The Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve Board have jointly proposed amendments to the recordkeeping and travel rule regulations. They propose to slash the threshold at which financial institutions must collect, retain, and transmit certain information related to international funds transfers and transmittals of funds.
Under the proposal, the threshold for international transactions will now be slashed to $250 from the previous threshold of over $3,000, which was established in 1995. However, the threshold for domestic transactions will remain unchanged at $3,000.
The agencies said comments on a proposed rule that would amend the recordkeeping and travel rule regulations under the Bank Secrecy Act will be accepted for 30 days after publication in the Federal Register. It is scheduled to be published on Tuesday.
They noted that the regulations will also apply to transactions above the applicable threshold involving convertible virtual currencies, as well as transactions involving digital assets or cryptocurrencies such as Bitcoin.
The agencies are pushing for the amendment based on findings from the data analyzed from about 2,000 suspicious activity reports (SARs) filed by money transmitters between 2016 and 2019. They were flagged as activity by terrorist organizations, drug cartels, and criminal groups.
The mean and median dollar values of these analyzed international transactions were found to be about $509 and $255, respectively. As per the existing threshold, the data of these transactions need not be maintained.
The U.S. Department of the Treasury established the Financial Crimes Enforcement Network in 1990 to provide a government-wide multisource financial intelligence and analysis network. The organization's operation was broadened in 1994 to include regulatory responsibilities for administering the Bank Secrecy Act.
The FinCEN's mission is to enhance U.S. national security, deter and detect criminal activity, and safeguard financial systems from abuse by promoting transparency in the U.S. and international financial systems.
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