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Bank Secrecy Act - OpenCongress Wiki
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The Bank Secrecy Act (BSA) of 1970 also known as the Currency and Foreign Transactions
Reporting Act is requiring all financial institutions in the U.S. to assist United States government
agencies to detect and prevent money laundering. The act requires financial institutions to keep
records of cash purchases and file reports of cash purchases of $10,000 or more and to report
suspicious activity that might signify money laundering, tax evasion, or other criminal activities.
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overview
The Bank Secrecy Act is also know as the Financial Recordkeeping and Reporting of Currency and
Foreign Transactions Act of 1970 (31 U.S.C. 1051 et seq.).
The bank Secrecy Act (BSA) was initially used to crack the rings of individuals involved in illegal
drug activities and drug trafficking. After September 11, 2001 terrorist attack, Bank Secrecy Act,
has been used in identifying the terrorists and their funding. Using the tools from BSA, Law
enforcement agencies were able to find currency transaction made by the drug trafficker to banks
out side the US in the past and recently they were able to shut down and crack the terrorist network
and their funding around the glob.
The BSA requires financial institutions to keep records of cash purchases and file reports of cash
purchases of $10,000 or more into, out of, and within the United States that might signify money
laundering, tax evasion, or other criminal activities.
The Bank Secrecy Act" (BSA) consists of two parts;
I) Financial Recordkeeping. It is demanding financial institutions to maintain records of all the
transactions for five years. Financial Institutions must also keep record of all the extension of credit
for $10,000 or more to private individuals with their name, address,
social Security number.
II) Reports of Currency and Foreign Transactions in excess of $10,000 for criminal, tax, or
regulatory investigations. Financial institution within the United States must file a Currency
Transaction Report (CTR) to the Internal Revenue Services (IRS) for each $10,000 transaction
during one business day or $10,000 transactions spread over a number of days. All the financial
institution in the US must also file Suspicious Activity Report (SAR) for suspicious transaction to the
Financial Crimes Enforcement Network (FinCEN) with 30 calendar days of the transaction. The BSA
requires all banks to designate a senior bank official to be responsible for all the reporting.
A simple overview of the Bank Secrecy Act (BSA) 31 USC 1051 et seq comes from Privacilla.org:
"Though most people do not know it, financial institutions are required by the federal government to
spy on their customers. Congress authorized the Treasury Department/Department of the Treasury
to require them to do so in the Bank Secrecy Act.
"The Bank Secrecy Act authorizes the Treasury Department to require financial institutions to
maintain records of personal financial transactions that 'have a high degree of usefulness in
criminal, tax and regulatory investigations and proceedings.' It also authorizes the Treasury
Department to require any financial institution to report any 'suspicious transaction relevant to a
possible violation of law or regulation.' These reports, called Suspicious Activity Reports are filed
with the Treasury Department's Financial Crimes Enforcement Network (FinCEN).
"This is done secretly, without the consent or knowledge of bank customers, any time a financial
institution decides that a transaction is 'suspicious.' The reports are made available electronically to
every U.S. Attorney's Office and to 59 law enforcement agencies, including the FBI, Secret Service,
and Customs Service. A law enforcement agency does not have to be suspicious of an actual crime
before it accesses a report, and no court order, warrant, subpoena, or even written request is
needed. Law enforcement agencies can, and allegedly do, download the entire harvest of new
information from FinCEN whenever they want it."
"The Bank Secrecy Act, commonly referred to as Title 31, has been evolving since the original
legislation was enacted in October 1970. The overall purpose of the act was to fight money
laundering and other financial crimes by requiring financial institutions to report cash transactions
in excess of $10,000. Initially, this legislation focused on banking institutions. However, the law has
been modified several times over the past three decades to expand the number and type of
industries and transactions covered. The Department of the Treasury recognized the importance of
extending the counter-money laundering controls to 'non-traditional' financial institutions, not
simply to banks, both to insure fair competition in the marketplace and to recognize that non-banks
as well as depository institutions are an attractive mechanism for, and are threatened by, money
launderers. For example, the definition of financial institutions has been expanded to include casinos
(1985), Indian casinos (1996), and card rooms (1998). Other businesses which fall under the
definition of financial institutions are money transmitters and money order and traveler's check
issuers, sellers, and redeemers.... The inclusion of Suspicious transactions is one of a number of
additional amendments made to the Bank Secrecy Act which went into effect on July 1, 1997."
From "Suspicious Transactions: A Continuation https://www.devere-group.com/fatca/ of the Bank
Secrecy Act" by John R. Mills, Ph.D., and Janet M. Vreeland, Ph.D.
See rest of article for expansion on the topic, as well as that on suspicious transactions.
As demonstrated above, the Bank Secrecy Act applies to many financial entities other than
banks/Banking institutions. For example, the Act also applies to
According to MoneyLaundering.com, the "Bank Secrecy Act has been turned on its head. The USA
Patriot Act/Patriot Act I amended it 52 times! Including some contradictory amendments! ... No
financial institution or business is untouched.... Not U.S. banks, not foreign banks, not securities
dealers, not insurance companies, not money transmitters, not check cashers, not car, boat or
airplane dealers, not jewelers, not travel agencies, not real estate brokers, not lawyers, not even
Hawala brokers."
The portion of Patriot Act I that applies to the Banking Secrecy Act is called USA Patriot Act Section
314(a).
The Relationship between Banking Secrecy Act, Terrorism, and Patriot Act I: Neal Boortz, in his
November 20, 2001NewsMax.com article "The 'Patriot' Act???" wrote:
"Take the Bank Secrecy Act, for instance. The true purpose of this bill was to make sure that the
federal government could keep an eye on your financial relationship with your bank. A more proper
title would have been the 'Bank Anti-Secrecy Act.'...
"Let's go back to that Bank Secrecy Act for a minute. Under that law your bank must file a report
with the Imperial Federal Government every time you engage in a transaction with the bank
involving more than $10,000 in cash.
"If you deposit $10,000 in cash the bank files a report. If you withdraw 10 grand, the bank files a
report.
"Are you told the bank is filing a report? No. Are you given a copy of the report? No. (I guess this is
where the 'secrecy' comes in.)
"Well ... Section 365 of the USA Patriot Bill has just expanded this reporting requirement. Now it
applies to most businesses, in addition to banks. Now, if you go to a business and spend more than
$10,000 in cash, that business has to report your name, address, Social Security number and other
pertinent information to the feds.
"It doesn't matter whether you spend the money on one item or a whole shopping cart full ... the
federal government must be notified.
"This has absolutely NOTHING to do with international terrorism. The terrorists who attacked the
World Trade Towers and the Pentagon did not deal in large amounts of cash. They carried picture ID
cards and used credit cards. They NEVER spent $10,000 in cash with any business.
"In short, they never engaged in any activity that would have to be reported under Section 365."
Related SourceWatch Resources
External links
Bank Secrecy Act Forms for Lawyers and Compliance Professionals in Banking, Lending, Securities
and Insurance.