washington, D.C.: November 8,  1993.
Money Laundering:  The Use of Bank Secrecy Act Reports by Law  Enforcement Could Be Increased. GAO/T-GGD-93-31. Washington, D.C.:  May 26, 1993.
Money Laundering:  State Efforts to Fight It Are Increasing but More  Federal Help Is Needed. GAO/GGD-93-1. Washington, D.C.: October 15,  1992.
Money Laundering:  Civil Penalty Referrals for Violations of the Bank  Secrecy Act Have Declined. GAO/T-GGD-92-57. Washington, D.C.: June  30, 1992.
Tax Administration:  Money Laundering Forms Could Be Used to Detect  Nonfilers. GAO/T-GGD-92-56. Washington, D.C.: June 23, 1992.
Money Laundering:  Treasury Civil Case Processing of Bank Secrecy Act  Violations. GAO/GGD-92-46. Washington, D.C.: February 6, 1992.
Money Laundering:  The Use of Cash Transaction Reports by Federal  Law Enforcement Agencies. GAO/GGD-91-125. Washington, D.C.:  September 25, 1991.
Money Laundering:  The U.S. Government Is Responding to the Problem.  GAO/NSIAD-91-130. Washington, D.C.: May 16, 1991.
Money Laundering:  Treasury’s Financial Crimes Enforcement Network.  GAO/GGD-91-53. Washington D.C.: March 18, 1991.