Money Laundering, Terrorism & Financial Institutions
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USA PATRIOT ACT MONITOR NEWS RELEASES

USA PATRIOT Act Monitor News Release: Travel Rule Exception To Expire
3/5/2003 11:00:44 AM Eastern Standard Timew

Actual Names and Addresses Required With Funds Transmittals as FinCEN To Let Travel Rule Exception Expire

The Financial Crimes Enforcement Network has announced the expiration of a conditional exception first granted in 1998 permitting funds transmittal orders to be made without a customer's real name and street address. The exception was granted because of computer programming limitations and the need to deal with the year 2000 problem. Under the "Travel Rule," 31 CFR 103.33(g), information that must accompany a transmittal order for a transmittal of funds of $3,000 or more includes the name and address of the transmittor. The exception came about because a group of banks and securities firms had advised Treasury that their customer identification files (CIFs) often contained PO box addresses, rather than street addresses, and "somewhat less frequently" used nominee or coded names rather than customers' true names. The institutions advised Treasury that reprogramming systems to include true names and street addresses would "require significant resources and would likely involve diverting programming time away from more urgent programming needs, especially correction of the world-wide 'Year 2000' problem." FinCEN therefore provided an exception for institutions that using preprogrammed name and address information, but required that a question mark follow any designation of a transmittor other than by a true name. The exception was due to expire May 31, 1999, but was first extended until May 31, 2001, and then until May 31, 2003. FinCEN believes the financial community has had a number of years to address the technological issues posed by the Travel Rule and should be able to resolve the technological issues now. Further, FinCEN believes that some private banking departments may be abusing the exception.

Comments. FinCEN requests comments within 45 days of the publication of the Notice of Expiration in the Federal Register on whether any technological barriers remain, how and when full compliance can be achieved, and the effect of the exception on law enforcement investigations. The agency would also like to know about any potential or actual abuse that has occurred because of the exception.

Further analysis of this development will be included in a forthcoming issue of the USA PATRIOT Act Monitor.


 

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