FinCEN Wants More Details To Fight Fraud

     WASHINGTON (CN) – The Financial Crimes Enforcement Network plans to require all U.S. entities that have accounts or other financial relationships with foreign financial institutions, even life insurance policies and mutual funds, to file reports detailing the relationship and keep track of all transactions.



In an effort to discourage and detect financial crimes such as money laundering, insider trading and market manipulation, FinCEN also has extended the definition of U.S. entities to include any person or organization that conducts business in the U.S. either physically or remotely.
     While the Bank Secrecy Act requires registration and record keeping of U.S. entities that have formal relationships with foreign financial entities, those relationships are defined by U.S. law. FinCEN intends make more general the definitions of bank accounts, escrow accounts, and financial services, so that these terms can be applied broadly, and independently of U.S. banking laws.
     In FinCEN’s proposed rule, definitions of financial accounts are extended to include life insurance policies, mutual funds, hedge funds and commodities trading accounts. The definition of U.S. entities is expanded to include any person or organization that conducts business in the U.S. either physically or remotely.
     The only exceptions to the definition if a U.S. entity, under the rule, are the federal and state governments and all of their political subdivisions, agencies, departments or branches, including the governments and subdivisions of sovereign Indian tribes.
     The information covered entities must submit would be limited to basic information that appears on account statements. Entities that control more than 25 foreign accounts would only need to list the name of the institution in which each account is held and the value of the account, unless Treasury Department officials request more detailed information.
     The FinCEN maintains that by expanding its definitions of the types of accounts which must be reported and the entities which must make the reports, financial crimes such as money laundering, insider trading and market manipulation are more likely to be discouraged and detected if they occur.

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