Court Opinion

ID: 9484401
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:52:42.232327+00
Date Added: 2024-06-11T17:50:13.822274
License: Public Domain

SILBERMAN, Circuit Judge,
concurring:
As the government was quick to concede, in the absence of the regulation authorizing penalties for non-knowing or non-willful violations, the Department would not have been entitled to levy a penalty on Iran Air. The government has not always been so forthright. In 1985, the Treasury Department sought and obtained massive fines against scores of American banks for having violated a Treasury Department regulation implementing the Bank Secrecy Act. The Act required banks to report currency transactions in excess of amounts set by the Secretary of the Treasury and provided for civil penalties against those who “willfully violated]” its provisions. 31 U.S.C. § 5321 (1988). In 1980, an amendment to the Department’s regulations extended reporting requirements to foreign currency transactions involving domestic banks. “[M]any banks apparently failed to focus on this change and continued to believe that such transactions, particularly when conducted for the bank’s own account, continued to be exempt.” K. Bachman, A. Henderson & S. Robinson, Recent Settlements Offer a Guide *1263to Bank Secrecy Act Compliance, American Banker, April 18, 1986, at 4.
Nevertheless, the Treasury Department collected fines from 38 .banking organizations which amounted to $16 million dollars by 1988. See J. Kutler, US Aide Says Banks Doing Better at Reporting .Cash Transactions, Amerigan Banker, May 26, 1988, at 1. At least 80 banks were under consideration for civil penalties. See St Germain Promises Quick, Passage of Measure to Stymie Money Laundering, 46 Washington Financial Reports (BNA) 614 (1986).
In 1986, the Department obtained an amendment to the statute permitting a lesser penalty for negligent violations. During congressional hearings, the government admitted that the amendment was necessary because the Act permitted fines only for willful violations. See ABA Says Money Laundering Bill Should Concentrate on Intentional Activity, 46 Washington Finanoial Reports (BNA) 437 (1986). In passing the amendment, Congress also recognized that the statute did not punish non-willful violations. See S.Rep. No. 433, 99th Cong., 2d Sess. 19 (1986). It is unclear how many, if any, banks were then made subject to the lesser penalties. It is clear, however, that based on the government’s acknowledgement in this ease the original penalties were levied improperly. At the time, banks (particularly large ones) were a popular target of congressional attacks. See 46 Washington Financial Reports'(BNA) 614 (1986) (remarks of Rep. St. Germain); cf. Wachtel v. Office of Thrift Supervision, 982 F.2d 581, 586 (D.C.Cir.1993). I assume that having taken the position the government did'in this case, we will not see a repeat of its posture of 1985.-